Retail Update - powered by LebensmittelZeitung
Retail Update - powered by LebensmittelZeitung
Tuesday, 20 September 2016

Another wave of store closures hits Kmart in the US while the dimension of Lidl's expansion plans across the pond seems to exceed previous expectations. The dominance of Alibaba is further consolidated by it dethroning Tencent as Asia's largest company by market value and Chinese cross-border e-commerce is further facilitated through a partnership between PayPal and China UnionPay. Enjoy the read!

Alibaba overtakes Tencent   With a market value which has risen to US$ 261 billion Alibaba has overtaken Tencent's US$ 255.98 billion capitalisation and has become the biggest company by market value in Asia. The e-commerce behemoth and the technology giant are also dominant in the country's mobile internet ad sector, where, together with web services company Baidu, they garner 72.8% of the market.   ▪
Expanding their reach   A partnership between PayPal and Chinese bank card partner UnionPay will make it easier for European retailers to attract customers in China +++ Indian private conglomerate Future Group is in advanced talks to acquire the retail business of Heritage Foods, which would further consolidate the group's position in grocery retail. ▪
Eased supply-chain fears   As 28 vessels from bankrupt Hanjin’s worldwide fleet of 97 container ships have offloaded their cargo, retailers' concerns about merchandise needed for the holiday season remaining trapped on sea ease slightly. ▪
Lidl on expansion course   The number of stores the German discounter plans to open in the US is rumoured to be as high as 150 by the end of 2018. In a first statement Christian Hartnagel, new CEO at Lidl UK, vowed to keep up the pressure on rival grocers by opening new shops and hiring even more staff. On 22 September, Lidl Spain will be inaugurating the discounter's biggest logistics platform in Europe.  ▪
Strategies to boost profits   Dairy giant Müller plans to unlock an additional GBP 700 million growth by 2020, facilitated by a GBP 100 million investment +++ Drinks giant Diageo is said to plan significant job cuts, mainly at its London headquarters but also at other operations as part of its cost-cutting drive to boost profits. ▪
Authorities at work   British Prime Minister May has met executives from leading US companies such as Amazon in an attempt to reassure investors after the Brexit vote +++ The European Commission opened a probe into Poland’s new tax on retailers that imposes a smaller levy on shops with lower sales. ▪
USA & Canada
More Kmart store closures   In addition to the closure of 68 Kmart stores announced last April, parent company Sears is reportedly planning to shut down a further 64 stores in at least 13 states in mid-December. ▪
Holiday hiring   A tighter labour market will make hiring for the holiday season more difficult this year as retailers are competing for a smaller pool of candidates. Reflecting the trend towards e-commerce, holiday hiring happens in the warehouses rather than in-store. ▪
Flourishing across the border   While department stores are retrenching in the US, the industry is expanding in neighbouring Canada. Hudson’s Bay and Holt Renfrew have invested heavily to remake and renovate their outlets across the country, Nordstrom and La Maison Simons are planning more store openings. ▪
Unexpected discoveries
Discounter helps house value gain   A recent study has revealed the 'Aldi Effect', the phenomenon of house prices rising by up to GBP 5000 as a consequence of an Aldi outlet opening nearby. ▪
Designed for social sharing   Luxury New York City retailer Bergdorf Goodman has optimised its flagship store for social media sharing, adding architectural features designed to become ' great Instagram sites'.  ▪

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