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RETAIL NEWS FLASH December 16, 2013

Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 9 Technology .......................................................................................................................... 17 Strategy .............................................................................................................................. 22

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Sales & Marketing PRICE CHOPPER ups healthcare offer December 13, 2013 | Planet Retail US regional value grocer Price Chopper now offers a range of health services and screenings at new Health Stations located at its pharmacies throughout the New York area. Shoppers can check blood pressure, weight, heart rate, blood oxygen, temperature and, with the help of a pharmacist, cholesterol and blood sugar. The service, provided in partnership with specialist CDPHP, is free. Kathy Bryant, Vice President of pharmacy at Price Chopper, said: “The Affordable Care Act (ACA) emphasizes the need for preventive and efficient health care. Pharmacies can play an integral role by providing greater access to screenings and valuable health services.� The growing importance of increasing the health & wellness offer to US supermarket retail has assumed mounting importance in recent months as the ACA comes into effect. With the majority of outlets occupying focal points in communities, supermarkets are especially well placed to provide the kind of localized schemes and care the Act requires. Even value-led retailers like Price Chopper can discern the obvious benefits of getting involved. They, like many retailers, have opted to partner with an established medical specialist to supply services. At present, the services appear confined to the New York area and it will be interesting to see how soon the company rolls them out to its outlets across its north-eastern catchment area.

Amazon Fresh Launches in San Francisco December 13, 2013 | Kantar Retail 7ao1KseDnhP53g%3d%3d On December 11 2013, Amazon Fresh launched in the San Francisco area. Amazon Fresh offers home delivery of over 500,000 items including fresh grocery and local products and is now available in 12 San Francisco zip codes as a free 30-day trial. The program includes all the benefits of Amazon Prime plus access to Amazon Fresh. After the trail period shoppers can sign up for the Prime Fresh program for an annual fee of USD 299. The program offers free same-day and early-morning delivery for orders over USD 35. Existing Prime members will be refunded for their Prime membership on a prorated basis.

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Penney to focus on profitable brands December 13, 2013 | Retailing Today J.C. Penny will eliminate the jcp menswear brand and reduce the assortments in its Joe Fresh, Michael Graves and Martha Stewart lines, Reuters reported. All four brands were introduced by former CEO Ron Johnson. Penney plans to use the resulting space to emphasize its exclusive private-label brands. Starting in January, Penney will shrink its Joe Fresh in-store shops and reduce the assortment, the report said, moving the shops away from the front entry to give a more prominent spot to the chain’s own a.n.a and jcp women's wear collections. “What we now need is to edit things out that didn't resonate sufficiently,” CEO Mike Ullman told Reuters in an interview. “We don't have six or seven years to get our business back. Half of our business has to be brands that we can produce profitably.”

TARGET site showcases hottest trends December 10, 2013 | Planet Retail Target is launching a beta site this month dubbed Target Awesome Shop, which offers a curated assortment of trendy and, according to social media, trending items. The retailer describes the site as a ‘shoppable visual catalog,’ designed to make shopping easy and inspire gift ideas. Featured items not only include the most-pinned products on Pinterest in the past few days, but have also received four-star reviews from Target guests. The retailer states it will closely monitor shopper feedback, and will likely consider adding more social platforms to the mix. Target obviously is working hard behind the scenes to mine the increasing amount of shopper data it collects: from its REDcard loyalty program, the Cartwheel initiative, as well as shoppers’ digital footprints. The Target Awesome Shop is an innovative move that keeps the general merchandise retailer on the leading edge in terms of incorporating social media and guest input into the offer.

Black Friday encore for WALMART December 09, 2013 | Planet Retail Calling all shoppers who missed Walmart's Black Friday deals because they were actually enjoying the national Thanksgiving Day holiday: you get a second chance. is offering its most popular deals from Black Friday weekend again in a one-day only event on what's dubbed 'Green Monday' on 9 December. We told you this season was going to be highly promotional and cutthroat.

4|Sutherland Insights Retail News Flash Dec 16, 2013 will offer over 300 online specials on Green Monday, including 10 of its best deals from Black Friday weekend. The retailer's e-mail, Facebook and mobile customers can shop selected deals early, starting Sunday 8 December at noon. Green Monday is the second Monday of December, which has become a leading traffic and sales day for online shopping. It was the third-highest online shopping day last holiday season, according to comScore. Joel Anderson, President & CEO said: “Green Monday was’s highest traffic day in December for two years running, and has always been one of the highesttrafficked days of the year.”

Kroger Rewards Program Ties Together Loyalty, Charity December 06, 2013 | Progressive Grocer _loyalty__charity/ The Kroger Co. is combining charity and customer loyalty by rolling out a new nationwide rewards program that allows Kroger loyalty card holders to choose which charities the retailer donates to, based on the amount they spend in its stores. The Kroger Community Rewards program is expected to donate $50 million to various schools and nonprofit organizations by the end of next year, according to a report. Kroger’s total charitable activity reaches $250 million annually. This new program is intended to benefit nonprofits, customers and Kroger alike, as program participants are likely to spend more of their grocery budget at Kroger, knowing this will directly help their chosen charity. “Our objective is to find ways to make our shoppers even more loyal,” said Lynn Marmer, group VP for corporate affairs. Community Rewards allows loyalty card holders to sign up online and select a preferred charity from the list of local nonprofit organizations that Kroger has agreed to support. Each participating customer’s purchases are then tracked (excluding alcohol, tobacco and gasoline), and each dollar spent counts as a vote for their chosen charity. At the end of every quarter, Kroger counts the total dollars spent by participating program members and distributes its donation money proportionately. Customers' earned loyalty program discounts and gas points are not affected by their participation in Community Rewards, as the charitable component is a separate feature, the report noted. Previously, customers could use reloadable gift cards to influence Kroger's contributions to their preferred organizations. “What's great is it's so much easier,” Marmer said. “The beauty of it is there's no work on the part of the consumer.”

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To date, the company has rolled out Community Rewards to roughly half of its operating divisions. The program will expand throughout the West, Pacific Northwest and Southeast in 2014. Kroger, Progressive Grocer's 2013 Retailer of the Year, operates 2,414 supermarkets and multidepartment stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's.

Kohl’s unwraps new strategy this holiday season December 05, 2013 | