RETAIL NEWS FLASH July 02, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ............................................................................................................................... 12 Technology .......................................................................................................................... 14 Strategy .............................................................................................................................. 18
2|Sutherland Insights Retail News Flash July 02, 2014
Sales & Marketing CARREFOUR updates 8 à Huit June 27, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89276 Carrefour is experimenting with a new concept for its 8 à Huit banner in a dozen neighbourhood stores nationwide, Linéaires reports. The intention is to modernise a network which is labouring under an ageing image by reusing ideas from Carrefour’s other proximity banners. The refurbishments should not require excessive capital expenditure as the stores are often located in rural areas and operated by small franchisees. The pilots have proved successful and a widespread roll-out will begin in September this year. Interiors have been refreshed with brighter colours and new ‘humorous’ signage has been added throughout the outlets. Fresh produce counter services such as charcuterie are now better presented. Food on-the-go is located by the checkouts to shorten shopping journeys during lunchtimes. Carrefour’s small boxes are one of the retailer’s fastest-growing French arms. According to Planet Retail data, Carrefour Proximité increased turnover by approximately 24% since early 2010. As a consequence most banners have seen some degree of remodelling over the past years. Even so, Carrefour continues to operate its Carrefour City and Carrefour Express small boxes alongside hundreds of stores under the Shopi and 8 à Huit banners, which it inherited from the merger with Promodès. Last year, the head of Carrefour Proximité, Gérard Dorey, stated that most Shopi, 8 à Huit, and Marché Plus “will not be rebranded under the Carrefour banners - as to do so, a store needs to answer to specific criteria. Furthermore, franchisees have their say, of course.”
Corte Ingles launches click and collect for non-food ranges June 27, 2014 | Fresh Plaza http://www.freshplaza.com/article/122704/Corte-Ingles-launches-click-and-collect-for-non-foodranges El Corte Ingles has announced that it has launched its click and collect service, enabling shoppers to buy online or through their mobile phones and then pick up their orders at more than 200 El Corte Ingles, Supercor and Supercor Express stores in the country. The retailer has said that the service is only presently available for fashion and accessories, perfumes and cosmetics, shoes, small appliances, computers, culture and leisure, toys and, therefore, excludes grocery ranges at the present time.
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FOOT LOCKER to dump CCS banner June 27, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89266 Foot Locker, the US based sportswear and footwear retailer, is to shift its skateboarder business from the CCS catalogue-online banner to its Eastbay brand, reports The Wall Street Journal. The digital sites of CCS will continue to offer a range of skateboard-inspired footwear, apparel, hard goods and accessories for the next few months, but over time the assortments will fully transition to the Eastbay.com website. Foot Locker purchased CCS.com in 2008 for USD103.2 million. The banner was renowned among the skateboarder fraternity as a credible and on-trend retailer of all things related to the skater lifestyle and sponsored a host of top-name X Games stars. The first CCS store opened in 2009, eventually reaching a total of 22 outlets, all of which closed in 2013, since when CCS has operated as a digitalonly entity. In a statement, Foot Locker said: “The company will take advantage of the strong organisation at Eastbay to consolidate the purchasing, marketing, and distribution of skate product from premier vendor partners such as Nike, Adidas, Vans, and others to its loyal, passionate skate customers. The company remains highly committed to maintaining and growing a competitive skate business.”
McDonald’s Is Quietly Testing Its Own Order-Ahead And Payments App June 26, 2014 | Business Insider http://www.businessinsider.in/Exclusive-McDonalds-Is-Secretly-Testing-Its-Own-Order-AheadAnd-Payments-App/articleshow/37099796.cms McDonald’s is quietly testing an order-ahead and mobile payment app at a tiny handful of its more than 14,000 U.S. locations. The pilot is limited to 22 locations in the Columbus, Georgia area. Called “McD Ordering,” the app links to a credit or debit card, which is automatically charged when a customer arrives and scans a QR code displayed at the restaurant. The phone then displays the customer’s order number. Once everything’s ready, the customer picks up food and drinks - without waiting in a line or interacting with a cashier. Here’s a tutorial from the app, which is listed in the iOS and Android stores, but has yet to be publicly announced: Around 10 customers a day have been using the test app at one participating McDonald’s franchise, says Gabriel Perez, a shift manager at the location. “We haven’t really advertised it yet, but once we do it’s going to get big,” Perez says. “You don’t have to wait in line.” McDonald’s has previously rolled out mobile and payment apps in foreign markets, and accepts the contactless Isis mobile wallet at many U.S. locations, but the Georgia pilot marks the U.S. debut of a McDonald’s-branded mobile payments app. A separate McDonald’s app called “McD App” currently serves up coupons and loyalty offers in multiple test markets, though none are in Georgia.
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Other quick-service chains have experimented with mobile payment apps with varying success. In April, Starbucks CEO Howard Schultz announced that the coffee chain’s app accounts for 14% of the company’s U.S. in-store payments. Chick-fil-A and Canadian coffee chain Tim Hortons have also recently launched mobile payment apps, but these chains have much smaller footprints compared to McDonald’s or Starbucks. McDonald’s is more interested in streamlining the customer experience than mobile payments in and of themselves, according to a top company executive who has knowledge of the project but was not authorized to discuss it publicly. The executive believes that the app’s core appeal lies in the ability to save customized orders, and let users skip drive-thru and in-store lines. McDonald’s also stands to benefit from the transaction data the the McD Ordering app collects. Combining the couponing and payment apps would allow the company to see everything customers purchase when they redeem a digital coupon, data that over time would allow McDonald’s to precisely target profitable offers, the executive says.
