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RETAIL NEWS FLASH January 02, 2014

Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 9 Technology .......................................................................................................................... 15 Strategy .............................................................................................................................. 20

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Sales & Marketing Benetton discontinues Playlife, Killer Loop and Jeans' West brands as part of business restructure December 30, 2013 | The Retail Bulletin west_brands_as_part_of_business_restructure_30-12-13/ The Benetton Group has confirmed that following the board's decision to focus on the two main brands of United Colors of Benetton and Sisley, it will now discontinue its Playlife, Killer Loop and Jeans' West brands. In an interview with WWD, chairman Alessandro Benetton said the decision to withdraw the brands had been taken for financial reasons in line with the strategic priorities outlined in the group’s new three-year programme. Last month, the Benetton Group announced that it had approved a programme in which three new entities would be created. The first would focus on the United Colors of Benetton and Sisley brands, the second on manufacturing and the third on real estate management. Alessandro Benetton also confirmed in the interview that the new business programme was showing “some early signs of a change in trend” despite being “only the initial signs of a course that remains lengthy.” Benetton added that the group expects to see a “substantially unchanged level of turnover” at the end of the three year period while gradually offsetting its exit from non-strategic countries with like-for-like sales growth. Meanwhile, the group will close 2013 with a debt 50% lower than in 2012 and is aiming to achieve a similar result in 2014.

Fresh & Easy Open 24 Hours in Las Vegas December 27, 2013 | Supermarket News LAS VEGAS — Most Fresh & Easy Neighborhood Market stores in Nevada will be open 24 hours a day, effective Dec. 30, the company said in a post on its website. El Segundo, Calf.-based Fresh & Easy, recently acquired by Los Angles-based Yucaipa Cos., previously unveiled extended hours for its Arizona and California locations. Stores in California and Arizona are now open from 6 a.m. until midnight daily. The previous hours were from 7 a.m. or 8 a.m., depending on the location, until 10 p.m.

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Most of the 19 Fresh & Easy locations in Nevada, all in the Las Vegas market, had previously been open from 8 a.m. to 10 p.m. As previously reported, Fresh & Easy also is adding store personnel and is considering going to fullservice checkouts.

John Lewis clearance sale proves mobile Christmas prediction December 27, 2013 | The Retail Bulletin rediction_27-12-13/ John Lewis says it has been proved right in its prediction that this year would be the UK's first 'mobile Christmas'. The retailer has reported that on Christmas Day traffic to from mobile phones and tablets made up three quarters of total traffic to overtake desktops by a considerable margin. Having started its clearance sale at 5pm on Christmas Eve, during the first hour John Lewis saw orders increase by 13% on last year while on Christmas Day orders rose by 19%. More customers than ever before chose to browse the retailer’s website on mobile devices with Christmas Eve seeing mobile take 56% of the traffic. On Christmas Day this rose to a record-breaking 76%. Mark Lewis, online director at John Lewis, said: “We predicted in October that mobile would be the shining star of Christmas 2013. With tablets being the must-have product throughout the year it was clear that mobile would step up, but yesterday surpassed even our expectations. “The tipping point has now passed and we expect mobile to be the way the majority of people shop online from now on. It will only grow from here and we will be working hard to ensure we meet our customers’ expectations, be that new technology or the seamless experience across multiple channels. Shopping is becoming much more of a social experience with people browsing, purchasing and sharing ideas with others using their mobile phones and tablets.” John Lewis saw shoppers snapping up bargains across its home, fashion and technology departments. The most popular items were laptops, Egyptian cotton bedding and towels, TVs, tablets, washing machines, handbags, suits and beauty products. One of the best selling items online was a treadmill as many customers responded to the annual Christmas Day overindulgence. The success of the clearance sale online follows a record final pre-Christmas week for John Lewis. The week ending Saturday 21 December saw sales reach £164.4 million, up 4.2% on the same week last year, to break the £160 million barrier for the first time. Lewis added: “Many of our customers clearly chose to shop right up until the last minute this year and I’m thrilled that we were able to provide them with the gifts they were looking for. The successful start to Clearance on shows that we are also meeting the needs of bargain hunters online. Our focus now shifts to our shops opening their doors tomorrow for the start of Clearance in our branches.”

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Amazon Announces Christmas Week Deals In Amazon Appstore December 26, 2013 | Kantar Retail B9fmYOkO4%2fZciw%3d%3d On December 23, Amazon announced Christmas week deals on content in the Amazon Appstore. From December 24 through December 28, shoppers who download an app or game from the newest version of the Amazon Appstore for Android will receive a credit of USD 5.00 for a future Appstore purchase. All Amazon Appstore shoppers will also find a paid app for free every day, exclusive Free App of the Day bundles on December 25 and December 26, and discounts from 50%-90%. Throughout the Christmas week shoppers can find additional deals in the Amazon Appstore including: •

Up to 65% off apps and games from top game developers including Electronic Arts, Sega of America and Gameloft.

One-day-only sale on Office Suite Pro 7 – only USD 0.99 (originally USD 14.99) on December 26.

