To follow is a brief review of retail news from around the world:
April 28 – Soriana (Mexico) See Solid Growth in Q1
Soriana presented positive results during the first quarter of 2017. Its revenues were 35,248 million pesos, equivalent to a growth of 1.3% compared to the same period in 2016 when it had revenues of 34.793 million pesos. This increase was driven mainly by the increase in the indicator of sales to equal stores, as well as by the incorporation of five new stores during the last 12 months. Excerpt from Planet Retail.
April 27 – – Office Depot Completes Sale Of South Korean Business
Office Depot has closed on the sale of its business in South Korea to Excelsior Capital Asia. The office superstore had previously disclosed its intention to sell substantially all of its international businesses under a process that began in 2016. “This transaction follows on the recently announced agreement to sell our businesses located in Australia and New Zealand,” said Gerry Smith, CEO of Office Depot. “We are now one step closer to achieving our goal of divesting substantially all of our international businesses in order to focus on the growth opportunities available in the North American market.” Excelsior Capital Asia, a Hong Kong and Korea-based direct investment firm, invests throughout Asia on behalf of major Korean institutions, pension funds and private family offices. From Home World Business.
April 26 – Retailers Seek New Deal For SMEs In Europe: EuroCommerce
Retailers and wholesalers have called on the EU to work on a new deal for SMEs, in a paper launched by EuroCommerce, a group that represents the retail sector across Europe. The paper, entitled The Contribution of Retail and Wholesale to the EU Economy, highlights the challenges that face small traders, pointing to the need for the EU and national authorities to provide support for SME retailers and wholesalers. The proposed measures include offering aid to develop online platforms, providing easier access to finance, a stronger approach to enforcing Single Market rules, removing barriers to SMEs operating across borders, and reducing burdens for small exporters and importers. For additional insight, visit European Supermarket Magazine.
April 25 – JD.com (China) Creates New Unit for its Logistics Service
JD.com, China’s second-largest e-commerce company after Alibaba, will create a new business group called JD Logistics. Not to be confused with a Wisconsin-based company that has a similar name, JD Logistics will take advantage of JD.com’s existing delivery and warehouse infrastructure. Operating its own logistics network is one of the main ways JD.com differentiates from e-commerce companies, like Alibaba, that rely chiefly on third-party providers, and is an important part of its growth strategy. In an interview with Bloomberg last year, CEO Richard Liu said that JD.com plans to invest more heavily in logistics automation, including automated warehouses and drone deliveries (JD.com launched its commercial drone delivery program last November during Singles’ Day, China’s annual online shopping festival). Establishing the company’s logistics operation as its own business unit will allow JD.com to speed up the development of its infrastructure and give it more flexibility to explore business opportunities. JD Logistics will offer integrated supply chain solutions, like warehousing, transportation, delivery and after-sale services, to e-commerce sellers and other companies. For further reading, visit Tech Crunch.
April 24 – Future Group (India) to Sell its Private Labels on Amazon and Bigbasket
The Indian retailer plans to launch a new brand, category or product every two weeks. It is part of their strategy to establish itself as a standalone consumer goods company by 2021. “Our brands will be where the consumers are -modern trade, general trade or ecommerce -and we have got traction in a few channels already,” said Devendra Chawla, chief executive at Future Consumer. Their juices and spreads are already listed on Amazon. The company is working with different partners to produce their private labels. Hain Celestial manufactures food products in the health and wellness segment. Mibelle from Switzerland makes a range of personal care products under the brand Swiss Tempelle. Kosh is an oats brand produced in Sri Lanka through a joint venture with SVA India. Taken from Retail Analysis.
April 20 – Debenhem’s (UK) Unveils New Turnaround Strategy
Department store group Debenhams has announced a turnaround strategy aimed at boosting its appeal as a “destination” shop and improving its online service. The plan means up to 10 of its 176 UK stores may be closed over the next five years. A central distribution warehouse and about 10 smaller warehouses could also be shut. Meanwhile, the group said its half-year pre-tax profits fell by 6.4% to £88m. Debenhams shares were down by nearly 5% following the announcement. Chief executive Sergio Bucher, who joined the company last October, said its customers were changing the way they shopped and therefore Debenhams was also changing. “We will be a destination for social shopping, with mobile the unifying platform for interacting with our customers,” said Mr Bucher, who was appointed with a view to shaking up the business. Debenhams has 82 stores in 26 other countries. It said it would leave some “non-core” international markets, with details due to be announced in October. For additional reading, go to BBC Online.
