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Retail Update - powered by LebensmittelZeitung
Thursday, 16 February 2017

Hello, subscribers
As Walmart continues its e-commerce shopping spree with yet another acquisition, legendary investor Warren Buffett has sold almost all of his shares in the retail giant. Has he lost faith in the leading US retailer? And what does this mean for traditional retail? Also, German discounter Lidl will open its first US stores sooner than expected. Have a great day, and if you enjoy this edition, please share.

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EUROPE
Nestlé is slowing down   The world's largest food company Nestlé has posted revenue growth of 3.2 per cent for 2016 - the slowest rate in at least a decade. And for 2017 its new CEO Mark Schneider has equally sobering news: The company expects revenue to rise 2 to 4 per cent on an organic basis and the trading operating margin to be stable excluding currency swings - missing its long-term targets again.  ▪
Danone tightens its belt   The French dairy giant's like-for-like sales increased 2.9 per cent to € 21.9 billion in 2016 - the slowest pace in nearly 20 years. Against this backdrop the yogurt maker has announced to cut 1 billion euros in costs within three years. The company wants to boost its business with the acquisition of US organic food group WhiteWave which is to close in the first quarter. ▪
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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
Profits & losses   Australian retail giant Wesfarmers, which owns DIY chain Homebase and has just launched Bunnings in the UK, has revealed a loss of GBP 28 million for its UK business. The company says that the half-year losses were due to slashing prices and restructuring +++ Russian retailer Dixy Group, on the other hand, says that its private-label Baby Boom Brand, which sells products such as diapers and napkins, has increased sales in the segment by 30% in six months.  ▪
Waitrose rebrands    Since it was revealed last year that its ‘British’ line of private-label lamb ready meals contained lamb from New Zealand, the UK retailer has re-branded the range's lamb products as ‘Classic.’ Pork, beef and chicken meals in the range will stay the same. In other news, Waitrose has just been voted UK's best retailer in the annual poll by consumer group Which?.  ▪
USA
Walmart buys online asset   As its war with Amazon rages, the big-box retailer has purchased outdoor retailer Moosejaw for about US$ 51 million because of its online following and social media expertise +++ Meanwhile, master investor Warren Buffett has sold US$ 900 million worth of shares in the company, fuelling fears that Walmart is fighting a battle it can’t win.  ▪
Lidl to arrive early   The German discounter, which runs over 10,000 stores in Europe, will open its first stores in the US this summer. The company was originally not expected to launch until late 2017 or 2018. Lidl now plans to open 100 stores in the country within a year.  ▪
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Kraft Heinz beats expectations   Cutting costs seems to pay off for the world's fifth-largest food and beverage company. For its fourth quarter the maker of Heinz ketchup has reported a higher-than-expected adjusted profit. Comparable sales growth came in at 1.6 per cent. The company which merged in 2015 is controlled by Brazilian private-equity firm 3G Capital known for running a tight ship.  ▪
New activist investor for P&G   After weeks of speculations the firm of activist investor Nelson Peltz has revealed itself as new major shareholder of Procter & Gamble. The news send its shares to a two-year high. According to insiders, Trian currently holds more than $3 billion of P&G's stock.  ▪
ASIA & AUSTRALIA
Growth on Asian shores   Thanks to consumers in Vietnam and in other Asian markets drinking more Tiger Beer, Dutch brewer Heineken has forecast growth in sales and earnings this year. The company’s shares have risen as much as 4.6% . ▪
New plant, new jobs   Packaging giant Tetra Pak will invest EUR 24 million to build a new closures plant for carton packaging at its Rayong site in Thailand. This will generate about 60 jobs. The plant, which will be capable of producing over three billion closures per annum, will open in early 2018. ▪
Would you like a car with that, madam?   In a push to bring new and innovative brands to the shop floor, Australian department store Myer has partnered with electric car maker Tesla and is launching a mini showroom at its Melbourne CBD store that will display a brand-new Tesla Model X worth A$ 115,000.  ▪
Insights
Catastrophic cyber-attacks    According to the “2017 Annual Cybersecurity Report” from Cisco, companies that fall victim to data breeches can suffer customer, opportunity and revenue losses of more than 20%. Almost 3,000 chief security officers and security operations leaders from 13 countries were surveyed for the report.  ▪
Brits complain most about retail   The fourth annual “Consumer Action Monitor,” conducted by the Ombudsman Services has revealed that the retail industry was the subject of almost a quarter of the 55 million complaints recorded in 2016 and is the most complained about industry in the UK. Telecoms came second.  ▪

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