AMAZON makes London Underground debut June 26, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89255 Finchley Central and Newbury Park will be the first two stations on the London Underground to host Amazon lockers. From 30 June, shoppers will be able to place an order from Amazon.co.uk and have it delivered to a locker in the station’s car park. Once the parcel is in the locker, shoppers will receive an e-mail notification with a unique code to be entered upon arrival. Amazon lockers were first introduced to the UK in 2011, opening in shopping centres, office buildings and even other (predominantly food) retailers such as the Co-op, SPAR and McColl’s. There are now more than 300 lockers across the country and the trend is set to continue as Amazon pursues alternative expansion routes such as the London Underground and National Rail stations. Earlier this week, it was announced that, from September, Amazon shoppers will be able to collect parcels from selected UK train stations, as part of an agreement with Doddle. “Some of our first lockers in the world were launched in London and they have become the preferred delivery option for many in the capital,” said Christopher North, Managing Director of Amazon.co.uk. “We are delighted to have teamed up with TfL to bring the convenience of Amazon Lockers to an even greater number of London commuters.”
CARREFOUR cardholders have new scheme June 27, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89238 Carrefour has introduced a new loyalty card programme for its French supermarkets. Cardholders will be granted a 10% discount on categories that will be rotated depending on the day of the week. On Monday the discount will apply to the Reflets de France regional private label range while on Wednesday baby food and baby care will be the focus, for example.
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In keeping with the banner’s renewed focus on fresh produce, these daily discounts also apply on fish, meat and bakery products on specific days but not on fruit & vegetables. This latest loyalty scheme is not something revolutionary in itself as some Carrefour supermarkets already offered a 10% discount on product ranges on some specific days, but the extension of the scheme to each day of the week means to us that the retailer is specifically looking to boost frequency of shop. By contrast, its smaller formats (Carrefour Express, City etc.) are offering a more consistent 5% off selected Carrefour private label products. In a market wracked by price war such as France, loyalty schemes have increasingly become a weapon of choice to deliver high-impact offers which then have to be compensated for by a reduced and/or rotating applicable product range. We can think of the Auchan or Système U loyalty programme relaunch in 2013 which pursued a similar rationale based around daily or weekly criteria. We acknowledge the financial advantages of the new system. Instead of giving direct discounts at the tills, they are added on to the cardholder account for later use in the store. However, we are doubtful that truly loyal shoppers will adapt their shopping habits or significantly increase their shopping frequency as a result. Instead, we see the move as an escalation of discounting, aimed at luring in new promotion hunters. Yet, these will leave as soon as they arrive, probably leaving in their wake dissatisfaction from the existing customer base.
SAINSBURY’S completes online move June 24, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89224 To support the growth of its multi-channel offering, Sainsbury’s has transitioned its e-commerce business to a new technology platform. The new system is based on IBM WebSphere Commerce and has replaced software from specialist Blue Martini. Digital agency Salmon implemented the solution in a phased approach by region. It is now fully operational. The new platform is set to support Sainsbury’s vision of growing a multi-channel offering for their customers spanning store, web, mobile and tablet. The move underlines the importance that the UK retailer places on digital sales channels and technology as it goes forward. According to Jon Rudoe, Sainsbury’s Digital & Technology Director, the retailer expects to double its annual online sales, which currently account for GBP1 billion (USD1.7 billion).
AUCHAN Chinese e-commerce banner trials O2O June 24, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89223 Auchan’s general merchandise e-commerce operation Feiniu in China has teamed up with convenience store operator C-Store to test an online-to-offline (O2O) pilot, local press reports. The move is seen as the first step toward creating a large number of collection points across the country in a bid to quickly expand the business’ sales volumes. At present, Feiniu is centred mostly on Shanghai and its environs.
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“When it comes to convenience stores, logistics is a key challenge. Working in partnership with RTMart’s Feiniu, the distribution system can be shared, reducing costs for both parties,” Ming-Tuan Huang, Chairman of RT-Mart China, said. To increase the operation’s penetration, the retailer is not only looking to create partnerships with grocers, but also with non-food specialists such as clothing retailers. In exchange, Feiniu is understood to be paying service fees to retailers, who will also hope to benefit from increased footfall and instore traffic from shoppers using the service. Feiniu was introduced last year, relatively late compared to its competitors in China. To gain critical mass in the important region of Shanghai and surrounding provinces, the retailer has no other choice but to aggressively expand its physical presence through methods such as this while working on rapid recruitment of suppliers thanks to generous listing fees.
Mall-based chains looking for new ways to serve teens June 24, 2014 | Roan Oke http://www.roanoke.com/business/mall-based-chains-looking-for-new-ways-to-serveteens/article_ac31f562-f328-11e3-8dc4-001a4bcf6878.html If Japanese retailer Uniqlo is looking for more space in American malls, there may be sites opening up soon. Same for UK clothing chain Topshop and Swedish retailer H&M, both of which have been expanding in North America. Hundreds of spaces that for years have been clubs for teens looking for preppy clothes, maybe with a flashy logo, could be available for lease as clothing retailers such as American Eagle Outfitters, Abercrombie & Fitch and Aeropostale reconsider what kind of square footage they need. The mall-based chains that for years ruled the nation’s high school wardrobes are trying to overhaul their merchandise delivery systems to serve a smartphone-enabled generation that wanders easily between digital and mall shopping. That means not just helping them shop by phone but also delivering new styles faster and at prices teens are willing to pay. “We continue to research this customer,” said Abercrombie CEO Michael Jeffries in a recent conference call with analysts. “I continue to believe we are taking the brands to a place that is more relevant.” No one could accuse the chains of not taking the issue seriously, even if they might have been a little slower than some would like. JPMorgan analyst Brian Tunick calculated that between 2007 and 2013, both off-price chains and fast-fashion retailers — a category that includes names such as Forever 21, H&M, Uniqlo and Zara that offer inexpensive fashion that is changed frequently — made significant gains. Meanwhile, the American teen retailing chains were following the example of some of those international players by opening stores aggressively in countries around the world. They’ve done well enough that most plan to continue to add stores abroad. Yet they still were trying to figure out how best to manage the massive chains that they had built across North America, as teen spending slowed along with the Great Recession and rising unemployment. Of late, there haven’t been any major fashion trends to drive sales, either.