April 20 – M&S Unveils Details of UK Stores Overhaul
Marks & Spencer is to open 36 new stores over the next six months as it reshapes its estate and builds its food business. The openings comprise 34 new food stores and two clothing, home and food stores. These include Foodhalls in Bishopsgate, London, Huntingdon, Aylesbury, Spinningfields, Manchester and Strood in Kent and new locations for M&S with clothing, home and food stores opening in Bracknell and Rushden in July. Over 1,400 new customer assistant and management jobs will be created by the new shops. However, the retailer has proposed closing six shops and is consulting with colleagues and their representatives in the stores in Monks Cross, Portsmouth, Slough, Warrington, Wokingham and Worksop. See Retail Week.
April 17 – Biggest Indian Store Chain Gains Steam
Future Retail Ltd., India’s biggest department store chain that gained from the government’s surprise currency clampdown, still has room to extend the rally that’s more than doubled its market value this year. The shares of the food-to-fashion retailer are set to rally 22 percent in the next 12 months, according to the average analyst price target compiled by Bloomberg. The stock has surged 128 percent since Jan. 1, beating returns from rivals such as billionaire Kumar Mangalam Birla-controlled Aditya Birla Fashion and Retail Ltd. and Tata group’s Trent Ltd. Investors are warming up to India’s brick-and-mortar retailers at a time when their online rivals face an intense discount war and eroding valuations. For more, go to European Supermarket Magazine.
April 17 – China’s Economy Accelerates As Retail, Investment Pick Up
China’s economy accelerated for a second-straight quarter as investment picked up, retail sales rebounded and factory output strengthened amid robust credit growth and further strength in property markets. Gross domestic product increased 6.9 percent in the first quarter from a year earlier, compared with a 6.8 percent median estimate in a Bloomberg survey. It was the first back-to-back acceleration in seven years. “For the first time in the recent years, China starts a year with a strong headline GDP,” said Raymond Yeung, chief greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, who correctly forecast the growth pace. “Thanks to strong investment and property, the economy is performing well.” The expansion further cements a rebound as producer prices surge, industrial output picks up and soaring credit fuels investment. Policy makers have shifted to a more neutral monetary stance as they seek to ease financial risk and reduce excess industrial capacity. See ES Magazine for additional reading.
April 13 – Walmart to sell Asda products in China via JD.COM
Walmart has launched its UK retail brand Asda in China via a partnership with China’s second largest ecommerce company JD.com. Asda will launch a flagship store on JD.com’s cross-border platform, JD Worldwide, giving the brand access to the ecommerce platform’s 226 million customers. It will sell food and health products, such as biscuits, coffee, tea bags, nuts, energy bars, and foods for babies and children. A number of the products will be from Asda’s Extra Special range and all products will be sourced from the UK. Asda plans to expand the product range significantly in the coming months to take advantage of Chinese consumers growing appetite for imported products. The launch is part of a strategic partnership between Walmart and JD.com, which was established in June 2016. The partnership was a change in direction for Walmart, which had planned to compete in China’s booming ecommerce market. As part of the deal, Walmart sold its online business Yihaodian to JD.com in return for a 5% stake in the ecommerce company – Walmart has since increased its stake in JD.com to 12.1%. The deal also saw JD.com provide the ecommerce platform for Walmart’s Sam’s Club stores across China. Additional reading at The Drum.
April 13 – Loblaw Plans $1.3BN Network Investment
Loblaw will invest $1.3bn in developing 30 new stores and remodeling 500 existing stores across Canada this year. While the investment will span most of the retailer’s formats, it will also include the continued roll out of click and collect for online groceries, improved health and wellness services and the addition of fresh food ranges at selected Shoppers Drug Mart locations. The level of investment is broadly consistent with previous years. Space growth in Canada has moderated over recent years for the leading five grocery retailers. Having peaked in 2013 with a 5.7% increase in new space, driven by Walmart’s acquisition of former Zellers locations, this fell to 1.0% last year. Over the next five years, these retailers are forecast to add 0.7% to 0.8% in new space annually. More at Retail Analysis.
April 12 – Alibaba extends partnership with KN to cover cross-border B2B shipments
Kuehne + Nagel this morning signed an agreement with the world’s largest e-commerce platform, Alibaba, to cover B2B volumes. The memorandum of understanding (MoU) deepens an existing partnership and is further evidence of Alibaba’s strategy of engaging as many logistics service providers and freight carriers as possible – in contrast to Amazon’s apparent preference for controlling as much of its supply chain as possible. KN and Alibaba already have an arrangement for the e-commerce platform’s sellers to use the 3PL’s air freight and less-than-container load (LCL) solutions for cross-border shipments. Today’s MoU extends that to include the full scope of KN’s forwarding services – including full ocean container loads and ground and contract logistics services both inside and outside China. For further reading, go to The Load Star.