Free App of the Day bundles (savings of over USD 50.00): –

December 25 – Free App of the Day Welcome Pack, which includes My Alarm Clock, Handrite Notes Notepad Pro, Stellarium Mobile Sky Map, Relax Melodies Premium: A White Noise Ambience For Sleep, Meditation & Yoga, SPC Music Sketchpad 2, PrinterShare Mobile Print, and Moon Phase Pro

December 26 – Free App of the Day Favorites, which includes Daily Ab Workout, The Lost City, Voxel Invaders, Chimpact, Osmos HD, Fraction Calculator Plus, Ultimate Hangman HD, From Cheese, and Business Calendar

Free App of the Day deals:      

December 23 – Draw a Stickman: EPIC December 24 – Piano Master Christmas Special December 25 – Angry Birds Star Wars II December 26 – Where’s my Perry? December 27 – Quell Memento December 28 – Doodle Farm

Macy’s kicks off post-holiday campaign December 26, 2013 | Retailing Today Macy’s is looking to drive post-holiday shoppers to its stores with its “Week of Wonderful” campaign, which it started last year.

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Aiming to capitalize on shoppers who are hitting stores to use their gift cards, the retailer is touting the seven-day shopping event as an opportunity for consumers to stock up on “fresh merchandise” for the New Year. “Last year, Macy’s created ‘Week of Wonderful’ to make this popular, post-holiday shopping time even more fun and helpful for customers,” said Martine Reardon, chief marketing officer. “In this ‘national vacation week’ just following Christmas, we’re able to offer new merchandise in our stores, so shoppers can find anything that may not have made it under the tree, with the latest styles from top designers and must-have items for the whole family.” Macy’s “Week of Wonderful” runs Friday, Dec. 27, through Thursday, Jan. 2, 2014. The campaign will be supported by promotions and events in select stores, social media, advertising and direct mail, including a 52-page book of new merchandise and a 20-page spread dedicated to activewear.

Kroger Issues Warning on Facebook Scam December 24, 2013 | Supermarket News CINCINNATI — Kroger Co. here has issued a warning to customers on its Facebook page about a fraudulent $250 “Kroger gift card giveaway.” “This giveaway is not affiliated with or supported by the Kroger Co.,” the company said in a Facebook post. “We recommend not engaging with the site or providing personal information. Our team is actively working to address the issue.” According to a report on, the bogus offer is a attempt to get Facebook users to participate in surveys and enter personal information. “In reality, users will never receive the promised gift card, no matter how many surveys they participate in,” the website explained. On Tuesday morning the offer was still listed on at least one website found via a Google search, asking users to share it on their Facebook page.

Better late than never for MORRISONS online December 20, 2013 | Planet Retail Today, Morrisons has launched its long-awaited and much-discussed transactional website. While the site has opened to the public in the Midlands, deliveries will not actually be available until 10 January. The retailer will roll out nationwide access to its online shop in monthly stages.

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The site has a number of innovative features that seek to differentiate it from well-established rivals Tesco, Asda and Sainsbury’s. These include “virtual” butchers and fishmongers allowing shoppers to pick the exact cut or fillet and thickness of their meat and fish. The site also offers advice on how much shoppers should be ordering based on family size. There are also cooking tips, as well as video content and recipes. Morrisons shoppers will be able to select one-hour delivery slots with off-peak delivery priced at GBP1 (USD1.58), a standard charge of GBP3 (USD4.75) and a GBP5 (USD7.92) fee for peak time delivery. We should not forget it is almost 14 years since Tesco launched its online grocery delivery service in the UK and so the retailer has a considerable amount of catching up to do. That said, Morrisons has last mover advantage and will, without doubt, benefit from its partnership with Ocado. Morrisons is certainly evidently utilising Ocado’s platform functionalities, allowing the creation of the virtual butcher and fishmonger on the website.

Walmart keeps on expansion path in China December 20, 2013 | Fresh Plaza Walmart says that Hong Kong's market is too competitive and it is instead focused on expanding stores and streamlining supply chains on the mainland and in India. "We enter a market because we believe that we're able to add value to the customer and make a difference through scale," Walmart Asia chief executive Scott Price said in Hong Kong yesterday, adding that "given the maturity and the duopoly that exists in Hong Kong", opening stores in the city did not interest the US-based firm. The focus will be on western China and second- and third-tier cities where the company sees opportunities to leverage its global sourcing and distribution network to compete against less resourceful regional players. Walmart is the third-largest supermarket chain on the mainland with a market share of 5.8 per cent and US$9.2 billion in revenue last year, according to China Market Research Group (CMRG). The firm has more than 11,000 outlets worldwide, including 20 in India where, because of prohibitions on foreign-owned supermarkets, it focuses on selling wholesale goods to retailers. Central to this is a joined-up logistics network. He said that unlike its competitors, Walmart supplied most of its stores through a chain of 14 distribution centres, each responsible for keeping shelves stocked and screening products for deficiencies such as food-related health hazards. Total logistics costs on the mainland topped 9.4 trillion yuan (HK$12 trillion) last year, equivalent to 18 per cent of gross domestic product, China Federation of Logistics and Purchasing data shows, with road tolls and trucking penalties accounting for a third of those costs. The new battleground is e-commerce and same-day home delivery. CMRG's Benjamin Cavender said Walmart would need to invest smartly to get the logistics right and maintain margin.

