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Subject:
RETAIL BUSINESS
Period: June 15, 2014 to July 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
 

Shoppers In U.K. Are Comfortable Buying Store Brand Foods

A survey of a thousand British food shoppers finds that a majority (55 percent) believe the best of the “own label” (i.e., store or house) brands are as good as national brands, and 63 percent regard “regular” own-label brands the same quality as major brands. The bottom line is that shoppers have grown very comfortable buying store brands in most – but not all – categories. Sixty-one percent of shoppers regard “value” own-label brands as worse than manufacturer brands. Only 27 percent see them as the same. A spokesman for the research company that conducted the survey says the results certainly show the impact of the recession on food shopping. But they also show a longer-term trend: retailers are more sophisticated in developing and marketing their store brands.

"Retailer brands are holding their own", Marketing Week, June 18, 2014

 
Companies, Organizations  

Wal-Mart U.S. Continues Reorganization; Appoints New Merchandising Executives

Wal-Mart Stores, Inc. appointed 13 executives as part of the retailer’s reorganization of its U.S. merchandising operations. Included in the changes are Scott Huff’s promotion to executive vice president in charge of merchandising operations in the country and the appointment of several new executives to manage consumables and sales innovation. Wal-Mart’s latest round of reshuffling under the watch of CEO Doug McMillion, who was appointed in February 2014, comes after the appointment of a new head of the retailer’s Walmart.com online business and the promotion of Wal-Mart Canada CEO Shelley Broader as leader of the company’s businesses in Europe, the Middle East, and sub-Saharan Africa.

"Wal-Mart Appoints 13 Merchandising Executives in Shake-Up", Bloomberg, June 24, 2014

Wal-Mart Appoints Van Den Berghe As Head Of Canada Operations

Wal-Mart Stores, Inc. appointed food retailer Delhaize Group SA executive Dirk Van den Berghe as chief executive officer of Wal-Mart Canada. His predecessor, Shelley Broader, was named in charge of Wal-Mart’s operations in Europe, the Middle East, and sub-Saharan Africa. Effective on August 1, 2014, Van den Berghe’s appointment is part of Wal-Mart CEO Doug McMillon’s reorganization of the retailer’s management structure since his appointment in February 2014.

"Wal-Mart Names Delhaize’s Van den Berghe as Canada Chief", Bloomberg, June 21, 2014

Tesco Announces Store Management Reorganization, Merger Of Metro And Express Divisions

Tesco completed a reorganization of its senior store management department, which includes the merger of its Metro and Express divisions. As part of the revamp, newly appointed operations director Tony Hoggett was named as retail director in charge of all superstores and Extra store formats. Also, Tesco said it will discontinue its store-format-based organization and will now group all superstores and Extra stores based on their geographical locations. Three regions, north, central, and south, came out from the revamp.

"Metro and Express merge as Tesco redraws map", The Grocer, June 15, 2014

Waste Not, Want Not Is The Motto Of A Pacific Northwest Bakery Group

A century-old bakery group in the Pacific Northwest is making huge strides in its efforts to become landfill-free: recycling everything from product and packaging waste to scrap metal, used oils, paper, cardboard, and plastic. The store in Spokane, Wash., in fact, is 100 percent landfill-free, having figured out a way to recycle, re-use or repurpose just about everything the store consumes in running the business. For example, it filters bakery equipment lubricant oil to re-use as heating fuel for the heater in its truck maintenance garage. Whatever can’t be recycled is sent to a waste-to-energy plant to help provide electric power for the region.

"Bakery Achieves Landfill-Free Status", Environmental Leader, June 11, 2014

eBay Launches Online Market For U.S. Fashion Designers

E-commerce giant eBay launched the Designer Collective, an online marketplace which features and sells products from 16 American fashion designers, such as Calvin Klein, Nicole Miller, and Rebecca Minkoff. eBay’s online fashion hub will let these designers own and manage their own online shops selling their latest fashion collections. With more than 145 million active users, eBay claims its online store can help these brands reach more potential customers. In return, these fashion stores will bring in new users to eBay, and help it rebrand itself into something more than an online auction site.

