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Subject:
RETAIL BUSINESS
Period: July 1, 2017 to August 1, 2017
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
 

Amazon's 2Q 2017 Profit Drops 77 Percent; Blames Expansion Costs

Online retailer Amazon.com Inc. reported profit fell 77 percent to $197 million in the second quarter of 2017, compared with the same quarter in the previous year. Sales grew 25 percent to $38 billion; however, the high cost of expansion efforts, which include new warehouses and delivery capacity for its retail business and datacenters for its cloud services business, caused the drop in quarterly profit. Amazon is expanding its brick-and-mortar business, highlighted by its acquisition of Whole Foods Market Inc. in June 2017.

"Amazon’s Expansion Costs Take a Toll as Profit Falls 77%", Wall Street Journal, July 27, 2017

Consumer Shopping: Speed Is Of The Essence

Now that consumers have the technological capability to shop at the speed of light, they expect instant gratification at online stores. Retailers have put in place a wide array of technologies and practices that speed transactions and fulfillment, from one-day delivery to in-store beacons (left) that communicate with shoppers via smartphones. Other advancements created to satisfy the new “I want what I want when I want it” shopping culture are: experimental delivery drones, same-day doctor appointments,, virtual doctor consultations, one-hour delivery of food and groceries, in-store restaurants and bars, and the “see-now, shop-now” trend that lets consumers order new fashion items seen on Instagram almost immediately.

"Faster Shopping: A Top Consumer Trend for 2017", Blog entry, Euromonitor, July 26, 2017

Ahold Delhaize Marks First Year After 2016 Merger

Ahold Delhaize is celebrating the first anniversary of the merger between Ahold and Delhaize Group that created the retail company in July 2016. As a merged company, Ahold Delhaize owns 21 local brands and employs 370,000 associates. It serves more than 50 million customers each week in 11 countries.

"Ahold Delhaize 1 year", Ahold Delhaize, July 24, 2017

Tesco Expands Same-Day Delivery Service Across UK

Tesco said it has expanded its same-day online grocery delivery service across the UK. Launched in 2014 in London and the South East, the service is now available for customers of more than 300 stores across the country, the company said. Free for a limited period to members of the Tesco's Delivery Saver online delivery program, the service will cost between ₤3 and ₤8. Customers need to place their order by 1:00pm to have their purchases delivered by 7:00pm or later.

"Tesco becomes first retailer to offer same day grocery delivery nationwide", Tesco, July 24, 2017

Aldi Says It Will Not Sell Flushable Toilet Wipes In Australia

Discount retailer Aldi has canceled plans to sell the Green Action line of bathroom cleaning wipes the company described as “flushable.” Aldi's action came following complaints by consumers and warnings by the Australian Competition and Consumer Commission regarding how “flushable” wipes harm the environment when disposed of in toilet. In December 2016, the ACCC sued Kimberly-Clark Australia and Pental for making misleading claims by describing their products as biodegradable.

"Aldi withdraws 'flushable' toilet wipes from sale after customer backlash and water authorities warning they block drains", Daily Mail, July 20, 2017

Walmart Says To Develop Camera System To Detect And Assist Unhappy Shoppers

Walmart is creating an in-store facial recognition system designed to recognize customers' facial expressions. According to the retailer's patent filing, the technology will use video cameras at store checkout lines to detect signs of anger and dissatisfaction. Upon detection of an “unhappy customer”, the system will alert staff and prompt them to report to the checkout line. Also, the company has filed a patent for using drones to improve customers' in-store experience.

"Walmart developing smart camera that can spot unhappy and frustrated shoppers and alert staff", Daily Mail, July 20, 2017

Bakery Adapts Old Portuguese Pastry Recipe To Make “Bagel Doughnuts”

The recipe for a popular Hawaiian pastry with roots in Portugal is the inspiration for a Leesburg, Va., bakery’s unusual “bagel doughnuts.” The founders decided to bypass traditional custard and jelly doughnut fillings, and model their treats on the malasada –  a yeast-leavened doughnut made with real fruits, premium heavy cream, and custards made from eggs. They are filled with pastry and chantilly cremes, as well as cream cheese. The bagel doughnuts are dipped in ”everything bagel” seasoning, filled with whipped cream cheese, infused with chives or smoked bacon, and can be topped with smoked salmon. 

"Malasadas-Inspired 'bagel Doughnuts' Come to D.C. Pop-Up Bakery", United Press International, July 19, 2017

Growth Of In-House Brands Squeezes Big Food

Supermarket private label brands in the U.S. historically have not been as important as in European countries. Private label accounted for 17 percent of U.S. sales last year, less than half their share in the U.K. and Germany. But supermarket shoppers are increasingly switching to generic brands, and big food companies are beginning to feel the pinch. Retailers like Walmart are already seeing a rise in sales of their own brands. As retailers allot greater shelf space for their own items, traditional manufacturer brands will see sales volumes decline. And retailers in a fierce competitive environment can point to the growth of their in-house brands to coerce suppliers to cut prices.

"Big Food’s Next Big Problem: Supermarket Brands", The Wall Street Journal, July 19, 2017

U.K. Relaxes Overly Cautious “Use By” Dates On Food Packaging

Calling current rules overly cautious, the U.K.’s Food Standards Agency has issued draft guidelines urging supermarkets to scrap “use by” dates on packages of food that wouldn’t cause poisoning in favor of “Best Before” dates. The proposed rules also state that packaging should tell customers how to store food, and should display the snowflake logo to indicate that a product can be frozen. The goal is to reduce the 7.3 million tons of food a year, two million tons of which is due to it “not being used in time.” The guidance is “under consultation” until August. ]

"Supermarkets are Told to Stop Telling Shoppers to Throw Away 7.3m Tons of Good Food Every Year by Scrapping 'Use By' Dates", Mail Online, July 17, 2017

Walgreens Announces Technology Investments, Proposed Purchase Of Rite Aid Stores

Walgreens Boots Alliance, Inc. said it is investing to update and upgrade the company's technology. According to the pharmacy and retail chain, the company aims to put in place a new system in a few years, enabling it to improve the organization of its stores. Also, the company announced its proposed acquisition of 2,186 stores from Rite Aid, including warehouses and inventory, as well as real estate properties.

"Walgreens Invests In New Technology and Personalization", Retail Info Systems, July 17, 2017

Kroger Most Loved Grocery Brand In US, Morning Consult Survey Says

Supermarket chain Kroger Co. received the highest customer satisfaction rating, according to Morning Consult. Data from the public opinion data company's Spring 2017 Most Loved Brands consumer survey revealed Kroger received a 53-percent favorability among grocery store brands. Whole Foods got 48 percent; Safeway, 40 percent; while Albertsons and Publix each received 33 percent.

"This grocery chain is most loved in U.S., survey says", bizjournals.com, July 17, 2017

Walgreens Adds UK Brand Sleek MakeUP To Beauty Lineup

Walgreens said it will start selling Sleek MakeUP brand of cosmetics at more than 150 stores and on Walgreens.com. One of the fastest-growing mass-market beauty brands in the UK, Sleek MakeUP was acquired by Walgreens Boots Alliance in 2015. Created by a local beauty entrepreneur in East London, the brand seeks to cater to the needs of women of color who were faced with limited choices in the cosmetics market.

"Walgreens Continues to Differentiate its Beauty Offering with Sleek MakeUP", Walgreens.com, July 17, 2017

Iowa Bakery Known The World Over For One Special Pastry

A small-town Iowa bakery sells the usual fare: doughnuts, fritters, cinnamon rolls, etc. But what makes 89-year-old Tiffany’s Tipton Bakery unique is its crescent rolls, crafted from a Dutch recipe. Twenty-three dozen of the treats, filled with homemade cream and topped with powdered sugar, are baked every Saturday. Many are shipped fresh out-of-town and all over the world, including such exotic destinations as Siberia and central China. Nevertheless, the shop maintains a hometown feel, as one employee notes: “We a lot of times know our customers by their order first, and then we learn their name later."

"Our Town Tipton: Bakery Ships Pastries Around the World", KCRG-TV9 (Tipton, Iowa), July 14, 2017

Age Of “Clerkless” Shopping Dawns In China

China’s largest companies are promising that “unmanned supermarkets” that apply mobile payment systems technologies are the next big wave in retail shopping. The automated stores use mobile technology to track payments, eliminating the need for cash, checkout lines, checkout counters, and checkout clerks. Alibaba Group CEO Jack Ma recently launched the company’s entry into automated stores with the opening of Tao Cafe in Hangzhou. Only three steps are required: scan a QR code to enter; shop (without employee assistance), then take items to exit; lastly, walk through two exit scanners. Payment is automatically deducted from customer's Alipay account. 

"Unmanned Stores Emerge in China, Jack Ma Follows Suit", Produce Report, July 12, 2017

French Patisserie Company To Expand Its Franchises Across U.S.

After establishing 48 successful franchise patisseries in eight U.S. states since 2012, Le Macaron French Pastries is expanding the franchise opportunity to metropolitan areas across the country. The company offers more than 20 flavors of macarons, in addition to seasonal flavors, as well as French pastries, gelato, coffee, cakes, and éclairs. The company says it hopes to sign 70 locations by the end of the year, in cities like Boston, Chicago, Denver, Nashville, New Orleans, Raleigh and Washington, D.C. Potential franchisees can expect to invest initially $59,900 to $99,000 for a cart, and $126,000 to $353,500 for a traditional café.

