English news : 18 october 2007
18 October 2007
A&P sees underlying improvements, Q2 Update
In the US, the Tengelmann-controlled Great Atlantic & Pacific Tea Company (A&P) has released the financial results for its second quarter ended 8 September 2007, saying that sales reached USD1.3 billion (compared with USD1.2 billion a year earlier) with like-for-like sales up 3.2% as the company's performance continues to improve in its core north eastern operations. Still, there was a net loss of USD2.9 million from continuing operations, compared with a lower loss of USD2.2 million in the equivalent period of 2006. Sales for the 28 weeks year to date were USD3.0 billion, compared with USD2.9 billion in 2006, on the back of like-for-like sales increasing by 1.9%. Net income from continuing operations for year to date 2007 was USD58.5 million, including a gain of USD78.4 million from the sale of Metro Inc. shares, compared to a loss of USD8.5 million for 2006. Christian Haub, executive chairman of the board, said: "A&P's strategic restructuring moved forward significantly in the 2nd quarter, as we exited our Midwest operations, and announced the divestiture of our Southern operations, which will be completed later this quarter. This fulfills our strategy to create a strong retail presence focused in our core Northeast markets, with improved profit and growth potential. Our Northeast presence will be significantly strengthened by the addition of Pathmark which we now anticipate to achieve before the end of the calendar year. Alongside the ongoing improvement of our existing business, our primary objective is the completion of the Pathmark transaction, and commencement of the integration process. I am pleased with the ongoing improvement of our Northeast operations, and with the overall progress and exciting potential of our transformation strategy."
AHOLD Giant/Stop & Shop to offer high oxygen packaged ground beef
According to Progressive Grocer, Ahold owned Giant Food and Stop & Shop will begin offering high-oxygen packaged ground beef in October, replacing low-oxygen modified-atmosphere packaging. The two chains said they decided to change the packaging because some shoppers found the retention of the meat's red colour, a result of low-oxygen modified-atmosphere packaging (MAP), to be confusing.
AHOLD Schuitema third quarter sales
In the Netherlands, Ahold owned Schuitema has reported that third quarter sales rose by 1.7% to EUR737 million (USD988.8 million). Retail sales at its C1000 stores were 2.4% higher at EUR912 million (USD1.2 billion).
AXFOOD nine month sales flat
Swedish group Axfood has reported a slight increase of 0.5% in consolidated net sales for the first nine months of the year to SEK21,536 million (USD3,097 million). Sales at wholly owned stores decreased by 0.3%, whilst net sales (including wholly owned and franchise units) rose by 0.9%.
BP rolls out ampm c-store format in the USA
In the USA, BP this autumn starts the rollout of the ampm c-store format across the Midwest, Northeast and Southeast of the country. The conversion will begin with the introduction of ampm sites in Atlanta and Chicago starting this November. BP Connect and Wild Bean Café sites will convert to ampm stores, establishing a consistent, unified c-store brand across the United States in BP’s company-owned and operated and franchised locations. “Extending the ampm brand presence in our convenience sites in markets East of Rockies will add to the 30-year success the brand already has in the Western United States,” said Fiona MacLeod, BP’s president of Convenience Retail for the United States and Latin America. “The ampm brand is well-known West of Rockies, with 96% of West Coast consumers familiar with the brand. We look forward to bringing that strong awareness to our East of Rockies marketing areas.”
CARREFOUR Dia pilots mobile telecom service
In Spain, Carrefour owned Dia has begun a pilot test in some of its own stores with a view to providing a mobile telecoms service to its clients through Orange.
CARREFOUR Spain nine months sales rise
Carrefour’s Spanish division has reported a 4.7% rise in sales for the first nine months of the year to EUR10.359 billion (USD14.1 billion). The supermarket chain Carrefour Express reported the fastest growth, with a 15.7% rise to EUR509 million (USD682.9 million). The group’s hypermarket operation recorded a 4.8% rise in sales to EUR6.785 billion (USD9.1 billion), whilst its discount chain Dia recorded a 2.8% rise to EUR2.349 billion (USD3.2 billion).
CBD third quarter sales rise
In Brazil, CBD has reported a 6% rise in net sales for the third quarter to BRL3.469 billion (USD1.7 billion), whilst gross sales grew by 5.5% to BRL4,132 billion (USD2.1 billion). Same store gross and net sales rose by 1.8% and 2.3% in the period respectively.
