Retail Update - powered by LebensmittelZeitung
Retail Update - powered by LebensmittelZeitung
Friday, 03 March 2017

Hello, dear reader,
German discount powerhouse Aldi has set a date for its Chinese entry. Amazon makes a huge commitment to renewable energy by investing into solar panels worldwide. US retailer Kroger posted an unexpected decline, and Austrian students have their say on how the supermarket of the future should look like. Enjoy the read and have a great weekend.


Aldi confirms China launch   The German retailer is planning to start online sales in the country via Alibaba's Tmall on March 20, hoping to appeal to Chinese consumers interested in German brands with a selection of products. Aldi's foray is once again placing the company in front of competitor Lidl (subscription) as in Australia or the US.  ▪
Financial moves   Chinese e-commerce company has agreed to sell its finance arm for US$ 2.1 billion as part of a spin-off deal that might create the biggest rival to Alibaba's Ant Financial. Beijing-based Commercial property developer Dalian Wanda has partnered with credit card provider Unionpay to support online to offline payment integration. ▪
Synergy savings   Anheuser-Busch InBev, the world's largest brewer, raised its forecast for savings from its SABmiller takeover to US$ 2.8 billion following weaker-than-expected earnings as beer sales suffered in Brazil. Meanwhile, merged giant Ahold Delhaize wants to achieve EUR 220 million of net synergies by the end of the year. ▪
Squeezing suppliers   British supermarket operator Asda is imposing harsher payment terms on its clothing contractors as it attempts to turn the business around, while Russia's X5 Retail Group (paywall) has asked its suppliers to reduce purchase prices by 10%, pointing out that the request is caused by the strengthening of the rouble.  ▪
Partnerships in Italy   Carrefour Italy has chosen refrigeration supplier Rivacold as its main partner for the development of its refrigeration plant in Turin, and Coop Italia has signed an agreement with the Milan Center for Food Law and Policy to promote best practices to eliminate the exploitation of labour in agriculture.  ▪
USA & Canada
Tough times ahead   Due to increased competition from Walmart and food price deflation, US retailer Kroger has posted an unexpected decline in Q4 sales. The company's net income decreased 9.5% to US$ 506 million. Meanwhile, struggling electronics retailer Hhgregg will close three distribution facilities and 88 stores amongst rumours that it is filing for bankruptcy protection.  ▪
Amazon's green initiatives   The online mega-retailer is looking to improve its renewable energy track record and plans to install solar panels on the rooftop of its fulfilment facilities around the world. In another move, Amazon is working to improve the functionality of its voice assistant Alexa.  ▪
Innovative investments   Idaho-based grocer Albertsons follows the footsteps of Ahold Delhaize and has partnered with online platform RangeMe to streamline product sourcing. In a bid to enhance shopping experience, family-owned supermarket chain Meijer plans to spend more than US$ 375 million in 7 new supercentres and 22 remodel projects. ▪
What to watch
Cutting advertising costs   The British FMCG industry is saving on marketing instead of lowering prices, hitting the income of media groups. TV network ITV reported a 6% decline in ad revenue for the first four months of 2017. ▪
Spar encourages students   Looking for fresh ideas to improve stores, Spar Austria has run a competition for students from Salzburg Technical College to develop an energy and self-sufficient supermarket of the future. The most compelling project was awarded. ▪
And the winner is ...   Ferrero. The Italian confectionery giant is the world’s most reputable company in the food industry, according to the 2017 Global RepTrak 100. Based on over 170,000 collected ratings, the survey is the largest corporate reputation study of its kind. ▪

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