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Subject:
RETAIL BUSINESS
Period: January 1, 2014 to January 15, 2014
Geographies:
Worldwide
Categories:
Comment & Opinion or Companies, Organizations or Consumers or Controversies & Disputes or Deals, M&A, JVs, Licensing or Earnings Release or Finance, Economics, Tax or Innovation & New Ideas or Legal, Legislation, Regulation, Policy or Market News or Marketing & Advertising or Other or People & Personalities or Press Release or Products & Brands or Research, Studies, Advice or Supply Chain or Trends
Contents
 

Wal-Mart Turns To Online Sales For Growth

Talking to Fortune magazine, Neil Ashe, Wal-Mart’s head of e-commerce, said that the boundaries between offline and online are blurring as consumers increasingly expect a seamless transition between the two. Wal-Mart has been relatively late to e-commerce, but Ashe’s remit is to make e-commerce central in the retailer’s strategy. Consumers are becoming used to choosing from a variety of purchasing and delivery/collection options, and Amazon has been at the forefront of this change, with innovations like its Prime service. Wal-Mart gets it too, but it has done little to compete with Amazon online. Ashe sees the way forward for Wal-Mart as leveraging its existing assets and making them “contemporary”, and since joining Wal-Mart in 2012 he has been acquiring tech startups, allowing the retailer to trial social gifting and subscription boxes. Wal-Mart has a long way to go for its e-commerce effort to “move the needle”, but Ashe says it is learning. 

"At Wal-Mart, moving the needle on e-commerce", Fortune, January 07, 2014

Online Grocers Continue To Address Negative Comparisons With Traditional Supermarkets

Online grocery shopping has had limited appeal, restricted by negative consumer perceptions of selection, price and delivery options, but competition in the market is changing that. This Wall Street Journal writer organized a shopping comparison and found that some online services are performing close to offline stores in terms of selection and convenience, and also price, driven by the expansion of online retailers like Peapod and FreshDirect, as well as the launch of AmazonFresh. Walmart has been trialing its Walmart To Go service in two cities, and further impetus is coming from new services, such as Instacart. Having others choose your food still puts off many from using online services, but for others it’s an advantage. There remain a number of issues still to address, such as minimum orders, what to do with all the delivery boxes, and product substitutions, but the retailers are taking notice and competition will help ensure these problems are ironed out.

"Do Online Grocers Beat Supermarkets?", Wall Street Journal, January 07, 2014

Online Christmas Sales Booming In The UK, Driven By Mobile

Analysis of sales in the UK for the Christmas 2013 period shows that some of multichannel retailers were seeing continued switching from offline to online purchasing. Sales at John Lewis were up 6.9% on a like-for-like basis in the five weeks to 28 December 2013, but online sales jumped 22.6%. johnlewis.com contributed nearly 32% of all John Lewis sales in this period. Its Click & Collect orders were up over 62%. House of Fraser saw like-for-like sales increase 7.3% in the three weeks to 28 December, but online sales were up nearly 58%. The IBM Digital Analytics Benchmark shows that online sales on Boxing Day 2013 were up over 40% on the same day in 2012. Mobile commerce is gaining traction. Christmas Day traffic from mobile phones and tablets represented three quarters of total online traffic, and IBM data for Boxing Day show that 58% of online traffic came from mobile devices, and particularly smartphones (nearly 30% of all online traffic), but the tablet was the device of choice
...  More

"Christmas 2013 ecommerce stats round up: John Lewis, Amazon and m-commerce", eConsultancy, January 02, 2014

Brooklyn’s New Whole Foods Market Is About As “Green” As A Grocery Can Get

The newly opened Whole Foods Market in Brooklyn, N.Y., may be an example of how eco-friendly stores could be built in the future. The 56,000-square-foot facility is 60 percent more energy efficient than requried by building codes, thanks to an array of advanced technologies. These include a combined heat-and-power system designed to keep the store operating even in a power failure. The store uses highly efficient and zero-ozone depleting refrigeration equipment and high-efficiency lighting and daylighting to illuminate the store. On-site renewable energy features include 324 kilowatts-worth of solar canopies over the parking lot that will supply about 20 percent of the store's electricity.

