RETAIL NEWS FLASH July 16, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 7 Technology .......................................................................................................................... 11 Strategy .............................................................................................................................. 14
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Sales & Marketing AMAZON not giving up on drones July 14, 2014 | ecommerce http://www.ecommercetimes.com/story/Amazon-Floats-Drone-Exemption-Proposal-to-FAA80729.html Amazon is ramping up its drone delivery project and is hoping for Federal Aviation Administration approval to conduct outdoor testing on its own property. The company has petitioned the FAA for an exemption from rules barring it from testing the devices. Amazon last year revealed it was working on a project that would allow it to deliver small packages to consumers within 30 minutes of ordering via the unmanned aerial vehicles. The project, called “Amazon Prime Air,” has been criticized as a gimmick, but the company seems intent on forging ahead with the plan. Drones could greatly speed up delivery times and give Amazon a strong competitive advantage. However, the company needs regulatory approval for the use of commercial drones before the project can come to fruition.
Walmart to maximize vendors' digital marketing July 14, 2014 | Planet Retail http://www.fierceretail.com/story/walmart-maximize-vendors-digital-marketing/2014-0714?utm_medium=rss&utm_source=rss&utm_campaign=rss Walmart announced that it would reshape its marketing team to include media purchasing for suppliers. The strategic move is part of the retailer's larger effort to keep its vendors at the forefront of the growing digital marketing space. At a meeting with 200 supplier marketing executives, Walmart U.S. Chief Marketing Officer Stephen Quinn discussed the details of Walmart Exchange, or WMX, the new program that focuses on digital targeting, buying and optimization platforms, reported Advertising Age. “We're going to bring a lot more tools that our vendors can use with Walmart that will make their digital marketing a lot more effective,” Quinn told Advertising Age. “If you think of a P&G and Samsung, it lets them see that their marketing is actually having an impact at Walmart, and we're able to speed up reporting in real time. It's pretty much a holy grail for us as marketers.” Quinn explained that the larger focus is on digital technology and social media. Wanda Young, Walmart's chief digital executive, recently had her duties expanded to include VP of media and digital marketing. Young will work with Brian Monahan, VP of marketing at Walmart.com, to head up WMX. Young and Monahan are just a few of the executives at Walmart adopting new roles as CEO Doug McMillon seeks to stimulate alignment with new priorities.
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Walmart currently works with MediaVest in buying Walmart digital ads, but it's not yet clear if MediaVest will also be involved in supplier buys.
AMAZON France fights back with one cent shipping July 14, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89414 Amazon has responded to a French ban on free shipping of book orders by charging shoppers EUR0.01 (USD0.014) for delivery. The new law was introduced by the French government last week in a bid to protect small bookshops from online retailers. In a statement posted on its French website, Amazon said: “We are unfortunately no longer allowed to offer free deliveries for book orders. We have therefore fixed delivery costs at one centime per order containing books and dispatched by Amazon to systematically guarantee the lowest price for your book orders.” France has regulated book prices for more than 30 years by banning retailers from offering discounts of more than 5%, and new rules now prevent online retailers from applying discounts to a book’s cover price.
TESCO completes Glasgow Extra re-launch July 11, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89408 Tesco has completed the renovation of its Extra store at the Silverburn Shopping Centre in Glasgow. Departments across the store have been transformed and now offer customers more choice with extended ranges, the inclusion of new departments and a Giraffe restaurant. One of the biggest new additions to the Tesco Extra store, based at the shopping centre on Barrhead Road, is the launch of the Beauty World department. This new feature includes a nail bar, eyebrow threading and a wide range of make-up counters, making it a one-stop-shop for health and beauty needs. A fresh pizza counter and a Nutri-Centre are also new additions to the store. A new Food-toGo range is now available which offers a selection of freshly prepared meal options. Fresh produce ranges, the F&F clothing department and the homeware ranges have also been extended following the remodel. There is also a dedicated space for local groups and charities to meet, host events, run workshop and health groups, training courses or fitness sessions. Mark Russell, Store Manager said: “The feedback we’ve received from our customers so far has been really positive and we hope that people continue to find our store a great place to shop and spend time with family and friends.” Tesco’s UK store refurbishment programme is ticking along nicely with Glasgow adding to remodels at Slough and Lincoln over the past few months. With sales uplifts at revamped big-box stores running at 3-5% the widening of the remodel programme will have a positive impact on Tesco’s future performance.
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Starbucks to double Thai network July 11, 2014 | Inside Retail http://insideretail.asia/2014/07/14/starbucks-double-thai-network/ US coffee chain Starbucks is undaunted by the fierce competition in Thailand’s coffee market. Starbucks says it will double its network in Thailand to 400 outlets by 2018. The chain’s Thailand boss, Murray Darling, says at least 30 new Starbucks stores will open annually until 2018. “Though the Thai coffee market is very competitive, we see a huge potential to grow our business here because only 30 per cent of the country’s population drinks coffee,” Darling said. The expansion plan was announced during the opening of the 200th Starbucks store at the Fast Fac project in Wang Noi district, Ayutthaya.