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Ikea launches employee loyalty program December 19, 2013 | Retailing Today Ikea plans to launch an employee loyalty program launch in the new year. Beginning in 2014, every employee worldwide will receive an equal contribution to their pension plan, based on the company's financial goals being met. The program named Tack! — which means ‘thank you’ in Swedish — was inspired by Ikea founder Ingvar Kamprad's wish to “share the success of the Ikea Group with all employees.” "In a time when so many other businesses are struggling, it is wonderful to be able to reward our valued employees and contribute to their future." says Kerri Molinaro, president of Ikea Canada. "Our ambition is to be an employer of choice and our commitment is to be a leader in wages, benefits and life-long security for our employees" Ikea Group employees will, after a qualification period of five consecutive financial years of employment, receive a contribution to their pension plans. The basic principle is that pension payout begins at regular retirement age. Full-time employees in a country will receive the same amount regardless of unit, position or salary level. Part-time employees will receive a proportional amount in relation to hours worked. Tack! will be launching just a few months after the One Ikea Bonus Program, a performance-driven bonus system, which is connected to the individual salary level, and will be paid annually, if the set goals are reached. opens NORDSTROM insert December 17, 2013 | Planet Retail Online-only jewellery retailer Blue Nile is to take a dedicated counter in the upscale department store operator Nordstrom’s flagship in Seattle, WA. The arrangement is part of a six-month pilot geared toward couples who want to view engagement or wedding rings in person before purchasing from The jewellery counter is situated in the wedding department, where Blue Nile non-commissioned representatives are on hand to answer questions and place online orders for shoppers. The assortment includes about 75 engagement rings and 40 wedding bands, with the most expensive piece approaching USD20,000. The test is only the most recent example of Nordstrom partnering with best-in-class category ecommerce specialists on instore displays. Nordstrom carries menswear from Bonobos and shoes from Sole Society in selected locations. Such collaborations further the retailer’s positioning as a curator of the best brands, both offline and online.

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Finance Debenhams warns on profit after disappointing Christmas sales December 31, 2013 | The Retail Bulletin tmas_sales_31-12-13/ Debenhams has reported disappointing sales in the run-up to Christmas and as a result has warned that profits will be significantly lower than last year. The retailer now expects profit before tax for the first half to be in the region of ÂŁ85 million compared to ÂŁ114.7 million in the same period in the previous year. In a trading statement issued today, the department store said that group like-for-like sales edged up 0.1% in the 17 weeks to 28 December with group gross transaction value rising by 0.7%. The better performing categories were beauty, home and gifting while clothing sales were weaker. Online sales continued to grow, increasing by 27% for the 17 week period and accounting for 15.6% of total sales compared with 12.4% for the same period last year. However, online delivery income was lower than anticipated. Debenhams said the retail sector had been highly competitive in the period with an unprecedented level of promotional activity which it said was the result of declining high street footfall, continued pressure on household incomes and the impact of unseasonal weather on clothing and clothingrelated sales. Gross margin declined in the 17 weeks due to product category mix and higher markdown. In addition, Debenhams did not experience the anticipated final surge in sales in the last week of the period and as a result expects to cut prices further to clear stock in January and February. Michael Sharp, chief executive of Debenhams, said: "As has been widely commented on in the media, the market was highly promotional in the run up to Christmas and we responded to these conditions to ensure our offer was competitive. However, this extremely difficult environment has inevitably had an impact on both our sales and profitability. "Looking forward, I expect conditions to remain highly competitive as we enter 2014. Everyone in the organisation is focused on improving performance and growing the business, building on the four pillars of our strategy which I remain confident will lead to success over the longer term."

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Kurt Geiger steps up with rising sales December 24, 2013 | The Retail Bulletin Premium footwear retailer Kurt Geiger has seen its sales jump by 18% year-on-year in the last four weeks. The retailer, which has 250 stores across the UK, has also revealed that online orders have surged by 90%. Boots have proved to be particularly popular and Kurt Geiger says it expects to sell 150,000 pairs throughout December. For the year to date, Kurt Geiger’s sales have climbed by 9% to £230 million, boosted by a 21% increase in overseas sales. Last week, the retailer’s US parent company The Jones Group announced that it had been acquired by private equity group Sycamore Partners in a deal worth $1.2 billion.

WALGREENS improved synergies boost profit in Q1 December 23, 2013 | Planet Retail Walgreens earnings for the first quarter of fiscal year 2014 ended November 30 were USD695 million, an impressive 68.3% increase from the year-ago quarter. First quarter sales increased 5.9% to a record USD18.3 billion, bolstered by 5.4% comparable store sales, slightly increased customer traffic and an average basket size increase of 2.2%. Prescription sales, which accounted for 64.7% of sales in the quarter, increased 7.3%. The company exceeded, by 2.9 percentage points, the prescription growth rate of the rest of the industry during the same period as reported by IMS Health. As Walgreens positions itself to operate on a global platform in connection with its option to acquire the remaining equity interest in Alliance Boots and its strategic partnership with AmerisourceBergen, it is assessing various steps to optimize its assets and cost structure. Already, the combined synergies for Walgreens and Alliance Boots in the first quarter were approximately USD107 million. During the next quarter, Walgreens will be launching several Boots product brands, including No7, across stores in the Phoenix market. In addition, it will be advancing Walgreens and Alliance Boots joint vision with the appointment of Richard Ashworth as Healthcare Director, Health & Beauty UK and ROI, for Alliance Boots. Previously, Ashworth was Walgreens Corporate Operations Vice President for the western United States.