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Now their answer to the real estate question seems clear: More stores aren’t always the way to add sales. In mid-May, American Eagle said it had identified 150 stores to close in North America in the next three years and is closely watching 300 more that have leases coming due. Roger Markfield, chief creative officer, said during a conference call to discuss first-quarter earnings that foot traffic has been down for all retailers in the malls. Tunick’s mid-May report to investors noted even before American Eagle’s store closure program was revealed that Abercrombie had closed 260 locations since 2011 (the company’s store at Valley View Mall in Roanoke closed in late 2011) and Pacific Sun had closed 230 stores in that period. Aeropostale is expected to close up to 300 locations in the next few years, including a number of its P.S. from Aeropostale stores, he said. Aeropostale, Pacific Sun and American Eagle all operate stores at Valley View. The pullback isn’t done. Abercrombie recently said it is on track to close 60 to 70 stores this fiscal year through lease expirations. Susquehanna Financial Group analyst Thomas Filandro pointed out in a report that more than 500 of Abercrombie’s store leases are up for renewal through 2016. Thirty percent of store supply could come out of the teen market over the next three years, according to a report last week from Jefferies analyst Randal Konik. If teen clothing retailers are finding they need less physical space, the timing may not be bad for the shopping center industry. After hitting a low point in 2010 and 2011 as the recession played out, regional malls now have an average of 93 percent of their space filled and shopping centers overall are at 92 percent, said Jesse Tron, a spokesman for New York trade group International Council of Shopping Centers. “We’re back to pre-recessionary levels in terms of occupancy,” he said. At the group’s annual trade show last month bringing together real estate brokers and retailers in Las Vegas, Tron said activity had picked up since the recession when people seemed to be hiding out in their booths. He noted 94 percent of sales in the U.S. are still through physical stores, with the remaining 6 percent coming through digital channels. The industry’s new focus on “omni-channel” retailing — a term that refers to seamlessly integrating online and offline stores — may bring store closures, but Tron noted there are other retailers, like Uniqlo and H&M, adding locations while some online-only merchants are finding they want physical spaces to raise their profile and give customers a different shopping experience. H&M’s new store at Valley View will open later this year. “Experience” is likely to be a popular buzz word going forward. Retailers hope to keep brick-andmortar stores contributing to sales results by making stores welcoming and the visits worth the effort. In the past, Abercrombie’s namesake stores had windows covered by blinds, while its Hollister chain of stores were distinctive for their beach shack entrances that made it hard to see inside. Now the company is testing a remodeled version of the Hollister stores, with 75 to 100 expected to be done by year end. Jonathan Ramsden, chief operating officer at Abercrombie, said on the company’s recent earnings conference call that it’s evident why the new storefronts are effective.
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“I mean it’s very fresh and new,” he said. “You can see into the store. You can see the merchandise. We’re certainly pulling more customers into the store, which is clearly one of our core objectives over the next few years to drive greater traffic.”
Target lowers its free shipping threshold June 24, 2014 | Internet Retailer http://www.internetretailer.com/2014/06/24/target-lowers-its-free-shipping-threshold Almost all orders of $50 or more trigger free shipping. In the past, only qualified items counted toward the total for free shipping. Target Corp. will now ship for free almost all orders over $50. Previously, only certain items qualified for free shipping when the order value exceeded $50. Now only oversized and heavy items will be excluded and subject to an extra handling fee. A Target spokesperson says the new policy has added thousands of more items to the free shipping list. “We’ve heard from guests they don’t fully understand our shipping policy—so we’ve changed it to make it simpler and reduce the friction in making purchases on the site,” says Jason Goldberger, senior vice president, Target.com and mobile. “Providing our guests a better free shipping offer is just one of the many ways we continue to improve the Target.com experience.”
Apple smart watch update: iWatch starts mass production July, ready for October release June 20, 2014 | Tech Times http://www.techtimes.com/articles/8877/20140621/apple-smartwatch-update-iwatch-startsmass-production-july-ready-for-october-release.htm After a long and rumor-riddled wait, Apple is finally set to begin mass production of its unannounced but frequently talked about smart watch this coming July, which will make it ready for shipping by October. A report released by Reuters Thursday cites supply-chain sources who spoke on condition of anonymity that Taiwan’s Quanta Computer is currently conducting trial production runs of what many have dubbed Apple’s iWatch. Until now, Quanta has been responsible for the production of laptops and iPods, two of Apple’s less popular businesses, and is expected to see a huge boost. Sources say Quanta will be Apple’s main iWatch manufacturer and will oversee up to 70% of the assembly process. Sources say the iWatch, if that will be the name that Apple plans to give its hotly-anticipated smart watch, will have a large display, much larger than the 1.3 to 1.5-inch screens reported earlier. In fact, the watch is said to have a diagonal length of 2.5 inches and a rectangular display. That would mean a screen width slightly larger than 2 inches and plenty of other things.
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For instance, Reuters’ sources claim the new iWatch will feature a touch interface, something that isn’t easily integrated into a smaller screen. Assuming that the smart watch will have that much state, it’s possible that the iWatch will offer the interactive notifications Apple introduced in iOS 8 to allow users to use their watch like a miniature iPhone. Sources also say that the watch will also have sensors for tracking health and fitness data, although some analysts believe Apple is working on a separate fitness-centric smartband. But of course, a 2-5-inch screen also has its downside. On the fashion side of things, there isn’t much users can do to make a high-tech watch that looks more like a cuff or a bracelet blend in with their outfits unless they want to look like an obnoxious geek. But then again, Apple has hired former Yves Saint Laurent chief executive Paul Deneve to head its special projects team, so there’s really no point dissing a 2.5-inch iWatch as a fashion flop. The iWatch will be Apple’s first jab at the wearable technology market, and many are hoping that Apple’s offering will drive mainstream adoption of wearable devices much as the iPhone has jumpstarted the smartphone revolution in 2007. Other companies, notably Samsung, Sony and Pebble, have dabbled in the smart watch category but have achieved mixed results. Earlier this year at Re/Code’s Code Conference, Apple internet software and services chief Eddy Cue raised expectations for a line of yet-to-be-announced Apple products for this year. “We’ve got the best product pipeline that I’ve seen in my 25 years at Apple,” Cue declared.