BOOKER to expand UK discount concept July 10, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89388 Booker has unveiled plans to expand its new discount concept Family Shopper, targeting up to 400 outlets within the next three to four years, The Financial Times reports. The outlets trade from an area of approximately 2,000 square feet (186 square metres), compared with a typical 10,000 square feet (929 square metres) at hard discounters Aldi and Lidl. Approximately 60% of products are branded, with the remainder private label, under the Euro Shopper brand. The stores stock an average of 1,200 products. There is also a range of GBP1 (USD1.7) non-food lines. Booker has become the latest UK retailer to introduce its own discount concept, hoping to gain a foothold in what has become the UK’s fastest growing bricks & mortar channel. It joins Sainsbury’s which has recently signed a joint venture deal with Dansk Supermarked to revise the Netto discount banner in the UK. Although a logical strategy, it will prove exceptionally difficult to compete with the hard discounters at their own game. Their limited range model which allows for massive buying power makes them a formidable force.
ALZA.CZ installs automated parcel stations July 07, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89351 Czech e-retailer Alza.cz has partnered with KEBA to add parcel automation to the company's existing delivery and collection services, offering a new way to collect goods 24 hours a day and seven days a week, Post & Parcel reports.
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Until now, Alza.cz offered only two options to its customers, to pay for delivery or to collect their parcels from one of the company’s stores which like post offices, have limited opening hours. The company recently decided to offer customers the additional option of collecting parcels from automated parcel stations, called Alza Boxes. The retailer initially ordered 30 systems, 10 of which have already been put into operation. The company plans to install additional Alza Boxes in Prague, then offer the new system in other large cities in the Czech Republic and Slovakia. Alza is the first online retailer among KEBA’s clients. Established in 1994, Alza.cz has grown to be one of the largest online consumer electronics retailers in the Czech Republic. The company has also been operating in Slovakia since 2004. In 2011, Alza expanded its product offer to include other categories such as cosmetics and toys. With increasing consumer confidence and curiosity towards online shopping, Alza has strengthened its market position in the Czech Republic, one of the fastest growing e-commerce markets in Central Europe. The retailer is currently focusing on expansion to maintain its dominant market position. Alza Boxes will have a positive impact on its geographical coverage as well as operational cost efficiency.
MORRISONS launches new café concept July 04, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89345 Morrisons has launched a new café concept in its Crawley store. The new format will be built into all new stores from September and retro-fitted into a number of existing ones as the supermarket continues to invest in its offer. Morrisons is investing in its foodservice offer as it seeks to capture a larger percentage of the 10.7 million customers who currently use its stores, but who may not have visited the café before. A retro-fit of Morrisons Ripon café saw footfall increase 40% in the first week. Darren Smith, Morrisons Café Customer Planner, said: “The way customers use cafés has changed and we have responded to that. Today’s discerning shoppers want free Wi-Fi, healthy meal options and an environment where they feel comfortable alone or with friends or family. The new concept builds on the formidable reputation our cafés already enjoy.” The café refit comes as foodservice becomes increasingly important at larger stores, with rival Tesco utilising various foodservice concepts to create destination appeal. In an era when shoppers are moving to purchase more online any initiative which can increase dwell time will be good for the hypermarket concept. Overall, the move is positive for Morrisons.
WALGREENS kiosks enhance convenience July 03, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89327 US drugstore giant Walgreens is piloting two MedAvail self-service pharmacy kiosks, one at a distribution centre and the other at an Access Health Clinic, Drugstore News reports. The kiosks are able to fill patient prescriptions, which will cut waiting times at the retailer’s pharmacies. The retailer has previously invested in other customer convenience solutions, one being Refill by Scan, an app that lets customers renew a prescription by scanning product packaging.
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Finance FAST RETAILING reduces profit forecast in Q3 July 11, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89401 Fast Retailing, the Japanese clothing giant, has announced a cut on its annual profit forecast of more than 10%, from JPY88 billion (USD 860 million) to JPY78 billion (USD762 million). The new forecast accounts for the losses of around JPY10 billion (USD97 million) at its US premium denim banner ‘J brand.’ This is the second time the retailer’s profit target has taken a hit in the current fiscal year. However, the losses have been partially offset by strong sales at its flagship Uniqlo stores, meaning profit rose 21% in the third quarter, in line with forecasts. Fast retailing’s operating profit for the March-May fiscal third quarter stood at JPY33 billion (USD320 million). Sales were up 19.4% to JPY323.6 billion (USD3.2 billion), while net profit fell 11.7% to JPY20.2 billion (USD190 million) due to losses from foreign exchange. Consistent losses at J brand indicate the bottlenecks for Fast Retailing in achieving international growth. Takeshi Okazaki, Chief Financial Officer, said, “We weren't effective enough in competing in the increasingly tough premium denim market. We hope to be able to talk about some progress next fiscal year.” Uniqlo, on the other hand, recorded a 71% increase in overseas sales and aims to expand its presence in various countries in the coming years. But the brand, known for its affordable prices, is feeling the pressure from the rising costs of imports due to a weaker yen and the growing costs of global textile materials. This has forced the brand to increase prices by 5%. The brand will continue to face a further rise in costs over the next several years as it aims to hire around 16,000 regular staff in order to increase turnover in the part time workers, given the tight labour market conditions in Japan. However, the company stated that if the brand achieves labour efficiency and the cost of training the staff declines, the brand could, in the long term, see a fall in overall labour costs.