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DARDEN to spin off lacklustre Lobster December 19, 2013 | Planet Retail Darden has reported a sales increase of 4.6% to USD2.05 billion for its second quarter ended 24 November 2013. Olive Garden sales were up 2.4% to USD869 million; Red Lobster sales were down 4.9% to USD561 million; Longhorn Steakhouse sales were up 16.5% to USD320 million, while the Specialty Restaurant Group sales increased 20.6% to USD291 million. Net income for the period declined 41.1% to USD19.8 million. Olive Garden and Red Lobster same-restaurant sales declined 0.6% and 4.5% respectively. Longhorn Steakhouse same-restaurant sales grew 5.0% and The Specialty Restaurant Groups same-restaurant sales increased 6.7% at The Capital Grille, 6.2% at Bahama Breeze, 5.7% at Eddie V’s, 1.2% at Yard House and 1.2% at Seasons 52. During the quarter Darden added 99 net new restaurants: 25 Olive Garden, 46 Longhorn Steakhouse, four The Capital Grille, four Bahama Breeze, 10 Seasons 52, two Eddie V’s, seven Yard House while one Red Lobster outlet closed. To date Darden operates 2,174 restaurants. Darden also announced plans to separate out the company's Red Lobster business to enhance shareholder value. Although no final decision has been made on how this will be achieved, the company expects to execute a tax-free spin-off of Red Lobster to shareholders. However, it may also consider a sale of the Red Lobster business. Planet Retail views this as a mixed Q2 performance for Darden. Positives for the company include an increase in global sales and strong performances from Longhorn Steakhouse and the Specialty Restaurant Group. On the other hand, Red Lobster performed poorly, with sales and samerestaurant sales down, and this impacted the whole company negatively. The spin-off of Red Lobster will surely see more appetising financial figures for the company in the future.

Acquisition costs weigh on NEIMAN MARCUS December 19, 2013 | Planet Retail For the first quarter of the company’s 2014 fiscal year Neiman Marcus Group reported a net loss of USD13.1 million in the 13 weeks to 2 November. The loss compares to a net profit of USD49.6 million in the same year-ago quarter and is largely attributable to more than USD110 million in costs associated with its sale in September to Canada Pension Plan Investment Board and Ares Management.

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Total sales, though, continue to trend higher, increasing 5.7% year-over-year to USD1.13 billion, mirroring the comparable store sales gain. By segment, sales were strongest in the online division, up 10.4% in the quarter to USD239.8 million. The stores division posted a gain of 4.5% to USD889.3 million. The company’s healthy results underlie the bifurcation in US consumer spending, with retailers positioned at the poles performing better than mid-market players. Indeed, while other department store chains catering to less affluent shoppers have ratcheted up sales and extended opening hours in advance of Christmas, management at Neiman Marcus has maintained a promotional cadence similar to years past and still performed well.

Morrisons current sales make full-year targets difficult to meet December 19, 2013 | Fresh Plaza Supermarket group Morrisons needs a strong final quarter to hit ambitious targets and Questor is concerned the signs are not looking good. The latest unofficial trading update from research firm Kantar does not make for good reading. Morrisons’ like-for-like sales have declined by 0.8pc in the four weeks ended December 8, according to Kantar. In Morrisons’ defence, the most important three weeks of the Christmas trading period remain. And Morrisons is also open for an extra two days this year, with trading on Boxing Day and New Year’s Day. However, on the numbers we have here, it looks like Morrisons has left it too late and could well have to issue a profit warning. The group was slow to open the local convenience store formats and is only now building up its online capability. This has left it exposed as sales in the core superstores have suffered from customers with falling real incomes and increased competition from discounters such as Aldi and Lidl. Analysts at Shore Capital pointed out that Morrisons needs to return to like-for-like growth in the fourth quarter to hit full-year targets, adding: “The heat is certainly on for management to deliver a material improvement in across-the-board sales growth over the important Christmas period.” Morrisons’ management stressed that full-year targets remain unchanged in its most recent trading update.

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Stater Comps Up in Q4 December 18, 2013 | Supermarket News SAN BERNARDINO, Calif. — Stater Bros. Holdings here said an extra week in the prior fiscal year resulted in a drop in sales and earnings for its fiscal year and fourth quarter, but same-store sales rose in both periods. Net income for the 13-week quarter, which ended Sept. 29, declined 32.4% to $5 million, and sales fell 6.3% to $960.4 million, while same-store sales rose 0.6%. For the year, net income was down 19.5% to $37.7 million, and sales dropped 0.4% to $3.9 billion, while same-store sales increased 1.5%. Fiscal 2013 was a 52-week year with a 13-week fourth quarter, compared with a 53-week year and a 14-week fourth quarter in fiscal 2012. Adjusting for the extra week, sales for this year's fourth quarter were up 0.3%, and up 1.4%, for the year. "We've increased sales and customer counts as our valued customers have responded favorably to our marketing strategy of keeping our prices low during these continued challenging economic times, during [which] we have intentionally sacrificed some gross margin, which has affected our current-year earnings," said Jack Brown, chairman and chief executive officer. He said Stater has reduced debt over the past three years by approximately $176.5 million and plans to make an additional payment of $13.9 million to its term loan by Dec. 31 — actions that have enabled the company to lower interest costs "and invest more in our customers."

