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Subject:
RETAIL BUSINESS
Period: April 15, 2014 to May 1, 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
 

McDonald’s Breathes New Life Into McGriddle Marketing

The fast-food breakfast war rages on, as McDonald’s – king of the quick-service morning meal mountain with a 31 percent market share – counters Taco Bell’s successful Waffle Taco introduction with a new ad campaign for an old standby, the McGriddle. The Waffle Taco itself is Taco Bell’s answer to the Egg McMuffin, but McDonald’s is countering with a renewed emphasis on the sweet-plus-savory McGriddle, launched in 2003 as a pancake-wrapped sandwich. The new campaign so far is confined to the McDonald’s Web site: the company has not yet launched a social media initiative.

"McDonald’s Is Taking On the Waffle Taco With This One Sandwich", Time.com, April 14, 2014

 
Companies, Organizations  

Tesco's Troubles Continue; Expected To Report Second Annual Profit Decline

UK supermarket chain Tesco is expected to report a 6.1 percent decline in trading profit to £3.24 billion for the year ending February 14, 2014, from £3.45 billion in the previous year,its second consecutive decline in annual revenue. With its market share and stock price at record lows, the retailer has seen its business suffer from shifting trends in the country’s grocery market, such as the expanding presence of international discount retailers Aldi Stores Ltd. and Lidl UK GmbH. Also hampering Tesco’s operations and sales is the growing trend of UK consumers shopping online and in convenience stores. Although these trends are also affecting rival Asda Stores Ltd., the retail chain owned by Wal-Mart, Tesco seems to have been affected the most.

"Tesco's Troubles Pile Pressure on CEO Philip Clarke", Wall Street Journal, April 14, 2014

Sweden's H&M and Ikea Top 2013 List Of Leading Retail Brands In Europe, Interbrand Says

Sweden’s fast fashion retailer H&M is the top retail brand in Europe in 2013, according to brand consulting firm Interbrand. Results of a study conducted by the company also highlighted the importance of having a strong brand in the retail sector, which lets retailers influence customer choice and loyalty, attract and retain top-quality workers, and reduce the cost of financing. Furniture retailer Ikea, fashion seller Zara, retailer Carrefour, and UK’s supermarket chain Tesco make the rest of the top 5 retail brands. Among the next 5 in the top 20 brands list are UK retailer M&S, French food retailer Auchan, retailer Boots, discount retailer Aldi, and French cosmetics retailer Sephora.

"Analysis: What are the top 20 retail brands in Europe?", Retail Week, April 14, 2014

Target: No. 22 in the DiversityInc Top 50

DiversityInc, April 24, 2014

Wal-Mart de Mexico's Net Profit Down on Year

Wall Street Journal, April 23, 2014

Wal-Mart Faces Uncertainty Over India

GuruFocus, April 18, 2014

Earnings Release  

Safeway Suffers Loss, Announces Slight Revenue Gains In 1Q 2014

Retailer Safeway Inc. reported a net loss of $83.1 million for the first quarter of 2014, including foreign-currency translation loss of $153.1 million and acquisitions-related costs of $4.1 million. Sales and other revenue grew 1.0 percent to $8.3 billion in the fourth quarter from $8.2 billion the first quarter of 2013. Gross profit declined 34 basis points to 26.15 percent during the quarter, compared with 26.49 percent in the first quarter of 2013, the company said. Operating and administrative expense rose 40 basis points to 25.49 percent of sales during the quarter, compared with 25.09 percent in the first quarter of the previous year.

"Safeway Inc. Announces First Quarter 2014 Results", Safeway, April 23, 2014

Tesco Reports Weaker Sales And Profits For FY 2014

Tesco reported group sales with VAT rose 0.3 percent to £70.9 billion for the fiscal year ending February 22, 2014, compared with the previous year. Group trading profit declined 6.0 percent to £3.315 billion, due to weaker UK grocery market in the second half of the year and challenges encountered by the company in overseas markets. Trading margin fell 5.17 percent, 34 basis points lower. Underlying profit before tax also fell 6.9 percent to £3.054 billion, while group profit before tax was £2.259 billion, after one-time charges of £801 million, the company said. Despite these charges, group profit before taxes rose 9.8 percent. Also, the company said net finance costs rose slightly to £315 million from £309 million in the previous year. Capitalized interest dropped by £44 million to £79 million.

"Tesco Preliminary Results 2013/2014", Tesco, April 16, 2014

Tesco profits fall: what the analysts say

theguardian.com, April 16, 2014

Market News  

Wal-Mart's Troubles Persist In Brazil After Two Decades

Wal-Mart Stores Inc. is struggling in Brazil, losing money after more than 20 years of presence in South America’s biggest retail market. The company’s emphasis on “everyday low prices” has not helped it significantly in battling rivals Carrefour SA and Casino Guichard-Perrachon SA. Brazilian consumers seem to prefer the “best deals” offered by the French retailers. Also hurting the U.S. retailer’s business in Brazil is its failure to integrate its operations, including its purchasing and IT operations, which has prevented it from using the scale to demand better prices from its local suppliers. Wal-Mart’s troubles in Brazil mirror its missteps in other overseas markets, such as in Germany and South Korea in 2006 and more recently in China.