PRICESMART reports 15% rise in Q3 earnings July 11, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89399 PriceSmart has reported revenues of USD615 million for the third quarter ended 31 May. This compares to USD571.7million from the previous year’s Q3. The US-based warehouse club operator’s net profits rose 15% to USD21.3 against USD18.5 million last year. Net warehouse club sales increased 7.6% from USD555.8 million to USD597.8 million. The Company had 33 warehouse clubs in operation as of May 2014, up from 31. Membership income increased 9% to USD9.5 million.
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TENGELMANN sees future both online and offline July 10, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89389 At its annual results conference taking place today, German multi-format retail group Tengelmann announced net group turnover has increased slightly by 0.1% to EUR7.82 billion (USD10.81 billion) for its financial year ended 31 December 2013. The company, whose core banners are DIY chain OBI and clothing discount chain Kik, said the results were due to a long winter in H1 as well as the flooding that affected Germany, Austria, Czech Republic and Poland in May and June 2013. Tengelmann’s supermarket division Kaiser’s Tengelmann generated a net turnover of EUR1.94 billion (USD2.68 billion), which is on the same level as in the previous year despite the closure of 11 stores. The store network, which is limited to Germany, is now at 501. Despite a tough H1 with a long-lasting winter and heavy rain in spring, Kik managed to increase its net turnover by 6.8% to EUR1.57 billion (USD2.17 billion). CEO Karl-Erivan W Haub stated that this growth was a direct result of the modernisation programme “Kik 17”, which has already been applied to 750 branches. Kik operates 3,255 outlets in its home market Germany and in 8 countries across Central Europe. Like Kik, OBI also suffered from bad weather conditions in H1. The garden department was reported to have been particularly affected. Net turnover decreased by 0.9% to EUR4.07 billion (USD5.63 billion). The banner runs 567 stores in 11 countries across Western and Central Europe. In addition to its physical store network, Tengelmann is also active in the e-commerce sector with various online stores such as Plus.de, GartenXXL.de and baby-markt.de, among others. CEO Haub stated: “In the future, retail will not exclusively take place online. It is important to combine the offline and online shopping experience.” That said, it is worth mentioning that click & collect at OBI proved well and will be rolled out also to international markets. The company also announced that from 1 September 2014, Alfried Bührdel will succeed Dr JensJürgen Böckel as Group CFO, as the latter retires.
Profitability issues continue to plague AEON in Q1 July 09, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89378 AEON has reported a 17.2% increase in operating revenue to JPY1,713.0 billion (USD16.8 billion), but saw net income tumble 9.9% to JPY1.3 billion (USD12.8 million) for the first quarter ended 31 May. The retail giant continues to struggle with profitability issues in its General Merchandise Store (GMS) unit, Supermarket business and at its China operation. At a press conference, AEON President Motoya Okada said the lower profit resulted from multiple factors, adding that the tax increase and hikes in electricity rates and other utility charges prompted consumers to cut spending on food.
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The GMS division, which accounts for almost half of the business, saw operating revenue jump 29.5% to JPY843.2 billion (USD8.2 billion) while posting an operating net loss of JPY3.8 billion (USD37.2 million). The Supermarket unit saw an 8.2% revenue growth to JPY507.0 billion (USD5.0 billion) but saw a net loss of JPY2.3 billion (USD22 million). Overseas, AEON’s ASEAN business saw revenue increase by 16.5% to JPY50.3 billion (USD491.5 million), but Chinese operations remained in the red, despite revenue growth of 23.9%. The GMS unit’s performance continues to be dampened by Daiei which was consolidated in August 2013, while the supermarket business (particularly chains MaxValu, Ministop and MyBasket) is losing customers due to increasing competition from rival stores. Moreover, Japan’s sales tax hike in April has also affected AEON’s supermarkets. On the other hand, AEON’s discount stores, such as The Big and A Colle have seen positive like-for-like sales growth at 6.5% and 6.7%, respectively. The discounters have benefited from an attitude shift, as consumers have become more cost conscious after the sales tax hike in April.
HMV reports strong sales and profit in Q2 July 08, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89358 HMV, the British music and entertainment retailer reported sales increase of 12% for physical albums, pushing the overall market up 3%, reports the Telegraph. Visual sales also saw an increase of 2%, but the effect was negated by a 2% drop in the market. Excluding store openings and closures, like-for-like sales at HMV stores increased 9.2%, which includes a 10.9% rise in audio and a 5% rise in visual products. HMV was acquired by Hilko last year following a decrease in HMV store numbers from 144 to 125. As for the future plans, the company aims to open four new stores and re-enter Ireland. An important relief for HMV is the reduction of its central overhead costs from GBP42 million (USD71.96 million) to GBP15 million (USD25.7 million). Gaming will be a major focus for the retailer this year. Paul McGowan, CEO Hilco and the new chairman of HMV, said: “While digital is fighting itself, our war is against Amazon and the supermarkets.” He also claimed that HMV is “very profitable” as per the second quarter results.
