This week’s top stories in Retail - November 12th 2010
Sainsbury’s posts 7% sales increase
Sainsbury’s says its strategy of “universal customer appeal” is helping boost performance in the still uncertain economic environment, as the supermarket reports sales and profit increased in the first-half. The company registered a 7% increase in total sales to £11.9bn in the 28 weeks to 2 October. The sales uplift helped push pre-tax profit up Sainsbury’s’ has been outperforming rivals. Its share of the market now stands at 16.2%, the supermarket says, up from 15.9%.
Morrisons Christmas ad pushes fresh message
Morrisons is launching its Christmas television campaign to drive its fresh food message in the run up to the festive season. The ad campaign breaks tomorrow (6 November) during The X Factor on ITV. Michael Bates, Morrisons marketing director, says the advertising and in-store campaign of the Morrisons Best range “reinforces Morrisons’ fresh food message”. The supermarket is pushing its premium range Morrisons Best with an “aggressive promotional package to drive footfall, encourage new shoppers and reward existing customers” with a 25% off promotion and an extensive sampling campaign.
Scottish minimum alcohol price policy rejected
The Scottish Government’s bid to introduce a minimum price for alcohol has been rejected by the country’s Parliament. Members of the Scottish Parliament have voted 76 to 49 against introducing a minimum price of 45p per unit of alcohol. Simon Litherland, managing director of Diageo GB, welcomed the result saying “As we have previously stated, we firmly believed minimum pricing was not an effective solution in tackling alcohol misuse. The debate has clearly moved on and now we can look forward to working collectively with other stakeholders in Scotland and the UK to support targeted interventions which can make a real difference to dealing with the problem of alcohol misuse”.
Gap opens in China
Gap opened its first store in China today, marking the beginning of the American retailer’s assault on the Chinese market. The flagship store in Shanghai is the first of four store to open across China in the next few weeks. The online store also launches today. This move into China marks a cornerstone in Gap’s global expansion strategy.
JJB issues profit warning
JJB has issued a profit warning after like for like sales in its current trading period were lower than planned. Like for like sales increased by 13.1%, which after taking account of the retailer’s promotional activity and weakening market, was lower than expected. The full year outcome remains dependent on the success if the Christmas and New Year trading period. According to city analysts, the update is a disappointing result and proves that JJB has a number of obstacles to overcome in its recovery - “the focus in the short term has to be on cash generation…and to create reinvestment opportunities back into the estate.”
Charles Kay steps down from Netto UK
MD of Netto UK, Charles Kay, has stepped down after only 6 months since the discounter’s UK business was bought by Asda. It is not yet known who will replace Kay nor whether he has a new position to move on to. It had been expected that Kay would stay in his role until the conversion to Asda was complete.
Shapland eyeing overseas growth for Sainsbury’s
Sainsbury’s has given its strongest indication yet that it will look abroad for the next major phase of its growth - with India likely to be next on the agenda. Sainsbury’s has previously indicated the Far East was its most likely area of expansion. In September Shapland was dispatched to China on a fact-finding mission, in the latest move by the supermarket to identify overseas opportunities. That came after Michael Hodgson was posted to Shanghai in the new role of international trading strategy chief.
Bolland cuts back the brands in new M&S masterplan
Marks & Spencer is to slash the number of branded food products it sells as part of a new focus on “fresh, speciality and convenience”. The changes come as part of Marc Bolland’s eagerly awaited business review, six months after he joined the retailer as its latest chief executive. Bolland said M&S would establish “a clear market position as a high-quality retailer, inspiring customers with unrivalled quality and innovation”. It plans to introduce 100 exclusive international brands and will increase its food lines by 1,000 to 8,000. Branded foods would be cut from around 400 to 100 and would “play a role only where we cannot develop our own best-in-class M&S alternatives,” Bolland said. The number of Simply Food stores is to be increased, but M&S ruled out the launch of a full online food offer.
Tesco Direct debuts non-food site for smartphones
Tesco Direct has launched a new website for smartphone users selling non-food and household items. The site follows the addition of a Tesco’s grocery app featured a barcode scanning facility for iPhone users. The latest launch allows customers to locate stores, search the entire Tesco Direct product range, add products to a shopping basket and pay. Shoppers can start transactions on their phone before finishing the order on a home computer. A marketing push over the next few weeks will work to improve awareness of the site and will seek feedback from customers. Smartphone-friendly websites relating to grocery and Clubcard are expected in early 2011.