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Retail Update - powered by LebensmittelZeitung
Friday, 03 February 2017

Hello, subscribers
Recently, a number of foreign retailers have shut down factories in China. So, the question is, what’s causing the exodus? In the UK, Sports Direct buys a stake in an ailing fashion chain, and in the USA, e-commerce giant Amazon reports profit growth but misses analysts’ expectations. Have a great day, and if you enjoy this edition, please share.

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USA
Q4 increase for Amazon   The US e-tail giant reported a 22% increase in sales for the fourth quarter reaching US$ 43.74 billion. The result, however, fell short of analysts’ expectations. According to a report by PowerReviews, which interviewed more than 2,000 consumers over 18, Amazon continues to dictate the pace of online retailing.  ▪
Retailing experiments   After a year of development, Walmart has launched its latest convenience store concept in Rogers, Arkansas. The 2,500-square-foot c- store and fuel station combo focuses on a wider range of food products and drinks +++ Off the back of a less-than satisfactory holiday season, Target, on the other hand, has decided to focus on its core business and scale back some innovations such as e-commerce start-up Goldfish. ▪
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Source Great British Foods at IFE 2017
IFE 2017 (The International Food & Drink Event) takes place 19-22 March at ExCeL London. The UK's biggest food & drink event will be packed with innovative food & drink products from 1,350 suppliers. IFE is divided into 9 easy to navigate sections, including a Great British & Irish foods section. Find inspiration for your retail shelves at the show - get your free trade ticket at
www.ife.co.uk/lebz
Appointments & resignations   Office Depot has appointed Gerry P. Smith as CEO, replacing Roland Smith +++ Iconic fashion retailer Ralph Lauren is seeking a new CEO since “mutually agreeing to part ways” with Stephan Larsson +++ Upscale clothing retailer Abercrombie & Fitch has finally appointed Fran Horowitz as CEO, filling a role that has been vacant since 2014.  ▪
EUROPE
Weak Christmas for Metro    The Cash & Carry business and the Real hypermarkets have weighed on Metro's profit in the important Christmas quarter. The German retailer has posted earnings before interest and taxation of €821 million - a 0.8 per cent fall. Sales increased 0.1 per cent on a like-for-like basis. Metro plans to split into two companies this year. ▪
Sports Direct acquires   The UK retailer has purchased 10.7 million French Connection shares equaling an 11% stake in the ailing UK fashion chain. The move will enable Sports Direct to disrupt any takeover bids for the retail group. ▪
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Crossing borders   As part of a GBP 500 million investment plan by parent company Wesfarmers, Australian DIY retailer Bunnings has opened its first UK store in Hertfordshire. The plan is to open at least four stores by June and 10 by year end.  ▪
Tesco reaffirms commitment   After being caught throwing away surplus food, despite pledging to donate it to the homeless, the UK retailer has reaffirmed its commitment (paywall) to cutting food waste. A bin-diver had published footage of freezer-loads of food he collected from Tesco skips on Christmas Eve. ▪
ASIA & NEW ZEALAND
Foreign firms quit China   The world’s largest manufacturer of hard-disc drives, US-based Seagate, has shut down its factory in Suzhou, which cost 2,000 jobs. This move comes on the heels of other big names such as Marks & Spencer as well as Metro closing factories. What is causing foreign firms to exit China? +++ Meanwhile, French retailer Carrefour’s China arm has launched its largest ever branding campaign in the country at the end of 2016.  ▪
Amway India opens stores   To increase consumer outreach and provide consumers and distributors with a platform to buy products directly, Amway India will open 50 stores in the country by the end of 2018. It will be the first unit in the Michigan-based company’s global operation to have a significant brick-and-mortar presence.  ▪
Briscoe’s enjoys profit   The New Zealand homeware chain has announced that profit increased by 25% in the year ending January 29 totaling NZ$ 59 million. The pleasing result was due to their resistance to discounting. ▪
AFRICA
Empty shelves at Nakumatt    The Kenyan supermarket chain is facing financial problems. New Chief Marketing Officer Andrew Dixon has acknowledged that poor cash flow has led to empty shelves and says they are negotiating with suppliers. ▪
Watch out for caterpillars   The South African government has warned that corn farmers are suffering extensive damage from what seems to be a foreign caterpillar that has wreaked havoc in other countries. Though not confirmed, the culprit is thought to be the fall armyworm, which is native to the Americas ▪

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