"Whole Foods opens one of nation’s most energy-efficient markets", GreenBiz , January 02, 2014

KFC’s Aggressive Expansion Strategy In India Vaults It To No. 3 In Market Share

Euromonitor says fast-growing Yum! Brands’ KFC is quickly gaining ground in the battle for market share in India, a country with huge but so far unrealized sales potential for fast-food companies. In 2012, KFC posted a 45 percent growth in value, with a year-over-year 41 percent increase in outlets (a net growth of 62). That speedy growth rate has made KFC the third-ranked brand in India, despite being a late entrant in the market (just three outlets ten years ago). The company’s growth success – compared to competitors Baskin-Robbins, Burger King, Domino’s, Pizza Hut, and McDonald’s – is due to “clever localization, savvy pricing strategies, and successful consumer education”. In addition, its menu appeals to the mercurial tastes of “sophisticated, urban Indian consumers”.

"Third-Ranked KFC is Winning the Fast Food Battle in India – For Now", Report, Euromonitor International, December 24, 2013

Returns Cloud Online Retail's Otherwise Rosy Outlook

In the United States, about a third of all products sold online are returned by consumers to online retailers, according to retail consulting firm Kurt Salmon. UPS said it expects product returns to increase 15 percent in the 2013 holiday shopping season, compared with the previous year. Rival FedEx’s survey of consumers’ holiday gift returns revealed about a third of U.S. consumers will return at least one gift after the holidays. Driven by free shipping and online retailers’ relaxed returns policies, the trend has prompted online sellers to mine their data for ways to encourage consumers to keep their purchases. For example, Kynetic LLC’s fashion discount seller Rue La La, which spent $5 million on returns in 2012, is testing a program that automatically identifies consumers who habitually return products and reminds them to choose products carefully as they purchase online. Such programs may result in fewer discount offers for constant returners and better offers for consumers ...  More

"Rampant Returns Plague E-Retailers", Wall Street Journal, December 22, 2013

Whole Foods Market’s Successful (So Far) Rural Expansion Strategy Confounds Skeptics

The snickering of investors, competitors and Wall Street analysts has tapered off: Whole Foods Market’s two-year-old plan to expand to smaller cities in rural America is succeeding. Shoppers in places like Boise, Idaho, (population 212,000) haven’t, as expected, turned up their noses at more expensive sodas without artificial coloring and flavoring or meats from organically, humanely raised animals. Instead, they have enthusiastically embraced the store, pushing the company’s stock price steadily higher. About a third of the roughly 700 locations Whole Foods plans to open – up from 300 in 2011 – will be in cities like Lincoln, Neb., (pop. 260,000). A skeptical investment analyst who follows Whole Foods acknowledged the success: “At this very early stage, the strategy does appear to be working”.

"In a furious effort to expand, the chain is opening shop and looking for local suppliers in places like Boise, Idaho. ", The New York Times , December 16, 2013

Retail Market Posts Higher Sales In November 2013, Data From U.S. Commerce Department Show

In November 2013, retail sales in the United States rose 0.7 percent from the previous month, according to the U.S. Commerce Department. Posting the highest growth rate since June 2013, the retail market’s expansion is driven by growing consumer spending, job growth, and recovery in the country’s manufacturing industries. For example, high-end retailer Sport Chalet said sales rose 17 percent year over year in Thanksgiving weekend, while Missouri Harley-Davidson dealership owner Gail Worth said sales have returned to pre-recession levels. Data from the Commerce Department also revealed consumers spent more on furniture, electronics, and building materials, with retail sales rising 4.7 percent compared with the same period in 2012. This also convinced several economic analysts to revise upward their growth forecasts for the fourth quarter of 2013, with Barclays economist raising their estimate to 2.2 percent annual rate from 2 percent and J.P. Morgan Chase analysts upgrading from 1.5 ...  More

"U.S. Retail Sales Rose 0.7% in November", Wall Street Journal, December 12, 2013

 
Companies, Organizations  

Kroger Appoints Parker Head Of Convenience Stores Business

The Kroger Co. appointed Jeff Parker as its new president of convenience stores and small format businesses, replacing Van Tarver who is retiring from the company in August 2014. Tarver joined the company as president of the retailer Quik Stop Markets Inc. in 1997 and will continue to manage the retailer’s supermarket petroleum business. Parker, who joined the retailer in 1998, also worked in other units of the company, including Kroger Accounting Services-Hutchinson, Kroger Regional Office, and Kwik Shop.

