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Subject:
RETAIL BUSINESS
Period: February 1, 2018 to February 15, 2018
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
 

Kroger Divests Its C-Store Business

Kroger announced it is selling its convenience store business to British petrol forecourt C-store retailer EG Group. As part of the $2.15 billion deal, EG Group will set up headquarters in Cincinnati, Ohio, home of Kroger. EVP/CFO Mike Schlotman said the company’s review of assets determined that the C-store business would “better meet its full potential outside of our business." Kroger said it plans to use the proceeds from the sale to repurchase shares and to lower its net total debt to adjusted EBITDA ratio. 

"Kroger and EG Group Announce Definitive Agreement for Purchase of Kroger's Convenience Store Business", News release, Kroger , February 05, 2018

Israel May Ease Tax Burden To Lure Walmart, Other Retailers

A senior aide to Israeli Prime Minister Benjamin Netanyahu disclosed that Israel is leaning toward loosening the tax structure that makes foreign investment more difficult. Netanyahu economic adviser Avi Simhon said “some drastic changes” – including tax cuts – are needed to lure foreign retailers like Walmart to Israel to help lower the cost of living. Netanyahu spoke with John Furner, a senior Walmart executive, at the recent World Economic Forum meeting in Davos, Switzerland. According to Simhon, the two discussed the idea of Walmart’s opening a retail branch and investing in Israeli technologies after the country eased some regulatory burdens. “The door to Netanyahu’s office is open,” Simhon said. Walmart did not comment on the discussions.

"Is Walmart Coming to Israel? Netanyahu Says the Door Is Open", Bloomberg, February 04, 2018

Amazon.com Posts $3B Profit For 2017; Cites Success Of Alexa Platform

Amazon.com posted a full-year profit of $3 billion ($6.15 per share) for 2017 on net sales of $177.9 billion, a sales increase of $41 billion year-over-year. Profit was up $600,000 over 2016. Fourth quarter profit was $1.9 billion ($3.75 a share) on $60.5 billion in sales, compared with a profit of $749 million ($1.54 a share) in the same period in 2016. The company also reported: five billion items shipped with Prime worldwide in 2017; Fire TV Stick and Echo Dot were the best-selling products in 2017; the Alexa Skills store now offers more than 30,000 skills; Alexa Voice Service (AVS) adoption among device makers continues to grow; and new tools and developer kits were introduced. “Our 2017 projections for Alexa were very optimistic, and we far exceeded them,” CEO Jeff Bezos said.

"Amazon.com Announces Fourth Quarter Sales up 38% to $60.5 Billion", Earnings release, Amazon.com, February 01, 2018

Kroger’s Scan, Bag, Go Digital Shopping Service To Expand Nationwide This Year

Kroger said it will introduce its Scan, Bag, Go shopping technology this year in 18 operating divisions and 400 stores. The company said it tested the service in several locations and decided to expand its availability across the U.S. through Restock Kroger. Scan, Bag, Go allows customers to use a wireless handheld scanner or the smartphone app to scan and bag products as they shop. Shoppers can view and download digital coupons, keep a running total of their order, and view the current week's sales ad. They can then provide payment directly through the app so they can exit the store quickly. 

"Kroger Announces Divisions for Scan, Bag, Go Expansion", News release, Kroger Co. , January 31, 2018

Walmart’s Wrestling Match With Amazon.com Now Moves To India

Walmart’s strategy in its game of catch-up versus Amazon.com is to acquire companies with the talent and technological expertise it needs to become an e-commerce behemoth. The company recently closed a $3 billion acquisition of Jet.com, after a five-year shopping spree in the world of young e-commerce companies, filling its shopping cart with 15 startups. It is now eyeing an investment in another, this time India’s Flipkart. Industry observers speculate that Walmart is looking to buy a 20 percent stake in the company, which sells a variety of consumer goods online, including electronics and appliances. Flipkart is looking to move into the food and grocery business, and an investment by Walmart could make that happen. Amazon.com, meanwhile, has pledged to invest $5 billion in India.

"Walmart in talks to buy a significant minority stake in Flipkart", The Economic Times, January 31, 2018

Walmart Makes Operational Changes To Speed Stock Replenishment, Delivery

Walmart has decided it can compete more effectively with Amazon.com if it shares more investory data with suppliers so out-of-stock items can be replenished more quickly. Formerly available only internally, the company’s On Shelf Customer Availability (OSCA) data information will be shared at the Supplier Growth Forum, a two-day event at Walmart headquarters. The retailer also said it will tighten deadlines for delivery. It is now requiring large suppliers to deliver full orders within a specified delivery window 85 percent of the time or face a fine of three percent of the cost of goods. Previously, large suppliers had to hit a 75 percent threshold to avoid fines. The delivery threshold for smaller suppliers will move to 50 percent, up from 33 percent, effective in April.   

"Walmart to share inventory data with suppliers in battle with Amazon", Reuters , January 30, 2018

Kroger Looks To Bolster “Restock Kroger” Initiative With Executive Changes

Kroger announced it is shuffling two management positions to bolster Restock Kroger, a data-drive initiative focused on pricing, personalized communications with customers, and a large revamp of product assortments. The company, the largest collector of food purchase data in the U.S., wants to put that data to competitive advantage as it expands meal- and food-shopping solutions. Thirty-seven-year Kroger veteran Steve McKinney, president of the Fry's Food Stores division, will become senior vice president of retail divisions, effective February 5. Monica Garnes, corporate vice president of produce-floral merchandising, will succeed McKinney as president of the Fry's division. She has been with Kroger for 23 years. 

"Kroger Names Steve McKinney Senior Vice President of Retail Divisions, Monica Garnes President of Fry's Division", News release, Kroger Co., January 30, 2018

 
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