Retail Round-Up December 3rd 2010
JJB likely to breach banking covenants
JJB has announced that it is likely to breach its banking covenants as a result of challenging trading conditions and like-for-like sales remaining below expectations. The company has said that it is ‘actively engaged’ in discussions with its advisers and Bank of Scotland over current covenants and future financing of the business. Despite there still being the Christmas trading period ahead, JJB has said that “the outlook for the full year remains uncertain”.
Waitrose weekly sales up 11%
Waitrose total sales were up 11% last week as shoppers stock up on wintry foods for the cold weather. Sales of tinned and long-life products increased in particular, and freezers were also stocked up with frozen roast potatoes and Yorkshire puddings to ensure that the traditional sunday roast does not suffer with the snow! Online grocery deliveries have also increased by 41.5% year on year since the cold spell began.
Grocery spend to top £180bn by 2015
Consumers will spend £182.7bn in grocery retailers by 2015, an average annual growth of 3.9%, according to grocery research house IGD. Gavin Rothwell, UK research manager, IGD said: “Many UK retailers have announced major development plans in areas such as convenience and online – all of which are helping drive growth. Multi-format and multi-channel strategies are gaining traction and scale as retailers seek to reach shoppers in different ways”.
Amazon faces boycott over WikiLeaks row
Amazon could face a boycott from free speech campaigners after it stopped hosting whistle blowing site WikiLeaks on its servers. WikiLeaks has caused global controversy this week after making public thousands of confidential political documents and free speech campaigners say consumers should now boycott the online retailer. Amazon is thought to have come under pressure from US Government. Joe Lieberman, chairman of the US senate Homeland Security Committee has called on Amazon and other companies to “terminate their relationship” with the controversial site.
OFT urges brands to review “misleading” price ads
Retail and brand marketers are being urged to review their pricing strategies by the Office of Fair Trading (OFT) or face tough “enforcement action” following its report into misleading price advertising. The OFT says it recognises that advertising price is a “key part of active price competition which benefits both consumers and the economy” but warns that some pricing practices can mislead consumers and break the law. The report identified seven potentially misleading pricing practices as part of a new framework to regulate price advertising.
Dixons says force will be with it at Christmas
Dixons Retail, which owns the Currys and PC World chains, says that the recent launch of its Star Wars-themed advertising campaign should help boost sales during crucial Christmas trading. The retailer’s forecast comes as it reports that losses narrowed in the first half. The pre-tax loss was £7.9m for the 24 weeks to 16 October, it says, from £17.6m a year earlier. The company, which traditionally makes most of its profit in the second-half of its financial year, says that Christmas trading should be lifted by the launch of the campaign featuring Star Wars characters R2-D2 and C-3PO.
Sainsbury’s Shrugs off big freeze for Super Wednesday store openings
Sainsbury’s shrugged off the snow and ice yesterday to add more retail space in a single day than any other day this year. While much of the nation struggled to come to terms with the harsh weather, the supermarket opened more than 225,000 sq ft of retail space on what it dubbed ‘Super Wednesday’. New stores were opened in Stanway in Essex, Neston on the Wirral and Hawick in Scotland. Extensions were completed at four additional stores.The openings come as part of a drive to open half a million sq ft of shop space in the run-up to Christmas. This year the supermarket will have added 2.5 million sq ft to its estate in total.
Andrex puppy gets digital makeover
The Andrex puppy – one of the most enduring brand ambassadors in UK advertising – has been given a digital makeover. The lovable Labrador has been replaced by a computer-generated version after almost 40 years plugging the loo roll brand. The CGI puppy makes its debut in a new advert that airs tonight during ITV’s I’m A Celebrity Get Me Out of Here. Andrex, made by the US manufacturer Kimberly-Clark, said the CGI creation was six months in the making.
A quarter of Christmas gifts to be spent online
One pound in every four spent this year on Christmas presents will be spent via the internet, new research suggests. Traditional high street leaders are also set to suffer due to aggressive promoting by the supermarkets on non-food items such as toys, Kantar Worldpanel suggested. Earlier this week data from the IGD suggested online grocery sales were set to double over the next five years to £9.5bn.