"Kroger Names New Head of C-store Division", Convenience Store News, January 10, 2014

Amazon.com Finds Key To Attracting High-Income Shoppers

Amazon.com is attracting high-end consumers, according to a study from The Shullman Luxury and Affluence Monthly Pulse, which shows 69 percent of adult shoppers with a household income of $250,000 and higher are shopping at the online retailer. Data revealed 35 percent of Amazon shoppers and almost 60 percent of the company’s customers with $500,000 and higher household income prefer to buy designer and luxury products on the site. Also, approximately 60 percent of the company’s online shoppers purchase products at least once a month; however, the study revealed the rate is higher for customers with income of $500,000 or more.

"Amazon.com attracting more wealthy shoppers", Herald Tribune , January 07, 2014

Asda Launches UK Campaign Aimed At Making Rival Discounters Seem Expensive

Walmart’s UK subsidiary Asda plans to launch a £50 million marketing campaign that will include price promotions the company claims will make rival discounters, such as Aldi and Lidl, look expensive. As part of the campaign, Asda will cut prices of products from leading grocery and FMCG brands, such as Kingsmill, Heinz, Flash, and Domestos. Also, the retailer will offer lower prices for fresh foods, including meat and vegetables. An above-the-line campaign created by VCCP Blue will support the value message.

"Asda challenges 'expensive' Aldi and Lidl with £50m value campaign", Marketing Magazine, January 04, 2014

Baking Entrepreneurs Find A Successful Formula For Pretzels – And Franchising

A trio of Indiana entrepreneurs who “like to eat” not only founded a flourishing pretzel baking business just five years ago, they are succeeding at franchising their business model. With no food industry or pretzel baking experience, the men, with help from their wives, developed and refined a recipe for pretzels. The proprietary recipe is now mixed by the company and provided to all of its retail locations, both company-owned and franchises. The recipe is also the same used in the take-home kits sold online and in super markets in Indiana. The ambitious company opened five franchise locations in 2013, have a sixth and a seventh in the works – for a total of 13 stores – and hope to add 20 more stores in 2014.

"Dining A La King: Ben’s Soft Pretzels business rising fast", The Elkhart (Indiana) Truth, December 23, 2013

Target is 2013 Mobile Retailer of the Year

Mobile Commerce Daily, December 31, 2013

Market News  

Delhi Announces Policy Banning Foreign-Controlled Supermarkets From The State

Delhi’s state government announced its plan to refuse foreign-owned supermarkets license to open and operate retail stores in India’s capital. Reversing the previous administration’s policy, which was in agreement with the federal government’s foreign direct investment reforms announced in 2012, Delhi’s policy announcement was part of the opposition party Aam Aadmi’s key campaign promises against the ruling Congress party of Indian Prime Minister Manmohan Singh during the recently concluded state elections. Singh’s FDI reforms would have allowed foreign supermarkets to own a majority stake in local retail chains and was promoted as a means to help the country end the current economic slowdown. Small family-owned stores and labor leaders, however, opposed the government’s FDI reforms.

"Foreign supermarkets face shut-out in Delhi", 4-traders, January 14, 2014

Carrefour Focuses on Reviving Hypermarts To Strengthen Overall Business In France

Reforms instituted by Carrefour’s new CEO Georges Plassat helped the French retail giant improve the sales of its hypermarket business by 2 percent in the quarter ending September 2013, compared with the previous year. Intense competition in France’s hypermarket sector has adversely affected Carrefour’s revenue performance, with the company’s hypermarkets losing market price leadership to rival Leclerc. After returning his company’s focus on its domestic business, Plassat emphasized his plans to simplify business strategy and reduce centralization to help enable stores compete more strongly at the local level. Also, Carrefour’s plan to launch smaller hypermarkets in selected urban areas in the country can help the retailer regain its reputation as the market’s price leader.