LAWSON Q1 results stagnate July 07, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89352 For the first quarter ended 31 May, LAWSON’s total net store sales for all convenience stores, including franchised stores, continued to stagnate coming in at JPY484.5 billion (USD4.7 billion), equating to a modest 1.5% increase. Consolidated revenues decreased 2.0% to JPY117.12 billion (USD 1.1 billion), as the decrease in the number of company-owned stores resulted in a decline of JPY5.97 billion (USD58.5 million) in company-owned store’s sales. At the same time, the number of franchised stores brought an increase of JPY3.61 billion (USD35.3 million) in operating revenues. Net profit soared 26.5% to JPY9.1 billion (USD89.0 million).
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In Japan, LAWSON continues to focus on a multi-format store strategy and strengthened partnerships with pharmacies and drug store chains across the country to cater to its customer base of the rising ageing population as well as the increased number of working women. The total number of stores in Japan during Q1 rose to 11,867, a net increase of 618 outlets, while overseas outlets saw a net change of 12 stores, rising to 495 branches. In China, profitability continues to suffer despite a general trend of increased sales. Similarly in Thailand, the joint venture with domestic SAHA Group, which operates the c-store banner LAWSON 108 in 2013, also suffered losses. However, in Indonesia, LAWSON stores saw a rise in both operating revenue and net profit. Recently LAWSON announced it would enter the Philippines by partnering with local Philippine retailer Puregold. Compared to Seven & I and FamilyMart, LAWSON’s overseas operations are still at an early stage. The company's struggling operations in China may have put LAWSON off expanding more aggressively overseas. But in recent years, witnessing Seven & I’s and FamilyMart’s success in China, LAWSON has been rethinking its overseas strategy. With the backing of its largest shareholder Mitsubishi Corp, Planet Retail expects LAWSON to accelerate overseas expansion in the near future.
Solid Q1 for FAMILYMART July 07, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89350 For the first quarter ended 31 May, total net sales for FamilyMart stores rose 9.3% to JPY452.6 billion (USD4.4 billion). In terms of consolidated results, gross operating revenue saw a 7.7% increase to JPY88.7 billion (USD867.1 million). Consolidated net income increased one and a half times to JPY14.0 billion (USD137.1 million), beating expectations. The full-year estimate for the year ending next February has been raised by 20.1% to JPY25.5 billion (USD249.4 million). With FamilyMart’s withdrawal from South Korea earlier this year, the total number of stores stood at 15,969 at the end of Q1 compared to 22,401 stores last year. For the coming year, the majority of FamilyMart’s store openings will continue to focus on Japan with a net increase of over 1,200 stores which will bring the total to 11,761 outlets. Outside its domestic market, FamilyMart plans to accelerate expansion in China and ASEAN countries (especially Thailand), with a net increase of over 680 new stores. The total number of overseas outlets at the end of Q1 was 5,837 stores. Comparing like-to-like sales growth of FamilyMart (down 1.7%) with competitors Seven & I and LAWSON in Japan demonstrates FamilyMart's under performance - with the two rivals posting positive growth. This may be because FamilyMart’s merchandise offering and service menus are weaker when compared to Seven & I.
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Technology COLES GROUP launches mobile wallet July 15, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89418 Wesfarmers-owned Coles Group has said it is introducing a mobile wallet service and plans to offer personal loans and credit cards via a new joint venture with GE Capital Australia. The 50-50 venture with GE Capital Australia is expected to begin operating in 2015, subject to regulatory approval. Following trials, the new mobile wallet, Coles Pay Tag, will now be rolled out to all Coles credit card customers. It allows them to pay without a card and collect FlyBuys points by tapping their phone at the checkout. The pay tag is a sticker that is attached to the back of a customer’s mobile phone and contains the payment details of their Coles credit card and FlyBuys information. Users can view their account balance, available credit, transaction history, see the due date of their credit card bill and see and activate current FlyBuys offers. Customers can “tap and pay” for transactions under AUD100 (USD90.67), but are required to enter a four-digit PIN for transactions greater than AUD100 (USD90.67). Coles General Manager of Financial Services, Richard Wormald, told News.com.au: “It allows customers to take their credit card and their FlyBuys card and put them both on their phone. They can leave their wallet at home and go shopping.” Coles has forged ahead of rival Woolworths in terms of financial services in recent years having launched insurance products in 2010. Coles now says it is approaching one million customers across its insurance offerings. Woolworths is fighting back, however, having recently partnered with Visa and Macquarie Bank to relaunch its consumer credit products in the first half of 2015. Woolworths Money General Manager, Dhun Karai, said: “Woolworths Money will deliver exciting product enhancements to the existing benefits and popular rewards offered to Woolworths Money credit card holders.”
FTC sues Amazon over in-app purchases July 11, 2014 | Fierce Retail http://www.fierceretail.com/story/ftc-sues-amazon-over-app-purchases/2014-0711?utm_medium=rss&utm_source=rss&utm_campaign=rss The Federal Trade Commission filed a lawsuit against Amazon (NASDAQ:AMZN) for billing parents for millions of dollars in unauthorized in-app purchases made by children on Kindle Fire tablets and other mobile devices.