"EBay Launches New Shops For Major Fashion Designers", Fast Company, June 10, 2014

Wal-Mart Expects 30 Percent Growth For Online Revenue In FY 2015

Wal-Mart, the world’s largest retailer and operator of almost 4,000 stores in the U.S. alone, said it hopes to see a 30 percent growth for its ecommerce revenue in 2014. With online retail sales in the country growing 9 percent in 2013 and forecast to expand at a compound annual growth rate of 9.5 percent until 2018, Wal-Mart can also count on its omni-channel initiatives, improved product variety offered online, and enhanced delivery efficiency. Also, the retailer is confident it can use its presence and network across the country in competing strongly against online retail giant Amazon. After growing 27 percent in the first quarter of fiscal year 2015, Wal-Mart’s online revenue trends imply the company is likely to hit its online revenue growth target.

"Wal-Mart Expects 30% Rise In E-Commerce Revenues This Year", Forbes, June 09, 2014

New MD and VP appointed at Unilever Ireland

Business and Leadership, June 24, 2014

Imagining a more modern grocery store

Chicago Tribune, June 11, 2014

2014 Effie Awards

Effie.org, June 06, 2014

Legal, Legislation, Regulation, Policy  

China Arbitrator Rules Against Labor Complaint Against Wal-Mart

An arbitration committee in the city of Changde in China ruled against a labor complaint filed by the local chapter of All-China Federation of Trade Unions, a Community Party-sanctioned labor union, against Wal-Mart Stores, Inc. Union official Huang Xingguo said many of the complaining workers plan to appeal the arbitrator’s ruling, claiming they have not received fair compensation or timely notification about Wal-Mart’s closure of a store in the city in March 2014. Wal-Mart said it complies with China’s labor laws, treats its employees with respect, and appreciates that “the arbitrator has agreed through the decision.”

"China Panel Dismisses Labor Complaint Against Wal-Mart", Wall Street Journal, June 26, 2014

Wal-Mart Should Find Ways To Launch Retail Business In India Despite Country's Unwelcoming FDI Laws, Analysts Say

India’s strict foreign direct investment laws made Wal-Mart reconsider its plans to invest in the country’s retail market, which reached $518 billion in value in 2012 and is forecast to reach $782 billion in 2017. Market analyst Deloitte predicts the country’s growing middle class will spend about $3.85 trillion by 2020, which will help the retail sector expand at a CAGR of 15 percent. Although only 12.6 percent of the population forms its online user base in 2012, according to the World Bank, online retail sales grew from $249 million in 2008 to $2.31 billion in 2013. Prevented by India’s FDI laws from opening traditional retail stores in the country, Wal-Mart partnered with local conglomerate Bharti Enterprises to open Best Price, a chain of wholesale stores. Cash and carry represents a tiny part of India’s total retail market; hence, Wal-Mart needs to establish a presence in the country’s conventional retail segment.

"India's Foreign Direct Investment Laws Shouldn't Stop Wal-Mart's Retail Growth Plans", Seeking Alpha , June 25, 2014

Market News  

Lidl Reveals £220 Million Expansion Plans In The UK

Lidl announced a £220 million expansion program in the UK. As part of the expansion move, the company will open 20 new stores in the next nine months, raising the number of its UK stores to 620. Also, the discount retailer said it will hire 2,500 new employees for new and existing store branches. Reporting sales of £3.3 billion in 2013, Lidl’s share of the retail market rose from 3 percent to 3.6 percent in the 12-week period ending May 25, 2014. Sales increased 20 percent in the 12 months ending June 2014.

"Lidl unveils £220m expansion drive as it creates 2,500 new jobs", Retail Week, June 27, 2014

Shopping Centers Fall Out Of Favor With UK Shoppers

In the UK, as in the United States, shopping malls are becoming unpopular and going out of business. Data revealed that shopping centers are declining at faster rates than their high street counterparts. Also, market analysts say that the growth of online retail and the convenience online stores offer, as well as the growing importance of convenience stores, are driving this trend in retail that does not bode well for shopping malls.

