This week’s top stories in Retail - November 26th 2011
Brasher dismisses Clubcard concerns
Tesco’s incoming UK chief executive Richard Brasher has dismissed suggestions that its ramped-up loyalty programme is inflating UK sales. However, Brasher has said that the numbers that have been quoted are “disproportionate to reality”. The retailer doubled rewards to customers using its Clubcard scheme about 18 months ago and will allow shoppers to double vouchers in-store this Christmas. Brasher said Clubcard was “a very important part of what we do… We are very comfortable in the way we account for it.”
From Somerfield to Cath Kidston
Former Somerfield and Matalan boss Paul Mason is expected to become chairman of private equity-backed fashion and homewares retailer Cath Kidston. Mason, who stood down as Somerfield chief executive in March last year after selling the grocer to the Co-op for £1.7bn, is expected to help steer Cath Kidston’s growth at home and abroad.
John Lewis to add spas to stores
Department store chain John Lewis is to introduce services such as beauty spas and hairdressers to its larger stores from next year as it seeks to create more theatre for its customers. John Lewis will take out some stockroom space in larger shops to make way for new customer experiences. Services introduced are also likely to include manicures, make-up lessons and more theatrical cafes and food areas. Some caution has arisen around the idea however, referring in particular to Boots’ Wellbeing division which was abandoned shortly after launch.
Molasses sale continues Tate & Lyle refocus
Tate & Lyle has sold its molasses business, continuing its radical strategic shift away from the sugar trade. Proceeds from the £67m sale, to Northern Irish commodities group W&R Barnett, will be used to pay down the group’s debt. The latest disposal comes after Tate & Lyle earlier this year announced plans to refocus on its ingredients division. In July the group sold its historic European refining business to American Sugar Refining for £211m.
Reckitt installs ex-Unilever exec Doherty as new finance chief
Cillit Bang maker Reckitt Benckiser has appointed former Tesco and Unilever executive Liz Doherty as its new chief financial officer. Doherty spent seven years at Tesco as international finance director and was at Unilever for more than 20 years. Most recently she worked for Australian supply chain consultancy Brambles Industries and is currently a non-executive director at brewer SAB Miller. At Reckitt, Doherty replaces Colin Day, whose departure from the cleaning products giant was announced last month. She begins in her new role in January and will serve a brief handover period with Day.
Northern boss Barden bags Brakes switch
Northern Foods chief executive Stefan Barden has sealed a surprise switch to foodservice giant Brakes. Barden will leave Northern next week, just a fortnight after the manufacturer announced plans to merge with chilled food giant Greencore Group. His start date at Brakes is yet to be confirmed. Brakes has been on the lookout since August for a new figurehead to drive its £2bn UK business. Group chief executive Philip Jansen said the capture of Barden would give the UK business dedicated leadership and enable group chief operating officer Ian Goldsmith to focus on building international operations.
Sainsbury’s adds services for shoppers’ convenience
Sainsbury’s has revealed “early stage” plans to allow doctors to open GP surgeries within its stores for free as part of a strategy to be more community focussed. A Sainsbury’s spokesperson says: “One thing that customers always tell us is that it would be useful to have a GP in-store. It’s part of our wider agenda to play a bigger part in the community.” Asda has previously trialled in-store doctor surgeries. Meanwhile, department store chain John Lewis is understood to be introducing services such as spas and hairdressers as part of plans to enhance the in-store experience.
Retailers expecting a tough Christmas
Retail sales rose in November but the outlook for Christmas trading is less favourable as businesses expect tough times ahead. According to a monthly poll by the CBI, 55% of businesses reported better sales in November than in the previous year. The CBI report claims that retailers are expecting the strong sales pattern to continue into December. However, only 11% of businesses expect sales to improve next year, due to the impact of the VAT increase from 17.5% to 20% on 1 January. Ian McCafferty, CBI chief economic adviser, says: “Confidence remains fragile, VAT is rising in January, and a combination of weak wage growth and high inflation is eating into household incomes.”
The man from Del Monte says yes to $5bn sale
Del Monte Foods has been sold to a private equity group led by Kohlberg Kravis Roberts & Co for $5.3bn (£3.4bn). The company is best known in the UK for its “Man From Del Monte” television advertisements, which saw a beige suited man approving the quality of the fruit used in its tinned products. Del Monte Foods has been the subject of takeover rumours for months. The deal values the company at $19 a share, 40% over Del Monte’s average closing share price in the past three months. Simon Brown, head of the KKR’s North American consumer practice, described Del Monte’s brand portfolio as “first rate”.