Laser Food signs agreement with Marks & Spencer June 20, 2014 | Fresh Plaza http://www.freshplaza.com/article/121620/UK-Laser-Food-signs-agreement-with-Marks-andSpencer The innovative laser labels for fruits and vegetables will soon arrive to the shelves of UK supermarkets, following the signing of an agreement between the leading retailer Marks & Spencer and the Spanish technological company Laser Food for a test to be carried out in a number of pilot stores. The distributor will try the laser labelling system with oranges at several of its stores in the coming months, thus providing British consumers with the opportunity to see the technology that makes it possible to use markings on the fruit’s surface without damaging it on the inside. Marks & Spencer announced that, if successful, this technology could potentially be extended to other fruits and vegetables in the future. According to Andrew Mellonie, Senior Agronomist at Marks & Spencer, the company’s first meeting with Laser Food took place shortly after the retailer’s managers read an article on a laser labelling system developed by the Spanish specialist Jaime Sanfélix, director of Laser Food. “We made an appointment with Laser Food after reading an article in the press,” explains Mellonie. “We thought it would be interesting to test this concept because the fruit often comes with stickers that can be difficult to remove. Additionally, there can be changes in design, leaving producers with a stock of labels to be thrown away.”
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TARGET hypes Store Pickup scheme June 18, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89167 Target has introduced its first TV ad campaign focused on its Store Pickup service launched chainwide last November. The theme is ‘Time Thieves’, highlighting all the time little ones (i.e. infants & toddlers) steal from mom throughout the day. The ad then transitions to feature Target’s Store Pickup with the core message: “Save what little time you have with Store Pickup from Target. Buy online. Pick up in store.” A marketing campaign around Store Pickup is viewed as a good move by Target. It helps create awareness of the new service, which already is proving to be a winner, according to company reports. In February, the retailer said that instore pick-up requests represented about 10% of Q4 digital orders - and that was without any marketing push behind it. More importantly, Target said that about 30% of store visits to collect an online order resulted in additional instore shopping on that same trip and the size of that store transaction was much larger than an average store trip. Anything that increases traffic and transaction size for Target is a good move. While Store Pickup is viewed as a much-needed add-on, keep in mind that Target’s launch trails Walmart’s Site to Store service by more than five years. In the digital realm, it’s light years.
TESCO tailors its on-the-go offering June 18, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89160 Tesco has launched a new healthy eating range, called ‘my fit lifestyle’. This follows research revealing that six out of 10 people regularly eat at their desk at work or on the move, while almost 90% of those surveyed said they made unhealthy food choices due to their busy lifestyles. The range, which is launching initially in London, builds on a new and emerging trend in the US for personalised eating plans. To make shopping the range easy, my fit lifestyle zones will be created in Tesco stores and Tesco.com, with products colour-coded according to five different calorie bands, so customers can see at a glance which products fit their personal plans. They will be able to count their calories on Tesco’s Health and Wellbeing website and app. The move follows Tesco’s decision to remove confectionery from checkouts at all stores. While these measures to promote healthy lifestyles are clearly welcome – there is still much more work to do.
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Finance ALIBABA opts for NYSE June 27, 2014 | Market Watch http://www.marketwatch.com/story/alibaba-opts-to-list-with-nyse-2014-06-26 Alibaba Group Holding Ltd. has opted to list on the New York Stock Exchange, according to a Bloomberg report that cited a person familiar with the matter. The decision by the Chinese internet giant to list with NYSE is a blow to the Nasdaq, traditionally a haven for tech companies, revealing that confidence in the exchange may still be recovering from the Facebook’s botched IPO in May 2012. Alibaba filed for the IPO in May.
Is METRO CASH & CARRY planning Russia restart? June 27, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89279 Metro Group could revive its plans for an IPO of 25% of its Russian cash & carry operation as early as September, Reuters reports, quoting sources close to the matter. In March, the company put the stock market listing - which had been expected to fetch at least EUR1 billion (USD1.3 billion) - on temporary hold, citing developments in Ukraine and the exchange rate of the Russian rouble as reasons. While the company declined to comment on the reports, a spokesperson for Metro Group said in an e-mail to Planet Retail, that, “We continue to adhere to the plans for a stock market listing of Metro Cash & Carry Russia. However, have always stressed that we need the right market conditions for such a move. In the light of the current political developments, this is currently not the case.”
AGROKOR finally seals MERCATOR deal June 27, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89275 The conclusion of one of European retail’s longest-running takeover sagas finally seems in sight. Croatian retailer Agrokor is set to assume a 53.1% share of Slovenian grocer Mercator in a deal worth EUR323.8 million (USD448 million). The acquisition process took more than a year due to various issues, including EUR1 billion (USD1.36 billion) debt restructuring. Agrokor’s initial attempt in 2012 collapsed when the previous Mercator management refused to allow due diligence to be carried out. In 2013, Agrokor initially offered EUR120 (USD166) per share but amended it during the year to EUR86 (USD119) per share plus an additional EUR225 million (USD311 million) recapitalisation, payable directly to Mercator creditors. The bulk of this transaction will be bankrolled by Russian bank VTB.
