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Retail Update - powered by LebensmittelZeitung
Tuesday, 28 February 2017

Hello, dear reader!
Big-box retailer Walmart fuels the price war in the US, taking on discounter Aldi and putting pressure on its suppliers. Over in the UK, Tesco makes headlines with its decision to cut thousands of manager jobs and in Asia, Germany's Metro Group reveals plans for Myanmar. Enjoy your Tuesday bulletin and feel free to share it.


USA & Canada
Walmart provokes rivals   The US retail giant is continuing its aggressive moves to improve its price-perception, squeezing suppliers such as Procter & Gamble, Unilever and Kraft/Heinz as it aims to close the pricing gap with its US rivals and German discounter Aldi. Meanwhile, soon-to-be competitor Lidl has started hiring 800 store associates in North Carolina. ▪
Changing stores   Coffee giant Starbucks is closing its last two remaining juice stores Evolution Fresh in Seattle, but says that the brand will live on. Also continuing operations are the 10 stores of Cincinnati-based Remke Markets, which have been sold to Ohio company Fresh Encounter. ▪
Joining forces   Finance service provider Mastercard and tech major Oracle have entered a partnership to streamline in-store digital payments. Targeting retail stores, restaurants and hotels, their joint platform promises to reduce friction and offer more security for consumers. ▪
Tesco axes managers   The British supermarket leader plans to replace 1,700 deputy managers in its Express convenience chain. Their work will be taken over by an extra 3,300 lower paid staff. This comes on top of 1,000 job cuts announced in January. Over in Ireland, sales fell significantly in stores affected by the strike action. ▪
Brexit boost for Lidl    The German discounter takes advantage of the weaker pound by ramping up shipments of British products to its stores across Europe, exporting GBP 300 million worth UK goods, particularly meat and vegetables. The company is expected to use cost savings on its refurbishment programme to offset currency costs. ▪
French achievements   Retailer Système U has posted a 1.2% increase in sales to EUR 23.7 billion for 2016, its convenience stores division enjoyed a 9.4% increase to EUR 2.12 billion, while compatriot Intermarché expands in Portugal, where the company recently opened two hypermarkets with a new concept. ▪
Asia & South Pacific
Metro partners in Myanmar   The Düsseldorf-based international retailer has teamed up with Singapore-listed Yoma Strategic Holdings to establish an integrated wholesale distribution platform in the country. Metro Myanmar is looking at improving the nation’s supply chain. The German group will hold an 85% stake. ▪
Indian initiatives   Mumbai-based supermarket chain DM aims to reach its customers faster and pilots a number of delivery projects. Due to higher input costs, FMCG makers in India have announced to raise prices up to 7% for packaged products. Among them are Biscuit maker Britannia, Amul and Dabur. ▪
Fresh opportunities    Kiwifruit marketer Zespri has signed a statement of intent for commercial opportunities in Iran and produce company Seeka, which handled a record volume of New Zealand kiwifruit, has reported a significant profit growth as it continues to invest in improving its infrastructure. ▪
Insider Insights
Online versus in-store pricing   Brick-and-mortar retailers have been struggling with pricing since Amazon arrived, 23 years ago. Gaining clarity whether prices should be the same online and in stores is critical for them to successfully compete in both environments, explains the Harvard Business Review.  ▪
Tackling waste   350,000 tonnes of avoidable household food waste, worth an estimated GBP 1 billion annually, could be prevented through further packaging and food label changes at key food items in British supermarkets, according to an analysis by global compliance experts WRAPS's latest retailer survey. ▪

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