Archie Norman joins Wesfarmers’ COLES campaign
In Australia, Wesfarmers has confirmed that it has taken on former Asda boss Archie Norman to help turnaround the flagging Coles’ business. Wesfarmers managing director Richard Goyder said Mr Norman would also help recruit executive muscle to beef up management at Coles. If the takeover goes ahead as expected, Mr Norman will move on to the board overseeing Coles' food, liquor and convenience businesses. "Archie will be available as deputy chairman of that board to influence the way we go about improving the results from the most financially significant part of Coles," Mr Goyder said. "Archie's great retail expertise in leading the team that so successfully turned around Asda will make a tremendous contribution before and after we embark on that task."
DIXI tests Mils supermarket format
Having opened a pioneer neighbourhood store VMart in St Petersburg in March 2007, Dixi is going to test a further format under the brand Mils. Mils supermarket will target consumers with middle and high incomes. The first store was opened in the city of Pskov in September this year. It runs to about 1,000 square metres in size and offers about 5,000 product lines. As Dixi stated, it does not plan any further store openings this year.
Another year of double digit growth at DM
In Germany, drugstore retailer dm has today announced results for the financial year 2007, ending the 30 September. Sales increased by 13% to EUR4.15 billion (USD5.56 billion), of which EUR3.03 billion (USD4.06 billion) were generated in the home market Germany (up 11.9%). In nine European countries, dm now operates 1,849 stores, of which 936 stores are in Germany (869 stores in 2006). In its other European markets, dm operates now 913 stores, compared to 851 in 2006. Future plans foresee investment of EUR220 million (USD295 million), which will be financed from the retailer’s cash flow. Around 100 store openings are scheduled for the home market Germany, whereas dm’s other country operations will see the opening of around 140 stores.
GUYENNE ET GASCOGNE nine month sales rise
French group Guyenne et Gascogne has reported a 1.2% increase in nine month sales to EUR412.2 million (USD553 million). Sales for the third quarter were flat year on year at EUR157.5 million (USD211.3 million). The company said it is still considering grouping most of its Centros Comerciales Carrefour property portfolio with Carrefour Property, which might offer a stake for sale to investors next year. The group said it had a 'particularly difficult' month in France in July and said the stable third quarter sales were largely due to a 'negative calendar effect of the order of 1.6%'. The retailer said bad weather conditions held back sales of clothes 'despite the progress achieved in new women's fashion collections.' In Spain, Carrefour and Carrefour Express shops saw 'more moderate growth' in the third quarter, the company said.
H.E. BUTT to launch new store concept
In the USA, H-E-B is set to launch a new store concept in Cypress, TX next week, according to the Houston Business Journal. At 10,405 square metres, H-E-B Cypress Market is designed to be a combination of a traditional H-E-B store and a Central Market. The store will feature large meat and seafood departments, more than 900 fruit and vegetables, more than 2,000 varieties of wine, a bakery and a cheese department offering more than 400 varieties of speciality and imported cheese. The store will also feature Central Market’s Café on the Run which offers take-out and catering services featuring a vast assortment of Central Market products such as a sushi bar, healthy living department, a coffee roast area and a tortilleria. The concept is based on years of research, testing and customer insight, according to Cyndy Garza-Roberts, director of public affairs for H-E-B’s Houston region. “Our future customers helped us create their ideal destination grocery store,” said Garza-Roberts.
KESKO nine month net profit rise
Finnish group Kesko has reported that net profit for the first nine months of the year rose to EUR260 million (USD348.8 million) compared with EUR225 million (USD282.2 million) in the year earlier period. Net profit for the third quarter increased to EUR75 million (USD100.6 million) from EUR70 million (USD87.8 million) in the year earlier period. Net sales for the nine month period rose to EUR7,079 milion (USD9,498 million) from EUR6,445 million (USD8,086 million) in the year earlier period. Due to the more rapid market growth and the expansion of the retail store network, Kesko expects its sales to grow more strongly in the other operating countries than Finland. The company estimates its sales will grow in the next six months, but at a slightly slower rate than during the period between January and September 2007. Regardless of the expansion of the retail store network, its operating profit for the next six months, excluding non-recurring items, is expected to remain at a good level. A higher-than-expected rise in labour costs in Finland may affect the future outlook and forecasts.
LOTTE sets up JV for Zara outlets in South Korea
In South Korea, Lotte Shopping Co. has announced that it will set up a joint venture with Inditex SA of Spain to open Zara clothing outlets here. The outlets will be opened within the Lotte department stores. Inditex will hold an 80% stake in the venture, and Lotte will own the remaining 20%.
