Retail Update - powered by LebensmittelZeitung
Retail Update - powered by LebensmittelZeitung
Friday, 27 January 2017

Hello, subscribers
The beef segment had a 'rough start' in the United States this year. Thanks to tightening animal supplies, tepid demand and dropping wholesale prices, meat processing companies such as Tyson Foods and Cargill are facing plummeting profits. Read this insightful analysis and a lot more in today's issue and have a great weekend!

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EUROPE
Tesco thinks big   The British supermarket giant Tesco is about to merge with Britain's biggest food wholesaler Booker. The partners would become the "UK's leading food business". Their deal is valued at GBP 3.7 billion.  ▪
Asda sells ad space   The leading US retailer has extended its digital ad platform, Walmart Exchange, to its UK subsidiary, which will offer space for ads on Asda's sites. Suppliers can now create more targeted adverts and have also the possibility to create brand awareness. ▪
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Aldi & Lidl strike Big 4   New results from Nielsen show that British consumers spend significantly less on their weekly shopping spree at discounters than at traditional supermarkets. In other news, Aldi has topped the Global Brand Simplicity Index which judges the experience a brand offers. ▪
Growth & change in Russia   Following the launch of 51 hypermarkets and 17 supermarkets last year, Lenta has posted a total increase in sales for 2016 of 21.2% +++ Meanwhile, Russian retailer Dixy Group has rearranged its board. The company has also announced that it is rolling out new model checkout terminals in its stores. ▪
ASIA
Alibaba pushes abroad   In a deal that is expected to shake up the international payments landscape, the e-commerce behemoth’s e-payment arm, Ant Financial, is poised to buy money US transfer company MoneyGram. Meanwhile, interest in cooperating with the Chinese online giant grows in Europe as Agrokor, Croatia’s biggest grocer, is considering possible projects with Alibaba. ▪
Big growth   Online-to-offline retailer Hema Fresh has opened its seventh store in Shanghai and plans to launch at least 5 – 10 more stores by the end of the year +++ Counting on increased consumer spending, Fuzhou-based supermarket operator Yonghui expects a double-digit increase in operating revenue for 2016. ▪
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Asahi to exit China   Japan's largest beer maker considers a potential sale of its minority stake in Tsingtao Brewery as more competition from foreign brands and local craft beers is taking its toll on the company's profit. The producer of “Super Dry” lager owns a 20% stake in Tsingtao, worth about US$ 1.1 billion. ▪
USA
Rite Aid sale talks continue   Despite reports that Federal Trade Commission attorneys are dissatisfied with a proposal to sell the drugstore chain to Fred’s, Walgreens Boots Alliance CEO Stefano Pessina has assured shareholders that discussions to get the deal approved are still active. ▪
Department store blues   In an effort to reduce costs, struggling US fashion retailer Abercrombie & Fitch Co. has cut 150 corporate level jobs, while Sears' share price has sunk more than 9% to its lowest since the US department store merged with Kmart in 2004. ▪
Digital ebbs & flows   US coffee giant Starbucks has reported a smaller than expected rise in quarterly sales caused by congestion at pickup sites due to a large increase in mobile orders +++ Fourth-quarter growth of 17% for online money transfer company PayPal, on the other hand, was on par with expectations. Revenue came to US$ 2.98 billion. ▪
WHAT TO WATCH
Beef causes concern   The price for wholesale beef has tumbled in the past year amid stiff competition from chicken and pork in the US, keeping analysts wondering how this affects meat giants such as Tyson Foods. The world largest meat producer posted strong earnings for last year and will reveal their quarterly numbers later on today.  ▪
Meeting the challenge   Most retailers would love a magical ‘crystal ball’ to anticipate consumer trends. Well, we all know that’s not possible, so here is the next best thing: five shopping predictions for 2017. +++ Amazon, Zara, Nordstrom and Walmart are topping the US-list of brands meeting customer expectations with their brands. Check out the other winners. ▪

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