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Agrokor plans to merge Mercator with its Croatian and Serbian retail arms, Konzum and Idea, under the umbrella of Adria Retail. Looking at the Balkans region as a whole, Agrokor will now become with its EUR6.1 billion (USD8.4 billion) forecasted revenue - the region’s second-largest retailer after Schwarz Group. The companies received clearance from competition watchdogs in Croatia, Slovenia, Serbia, Montenegro, Bosnia and Herzegovina and Macedonia. The only provisos surrounding the deal are that, in Croatia and Slovenia, Agrokor must divest some of its assets to avoid market saturation.
KROGER sets strong pace in Q1 June 19, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89184 Leading US grocer Kroger has reported total sales up 9.9% to USD32.96 billion for the first quarter ended 24 May compared with the same period last year. Worth noting is that this is the first period that includes Harris Teeter in Kroger’s operations. Consequently the addition has a positive impact on year-over-year comparisons. Total Q1 sales, excluding gasoline, rose 11.4% over Q1 2013. Growth was also driven by a 4.6% gain in identical supermarket sales, excluding fuel. This marks the retailer’s 42nd consecutive quarter of positive same-store sales growth, a remarkable feat. Compare Kroger’s quarterly comp gain to a 0.1% decline at Walmart and the results are even more impressive. In fact, Kroger’s comps outpaced the latest quarterly comps reported by typically high-performing grocers Publix (+4.0%) and Whole Foods (+4.5%). CEO Rodney McMullen said: “Our strong first-quarter results set us up to deliver a 12-15% net earnings growth rate for the year, partly due to the benefit of Harris Teeter, compared to our longterm growth rate of 8-11%. We are pleased to start the year with growth momentum.” Kroger’s net earnings of USD501 million for the quarter are up from USD481 million in the same period a year ago. As reported, net earnings include charges related to a restructuring of pension plans announced on 18 June. Excluding the effect of these charges, Q1 net earnings would have been USD557 million. The company continues to invest more capital in the business for new builds, remodels and technology improvements. Capex totaled USD709 million in Q1 compared to USD640 million last year. Stellar Q1 results have led Kroger to raise its guidance for fiscal 2014. The company now expects identical store sales growth for the year to be in the 3-4% range. Previous guidance was 2.5-3.5%.
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Technology WALGREENS expands on aisle411 June 30, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89294 Walgreens has combined its aisle411′s indoor maps with Google’s Project Tango 3D computer vision technology, Mobile Commerce Daily reports. Shoppers using smartphones or tablets to search and navigate to products will receive instant and relevant product details and promotions that pop up along their instore route. The technology is currently being piloted in multiple Walgreens locations as well as potentially with other major retailers over the coming months. According to Google, the technology has the ability to show a user’s precise location to an accuracy of centimetres. Walgreens was the first retailer in the US to map all of its stores with the roll-out of the Aisle411powered app completed in summer 2012. So far, shoppers can only see floor maps and product layouts for every US store with an integrated product list plus pop-up promotions based on current product searches. Indoor navigation and shopper tracking is currently a very hot topic for retailers with many experimenting with innovative tools. There is a plethora of different technologies available, but so far no clear winner has emerged.
Tesco claims slimline self-service checkouts can slash queue times June 30, 2014 | The Grocer http://www.thegrocer.co.uk/companies/supermarkets/tesco/tesco-claims-slimline-self-servicecheckouts-slash-queue-times/359004.article Tesco in the UK has started to test slimmer and smaller self-checkouts from NCR at three stores in London, The Grocer reports. With the new tills – which take up half as much space as standard selfcheckouts, meaning Tesco can install more in the same space - the retailer aims to further reduce queuing time. According to Tesco, the new card payment-only tills – which were launched last week - have cut queuing times by a quarter in the three stores. Around 80% of the transactions are now self-service in the three pilot sites (St Paul’s Express and Tesco Metro stores in Tooley Street and Canary Wharf). If the tests prove successful, the retailer will consider a wider roll-out, to up to 150 locations in London as well as to food-to-go areas in larger stores outside the capital. It was only last month Tesco installed another new self-checkout solutionfrom NCR at its store in Lincoln. The retailer was first in the UK to install the automated scanning system from NCR which uses Datalogic’s Jade x7 scan portal to capture product barcodes passing on a conveyor belt. The machine automatically scans merchandise and then sorts it to one of three collection areas for customer bagging.
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PICK N PAY makes money mobile June 27, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89277 South Africa-based retailer Pick n Pay has teamed up with mobile operator MTN to introduce a free money transfer service. Customers who sign up for a Pick n Pay SIM card and register for Mobile Money are able to use this service free of charge in South Africa. Mobile Money was launched in late 2012 by the two players in partnership with the South African Bank of Athens. Since then, nearly two million customers have used it as a bank account and have transferred and withdrawn money instore, purchased pre-paid electricity and airtime and paid municipal bills. In addition, Mobile Money users have been able to buy goods at Pick n Pay and Boxer stores without using cash or a debit card. In an environment where the spread of bank branches or ATMs is not very widespread, this service will allow more people access to banking services. In addition, Pick n Pay is also partnering with Nedbank, one of South Africa’s main banks. Through the partnership, Nedbank customers can make cashback transactions at Pick n Pay’s tills.
eBay Launches “eBay Valet,” An iPhone App That Does The Selling For You June 18, 2014 | Tech Crunch http://techcrunch.com/2014/06/17/ebay-launches-ebay-valet-an-iphone-app-that-does-theselling-for-you/ eBay today is expanding its lesser-known eBay Sell For Me service to mobile with the launch of a new app called eBay Valet, which promises to let eBay do the selling for you. That is, it takes every step of the selling process — from determining an item’s value to listing it online to shipping it when sold – and handles it for you. Like its web-based counterpart, eBay Valet is designed to make online selling easier and more approachable, not only for first-time buyers, but for anyone who doesn’t have time to handle a listing for themselves. (It’s sort of like the digital counterpart to those stores that would “sell it on eBay” for you, which you might remember from the movie “The 40-Year-Old Virgin!”) To some extent, eBay’s Sell For Me service is its own take on the various online consignment shops that have sprung up lately, like Poshmark, The Real Real, ThredUp, Threadflip, Twice and others. But unlike those services, neither eBay’s Sell It For Me, and now Valet on mobile, support selling clothing.