MIGROS teams up with Edeka to distribute its "Anna's Best" private label in Germany
The food industry subsidiary of Migros, "Bischofszell Nahrungsmittel AG", intends to expand its "Anna's Best" (chilled convenience food, potato products, fresh juices etc) private label in Germany. The retailer has started with a first step towards its own distribution. First trials with chilled convenience food have already been implemented at Edeka Minden-Hannover. Other German speaking markets are due to open up too.
OCADO to expand into north of UK
Online service Ocado (partly owned by John Lewis) has announced plans to build a GBP100 million (USD198.4 million) distribution centre in the north of England to allow it to expand across the region and into Scotland. Ocado's chief financial and marketing officer, Jason Gissing, confirmed that the group was looking for a site. He said the time was right to expand. "The model is scalable. We now know how it works,'' he said.
PANTALOON ambitions for private label
According to unconfirmed reports in the Indian press, Pantaloon Retail expects its inhouse brands to contribute around INR120 crore (USD30 million approx) to its food business in the current fiscal year. Pantaloon's revenue from the private labels is expected to jump to INR190 crore (USD46.5 million) in the fiscal year 2009. Senior Manager - Private Labels Pantaloon Retail Subham Ray said, "We have a strong own-branding exercise. We would like to be in every category as we are looking at the entire basket of the consumer spend". At present the company has about 500 products in around 50 categories, ranging from food to personal care. The company does not manufacture any of its own brands rather sources them from around 50 vendors including small and medium enterprises. "Private labels constitute about 6% of Pantaloon's food division" Ray added.
PATHMARK and HSBC to launch new loyalty card scheme
In the US, Pathmark (to be acquired by Tengelmann-controlled A&P following formal approval by the competition authorities) and the HSBC banking group’s card and retail services arm have signed an agreement to offer a multi-purpose rewards and payment card for Pathmark customers named Pathmark Advantage Payment Card. Linked with a customer’s existing bank checking account, the new product will enhance the current Pathmark Advantage Club card by providing an easy one-swipe payment process that also generates loyalty rewards. According to HSBC, the new scheme “is the first of its kind for a major supermarket chain in the United States that combines loyalty and rewards with decoupled debit functionality all on one card”. A pilot launch of the scheme is planned for later this year at a select number of stores in New York. In addition to in-store payments and rewards, Pathmark customers will be able to use the new card at more than 200,000 merchant locations in the US participating in the Tempo Payment Network.
SAINSBURY extends Fairtrade clothes
According to reports in the UK marketing press, Sainsbury is converting key lines of its TU clothing private label to 100% Fairtrade cotton. By early January, all men's standard T-shirts and more than half of women's will be made from Fairtrade cotton. It also plans to convert 25% of its cotton jerseys.
SAINSBURY to launch “green” private label cleaning products
According to reports in the UK marketing press, Sainsbury is launching seven private label “green” household cleaning products called Cleanhome next week. The Cleanhome formulations use sustainable natural ingredients "to deliver outstanding cleaning performance, at no additional cost to the Sainsbury's shopper". The retailer says that "wherever possible, packaging is recyclable or made from recycled materials".
SHELL is re-branding former BP outlets in Kenya
Following the approval from Kenya's ministry of finance in April this year of Shell's acquisition of BP's stake in the two company's 80-year old 50/50 joint venture, Shell has started to re-brand the acquired petrol stations. The re-branding process is due to be complete by the first quarter of 2008, acording to Shell Kenya's managing director Patrick Obath speaking in Nairobi. Shell operates around 120 petrol stations in Kenya; of these, approximately 20 are equipped with a forecourt store.
SUPERVALU Shaw’s partners with RecycleBank
In the USA, SuperValu owned Shaw’s has partnered with RecycleBank to encourage its shoppers to recycle more. RecycleBank measures the amount of material recycled by a household and then converts that amount into RecycleBank Points that can be used in Shaw’s stores. "Shaw's is a leader in the supermarket industry when it comes to innovative environmental programmes for energy conservation, recycling and other green efforts," said Larry Wahlstrom, president of Shaw's. "By partnering with RecycleBank, we are taking it one step further by rewarding our customers for recycling and helping preserve the environment." Other RecycleBank partners in New England include Coca-Cola, Dunkin' Donuts and Dick's Sporting Goods.