April 11 – Mexico Department Store Sales Recover in March
Sales of the National Association of Self-Service and Department Stores (ANTAD) recovered during March. After five months of slowdown, same store sales, which include those with more than one year of operation, showed a variation of 3.1%, while in February grew 2.7%. As for its total stores, which include stores open in the last 12 months, ANTAD, which agglomerates the country’s top retailers like Walmart and Liverpool, said that growth was 6% compared to the same month of 2016, while in February rebounded 5.6%. Accumulated sales in the third month of 2017 amounted to 361,100 million pesos (mdp). At the end of 2016, ANTAD consisted of 51,917 stores: 5,410 of Self-service; 2,258 Departmental and 44,249 Specialized. The total sales area of these establishments totals more than 27.4 million square meters. For more, go to Forbes Mexico.
April 10 – Hudson’s Bay Company names new European head
Canadian department store operator Hudson’s Bay said on Friday it planned to invest around EUR400 million in Europe this year in a bid to grow its sales there by 20% over the next two years. For additional information, go to Planet Retail.
April 10 – Microsoft, eBay, Tencent Invest $1.4 Billion in Amazon’s India Rival
Indian e-commerce startup Flipkart Group has raised $1.4 billion from Microsoft Corp, eBay Inc. and Tencent Holdings Ltd., taking a hit to its valuation to raise the cash it needs to defend its home market from Amazon Inc. Flipkart, which was started in 2007 by two former Amazon employees, said Monday that the new investment values the Bangalore company at $11.6 billion. That allows Flipkart to retain its title as India’s most valuable startup but is still a step down from the $15 billion valuation it received during fundraising in 2015. For more, see WSJ Online.
April 10 – Carrefour intends to open 120 franchise stores in Poland
Carrefour Poland is aiming to open 120 franchised smaller formats in 2017. This follows the successful opening of 26 in the first quarter. The majority of franchised stores will trade under the Express fascia. See Planet Retail for further reading.
April 7 – Walmart’s same store sales increased 4.7% during March
Walmart’s same store sales increased 4.7% during March. This indicator refers to establishments open more than one year. Its sales in Mexico amounted to 35.396 million pesos (mdp), a 5.8% increase compared to the same period of 2016. Between January and March totaled 105,042 mdp 0 5% more than last year. In Central America, they sold 8,709 mdp, 13% more. During March, the retail company opened 6 stores, and another two in Guatemala and Honduras, respectively. In total, Walmart has 2,291 stores in Mexico and 737 in Central America. Taken from Forbes Mexico.
April 7 – Coop Norway Sees Profit Growth Of NOK 2.1bn In 2016
Coop Norway has posted a pre-tax profit increase of NOK 2.1 billion (€230 million) in full-year 2016, with the group’s total revenue rising NOK 4.9 billion to NOK 58 billion (€6.32 billion) for the year. The Group said that its improved performance was due to a ‘very successful integration of the stores from the acquisition of ICA Norway’, a process that was completed last year. Revenue growth in the rebranded stores has performed “absolutely to expectations”, said Coop Norway chief executive Geir Inge Stokke. Sales for the group increased 10.9% for the year, of which 7.8% was attributable to the added sales of the former ICA Norway business. Total membership of Coop Norway now exceeds 1.5 million. “It pays to be a shareholder in Coop,” said Stokke. “We are a sharing economy in practice.” For additional reading, see European Supermarket Magazine.
April 6 – WeChat Looks to Expand its Ecommerce Platform in Europe
WeChat, China’s largest social media platform, has launched a new bid to expand its ecommerce and payment services for brands in Europe, starting in the UK. Owned by Tencent Holdings Ltd, WeChat is the largest social media platform in China, with over 889 million users. It now looks to open up its ecommerce platform and payment services to European merchants, to sell to Chinese shoppers. International payment services would allow Chinese tourists to pay with WeChat in European stores. The app has become a powerful tool for brands to communicate and engage with shoppers, and now it wants to replicate this with more international brands. Tencent is looking to open a WeChat office in the UK and another European country, alongside its existing presence in Italy. It is also looking to expand WeChat in the US, by growing its team at the existing office in San Francisco. WeChat is not looking to enter the consumer market in Europe, due to the difficulty of integrating it with already popular rivals, namely WhatsApp. It is focusing on business-to-business instead, by encouraging European brands to sell and advertise products on the WeChat platform. For brands and retailers, this means they can build a direct, more personalized and targeted relationship with Chinese consumers. Tencent has launched a program to remove the need of having a Chinese business license, if brands open up to only WeChat. This will allow smaller European companies to have access to the second largest consumer market in the world, without the usual restrictions. For more, go to Retail Analysis.