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The charges, filed on July 10 in the U.S. District Court, stated that Amazon willingly allowed kids to make purchases within apps without parental consent, reported USA Today. The unauthorized charges, ranging from 99 cents to $99, were primarily for items that appeared in games. “We are seeking this money back for consumers as well as an order preventing the company from billing consumers without their permission in the future,� said Jessica Rich, director of the FTC's consumer protection bureau. Amazon began in-app purchases in November 2011. However, the retailer did not implement password requirements to prevent kids from accidentally making purchases. So in March 2012 Amazon made passwords a requirement for purchases over $20 and then last year, for all purchases. However, entering a password would open a window for anywhere from 15 minutes to an hour, so children could still make purchases within that time frame, Rich said. Apple recently faced similar unauthorized billing charges from the FTC over in-app purchases. The result was stricter policies for obtaining consent and a $32.5 million settlement. In a letter to FTC Chairwoman Edith Ramirez, Amazon said it prefers to defend its policy for disclosures in court and that it shouldn't be held by the same requirements as Apple, reported the Washington Post. As more retailers start to include in-app purchasing opportunities on mobile, the question of authorization and rules around it will also become more prevalent.
AMAZON ups the ante in Cloud Services July 11, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89402 Amazon is upping the ante in the cloud services market with Amazon Web Services adding a feature called Zocalo, placing it in direct competition with the likes of Box and Dropbox. The secure enterprise storage service enables users to store, access and collaborate on documents. The product includes native apps for iOS and Android. Amazon WorkSpaces customers will get Zocalo for free. Amazon is exploiting a relatively untapped market, where its competitive pricing and trusted capabilities will stand it in good stead to take share from more established players.
EBAY looks to simplify mobile payments July 10, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89387 Through its payments business Braintree, eBay is hoping to make it easier for customers to pay for products on their smartphones through enabling businesses to deduct payments directly from a customer's PayPal account. This is a big push from Braintree since being acquired by eBay for USD800 million (GBP480 million) in 2013 to help PayPal expand its presence on mobile devices. Making checkout on mobile easier should help boost sales, especially critical as consumers spend more time on their smartphones.
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Bebe shifts focus to e-commerce July 10, 2014 | Fierce Retail http://www.fierceretail.com/story/bebe-shifting-focus-e-commerce/2014-0710?utm_medium=rss&utm_source=rss&utm_campaign=rss Bebe (NASDAQ:BEBE) is looking to boost its online and mobile strategy through a new partnership with digital experience management platform provider Qubit. The strategic move comes weeks after the retailer's announcement that it would discontinue its low-end brand 2b. The new platform will provide wide-reaching and bespoke A/B testing, website optimization and a personalization program designed to increase conversion rates. The new technology will enable the retailer to target customers based on previous purchases. Bebe will also be able to serve content to visitors in real time during a shopping session based on their specific needs. “Bebe can now really take control of its data and optimize business performance; creating a more personalized omnichannel experience for its customers.” said Graham Crooke, CEO of Qubit. Already a presence in brick-and-mortar, Bebe hopes to establish itself as a strong player in ecommerce by delving into online and mobile strategies. A new responsive mobile site is planned for release in the upcoming weeks. The shift to e-commerce is a new focus for Bebe and part of a larger, on-going turnaround plan. Just last month, the retailer announced it would discontinue its 2b brand by the end of 2014 and focus more on the core Bebe brand. E-commerce is one way in which the company hopes to realize $9 million to $10 million in annualized pre-tax savings for 2015.
DM goes m-commerce July 08, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89365 dm has introduced a mobile enabled version of its Austrian web shop, CASH reports. The drugstore chain launched its e-commerce operation at the end of 2013 with an attempt to combine editorial content with an online offering. The range currently comprises 8,000 items in eight categories – beauty, care, fragrance, health, diet, baby, household and pet – which are now also conveniently accessible via smartphone and tablets. By autumn, dm Austria intends to make its entire assortment of 14,000 products available. It is currently testing click & collect and plans to roll this service out next year.
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Strategy AUCHAN to go small in Moscow July 14, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89411 Auchan is going a step further to penetrate the Russian metropolis. After introducing the Auchan City superstore concept, Auchan Russia is looking to open convenience stores in the Russian capital, RBC daily reports. This echoes a similar move by Germany-based Metro Group with a chain of independently-owned convenience stores, Fasol, introduced in 2012. Auchan’s 100 square metre stores (1,080 square feet) are likely to be developed with franchise partners. Should the move materialise, these stores will be the smallest operated by Auchan worldwide and two to three times smaller than the A2Pas neighbourhood stores rolled out in France. Auchan stated: “Now, we are waiting for proposals on specific premises in the city, we are ready to test small shops”. It is thought the first units will open in the Moscow underground as the city authorities stated earlier this year that several reconstruction works will free space for grocery stores. The latter are lacking in the Russian capital’s city centre, but the high price of property might reduce the investment’s attractiveness. For Auchan, the risks are minimal as charges would be passed onto franchisees. Even so, it will gain an advantage developing a presence beyond the city’s outskirts. The expansion would also contribute to the volume of private labels sold, especially the economy range Kazhdyi Den (Everyday).