Losses keep coming for TOYS ‘R’ US December 18, 2013 | Planet Retail Toys ‘R’ Us has released results for its third quarter ended 2 November. Comparable store net sales declined 5.2% in its domestic US operations. At the company’s international segment comparable net sales slipped 3.0% as sales of seasonal, entertainment and juvenile categories waned. However, this figure is an improvement in comparison to the first half of fiscal 2013. Net sales decreased by USD118 million to USD2.5 billion compared to the previous year, which the company largely attributed to comparable store net sales declines. Net loss stands at USD605 million, compared to the previous year’s USD105 million, which is largely due to an increase in income tax expenses of USD379 million.

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The results come as yet another reminder of the difficulties entertainment retailers are facing from both online retailers and supermarkets that have diversified their product ranges. It may also suggest overseas markets are continuing to be problematic, especially given the negative effects of foreign currency translations, which have again impacted Toys ‘R’ Us’ results in this quarter.

H1 delight for DIXONS RETAIL December 17, 2013 | Planet Retail The six months to 31 October have yielded an encouraging crop of results for Dixons Retail, signalling a turnaround is well under way. The UK-based consumer electronics specialist posted a group-wide like-for-like sales uptick of 6%. Adjusted revenue grew 5% (in local currencies) to GBP3.43 billion (USD5.4 billion). Profitability has seen a marked improvement with underlying group EBIT from continuing operations up 52% to GBP48.1 million (USD76.2 million), thanks in part to a five-fold operating profit increase in the company’s UK & Ireland division. Due to the disposals of Electro World in Turkey and PIXmania across Europe (both unprofitable), as well as improved efficiency measures, the company says it remains on track to reduce costs by a targeted GBP45 million (USD71.3 million) in the current financial year. The fact that Dixons is reporting a group underlying profit this period is testament to the efficacy of its turnaround strategy – it is the first time the business has been out of the red in six years. However, Dixons may find the second half of this fiscal year somewhat more challenging given that it has now been 12 months since its largest UK rival, Comet, lapsed into administration. That event and the subsequent customer shift was a factor many claim contributed significantly to Dixons’ stellar performance in its home market over the last year.

One-off charges dent UNIFIED GROCERS FY December 16, 2013 | Planet Retail Retailer-owned wholesale grocery co-operative Unified Grocers announced total sales fell 1.9% to USD3.7 billion for the year ending 28 September. The group’s net loss was USD17.6 million, compared to earnings of USD2.0 million for the same period in 2012. The co-operative attributed the loss to one-time expenses totaling USD21.4 million, including USD9.8 million fee for early extinguishment senior secured notes, USD9.1 million in workers' compensation reserves for claims exposure and USD2.5 million in disposal costs related to leases and equipment. Bob Ling, President & CEO, said: "While some are experiencing ups and others downs, a significant number invested in the future growth and success of their businesses in 2013 by remodeling stores and, in some cases, opening new locations — an indication of confidence regarding future business prospects."

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Technology HOME BARGAINS invests in supply chain December 23, 2013 | Planet Retail TJ Morris, operating as Home Bargains, has invested in new purchase tracking software VBX Store Replenishment, as it looks to improve the efficiency of its supply chain, reports The Grocer. Transactions are recorded in real time from which store replenishment orders are produced. The software also generates a prediction of how a store could have performed if out of stock items had been available. TJ Morris’ servers have been updated to support the software, which will be used across its 320 store estate. Real–time sales information will allow Home Bargains to make more informed purchasing decisions, whilst improvements in the supply chain give the retailer that level of flexibility so crucial in today’s market. Ultimately it will be able to more readily adapt to changing consumer demands, whilst being able to leverage better deals with suppliers to undercut its competitors.

AMAZON Cloud looms over China December 19, 2013 | Planet Retail As it seeks to become the world’s biggest Cloud computing platform for businesses, and to compete effectively with Alibaba, Amazon is extending its Amazon Web Services (AWS) suite of products to China in early 2014. The US online behemoth is teaming up with local players to provide the infrastructure to underpin AWS. This move will enable Amazon to attract larger companies to its services, but more importantly will enable it to tap the very large and growing community of smaller and medium-sized businesses in China. That places Amazon into direct competition with Alibaba, which offers similar services. This will be very much a long-term project for the online retailer, which has been expanding its ecosystem and raising its profile in the country since 2004 when it acquired local site Joyo, which rebranded to in 2011. One caveat might be worth observing, though, is the deep suspicion with which Chinese communications and telecoms operations are viewed by authorities and regulators in the US. Amazon should be extremely careful in its choice of tech partners in China, especially if it is looking at Cloud-based collaborations.

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Target’s big data breach could prove costly December 19, 2013 | Retailing Today Target early Thursday confirmed widespread media reports that it suffered a major data breach that affected as many as 40 million credit and debit card transactions during a period that began the day before Thanksgiving through December 15. The big data breach revelation and subsequent negative publicity could not have come at a worse time as Target enters the busiest weekend of a shortened holiday season. In addition, the company remains focused on increasing the penetration rate and utilization of its proprietary REDcard credit and debit products which offer shoppers a 5% discount on most purchases. Target said it alerted authorities and financial institutions immediately after it was made aware of the unauthorized access and identified and resolved the matter, according to a statement by the company. Target did not say when it was made aware of the unauthorized access to payment card data or whether any fraudulently activity had occurred as a result. However, the potential for illegal card use would appear to be high since Target said it determined the information involved in this incident included customer name, credit or debit card number, and the card’s expiration date and three-digit security code. “Target’s first priority is preserving the trust of our guests and we have moved swiftly to address this issue, so guests can shop with confidence. We regret any inconvenience this may cause,” said Gregg Steinhafel, Target’s chairman, president and CEO. “We take this matter very seriously and are working with law enforcement to bring those responsible to justice.” Target said it was working with a leading third-party forensics firm to conduct a thorough investigation of the incident and to examine additional measures that could be taken to prevent a similar incident from occurring. “We are putting our full resources behind these efforts,” according to a statement on In the meantime, information Target posted on its Web site recommended customers should remain vigilant for incidents of fraud and identity theft by regularly review their account statements and monitoring free credit reports.

