Retail Update - powered by LebensmittelZeitung
Retail Update - powered by LebensmittelZeitung
Thursday, 18 August 2016

Hello, dear reader!
Numbers, numbers and more numbers - The Switzerland-based food giant Nestlé and US retail heavyweights Target, Staples and Lowe's have revealed their latest figures. China's Tencent as well as Denmark's Carlsberg also reported results. Mergers and other deals were in the headlines in Asia, Australia and Europe, where Germany's Tchibo acquired a Scottish coffee roaster to expand its footprint in the UK.

asia & australasia
Chinese overseas investments   E-commerce powerhouse Alibaba is in discussions to acquire Indian online marketplace Shopclues, which is valued at over US$ 1 billion. ▪
Beating estimates    Internet company Tencent, best known for its messaging app WeChat, saw revenue grow at its fastest rate in more than three years. WeChat also offers food deliveries and online shopping.  ▪
Expanding in Oceania    Universal Robina is set to grow its footprint in the South Pacific with the acquisition of Snack Brands Australia for US$ 460.86 million. The deal comes two years after the Philippine-based snacks and drinks maker purchased Griffin’s Foods, New Zealand’s largest biscuits maker. ▪
Cross-border acquisitions   German coffee giant Tchibo expands its business across the UK with the acquisition of Scottish coffee roaster Matthew Algie for an undisclosed sum +++ Online glasses retailer MyOptique, which operates sites in the UK and Germany, has been purchased by French eyewear giant Essilor. ▪
Brewing strategies   Copenhagen-based brewer Carlsberg posted half-year results slightly below expectations due to the beer-market concentration in Eastern Europe. Danish brewer Harboe is increasing its investments in Brazil, aiming to make the South American country one of its top 10 markets by 2020. ▪
Ikea changes policy   The Swedish furniture retailer has announced a change to its lifelong return policy in Germany. Beginning September 1 of this year, customers will have 365 days to return an item without any explanation and get their money back. ▪
Sales target missed  The Swiss food and drinks giant Nestlé has again failed to deliver on its organic growth target of 5% to 6%. The first-half revenue was 43.2 billion Swiss francs; first-half net profit fell 8.9% to 4.1 billion francs.   ▪


usa & canada
Target looks for fixes   The US discount retailer reported a significant dip in sales. Net income for the quarter was US$ 680 million, down from US$ 753 million a year ago. One of the strategies to improve the company's competitive position is to upgrade the US$ 20 billion grocery business by strengthening its private-label food brands. ▪
Results and major initiatives   Department store operator J.C. Penney outlined its long-term strategy, saying it will step up its focus on exclusive and private brands. Office supplies retailer Staples reports a 3.7% fall to US$ 4.75 billion in the second quarter, blaming a reduced number of stores and intense competition. Home improvement chain Lowe's missed analysts' expectation with a modest growth in Q2, where sales increased 5.3% to US$ 18.3 billion.   ▪


what to watch
Sugar tax pressure   The UK government plans to use the sugar tax it will levy on softdrinks companies to tackle childhood obesity.  In South Africa, the Beverage Association has warned that up to 70,000 jobs in the industry could be lost if the Treasury’s tax on sugar-sweetened drinks were implemented in its current form. ▪
Omnichannel profitability   A study by RetailMeNot has found that a significant number of UK retailers are struggling to integrate omnichannel sales. Although bricks-and-mortar retail is not dying, longterm winners will be those who are visible across the channels. ▪

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