"In Britain, like the US, the out-of-town shopping giants are dying", The Guardian, June 22, 2014

Amazon's Fire Phone Highlights Online Retailer's Expansion Moves

Amazon.com’s launch of the Fire Phone smartphone on June 18, 2014, highlights the company’s expansion and transformation from an online book retailer into a giant of the ecommerce world. The latest in the company’s lengthening line of devices used by Amazon to “anticipate and respond” to changes in how consumers read, shop, and entertain themselves, the Fire Phone comes with the Firefly button, which provides cloud-based information about what the phone sees or hears — a song perhaps, or a TV show. Most importantly, for the online retailer, it tells phone users how to buy it from Amazon. Forecast to become the world’s second-largest retailer in terms of sales by 2018, according to Kantar Retail, Amazon, which reported total revenue of $74.5 billion in 2013, sells 230 million items in the United States. It also launched the Kindle ereader and ebook business and Amazon Web Services cloud computing operations.

"Amazon Relentless.com: At 20 Amazon is bulking up. It is not—yet—slowing down", The Economist, June 21, 2014

Leading Retailers Join Initiative Seeking To Display Prices Of Products Sold Online

Some of the largest supermarkets and drugstores in the United States agreed to post prices of their products on their websites and mobile apps. Promoted by the office of New York’s attorney general Eric T. Schneiderman, the initiative includes leading retailers Walmart, CVS and Costco; however, online retail giant Amazon.com refused to participate in the initiative. At present, 19 states and the District of Columbia require stores to display the prices of products they sell.

"Big Retailers Agree to List Unit Prices on Websites", The New York Times, June 17, 2014

Wal-Mart Announces B2B Online Market For India

Wal-Mart Stores, Inc. plans to launch a business-to-business ecommerce marketplace in India in the first week of July 2014, according to Wal-Mart India CEO Krish Iyer. To be located in the cities of Lucknow and Hyderabad, the online service will be exclusively offered to trader members and is likely to be expanded to cover 18 more urban centers across the country. After suspending its plan to launch its retail business in India, Wal-Mart said it plans to open 50 more wholesale stores in the next 4–5 years.

"UPDATE 1-Wal-Mart to launch e-commerce marketplace in India in July", Reuters, June 13, 2014

Asia Pacific's Top 500 Retailers

Euromonitor International, June 22, 2014

Why the future of retail is exciting, not gloomy

Retail Customer Experience, June 09, 2014

Mullins: Publix chief dishes up grocery gossip

The Tampa Tribune, June 01, 2014

Marketing & Advertising  

Walmart Launches B2B Ecommerce Business In India

Walmart plans to launch its business-to-business ecommerce pilot project in India in the first week of July 2014. Currently operating 20 cash-and-carry stores in the country, Walmart said it will start operating its ecommerce pilot in Lucknow and Hyderabad. Expecting its ecommerce revenue to grow 30 percent from its global operations, Walmart said it aims to engage with other users in addition to the about 15,000 registered users each of its Indian store has. Walmart will launch the ecommerce pilot through its existing Best Price website, with delivery operations to be handled by local logistics service providers.

"Walmart eyes 30k consumers through its e-commerce pilot", Business Standard, June 29, 2014

Boots Launches Mobile App To Add Digital Convenience To Its Loyalty Program

Boots launched a mobile app which offers members of its Advantage customer loyalty program access to the promotions and offers from the retailer. Part of the retailer’s efforts to transform its customer loyalty program into a digital platform, the app comes with a “My Offers” section, which Boots regularly updates, allowing customers to browse customized deals. Results of a research by Boots revealed a third of customers said they regularly forget to bring paper coupons with them when they visit the store, prompting the retailer to digitize its loyalty scheme.