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MIGROS opts for GK quintet December 18, 2013 | Planet Retail Migros has decided to equip stores with five GK Software solutions distributed by SAP. The Swiss retailer will deploy SAP Point-of-Sale by GK, SAP Store Device Control by GK, SAP Mobile Offline Store by GK, SAP Open Scale Management by GK and SAP Label & Poster Print by GK. GK Software will also assume the implementation of the project across all locations of Migros’ various sales divisions in the country. In June this year, it became known that Migros was seeking to replace its legacy point of sale solution. The Swiss co-operative has used Visual Store software from IBM Retail Store Solutions, now part of Toshiba, for more than 12 years. The retailer was looking for a system which integrated sales and payment processes, master data and promotions, as well as marketing activities across channels and Migros’ Cumulus customer loyalty programme. Another requirement was that the solution would support the retailer’s self-scanning system Subito and its Bizerba scales system. Migros’ shortlist comprised Toshiba Global Commerce Solutions, GK Software, Wincor Nixdorf and NCR with its Retalix software. Martin Haas, Head of IT Services at Migros, stated at the time: "We are not looking for traditional POS software, but for an integrated IT concept for the next 10 years. “

JOHN LEWIS caters to the connected consumer December 17, 2013 | Planet Retail John Lewis is trialling mobile POS over the Christmas period in three stores as it ramps up its use of shopping technology. It is testing the use of transactional tablets in three stores - John Lewis Cheadle, John Lewis Brent Cross and Peter Jones in Sloane Square - enabling shoppers to buy directly from assistants on the shop floor. According to Planet Retail’s consumer research, 15% of consumers have engaged with an employee equipped with a tablet computer to help with purchasing decisions. In addition to equipping staff with tablets, John Lewis has mapped its Oxford Street, London flagship in Google Street View. The service allows customers to navigate the store and walk virtually through the aisles. The aim is to help shoppers navigate their way around the store and plan their shopping trip. With Planet Retail’s consumer data showing that 62% of consumers use their mobiles for shopping, and 37% having logged into a retailer’s instore Wi-Fi, providing such facilities is an excellent way of catering for the constantly connected consumer. If the trial is successful John Lewis will look into rolling it out to other branches in the next two years. Stores are integral to the omni-channel environment, but must become more enticing, engaging place to be. Retailers should be arming employees with the tools of the digital age, so that when customers of the digital age enter a store they can serve them effectively. As the channels continue to blur, the next retail revolution is likely to come from stores. Given the innovative approach being deployed by John Lewis, this looks certain.

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Instore multi-channel moves at M&S December 17, 2013 | Planet Retail Making the online offer accessible instore is one of the major challenges currently confronting bricks and mortar players. Now variety retailer Marks & Spencer has installed 700 Polytouch kiosks from Wincor Nixdorf in its high street stores across the UK. The 32“ and 22“ touchscreen-based selfservice terminals not only allow shoppers to browse for products held either instore or online, but are also equipped with Chip & PIN capabilities, enabling instant payment. With the new technology, M&S will be coming one step closer to providing shoppers with a real multi-channel shopping experience. The touchscreen terminals will enable M&S to make the instore shopping experience more convenient by allowing shoppers to move more freely between channels. Shoppers will also benefit from reduced queue times and smoother card payments.

Online styling chat with ASOS December 16, 2013 | Planet Retail http://ww Asos has joined forces with Google to launch a real-time chat service called Helpouts, giving shoppers access to live styling advice from professionals. The aim is to make Asos more ingrained in existing customers’ fashion habits, and break down barriers between potential customers and the Asos brand. The new advice service will be available from 16 December in the UK, US and Australia. People will be able to book appointments for a Helpout chat online, with the retailer offering up to 50 hours per week from Monday to Friday between 9am and 9pm GMT. Each individual can book a 15-minute slot with one of the professionals for free. Asos is the first British brand to use Google’s Helpouts chat facility and the first fashion retailer globally. It is another example of the innovative approach adopted by Asos to effectively cater for the needs and wants of its technically-aware, internet-savvy core customer base of twentysomething consumers. This is a great way of blending content with commerce to provide personal shopping to the masses, building brand advocacy and driving conversion rates.

Office Depot to offer 3-D printing services in 150 stores December 16, 2013 | Retailing Today Office Depot plans to expand 3D Systems Cube 3-D printing services to 150 Office Depot stores nationwide as a result of positive customer feedback.