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Domino’s jumps ahead in mobile ordering with voice-activated app June 17, 2014 | Mobile Commerce Daily http://www.mobilecommercedaily.com/dominos-jumps-ahead-in-mobile-ordering-with-voiceactivated-app Domino’s is tipping impulse decisions supported by the fast-casual ecosystem with an in-app ordering persona called Dom that will assist customers during order placement. Pizza delivery is a competitive space, with the leaders here quick to grab onto mobile marketing as a way to drive sales. Domino’s, which sees 40 percent of online orders coming from mobile, is likely to generate the kind of excitement with this new feature that can drive sales. “One can’t deny the fact that there is something intriguing about a voice activated app,” said Shannon Spence, associate integrated media director for digital activation at Zimmerman. “The fact that consumers don’t have to manually key in or click will generate buzz around the release, ultimately driving additional downloads of the Domino’s app and an increase in sales,” she said. “It only makes other Brand’s wonder what Domino’s next activation is.”
AUCHAN trials subscription-based online grocery June 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89148 Mimicking Amazon, Auchan has introduced a subscription-based online service for the repeat purchase of non-perishable goods, Linéaires reports. On AbonnementCourses, shoppers can browse among a relatively wide assortment of items and create an account in which they define each product’s purchase frequency (e.g. monthly or quarterly). Then, a week before the order is dispatched, the client receives an order summary which can then be amended. To simplify the shopping list process, Auchan has provided key products suggestions based on standard household needs (single, couple, with children or without). Purchases can be sent by post, home-delivered or picked up at a collection point. While the concept is interesting on paper, several weaknesses seem evident. First, an absence of fresh produce, which makes the service a complement to regular purchases more than a main channel. As a consequence, the service will prove relatively costly, especially as French shoppers have been relatively resistant to delivery fees. In detail, shoppers will be charged from EUR9.95 (USD13.76) for home delivery – in line with the competition - to EUR5.95 (USD8.23) for pick-up from a collection point. Despite a 5% discount offered to subscribers, the pricing of the service is not really competitive compared to the popular Drive click & collect option – which, last but not least, has the immense advantage of often being free of charge. Planet Retail remains sceptical as to the potential success of this pilot. Auchan stresses this idea was based on customer needs, but we believe the positioning of the service to be offset against other grocery e-commerce services like Drives or even online supermarkets. We see the move more as an experiment which could eventually, if successful, be integrated as a feature for its Drives or the AuchanDirect home delivery website.
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Another acquisition for WALMART tech unit June 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89138 Stylr, a company offering a location-based shopping app, has been acquired by @WalmartLabs. This is Walmart’s first acquisition of a Silicon Alley-based company in New York. The smartphone application brings the convenience of online shopping into physical stores and integrates online and offline experiences to enable customers to shop anytime and anywhere. The app allows shoppers to find the clothes that they love in nearby stores. With real-time inventory information for largest retailers in the United States, Stylr can direct consumers to the retail location that has the right size in stock. Stlyr marks the 13th acquisition in the past three years for @WalmartLabs. Only one month ago, Walmart’s technology development unit acquired product search company Adchemy. The company specializes in semantic searches, data analytics and marketing.
MARKS & SPENCER to shorten product lifecycle June 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89134 As part of its major IT project, Marks & Spencer will implement Product Lifecycle Management (PLM) technology from PTC, Retail Technology reports. The PTC Windchill FlexPLM solution will help the retailer’s PLM requirements and support a four-year transformation process within its general merchandise business. The pre-configuration solution helps to manage the company’s complete assortment of products and to bring more innovative and profitable products faster to market. As reported in January this year, Marks & Spencer is currently undergoing a major IT revamp. The retailer’s new self-developed web platform went live in February. Other projects on the IT agenda are the Allocation & Replenishment project, planned to be completed by the end of 2015. In 2014/15, the retailer will roll out new merchandise and macro space planning solutions. For 2015/16, fresh solutions for assortment planning and micro space are scheduled.
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Strategy Sales near for Kiddicare and Co-op’s chemist business June 30, 2014 | Retail Week http://www.retail-week.com/city-and-finance/mergers-and-acquisitions/sales-near-for-kiddicareand-co-ops-chemist-business/5061719.article Morrisons is close to a deal on the sale of online baby goods retailer Kiddicare, Retail Week reports. It is understood two parties remain in the race to buy Kiddicare - private equity firm Better Capital and restructuring specialist Endless. A decision is expected within weeks. Rothschild Group is running the sale for Morrisons. The Co-operative Group is also reportedly close to reaching a deal in the sale of its pharmacy business. Bidders include McKesson-owned Lloydspharmacy and Carlyle Group, with Alliance Boots and one other unnamed firm also in the frame. The move to sell off peripheral businesses is good for both the Co-op and Morrisons, allowing them to focus on their core grocery-led businesses which account for the lion’s share of sales at both retailers. Nevertheless, these sell-offs signify failures on the part of both companies – Morrisons in buying the successful Kiddicare business then burdening it withexpensive former Best Buy sites with the Co-op being forced to sell off successful businesses due to the fall-out from its struggling banking unit.