WAITROSE signs export deal with AUCHAN July 14, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89412 Waitrose has announced a new export deal with Auchan to sell groceries in Portugal. A range of around 100 grocery and chilled products will be available in six Auchan stores in Lisbon and across the Algarve, including the city of Faro and the town of Portimao. From Chile and the Caribbean to South Korea and Taiwan, Waitrose now exports to over 50 regions across every continent in the world, with the exception of Antarctica. In 2013, Waitrose export sales grew by almost 30%, with some of the most popular export products including Waitrose teabags and marmalade. Waitrose products are also available on all Eurostar trains. The move is a positive step building on the company’s already successful domestic business. Although moves to launch stores in areas where Waitrose has created a brand presence through the export business have been put on the back burner for now Waitrose continues to expand the number of overseas customers it sells products to. This is a lower risk means of international expansion than opening outlets abroad.
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BCBG boosts e-commerce traffic 40% July 14, 2014 | Fierce Retail http://www.fierceretail.com/story/bcbg-boosts-e-commerce-traffic-40/2014-0714?utm_medium=rss&utm_source=rss&utm_campaign=rss BCBG is celebrating its 25th year with a retrospective of the brand's fashion using an integrated instore and social media promotion, which resulted in a 40 percent jump in e-commerce traffic. BCBG has teamed up with Postano, a social curation and analytics platform, to promote the in-store event touring multiple cities by displaying hashtagged social content, reported Forbes. The idea was that if customers could not attend the in-store event, they could view the content online. “It was important for us to have real time social sharing for visitors attending the 'Living the Bon Chic Life' retrospective, so that their experiences posted provide an opportunity for our global community to be a part of the retrospective,” BCBG's VP of global PR, Sunny Jenkins, told Forbes. Interactively, guests to the event could use hashtag #BCBGx25 while walking through the exhibit and were able to see their posts in the final room of the exhibit. The idea was to engage consumers on the social site rather than just have them jump on as followers. The results were that the Bon Chic Blog, #BCBFx25, and #BCBGMoment had more than 60,000 views, an average of 94 social media posts viewed by each visitor, with an average viewing time of four minutes and 13 seconds. The promotion also led to an increase in sales. Through the “shop this look” button, which leads viewers to the e-commerce site, the retailer saw a 40 percent increase in traffic from the #BCBGMoment activation and a 2 percent increase in average order value. Shoppers also spent 53 percent more time on BCBG.com than average.
Hyderabad aims to host IKEA Indian debut July 10, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89381 Swedish furniture retailer IKEA is expected to open its first outlet in India in Hyderabad. The Telangana government has promised to fast-track all necessary clearances as the new state seeks to attract investment. After a meeting with top IKEA executives, Chief Minister K Chandrashekar Rao was quoted as saying all necessary clearances will be given through a single window to expedite the process of opening the store in the city. During the meeting, women's entrepreneur groups, bamboo and wood artisans, carpet makers were identified as potential suppliers to IKEA's store. IKEA was one of the first companies in India to be allowed 100% FDI in retail. In May last year, the government allowed the Swedish furniture major to invest USD1.7 billion for setting up single brand retail stores.
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LEROY MERLIN acquires BAUMAX stores in Romania July 09, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89379 As part of its strategy to expand its presence in Central and Eastern Europe, Adeo-owned Leroy Merlin is acquiring bauMax’s 15 DIY stores in Romania. The transaction still needs approval from the Romanian Competition Council before it will be finalized. The value of the transaction was not disclosed. bauMax’s 15 stores in Romania generated sales of EUR123 million (USD163 million) in 2012. The company has not published financial results for 2013. Between 2010 and 2012 the company posted losses of EUR38 million (USD49 million). This sale is part of the troubled Austrian DIY group's strategy to close loss-making units in Eastern Europe as part of a new restructuring program aiming to get the firm back on track. In the spring, bauMax announced that is wants to focus on its core markets of Austria, Czech Republic, Slovakia, Hungary and Slovenia. With the acquisition of bauMax's stores, the French DIY operator will be able to consolidate its presence on the Romanian market, which is dominated by Romanian group Dedeman. Leroy Merlin runs only one store in Bucharest. The store posted a turnover of EUR 24.5 million (USD33 million) and a loss of EUR7.5 million (USD10 million) in 2013.
PRIMARK acquires shopping centre July 09, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89380 Primark is poised to go even larger in Birmingham, the UK’s second largest city. Parent Associated British Foods has signed a deal to acquire the Pavilions shopping centre, which could ultimately house the world’s largest Primark store. The centre covers 250,000 sq ft (23,000 sq m), although the value retailer is unlikely to occupy the full site. The largest Primark store is currently the 150,000 sq ft (14,000 sq m) store in Manchester. The move is interesting on two counts. Firstly, it underlines the fact that Primark is now comfortable trading above its traditional 80,000 sq ft (7,500 sq m) model in large conurbations. Secondly, acquiring secondary or under-performing shopping centres could prove a means of securing elusive large-scale sites, not just in the UK but also in overseas markets
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CARREFOUR to replace Carrefour Discount private label line July 09, 2014 | Store Brands http://www.storebrandsdecisions.com/news/2010/09/21/carrefours-switches-strategy-to-focuson-private-label The economy private label brand Carrefour Discount is to be replaced by unbranded items, reports Consultant Olivier Dauvers. Launched in 2009, in a bid to compete with the discount retailers, the Carrefour Discount label positions itself between the “N°1” entry-price range and the standard range Carrefour. Carrefour Discount branded products are reportedly 30% cheaper than the standard range. According to Dauvers, the first no-name products, with a white packaging, will resemble Carrefour Discount, although minus the logo. Carrefour has been testing unbranded products since 2012. The line is expected to make its first appearance nationwide across France during the summer. Several years ago, “No. 1” private label products began disappearing from Carrefour’s shelves, leaving Carrefour Discount branded products to take their place. However, Carrefour Discount is no longer promoted by the retailer. Private labels remain a lever for Carrefour's price perception. The move falls in line with the retailer’s strategy, which is to rationalise its offer on three axioms: entry-price products, standard and premium as an alternative to manufacturer brands.