April 5 – PriceSmart Santa Ana To Open in Late 2017
PriceSmart, the largest operator of membership warehouse clubs in Central America and the Caribbean, says it will invest more than US$12 million dollars in its new point of sale to be located in Santa Ana. The new store, the 7th in Costa Rica and 40th globally, to be located about on the Ruta 27 (San Jose – Caldera), 1.5 kilometres west of Forum 1 (at south side of the Hacienda Real intersection), is expected to open by the fourth quarter of 2017. The new store, designed under the “Green Club” concept, will generate 200 direct jobs and 150 indirect during the construction process. “We are committed to providing our new partners with a comfortable and modern environment that characterizes us, with a wide variety of quality products at competitive prices, but also, we have worked hard to build a building that allows us to reduce our energy consumption,” explained Marco Torres, manager of PriceSmart Costa Rica. In Costa Rica, Pricesmart stores are located in: Alajuela, Escazú, Heredia, Llorente de Tibás, Zapote and Tres Rios. PriceSmart is headquartered in San Diego, California operating in 12 countries and one U.S. territory (U.S. Virgin Islands), with more than 770,000 membership accounts and 1 million cardholders. It also offers online shopping in all countries where PriceSmart operates. See Q Costa Rica for more reading.
April 4 – Amazon dominates top 20 Retailers by UK Online Sales
Retail Week Prospect’s league table of the largest retailers by UK online sales does not throw up many surprises, with Amazon continuing to lead the way, well ahead of Tesco. A number of pure-plays have been steadily gaining ground in recent years, with Ocado now just inside the top 10 and Asos and Ao.com also having made the table. But underlining the strength of the multichannel retail model, the largest contingent of retailers are those that have managed to grow a substantial online business by leveraging their store networks. Retailers such as John Lewis may generate £1.7bn of online sales, but over 40% of those sales were collected in its stores. For Argos – which comes in third place – this percentage is nearly 75%. For the detailed list, go to Retail Week.
April 4 – REAL, NETTO, BÜNTING and others create new German buying alliance
Retailers including Netto Germany, Metro Group’s Real chain and Bünting Gruppe have announced the creation of a new procurement collaboration. The RTG Retail Trade Group is a joint venture between Real, Netto Germany, Bartels-Langness, Bünting, Klaas & Kock, Georg Jos. Ownership shares are divided equally between all parties. The director of Netto International, Morten Møberg Nielsen, said that the move enables the Dansk Supermarked-owned business to “match the major German chains”. He added that the move will also enable the operator to “exploit synergies and benefit from increased scale”. For additional reading, see European Supermarket Magazine.
April 3 – Costco Opens First Canadian Business Center
Costco Canada has opened its first Business Centre as it embarks on a more aggressive opening plan this year. The Costco Business Centre format was launched in the US over 25 years ago. However, the concept has grown at a relatively slow pace with 15 sites currently trading in the country. The launch in Canada is the first time that the format is being tested internationally; its success could pave the way for it in other Costco markets. This opening forms part of a more aggressive expansion plan in Canada this year, with seven new locations planned. The Business Centre format focuses exclusively on the needs of small to medium sized businesses. This includes restaurants, convenience stores and professional services such as doctors’ offices. Ranges include equipment and appliances, restaurant supplies, cleaning products and grocery items, with the majority of the latter sold in case pack sizes. The format also opens earlier than a typical Costco and offers a next-day delivery service. Any Costco member can shop at this location; 80% of the ranges are exclusive to the Business Centre. For more, see Retail Analysis.
April 3 – SM (Philippines) acquires stake in 2Go Group, moves into Logistics
SM Investments has entered the logistics business by acquiring a 34.5 per cent stake in supply-chain specialist 2Go Group. SM president Harley Sy says 2Go is the largest integrated supply-chain group in The Philippines covering shipping, freight forwarding, warehousing and express-delivery services. Its brands include 2Go Travel, 2Go Freight, 2Go Express and 2Go Logistics.
2Go has JV partnerships with such global supply-chain companies as Hansa Meyer Global, Hapag Lloyd and Kerry ATS Logistics. SM has a range of interests including retail, property and financial services, with subsidiaries including SaveMore, SM Hypermarkets, SM Prime Holdings, SM Supermarkets, The SM Store and Waltermart Supermarket. Taken from Inside Retail Philippines.
The International Business Council is a special interest group of IHA members, dedicated to helping its membership market and sell their products internationally by sharing information, providing networking opportunities and offering programs to assist, support, and educate. Membership is free to all regular, IHA members – visit the IBC website to learn more.
The Global Retail Intelligence Report provide a brief review of retail news from around the world, useful when evaluating foreign market opportunities.