AMAZON India looks to get SMEs online June 30, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89288 Amazon has reportedly partnered with an Indian private investment firm that aims to help get local companies online. According to the Times of India, Catamaran Ventures holds a 51% in the joint venture — Taurus Business & Trade Services — that was incorporated in New Delhi in 2012. “Catamaran and Amazon Asia formalised a partnership in May to help offline sellers and SMEs in India to take advantage of the potential of the fast-growing online customer base in the country. The partnership will focus, accelerate and scale the inclusion of SMEs into the digital economy,” said a spokesperson from Taurus Business & Trade Services. At this point, it is unclear whether the purpose of the partnership is to ramp up back-end delivery operations or if it is a structure created to get into direct e-commerce. The Indian government does not currently allow FDI in e-commerce - Amazon India currently operates as a third party marketplace operator.
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LIDL makes aggressive UK move June 27, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89273 Lidl intends to invest GBP220 million (USD304 million) in its UK expansion. The Schwarz Group banner is to fund the opening of new discount stores, its fresh food offer and 2,500 new jobs. It plans to open 20 new UK stores in the next nine months to take its market total to 670 outlets. According to the discount store chain, jobs will be created across both new and existing stores. It is rolling out instore bakeries to all of its UK stores. Following the example of Lidl’s German home market, it is hiring for specialist roles such as bakery managers and ‘freshness co-ordinators’. Additional jobs will also be created at its Wimbledon headquarters. Lidl UK Managing Director Ronny Gottschlich said: “We’re focused on a single goal – giving our customers the freshest, highest-quality products possible at the best value. We operate on a highly efficient business model and source as much as we can locally because it supports UK producers and also limits the financial and environmental impact of transport.” This September, Lidl will open its ninth regional distribution centre following a GBP80 million (USD111 million) investment, to support its surge in fresh product sales. According to Retail Week, fresh produce now accounts for 40% of Lidl’s turnover, up from 25% four years ago. Two-thirds of the range is UK-sourced.
UNIQLO to source from India June 26, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89248 Uniqlo, the Fast Retailing-owned banner, has announced plans to have garments manufactured in India. Uniqlo will join the list of global operators including Inditex, GAP, Marks & Spencer and Ralph Lauren that have at least some of their apparel ranges made in India, reports The Wall Street Journal. Fast Retailing is hopeful that sourcing products from India will eventually lead to it opening stores in India, the third-largest economy in Asia. Tadashi Yanai, Chairman & CEO of Fast Retailing, made the announcement after meeting the new Indian Prime Minister Narendra Modi. During their meeting Modi highlighted the advantages India had to offer in the garment sector, such as availability of cotton, skilled labour, robust infrastructure, a large domestic market and good seaports, as per a statement given by the PM’s office.
RAKUTEN establishes Indian presence June 25, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89243 Japanese e-commerce giant Rakuten today announced its entry into India via the opening of a unit called the Rakuten India Development & Operations Center (RIDOC) in Bangalore. A statement from the e-tailer says the centre will focus on “infrastructure operations, processes, and resources.”
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In addition to its primary role as a global development centre, RIDOC will also supplement Rakuten’s knowledge base and staffing retention. At present, the retailer has not committed to opening an online store in the country.
BEST BUY looking for China exit June 25, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89237 Best Buy is looking to either sell or form a partnership with a third party for its China network. According to the Wall Street Journal, the world’s largest electronics specialist is looking to increase focus on its US business and thus needs to turn its attention away from the struggling overseas operation. This is a move which reflects similar tactics by other major electronics retailers over the last 18 months. Dixons Retail has shed its online Pixmania business, as well as its chains in Slovakia, the Czech Republic, Turkey and Italy, while Darty has also exited Italy and Spain recently. It is estimated that Best Buy could realise about USD300 million from a sale of its Chinese business.
CONSUMER GOODS FORUM reveals major health strategy June 19, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89177 The Consumer Goods Forum’s (CGF) board of directors has reaffirmed its commitment to implementation of its Health & Wellness Resolutions published in June 2011. The resolutions set out its belief that manufacturers and retailers have a key role to play in improving the health & wellness of consumers, employees, their families and the communities they serve. During its annual global summit in Paris, The CGF has asked members for increased alignment and engagement on its ambitious five-year plan, which aims to empower the world’s population to make healthier product and lifestyle choices. The board has revealed a number of specific actions based on the Resolutions, namely: •
By 2016: Make company policies public on nutrition and product formulation;
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By 2016: Implement employee health and wellness programmes;
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By 2018: Industry-wide implementation of consistent product labelling and consumer information to help consumers make informed choices and usages; and
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By 2018: Stop targeted advertising to children under 12 for products that do not fulfil specific nutrition criteria based on scientific evidence and/or applicable national and international dietary guidelines.
In addition, the board has approved the establishment of an External Scientific Advisory Council on Health and Wellness to give directional guidance on this strategic pillar.
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In order to measure implementation progress, the industry’s first ever industry-wide survey is also being conducted. Following on from the 2013 pilot, The CGF is now extending the process to the entire membership with a new report describing industry progress to be published in January 2015. The Consumer Goods Forum is a global, parity-based industry network that is driven by its members. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format.
TESCO India partnership forges ahead June 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89137 Tesco, in partnership with Trent through the joint venture Trent Hypermarket Limited (THL), plans to open six to eight new stores in Maharashtra and Karnataka under three of its formats - Star Bazaar, Star Market and Star Daily - by the end of this financial year. The openings will take the total number of Tesco-Trent outlets in the country to 20. Trent Chairman Noel Tata said, “We are evaluating other formats. We opened a smaller-format store, Star Daily, in Pune. It’s a convenience store that is doing very well. We plan to launch a second one shortly. We believe these mid-sized formats will reach profitability faster.” THL currently runs 12 stores across Maharashtra and Karnataka and plans to open stores of 1,00030,000 square feet (93-2,800 square metres) in Pune, Mumbai and Bangalore under Star Bazaar, Star Market and Star Daily formats. THL also plans to open two or three stores in Bangalore, Pune and Mumbai which will be 1,000-5,000 square feet (83-465 square metres) stores under the Star Daily express format; 5,000-20,000 square feet (465-1,860 square metres) outlets under the Star Market format; and 20,000-30,000 square feet (1,860-2,800 square metres) under the flagship Star Bazaar format. Progress on expansion of Tesco’s smaller format operations in partnership with Trent is a positive step forward considering the long-term growth potential of the Indian grocery market. Despite years of delays in the planned roll-out of cash & carries (something which never happened) Tesco’s current strategy of operating grocery stores in partnership with a local player seems a good combination for success – Tesco’s global expertise alongside Trent’s local market knowledge. We await the further roll-out with interest.