"Boots takes first steps to digitising Advantage card", Marketing Week, June 26, 2014

Sephora Strengthens Digital Business By Bringing Web Development In-House

Cosmetics retailer Sephora improved its mobile and web-based operations by moving its web development in-house and creating an internal digital development team, according to the company’s chief marketing officer and chief digital officer Julie Bornstein. Sephora outsourced the development of the original Sephora.com website, something that Bornstein immediately saw as insufficient for the retailer’s need for a strong and flexible platform for its current and future digital operations. She said Sephora’s integration of digital operations into its core business has positioned the company for ecommerce success, as well as enabled it to stay in touch with what customers want.

"How Sephora Reorganized to Become a More Digital Brand", Harvard Business Review, June 26, 2014

Alibaba Launches US Online Store; Promises Support For Small Businesses

China’s online retail giant Alibaba launched its 11Main.com online shopping hub in the United States. With a name invoking main streets across the country, the invitation-only online marketplace will feature fashion products, jewelry, and home products from selected boutique sellers. 11Main’s emphasis on merchants offering specialty items highlights its support for small businesses, the company said.

"Alibaba makes U.S. debut with 11 Main", CNN Money, June 11, 2014

How Rodney McMullen took Kroger to the top

Cincinnati.com, June 25, 2014

Press Release  

Kroger Posts Impressive Revenue Numbers For First Quarter Of FY 2014

The Kroger Co. said net earnings grew 4.6 percent to $501 million, or $0.98 per diluted share, in the first quarter of fiscal year 2014, compared with $481 million in the same period of 2013. Without the effect of charges related to restructuring of pension obligations, the company’s net earnings would be $557 million, or $1.09 per diluted share. Total sales for the period, which includes Harris Teeter for the first time, rose 9.9 percent to $32.96 billion from $30 billion in the same quarter of the previous year. Total sales, minus fuel, grew 11.4 percent. Kroger said its LIFO charge was recorded at $28 million, compared with $17 million in the same quarter of the previous year.

"Kroger Reports Strong First Quarter Results", Kroger, June 19, 2014

Tesco Launches My Fit Lifestyle Line Of Healthy Food Products In UK

Tesco launched its “my fit lifestyle” range of food products for consumers who want to eat healthy. Citing results of a research showing six out of 10 people eating at their work desk or on the move, and almost 90 percent of respondents saying they consume unhealthy foods because of their busy lifestyles, Tesco said the product range aims to help shoppers looking to have personalized eating plans. To help promote the product range, Tesco is employing the Ride ‘n’ Dine mobile restaurant and pre-booked taxi service to offer Londoners a chance to sample products from the “my fit lifestyle” lineup.

"Tesco launches brand new healthy food range for people ‘on the go’", Tesco PLC, June 18, 2014

Trends  

More US Consumers Buying Private Label Grocery Products, Study Shows

In the United States, 98 percent of shoppers buy private label food or cleaning products, compared with 96 percent in 2013, according to data from market research firm Market Force Information. Results of the grocery study revealed only a small percentage of consumers are not aware of private label brands and the same number say they never purchase them. Also, 78 percent of respondents said their primary grocery retailer offers private label dairy products, with 60 percent of customers saying they buy private label dairy products most of the time or always. According to Market Force, 26 percent of shoppers buy private label cleaning products most of the time or always, an increase from 23 percent in 2013.

"Private Label Groceries Growing in Popularity, According to Market Force Study 95% of shoppers buy private label dairy products at least some of the time ", Market Force , June 12, 2014

Trade And Transportation Jobs Account For Large Chunk Of New U.S. Employment

In the United States, companies from the trade, transportation, and utilities category account for an increasing proportion of jobs being created, according to government employment data. In the past 12 months, the trade and transportation sectors created almost 576,000 new jobs, more than 20 percent of the 2.4 million jobs created during the period. These developments led some economists to declare that, at present, the economy is an Amazon.com company. With 124,600 employees, the online retail giant account for about 1 out of every 4 workers in the non-store retailers segment. Data from the U.S. Bureau of Labor Statistics suggest the trend is likely to continue for some time.

"It's an Amazon.com economy, now", Fortune, June 12, 2014

Accelerating the Growth of Ecommerce in FMCG

Kantar Worldpanel, June 16, 2014

Developed by Yuri Ingultsov Software Lab.