WALMART pushes Made in USA agenda July 09, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89370 Walmart is returning to its Made in America roots in an effort to bolster the US manufacturing sector, create jobs, and stimulate the local economy. To this end, the retailer has committed to increase its purchases of US-made products by USD250 billion cumulatively over the next 10 years. On 8 July, the company hosted its first-ever “Made in the USA” open call event, inviting more than 500 suppliers and potential suppliers to showcase their products at Walmart's Bentonville, AR headquarters. Throughout the course of the day, over 800 meetings were held with 175 Walmart buyers from Walmart, Sam's Club and Walmart.com. Requirements of pitched products: they are made, assembled, grown or sourced in the US. President and CEO Bill Simon stated: “We are opening our doors and making our buyers available to meet with suppliers with one goal in mind: buy more American products. When we buy new products, suppliers hire people to make those products. These American jobs build families and communities, and they help our country thrive. That’s really what our domestic manufacturing commitment is all about.”
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SEARS and KMART link-up multi-channel services July 09, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89371 Sears and Kmart are introducing an online/instore collaboration to make shopping easier for their loyalty scheme Shop Your Way members and customers. The US-based chains, which are both controlled by Sears Holdings, are giving their customers the choice of cross order and collection at over 2,000 Sears and Kmart locations. The free service promises instore order retrieval within five minutes and allows customers to pick up branded merchandise that is exclusive to Sears or Kmart at either chain. The company’s customers are increasingly opting for multi-channel ways of transacting, which now comprises 60% of the company’s online sales. Last quarter online and multi-channel sales increased 26 % over the prior year. Imran Jooma, Sears Holdings Executive Vice President said: “Leveraging the breadth of both Sears and Kmart's online and in-store networks means more convenience for members and opens an even wider brand-name product selection available to fans of both stores.”
RELIANCE RETAIL plans to shutter small box stores July 09, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89373 Reliance Retail is planning to shut over 100 Reliance Fresh stores which sell mostly fresh produce and groceries, as it increases its focus on its wholesale cash-and-carry business. At present, Reliance Retail operates around 550 Reliance Fresh stores in India. A typical store is spread over approx. 350 square meters and caters to a catchment area of 2-3 kilometres. The firm has informed its vendors about its impending strategy shift. Some of the shortlisted stores to be shut have not been producing optimal returns and will thus be axed from the portfolio, while others will be converted into more feasible formats. Reliance Retail is not the only retailer in the country to have moved away from the small box format in search of profits. In the past, unable to compete with local kirana (Mom and Pop) stores and high rentals, retailers such as Aditya Birla Retail and Spencer's Retail have also taken similar steps. In 2012, Aditya Birla Retail, which runs stores under the More brand, shuttered all its outlets in Mumbai due to steep real estate costs.
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EURONICS re-evaluates cross channel retailing July 08, 2014 | 4c Group www.4c-group.com/news/planetretail?page=3 As it sees competition from online rising, Euronics Germany has unveiled a new cross-channel approach at this year’s Summer Convention in Mallorca, Spain. This is according to a report in crn.de. Marketing-Manager Jochen Mauch explains that the consumer electronics buying group “believes in the local brand and the local dealer” as it aims to excel in local product availability. Therefore, the group intends to pool as many Euronics dealers on the Euronics.de as possible. In an ideal scenario, Mauch said, the website would offer 15,000 different items. For any item, the website would depict the dealer who has the requested product in stock within a 20 kilometre radius. If the item is out of stock, it would be shipped from the nearest outlet. As usual for a buying group, the product prices are set by the individual dealer so the competitive environment will be taken into account. Euronics says farewell to its proprietary online shop system as it now embraces a solution from the e-commerce specialists Shopware. The updated concept will feature various payment options, responsive design as well as a click-and-collect functionality. In addition, the new solution will automatically feed dealer information into local portals such as “Yelp” or “Meinestadt.de” to give the local dealer a higher visibility. It will be interesting to see how customers respond to Euronics’ approach. In any case, the buying group could well need some fresh online impetus as it has seen its sales slide over three consecutive years, due to strong price competition, market saturation and the rise of Amazon, ebay and the likes. The new online shop will prove a success only if Euronics convinces its local dealers to join.
CARREFOUR to exit India July 08, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89359 Carrefour announced yesterday its intention to close its five cash & carry outlets in India, ending its four-year presence in the country. The closure of Carrefour’s business in India will be completed by the end of September 2014. Carrefour is reportedly in advanced talks with a potential buyer of its India assets, according to a source with direct knowledge of the matter. It was reported last month that Walmart had entered into talks to buy some of the French retailer’s outlets in India. Carrefour had previously put expansion of its Indian business on hold, on account of both internal and macro issues. Internally, it has undertaken a major international asset rationalisation programme. On a macro level, progress in India has been held back by local legislation. Despite the apparent ‘opening up’ of the Indian market for multi-brand retailers, Carrefour has not made significant plans for further development. Although on the surface the new legislative framework appears more favourable, it still presents a number of hurdles for international retailers. In fact, expansion is likely to prove more difficult now that power / decision-making is devolved to local governments, exacerbating other more general challenges, such as procurement and logistics.