"Wal-Mart’s Everyday Low Prices Fail to Stir Brazilians", Bloomberg, April 23, 2014

Wal-Mart Eyes 50 More Wholesale Stores In India

Wal-Mart Stores Inc. said it plans to open 50 new wholesale stores in India and launch an online business aimed at selling to small shopkeepers in the country. Currently operating 20 wholesale outlets in India, Wal-Mart said it would open the new stores in the next 4–5 years. The move comes several months after the retailer dropped its plans to launch its retail business in India. Wal-Mart’s operations have been adversely affected by an internal investigation into alleged bribery, confusion over India’s foreign investment rules, and its termination of its business partnership with Bharti Enterprises.

"Wal-Mart plans 50 more India wholesale outlets, e-commerce launch", Yahoo Finance, April 08, 2014

Introducing NEW Seventh Generation Concentrates

Seventh Generation, April 28, 2014

Marketing & Advertising  

Waitrose Begins Trial Period For In-Store Cheese And Wine Tasting Concept

UK retailer Waitrose is testing an in-store concept, which involves serving gourmet cheese boards and wines by the glass at one of its supermarkets. Designed to allow customers to try products sold at the Keynsham Somerset store, the concept includes benches, tables, a fresh juice bar, and a wine tasting area. Waitrose also offers wine tasting at its stores in Cambridge and Kingston.

"Waitrose trials in-store wine bar", The Drinks Business, April 21, 2014

Walmart Studies Click And Collect At Asda Store

Walmart is evaluating the pilot “click and collect” program at the Asda store in Pudsey, England, for lessons that the retailer can possibly adopt for its grocery operations in the United States. Designed to allow shoppers to pick up their purchases from temperature-controlled lockers, the program also involves lockers with three temperature-based zones: chilled, frozen, and ambient. With the UK more advanced than the US in terms of online grocery shopping, Asda can help its parent company in determining which technologies and strategies to adopt in the home market. Click and collect is expected to grow at a much faster rate than home delivery in the UK, according to consulting firm OC&C.

"Walmart’s English experiment", Financial Times, April 21, 2014

Sephora and the Upstarts

The New York Times , April 30, 2014

Survey spots pricing trends of the big five

Independent Newspapers, April 20, 2014

Press Release  

Wal-Mart Reports Mix Of Higher Sales, Lower Profits For FY 2014

Wal-Mart reported consolidated net sales increased 5.0 percent for fiscal year ending on January 31, 2014, driven by the 3.1 percent growth year over year in retail square feet, increase in ecommerce sales, and the impact of acquisitions made in the previous fiscal year. However, these positive effects were partially offset by the $5.1 billion negative impact from currency exchange fluctuations and declines in comparable store sales in the U.S. market and several overseas operations. Comparable store and club sales in the U.S., including fuel sales, declined 0.5 percent in fiscal year 2014, compared with the previous year. Sales were negatively affected by decline in consumer spending due to slower-than-expected economic recovery, the 2 percent increase in payroll tax rate in 2013, and reduced government food benefits, as well as the severe winter storms affecting the country during the fourth quarter.

"Walmart 2014 Annual Report", Wal-Mart, April 23, 2014

Carrefour, Partners Launch CARMILA Real Estate Management Firm

Retailer Carrefour partnered with several investors to launch CARMILA, a company created to help improve the value of shopping centers located next to hypermarkets owned by the company in France, Spain, and Italy. Carrefour will own 42 percent of CARMILA, which will operate real estate properties and assets valued at €2.7 billion. With initial funding of €1.8 billion in equity, CARMILA will not be part of Carrefour’s accounts. Carrefour will contribute €0.8 billion, while Amundi, Axa, Blue Sky Group, BNP Paribas Cardif, and other partner investors will add the remaining €1 billion.

"Carrefour announces the completion of its agreements with Klépierre and the creation of CARMILA, a company dedicated to enhancing the value of its shopping centers in Europe", Carrefour, April 16, 2014

Products & Brands  

Target Netherlands Adds Method's Airopack Air Fresheners To Environment-Friendly Product Line

Retailer Target’s Netherlands division added Method’s Airopack line of home fragrances to its range of ecology-friendly and organic products. Target chose leading brands whose products are already being sold at its stores, and called on them to offer products that are natural, organic, or sustainable. Method’s home air fresheners come with the Airopack air-powered dispensing system the company claims offers a “fully transparent, all-plastic pressurized dispenser” that combines effectiveness and environment-friendliness.

"Airopack's Air-Powered Room Fresheners to Join Target's New Sustainable Range", PR Newswire, April 17, 2014

Walmart To Launch Inexpensive Two-Tier Money Transfer Service

Walmart announced a low-cost service that allows customers to transfer money to and from more than 4,000 Walmart stores in the U.S. The Walmart-2-Walmart Money Transfer Service, available beginning April 24, will cost about half of what competitors are charging. The fee structure includes two transfer pricing tiers: up to $50 for $4.50 and up to $900 for $9.50. Competitive offerings can have as many as 10 or more fee tiers and charge up to $70 for transferring less than $1,000. Money transfers above $50 make up the majority of transactions in the U.S., according to Walmart, which noted that about 28 percent of Americans are either underbanked or unbanked. Millions use money transfers to maintain household budgets or help friends and family in times of crisis, the company said.

"Wal-Mart to unveil new service with electronic payments provider", Reuters, April 16, 2014

A personal touch gives smarter rewards

Marketing Week, April 17, 2014

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