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Customers can see 3-D printing technology in action by attending demonstrations in stores in participating states — California, Colorado, Florida, Georgia, Illinois, Nevada, Oregon and Texas. Cube or CubeX applications are also available for purchase on for consumers who want to print on their own. The 3D Systems Cube is equipped with a tablet-like touchscreen and offers 16 different color options, including two that glow in the dark. It prints objects up to 5.5” x 5.5” x 5.5” in size. It prints objects in all sizes up to 10.8” x 10.45” x 9.5.” “We received an overwhelming response from our initial pilot program in Denver,” said George Hill, Office Depot’s SVP of copy and print depot. “Customers ranging from tech buffs and entrepreneurs to marketers, educators and stay-at-home parents commented on how they would utilize 3-D printing in their lives. With that insight, we knew we needed to expand the scope and offer these demonstrations to markets across the country.”

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Strategy N BROWN looks to open 20 stores December 23, 2013 | Planet Retail Internet and catalogue retailer N Brown is seeking to expand its presence in the UK. The clothing specialist, which has nine outlets in the UK, has hired a former Asda property executive to spearhead the acquisition of 20 properties. The move follows the retailer’s announcement in October that it planned to open 25 stores in the UK to drive sales from its click- &-collect services. Although online sales are growing rapidly, adding stores is intended to create “multi–channel hubs” that will not only increase brand awareness, but the retailer’s multi-channel credentials.

Michaels plans 2014 IPO December 23, 2013 | Retailing Today A 1,500-store market potential and an untapped online opportunity await Michaels Stores in 2014 as the retailer’s private equity owners look to sell a portion of their stake and return the nation’s largest arts and crafts retailer to public ownership. Michaels currently operates 1,259 stores in the United States and Canada and believes future growth will come from the addition of new stores and the sale of products to customers who already engage with the brand online, according to a filing with the Securities and Exchange Commission. During the nine-month period ended Nov. 2, Michaels opened 54 new stores which average about 19,000 sq. ft. and offer 36,000 unique items. In 2014, the company expects to open between 40 and 50 new stores. In addition, next year the company will launch a long overdue e-commerce site that is actually capable of commerce. Michaels had more than 180 million visitors to its website during the past 12 months, but those visitors weren’t able to buy anything. That will change in 2014 which should be welcome news to the company’s 1.5 million Facebook fans, 300,000 Pinterest followers and 100,000 Twitter followers. “We expect our new e-commerce platform will allow us to sell much of our current assortment while also expanding into e-commerce-only products,” the company said in the filing. “Although we expect this channel will produce a more limited sales penetration than more commoditized retail categories, we believe it will augment our multi-channel strategy to broaden our customer base and improve the shopping experience.”

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The initial public stock offering will mark a return to public ownership for a company that was taken private in late 2006 by Bain Capital Partners and Blackstone Group. The offering will be led by J.P. Morgan and Goldman, Sachs & Co. Upon completion, the private equity concerns will retain control of the company in an offering that will see Michaels receive none of the proceeds from the stock sales. Instead, the $4.4 billion retailer will remain saddled with debt of roughly $3.7 billion but some sales momentum and a host of favorable financial metrics on its side. Sales for the nine-month period ended Nov. 2 increased 4.5% to a little more than $3 million thanks to a 2.1% same-store sales increase and the addition of new selling space. Meanwhile, operating profits of $334 million during the period were essentially flat with the prior year total of $337 while net income increased to $110 million from $95 million. The company boasted an 11.1% operating margin and a 3.6% net margin during the period. Going forward, Michael’s growth strategy as outlined in its registration statement consists of the following: Broadening the appeal of stores to those new to do-it-yourself projects as well as more experienced crafters. Enhancing the store experience with improved signage and open sightlines to make stores more shoppable while developing flexible store formats to address unique market opportunities. Launching an e-commerce platform to become a true omnichannel retailer in 2014 and leverage high levels of existing engagement with customers. Reaching new and existing customers with expanded marketing efforts that include print, digital, direct mail, broadcast and community events. Strengthening merchandising and sourcing capabilities to better identify and source new trends, merchandise and categories that enhance our exclusive brands. Overseeing the retailer’s growth strategy is Carl Rubin. He joined the company as CEO in March after spending three years as president and CEO of Ulta Salon, Cosmetics & Fragrance since 2010. Prior to that, Rubin spent five years with Office Depot, last serving as president of the company’s North American Retail division and prior to that spent six years with Accenture where he was a partner.

Aldi to Accelerate Store Growth December 20, 2013 | Supermarket News BATAVIA, Ill. — Aldi on Friday said it would step up its pace of new store development in the U.S., with a goal of 650 new stores in the next five years. Plans call for the discounter to open approximately 130 new stores per year, representing an increase of 62.5% from its 80-store pace of recent years and an overall store count growth of 50% by 2018. The growth plan includes the establishment of a Southern California warehouse and headquarters to be located in Moreno Valley, Calif. Aldi had confirmed earlier this year that the company would seek to expand in California.

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Aldi currently operates 1,300 stores located from the East Coast to Kansas. "We're ramping up our expansion plans to meet growing demand for Aldi from customers across the country," Jason Hart, president of Aldi, said in a statement. "Recently, we successfully entered new markets such as Houston, and expanded our presence in competitive markets like South Florida and New York City. At Aldi, we believe that great quality can be affordable, and we are eager to bring the Aldi difference to new markets like Southern California.” Aldi also on Friday said its stores would soon launch a natural and organic private brand to be known as SimplyNature.