TESCO unveils major UK restructuring June 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89142 Tesco has unveiled a major restructuring of its UK business replacing the current store format based divisions with regional divisions, The Grocer reports. It will also merge the Metro and Express divisions. As part of the changes, Tony Hoggett, Operations Director, becomes Retail Director overseeing all superstore and Extra formats.
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Under the plans all superstore and Extra formats will be grouped according to geography. There will be three regions - north, central and south. Neil McCourt, formerly Support Officer and Managing Director for Metro, becomes Retail Director North. Richard Baker, MD of Superstores, becomes Retail Director Central, and Andrew Woolfenden, formerly Extra Operations Director, will become Retail Director South. Former Northern Ireland Operations Director Gary Mills becomes Retail Director for Convenience, with responsibility for all Metro and Express stores outside London. Andrew Rowlinson, Managing Director for Express will take up a new role as Operating Model Director, reporting to Hoggett. Andrew Yaxley, the MD for London, will remain in his post. Tesco’s structure in the capital remains unchanged. With Tesco’s performance slipping further into negative territory in quarter three a restructuring may be just what the company needs. With like-for-like sales dropping by some margin – the current strategy is clearly not working. Adopting a more regionalised management approach will allow Tesco to better localise its offer – countering its current perception as being too big. We await the bedding in of these changes with interest.
MARKS & SPENCER seeks Asian uplift June 17, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89133 UK variety retailer Marks & Spencer plans to boost sales and offset sluggish domestic growth by further expansion in Asia. The company intends to open at least 30 stores in the Asian region this year, Asia chief Bruce Findlay told Bloomberg Businessweek. The retailer is seeking overseas growth after a GBP2.3 billion (USD3.8 billion) three-year effort to improve stores, clothing ranges and online sales failed to revive profit. The retailer plans on adding two stores in Macau, China, this year and is considering expansion options into Japan, Australia, Taiwan and Vietnam. M&S currently operates over 140 stores across Asia in markets including Hong Kong, India, Singapore, South Korea and Thailand.
7-Eleven to open in Dubai next year, first in Middle East June 17, 2014 | The National http://www.thenational.ae/business/industry-insights/retail/7eleven-to-open-in-dubai-nextyear-first-in-middle-east A convenience fixture around the world and in popular culture, name-checked in a U2 song and parodied on Grand Theft Auto, 7-Eleven will now launch in the UAE next year. Tokyo’s Seven & I Holdings will expand into the Emirates with a 7-Eleven convenience store in Dubai, its first in the Middle East. The largest operator of convenience stores in the world, 7-Eleven has 52,811 outlets in 16 countries as of March this year – around 17,000 more than McDonald’s.
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The Dallas-based 7-Eleven has entered into a contract with Abu Dhabi-based Seven Emirates Investment to operate the stores in the UAE. Sheikh Zayed Al Nahyan, the grandson of the current UAE President, is the president of Seven Emirates Investment. With the first store expected next summer, 7-Eleven plans to open 100 stores in the UAE through 2017, the company said. Seven Emirates Investment will build new stores besides converting some existing locations to the 7Eleven brand. “7-Eleven’s entry into the country provides a solution to the UAE government’s strategic initiative to modernise the small-retail environment and bring greater convenience to shoppers,” the company said in a statement. Abu Dhabi mandated the upgrade of 1,300 neighbourhood grocery and convenience stores in the capital in 2012, and some of them were closed down for good. A handful of international companies have moved in to take their place. Convenience stores were the fastest-growing grocery retailer sector at 10 per cent last year in the UAE in terms of number of outlets, according to the research company Euromonitor International. As the trend of shopping for groceries and daily needs at hypermarkets picked up, the number of independent small grocers shrank in the country by 4 per cent last year, according to the research analyst Fatemah Sherif in a note. “Convenience stores are also expected to benefit from high footfall in outlets as more expatriates enter the country given the positive economic outlook,” she wrote. “The category will also benefit from the decline in independent small grocers.” The Euromonitor study treats convenience stores and independent grocery retailers as separate categories Total sales in convenience stores in the UAE are expected to touch US$263.7 million in 2018, up from $222.5m this year. This will coincide with the rise in the number of convenience stores to 443 in 2018, up from 336 this year, according to Euromonitor. The 7-Eleven stores in the UAE will carry fresh foods as well as its frozen carbonated beverages and soft drinks. “The UAE is a growing and dynamic part of the world and is attracting investment from around the globe,” said Joe DePinto, the president and chief executive of 7-Eleven. “It is the business gateway to the Middle East and offers an excellent environment for 7-Eleven’s first retail venture in the region.” Last year, 7-Eleven stores generated US$84.5 billion in sales globally. Outside the United States, where it operates more than 7,800 stores, it has a large presence in Japan with 16,375 stores, Thailand with 7,651 and South Korea with 7,085. Started in Texas in 1927, 7-Eleven was acquired by Seven & I Holdings in 2005. The parent company initially took up a majority stake in 1991. Hypermarkets are the most popular place to shop for groceries in the UAE. These accounted for 52 per cent of overall sales of grocery retailers last year, while supermarkets accounted for 21 per cent.
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