"Le Macaron French Pastries Sweetens Up Market with National Franchise Opportunities", News release, Le Macaron, July 11, 2017

Six Firms Were In The Hunt For Whole Foods Market Last Spring

Amazon.com wasn’t the only company considering buying Whole Foods Market last April and May, although it did end up the successful suitor. Four private-equity firms and two companies were also in the hunt, including supermarket operator Albertsons, according to financial disclosures Whole Foods made to investors. The companies started contacting Whole Foods in mid-April, shortly after activist investor Jana Partners LLC took an almost nine percent stake in the natural foods grocery chain.

"Albertsons Among Six Firms That Vied for Whole Foods", The Wall Street Journal, July 07, 2017

Woolworths Supermarkets Will Not Range New Coca-Cola No Sugar In Australia

Australia’s largest supermarket chain has refused to stock Coca-Cola’s recently introduced Coke No Sugar beverage. Euromonitor says the refusal by Woolworths reflects market saturation of low-calorie cola carbonates and the increasing health consciousness of consumers. Woolworths accounted for 40 percent of sales in the A$85 billion (US$67 billion) supermarkets category. More than two thirds of soft drink sales went through supermarkets last year. Without Woolworths, Coca-Cola No Sugar will have a tough time in Australia.

"Coca-Cola No Sugar Faces Setback as Australia’s Largest Supermarket Chooses Not to Range the Product", Blog entry, Euromonitor International, July 06, 2017

U.K. Supermarket Chain Experiments With Smart Food Label

British supermarket chain Sainsbury’s is testing an advanced labeling technology to help customers avoid tossing edible food in the waste bin before its time. The company sticks a color changing label to packets of its own brand sliced ham. The smart label changes from yellow to purple the longer the packet has been open. It is sensitive to temperature as well, because an open pack of ham has a relatively long fridge life when kept below 5º C (41º F). The new label is being used on ham packages in all 601 stores and will be expanded to other foods if consumers like it.

"Sainsbury’s Launch Colour Changing LABEL on Ham Packets to Reveal When Meat is OFF", Sunday Express, July 04, 2017

Pizza Hut’s Japanese Customers To Have A Quick, Secure Ordering Solution

MasterCard has partnered with Pizza Hut to integrate the Masterpass digital payments technology into the pizza chain’s mobile ordering application. The two companies are launching the initiative in Japan, where time-pressed customers will be able to order pizzas quickly, securely and easily by safely storing credit card information, as well as delivery addresses, in their Masterpass account. Ordering pizzas will require only three clicks on a smartphone, the companies said.

"MasterCard, Pizza Hut Partner on Digital Payments Solution in Japan", Digital Market Asia, July 03, 2017

Burger King: No More Human Antibiotics Use In Chicken Supply By 2019

Restaurant Brands International, parent company of Burger King and Tim Hortons, announced that it will end the use of antibiotics important to human medicine in its chicken supply by the end of 2018. According to the Natural Resources Defense Council (NRDC), 11 of the top 15 U.S. restaurant chains have now committed to some level of “responsible antibiotics use” for their chicken supplies. Nearly half of the U.S. chicken industry has either made a no-antibiotics commitment or is already using responsible practices, NRDC said.

"Burger King to Clean Up Antibiotics Practices in Chicken Supply by 2018", News release, Natural Resources Defense Council, June 22, 2017

 
Companies, Organizations  

Aldi Plans €5-Billion Upgrade Of Stores Worldwide

Germany's discount retailer Aldi North plans to invest more than €5 billion to upgrade its stores worldwide, according to local weekly Bild am Sonntag. In June 2017, Aldi South announced its plan to spend $3.4 billion to expand its store network in the US to 2,500 locations by 2022. According to the magazine, Aldi North plans to finance its planned investment with cash on hand instead of taking on debt.

"Germany's Aldi to invest 5 billion euros in stores: Bild am Sonntag", Reuters, July 02, 2017

Supermarkets Face a Growing Problem: Too Much Space

The Wall Street Journal, July 31, 2017

Marketing & Advertising  

Sephora Opens First Studio Store Concept In Boston

Beauty retailer Sephora opened its first Sephora Studio, the company's smallest store, in Boston, Massachusetts. Integrating various digital tools, the store concept aims to provide customers with optimized shopping experience during and after store visit. Also, the store offers the company's digital-enhanced beauty care services, including the Sephora Digital Makeover Guide. According to the company, the store's consultants are equipped with the highest levels of certification they can earn from Sephora.

"SEPHORA Pioneers New Retail Innovation with Launch of First Small-Format Concept Store", Business Wire, July 21, 2017

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