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Financially, expansion in India is also proving expensive, with a poor return on capital in the medium term. Carrefour may well have decided its efforts and funds could be better employed in fixing key markets in Western Europe, China and Brazil.
7-ELEVEN USA partners with Nexxus Group July 08, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89356 7-Eleven has signed an agreement with The Nexxus Group to employ its scan-based trading (SBT) process to handle payments with its newspaper distributors, Convenience Store Decisions reports. The Nexxus Group will use its proprietary SBT programme to manage the newspaper category invoices across the Seven & I-owned convenience store operation in the US. This move should help to simplify the process in 7-Eleven stores.
MOTHERCARE approached with yet another takeover bid July 07, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89348 After rejecting two takeover offers from the maternal apparel retailer Destination Maternity, Mothercare is now faced by yet another bid from the US rival. Mothercare had denied the proposals earlier on the grounds that the bid offered was undervaluing the business. The refusal has been backed by two financial services corporations, Fidelity and Allianz. Reports suggest that Ed Krell, Destination Maternity’s Chief Executive is flying to London this week to negotiate talks with the major investors in Mothercare to strike a deal.
SAFEWAY (USA) to sell mall business July 04, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89346 Safeway (USA) has opted to sell its shopping centre development business, reports the Financial Times. The sale is expected to fetch around USD1 billion. The development business was set up to secure land and construct retail complexes in which Safeway would be the anchor tenant. The divestment is likely to attract interest from real estate companies and private equity buyers. Safeway, which was acquired by rival Albertsons for USD9 billion in March this year, has hired Eastdil Secured to find buyers for the development division and has asked for bids to be placed this month. However, it is unclear if any bids have yet been placed and any sale could be many weeks away. The sale of the real estate business is part of a wider disposal of assets by Safeway. As part of the sale to Albertsons, Safeway will also look for buyers for its Mexican business.
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FAMILYMART, YIHAODIAN in O2O tie-up July 04, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89335 FamilyMart will partner with Walmart China's Shanghai-based e-commerce grocery operator Yihaodian to allow customers to collect shopping at 300 participating FamilyMart outlets in the city, reports the Shanghai Daily. Personal identification and a verification code on mobile phones will be required to facilitate collection. The majority of the 1,100+ FamilyMart outlets in China are located in Shanghai. Amazon China launched a similar service last year, allowing parcel pick-ups at FamilyMart stores, initially in Shanghai, but now also available in other locations like Beijing. E-commerce retailers in China are more and more seeking partnerships with offline stores, trying to solve the problem of high costs of the last mile. FamilyMart is also leveraging underused instore pick-up stations to work with more e-commerce retailers and attract traffic to their stores.
BASKIN-ROBBINS re-enters the Philippines July 03, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89325 Dunkin’ Brands-owned Baskin-Robbins has opened its first store in the Philippines with local partners IceDream, reports abs-cbn news. This marks the return of the ice cream brand, decades after it opened in the early 1990s. Planet Retail first announced the brand’s re-entry in April 2013. The first outlet will be located at the Central Square Cinema in Bonifacio Global City, Manila. Michael Dargani, President of IceDream, said: “We wanted to position the brand in a certain way, so there are strategic areas where we want to be present first to sort of establish Baskin-Robbins. Eventually, we will open in all kinds of different locations, but we wanted to start in a location which is within the profile of our clientele.” Baskin-Robbins will face tough competition in the region from other ice cream brands such as Morelli’s, Swensen’s and Cold Stone. It will be really interesting to watch how the brand will perform in the extremely competitive environment. Two years ago, the premium brand Haagen-Dazs closed down its Philippines operations due to an increasingly challenging business environment. In order for Baskin-Robbins to attract customers they will need to be competitive on price and offer a wide range of flavours. What’s more the company will need to keep a close eye on its competitors and local consumer trends.
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EBAY extends ARGOS partnership July 03, 2014 | Planet Retail http://www.planetretail.net/NewsAndInsight/Article/89324 Argos is set to roll out its eBay click & collect service to more stores as the general merchandise retailer extends its partnership with the online giant, reports Retail Week. The initial six-month trial, which began in September last year, enabled eBay shoppers to collect online orders from 150 Argos outlets. This is now set to be extended to some 650 stores and will encompass a significantly greater number of eBay merchants from the original 50. This latest news clearly hints that the deal has thus far proved lucrative for both retailers. As the battle for fulfilment heightens across the retail landscape, it is becoming increasingly necessary for pure-play retailers to provide additional collection points. For Home Retail Group-owned Argos, the tie-up enables the company to further exploit the advantages of its physical presence on the UK high-street. However, Planet Retail believes caution must be exercised in extending the product ranges available for collection. Argos must ensure that there is minimal product overlap to prevent cannibalisation of its own sales.
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