TESCO launches Greener Living Club
Speaking at an industry conference yesterday, the senior web marketing manager at Tesco, Charlotte Tookey, said that the launch of the retailer’s “Greener Living” website this week is a milestone as it is the first time a Tesco Club has been launched “online only”. Greener Living is Tesco’s newest club, following in the footsteps of Baby and Toddler, Healthy Living, Food Club and Wine Club which all have both off and online activity, has been set up to share practical advice about being green, as well as communicating what Tesco is doing to protect the environment.In response to consumer demands, Tesco is making its sites more interactive by introducing Q&A sections on the site and launching controlled forums that encourage users to share tips about how consumers can do their bit for the environment. The site also has activities for children so that they can be educated about environmental issues from a young age. Ms Tookey said the aim of the site was not to tackle big issues but was focused on helping them “make a little difference”.
WAL-MART Canada announces retrofit of store lighting
Wal-Mart Canada has announced a nationwide retrofit of its store lighting, as part of its goal to reduce greenhouse gas emissions by 19,000 tons of CO2 in 2007. The company will replace 1.75 million lights in all of its 293 Canadian stores to higher efficiency 25-watt bulbs, a move that is expected to reduce overall store electricity use by 7%. Wal-Mart also expects the switch to result in a reduction of lighting-specific electricity use by more than 20%; a cost savings of CAD5 million annually; and a reduction in CO2 emissions by 17,000 tons. The company has also replaced existing lighting in locations such as its external storefront signs and sales floor refrigerators with 90% more efficient LED alternatives. “As a company that measures every detail of our business very carefully, we were amazed by the immediate environmental impact and the business benefits from something as simple as switching light bulb wattage," said Ken Farrell, Vice President, Store Development, Wal-Mart Canada Corp. "We're seeing huge cuts to our energy consumption and cost savings of up to CAD12,000 (USD11,260) a store, with a return on investment of about one year. This is another example of the marriage between environmental best practices and smart business.”
WAL-MART head of outreach stepping down
In the USA, Harriet Hentges has announced that she will leave Wal-Mart Stores at the end of the week. She was hired in July 2006 as Wal-Mart's first "director of stakeholder engagement" to work with outside groups to develop Wal-Mart policies in areas including the environment and health care. Wal-Mart spokesman David Tovar said Wal-Mart is seeking a replacement for the same position and remains committed to working with outside groups on issues including the environment.
WAL-MART property firm eyes India, LatAm expansion
British property develop Gazeley has announced that it has opened an office near Delhi to assist the entry into India of its parent company Wal-Mart Stores. Gazeley, which provides Wal-Mart with its distribution warehousing needs in Britain and China, said it has also set up its first Latin American operation in Mexico. Gazeley Chief Executive Pat McGillyCuddy told Reuters the aim, starting in 2008, was to build around 92,900 square metres of industrial space in India per year. “Wal-Mart are just starting in India so we're going in there at the same time as them. Growth there is expected to be phenomenal and we want to position it like positioning your canoe on the tide to take advantage of that growth." The plan is to position initial developments around key transport nodes in the Delhi region and in the coastal state of Gujarat due to structural challenges elsewhere in India, McGillyCuddy said. In contrast to India, Mexico's logistics market was far more mature and would provide Gazeley with a strong platform to expand further into Latin America, notably Brazil. "We're getting some real traction in Mexico very quickly and we can get up to 2 million square feet per year in a couple of years," he said.
X5 RETAIL to invest in own logistics structure
As CEO of X5 Retail Group Lev Khasis has stated, the company is going to invest USD1 billion in the next 3-4 years in building its own logistics structure. X5 is aiming to build distribution centres in the European part of Russia with a total storage of 600,000 to 700,000 square metres. Mr. Khasis has also disclosed that X5 will be testing a cash & carry format in 2008. If this format succeeds, it will be roll out throughout Russia.
AMAZON launches MP3 referral programme
Amazon has launched a new affiliate programme that allows customers to earn referral fees for purchases at its MP3 store. Customers must sign up for Amazon's affiliate program, and create a link to Amazon’s MP3 download page. Every time someone follows the link and purchases the MP3 from Amazon, the referrer gets 20% of what they spend, with a limit of USD1.50 per transaction. After 1 January, 2008, that percentage will drop to 10%.
BEST BUY launches recycling initiative in Canada
Best Buy has announced the company has entered into an agreement with Greentec (www.greentec.com ) to provide a recycling alternative within its Canadian retail operations. The recycling service will be offered free to consumers and has been available in all 48 Best Buy stores throughout Canada since October 12, 2007. Consumers who wish to retire or recycle unneeded products can visit a local Best Buy location where recycling stations will be available. The stations are free of charge to consumers and currently the following items will be accepted: MP3 players, cellular phone, portable DVD players, portable CD players, CDs and DVDs, batteries, ink cartridges. "Best Buy Canada's partnership with Greentec was created in direct response to our customers' feedback and will help our eco-conscious customers take steps to reduce their environmental footprint," said Charles Tobin, Vice President of Store Operations Best Buy Canada.