Arden Agrees to Sale for $394 Million December 20, 2013 | Supermarket News LOS ANGELES — Arden Group here, parent company of Gelson's Markets, said late Friday it has entered into a definitive agreement to merge the 17-store chain into TPG, a global privateinvestment firm, in a cash transaction valued at approximately $394 million. Carrie Wheeler, a partner in TPG, said Gelson's is "an iconic Southern California supermarket chain, [and] we look forward to working with the team to further expand its footprint." According to Rob McDougall, president of Gelson's, "TPG has a strong understanding and appreciation for our brand and our dedication to superior customer service. We are pleased to partner with TPG and look forward to the next phase of the company's growth. Gelson's will continue to provide the highest levels of service to our customers at our same locations while looking to offer a remarkable shopping experience in other areas of Southern California." Under terms of the agreement, Arden shareholders will receive $126.50 per share in cash for each share of Arden common stock. TPG, headquartered in Fort Worth, Texas, has $55.7 billion of assets around the world, including investments in Burger King, Daphne, China Grand Auto, J. Crew, Neiman Marcus Group and Petco. According to its website, "We are problem solvers, partners and pioneers. TPG's approach to investing helps us recognize value – or the potential for value – where others cannot see it. This contrarian philosophy has delivered consistent and outstanding performance because we dedicate the right mix of capital, time, and management and operational expertise to make successful investments out of challenging situations."

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TESCO sells 22 Czech stores to local rival December 19, 2013 | Planet Retail Tesco is selling 22 stores in Northern Moravia in the Czech Republic to local rival Hruska, according to local press reports. The deal remains subject to regulatory approval. The move to sell underperforming stores demonstrates Tesco is still struggling in the Czech Republic – a country in which trading remains subdued. It also highlights Tesco’s more cautious approach to international expansion – with outlets having to perform or risk being closed or sold. Similar sales or closures of stores have already taken place in other international markets such as Turkey and China.

Whole Foods Sees 1,200 U.S. Stores: Analyst December 18, 2013 | Supermarket News AUSTIN, Texas — Whole Foods Market here has increased its store-count goal to 1,200 — up from the 1,000 units it has been projecting for several years — according to a Wall Street analyst. Kelly Bania, of BMO Capital Markets, New York, said in a published report Whole Foods executives told her they now see the company's growth potential in the U.S. as 1,200 locations. "This is a key positive for Whole Foods," Bania wrote, "and suggests the company remains very optimistic about its ability to continue expanding, supported in part by recent success in new markets such as Detroit, where sales are trending twice that of projections. "This development is particularly positive at a time when many investors remain concerned about capacity growth in the sector — both from traditional retailers as well as natural and organic retailers. That growth in capacity will be met with growth in demand as improved availability of natural and organic [products] supports growth in crossover consumers, or consumers who purchase both organics and conventional products and [who], over time, tend to seek out the better selection and product innovation Whole Foods continues to provide."

TESCO Indian market entry confirmed December 17, 2013 | Planet Retail Tesco has applied to buy a 50% stake in Tata Group’s Trent Hypermarket division as part of plans to become the first foreign supermarket operator in the country, Reuters reports. The news was first exclusively revealed by Planet Retail (Tesco secretly preparing for Indian market entry, Insight, 18 October).

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Tesco has made an application to India's Foreign Investment Promotion Board to invest USD110 million in the venture. The UK retailer plans to invest in Star Bazaar stores in the western state of Maharashtra and neighbouring Karnataka. Star Bazaar currently operates 16 stores in southern and western India. "We have been working with the Tata Group in India for over five years," said a Tesco spokesperson. "We are submitting an application to the Government of India which, if successful, would allow us to enter into a joint venture with Trent Hypermarket Ltd." Tesco first entered a franchise agreement with Trent Retail part of the Tata Group in 2008. Since then it has been providing back-end support to Trent’s Star Bazaar hypermarket chain as well as the recent launch of the Star Daily concept in Pune. The move can only be seen a positive step which demonstrates that, despite Tesco’s recent more cautious approach to capital investment, it continues to have an eye on major expansion opportunities. While this initial investment is small by Tesco standards, it is a starting point for what could in the future be a lucrative venture for the company.

WALMART buys out Bharti stake December 17, 2013 | Planet Retail India’s Competition Commission has approved Walmart’s purchase of Bharti Group's near 50% stake in their wholesale stores joint venture. The split between the two groups involves two interconnected and interdependent transactions with respect to the businesses. The first involves the acquisition of 50% minus 515 equity shares of Bharti Walmart from BVL & Cedar Support Services. The second transaction involves INR454.8 billion (USD7.1 million) compulsorily convertible debentures of Cedar by BVL from Walmart Mauritius Holdings. The total sum involved is said to be USD7.5 million. BVL is an investment holding company of the Bharti Group, while Cedar is a wholly-owned subsidiary of BVL and provides real estate consultancy services. Bharti Retail, a wholly-owned subsidiary of Cedar, is in the retail business and operates stores under the Easyday banner. In essence, the deal means Walmart now owns 100% of the Best Price Modern Wholesale business in India. As is common knowledge, the US retail giant has put its expansion plans in India on hold until 2015 at the earliest, while it rationalises operations and cuts employee numbers. Lest anyone forget, Walmart still operates 19 Best Price Modern Wholesale cash & carry stores across India, though whether these could provide any kind of base from which to launch a fresh foray into the market seems doubtful.

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Sutherland insights retail news flash jan 02, 2014  
Sutherland insights retail news flash jan 02, 2014