"Carrefour: Reinventing Hypermarkets to Support Their Revival", Euromonitor International, January 14, 2014

Amazon Gave The Best Web Experience For 2013 Holiday Shoppers

A survey of over 67,000 consumers conducted by ForeSee asked which brands provided the best online experience over the 2013 holiday period. It found only 14 of the 100 largest retail brands delivered substantially above the average 79/100 consumer satisfaction score. The top performer was Amazon, with a score of 88. Avon has shown that it is developing its channel reach, and scored 83. Estee Lauder, with 82, provided a high-glamor site and a “more ways to shop” option that includes discontinued merchandise and gift cards. Walmart was above average, but only just, and its score of 80 was below Publix and QVC, both with 83. Others in the top 14 were: Vitacost (86); Keurig (84); L.L. Bean (84); Barnes & Noble (83); Bass Pro Shops (83); Apple (82); Disney Store (82); Shutterfly (82); and Victoria’s Secret (82). Interestingly, although the average score for the online experience was 79, it was 83 overall, indicating a better offline experience generally. 

"Who Won The Web -- The 14 Best-Loved Brands Online", Forbes, January 09, 2014

Walmart Plans Expansion Moves In Vietnam

US retailer Walmart is looking for expansion opportunities into Vietnam, according to Walmart Global Procurement vice president Bill Foudy. He said the retailer plans to sell Vietnamese exports at its retail stores and to launch its retail business in the country. Foudy, after meeting with Vietnam’s Deputy Prime Minister Vu Van Ninh in Hanoi, said his company’s operations will help improve cooperation between the US and Vietnam.

"Walmart seeks business opportunity in Vietnam", The Global Times, January 08, 2014

Costco Spends $110 Million To Expand Australian Operations

U.S. discount retailer Costco invested an additional $100 million to finance its ongoing expansion in Australia. As part of its efforts to compete with local retailers Woolworths and Coles, Costco is building big-box warehouse stores in the country, with its sixth store currently being built in Brisbane. Documents submitted by the company with the Australian Securities and Investment Commission revealed Costco Wholesale Australia earned $612 million in revenue in the year 2012–2013, which also marks the second consecutive profitable year for the company.

"Costco gets another $110 million from US parent for Australian expansion", The Sydney Morning Herald, December 30, 2013

European Sugar Cookie Becomes Big Business In North Carolina

A Southern regional baking specialty – the Moravian sugar cookie – that has attracted a worldwide audience actually originated in old Czechoslovakia, making its way to North Carolina with immigrants escaping religious persecution in the 1700s. It’s become big business in the Winston-Salem area, represented by Dewey’s, which annually produces a million pounds of the sweet treat – round, thin, serrated on the edges and packed in Pringles-like tubes – and by Mrs. Hanes, whose 110,000 pounds a year are produced the old-fashioned way, rolled out and cut by hand. Dewey’s strategy is to modernize the Moravian cookie: it now offers variations on the basic theme, including chocolate-dipped, a “S’Moravian” (toasted marshmallow between two chocolate-dipped ginger cookies) and a ginger cookie topped with blue cheese, toasted walnuts and honey.

"Moravian cookies grow beyond Winston-Salem", The News & Observer (Raleigh, N.C.), December 21, 2013

METRO GROUP Trading Statement Q1 2013/14

METRO GROUP, January 13, 2014

India growth story very much alive

The Business Times Singapore, January 10, 2014

Marketing & Advertising  

Target Plans To Start Selling High-End Skincare Products

Retailer Target plans to start selling a line of high-end skincare products, including the brands Vichy and La Roche-Posay. To be sold in stores and on the company’s online retail site Target.com, the lineup will also include a product line from dermatologist Brian Zelickson. Target’s previous collaboration deals with designers include those with Missoni, Rodarte, and 3.1 Phillip Lim.