BEST BUY pulls analogue TV sets from shelves
US based electronics retailer Best Buy has announced that has removed all analogue televisions from its shelves, making it the first retailer in the US to do so. The company said that all analogue TVs were removed at the start of October and have been replaced by flat-panel and high-definitions screens. Beginning in February 2009, broadcasters plan to stop transmitting analogue signals. Television sets that are not digital and not attached to satellite or cable or converter boxes will no longer work after that date.
CARPHONE WAREHOUSE agreement with Patni detailed
Carphone Warehouse’s agreement with Patni Computer Systems could result in contracts worth around USD200 million over five years covering a wide range of consultancy, software and maintenance services. The consulting portion of the agreement will involve redesigning some of CPW's business processes to help it reduce costs. Patni's executive vice-president Neeraj Gupta and head of Europe Brain Stones termed it a breakthrough and an instance of where a client relations has blossomed into a partnership. "Patni will become a key technology partner providing services across consulting, systems integration, application development and maintenance. In addition, Patni will also be a key partner to The Carphone Warehouse for developing next-generation systems for its global telecom and retail operations," the company said. Services to customers in the telecom industry now contribute to around 14% of Patni's revenues.
COMPUSA increases foothold with small and medium businesses
CompUSA has announced it has successfully implemented key initiatives as part of its plan to be the electronics retail leader for small and medium businesses. CompUSA is focusing on serving its business customers with a new area in its stores, expanded product selection, highly skilled technicians, free technology seminars, and enhanced customer communications. In addition, Bob Sayewitz has joined CompUSA to operate its business sales and services and oversee the implementation of the company’s small and medium business strategy. “Earlier this year CompUSA embarked on the most aggressive business strategy in the company’s history to focus on its core customers that include the tech enthusiast, educated professional and small and medium business. While it’s early in the game, our hard work and commitment are paying off,” said Roman Ross, president and CEO, CompUSA. “We are determined to be the leading electronics retailer for small for medium businesses and our recent achievements demonstrate our commitment to this vision.”
DSG first half sales held back by Italian operations
DSG International has announced that its half year sales for 2007 rose 5% on a like-for-like basis, however they were held back by a poor performance in Italy. Comparable sales of electrical goods in its UK and Ireland stores open at least a year rose 6% in the 24 weeks to October 13, but fell 8% at its Italian UniEuro business. "Our performance in Italy remains disappointing with a weak consumer backdrop continuing to affect sales growth. We continue to reposition the UniEuro brand and improve our proposition to customer supported by the restructured operational base," DSGI's Chairman John Collins said in the statement. Across the UK and Europe DSGI's sales continued to be driven by flat panel, high definition televisions, laptop computers, digital SLR cameras, games consoles and accessories.
HMV promotes scary movies for Halloween
HMV has announced it is launching its largest DVD Halloween campaign promoting more than 125 horror, gothic and sci-fi titles. The Halloween DVD promotion launches this week and comprises in store, online and print marketing activity. In addition an advertisement promoting HMV’s exclusive 4-DVD version of Halloween, tagged with HMV’s new strapline ‘Get Closer’, will be placed in consumer magazines. Mark Frampton, DVD back catalogue manager for HMV, said: “Prompted by heightened media focus and increased label and retail activity, Halloween keeps growing in retail importance with each year, and is becoming a significant calendar event. This is great when you consider the wealth of catalogue titles to support it, and, of course, it works really well with HMV's 'Get Closer' creative approach.”
TOYS 'R' US will open first store in Korea by December
Toys ‘R’ Us has announced plans to open its first store in Korea in early December. The store will open at Lotte Mart in Guro, and will measure 2,600 square metres will sell 8,000 kinds of toys and children's products. Lotte Shopping signed an exclusive licensing agreement with Toys ‘R’ Us last December. The company organised the Toys ‘R’ Us business division earlier this year and began preparations this month to open the shop. A temporary Korean website is online at www.toysrus.co.kr. The US company will guide the Korean firm in product development, supply and store management. Lotte Shopping plans to expand the chain next year, opening a second shop at Lotte Mart in Guri with an aim to operate 15 to 20 stores by 2010.
WOOLWORTHS extends deal with Tesco
Woolworths has announced its Entertainment UK (EUK) business will supply and distribute books to 723 Tesco stores until the end of February 2009 after winning a one year extension to its current deal. EUK has been supplying Tesco with books since 2004, however, its contract to supply the supermarket chain with DVDs, CDs and games product ended in April.