"Target To Introduce New Premium Skincare Options", The Huffington Post, January 10, 2014

Aldi Launches Campaign Claiming Shoppers Can Save By Switching From Rival Supermarkets

UK retailer Aldi launched its latest Swap & Save marketing campaign. Set to run in print, online and on television, the campaign focuses on the information gathered by the retailer from four consumers who shopped for a four-week period at a major rival supermarket and switched to Aldi for the same length of time. Aldi claims through the campaign that shoppers saved an average of £28 per week by shopping at its stores, with some shoppers reporting savings of between £30 and more than £50. Also, Aldi rejected suggestions that the campaign was a response to rival Asda’s move to reduce prices of products it sells.

"Aldi trumpets consistent savings in latest Swap & Save push", The Grocer, January 07, 2014

Do Online Grocers Beat Supermarkets?

Wall Street Journal, January 07, 2014

Big Data’s Impact on 2013 Holiday Sales

Practical Ecommerce, January 02, 2014

Rampant Returns Plague E-Retailers

Wall Street Journal, December 22, 2013

Products & Brands  

Queensland Retailers Keep Rexona Deodorant From Sight To Prevent Chroming By Young People

Supermarket chains Coles and Woolworths removed Rexona deodorant products from the shelves of their stores in Mount Isa, Queensland, to help prevent young people from sniffing the brand’s volatile substance. The step was taken by the retailers following their discussions with nonprofit group Young People Ahead, as well as with the Queensland Police Service. Coles and Woolworths replaced the products with a sign informing customers that they could buy the deodorants from the customer service department.

"Rexona hidden to reduce chroming", North West Star , January 12, 2014

Indiana Bakery Owner Thrives By Delivering Healthful Products For Special Needs

Working under the theory that “bad” bacteria in her autistic daughter’s gut – nourished by preservatives, refined sugars, and corn starches – were encouraging her symptoms, a baking entrepreneur created a product line that turned out to have wide appeal. Nutty Bakery (Indiana) owner Amy Ervin bakes her products – gluten free and lactose free – using coconut or almond flour and none of the “unhealthy” stuff. Her baked goods "starve" the bad bacteria, she believes. She also sells organic bakery items for “paleo”, vegan and other specialized diets. Customers include cross-fit trainers and parents of autistic children. Most of her orders come from her Web site, and she ships all around the U.S.

"Special Foods Specialist", The Courier-Times (New Castle, Indiana), December 16, 2013

100 Things to Watch in 2014

J. Walter Thompson Intelligence, December 26, 2013

Trends  

UK's Premium Beauty Market Forecast To See Some Changes, Growth In 2014, Analyst Says

After a booming 2013, the UK’s premium beauty market is forecast to have more of the same in 2014 but is likely to see some changes including an increase in merger and acquisition deals, online traders launching their high street operations, and retailers reducing the brands they carry. Unlike what happened in Christmas 2013, consumers are less likely to see broad discounts offered by retailers. Also, the market is expected to get significant boost from the fast-growing men’s grooming segment, but could lose some drive from the absence of a new product trend as big as the BB creams.

"What’s Hot in 2014? Our Predictions for Premium Beauty", Imogen Matthews , January 09, 2014

Foodservice Companies Are Increasingly Hip To Consumers’ Love Of Exotic Breads

Emerging trends in in-store and other retail bakeries include breads made with whole grain, sprouted grain, and ancient grains, along with savory loaves, pretzel breads, vegetable-fortified breads, and ethnic flatbreads. Mintel says 36 new varieties of flatbreads were launched globally over the last year, the most popular claims being microwaveable, low transfats and high fiber. Almost two thirds of these launches were in the U.S. and South Africa. Also trending strongly were Latin-American influences, breads from the East and gluten-free breads. A food and beverage analyst sees in-store and retail bakery opportunities in high-protein breads and niche products for an aging population. Quick-service restaurants have also started experimenting heavily with exotic bread varieties.

"Grocery chains turning to exotic options to make a crust", Irish Examiner, December 23, 2013

YooMee Helps Open Up Africa's Web Market

Wall Street Journal, January 09, 2014

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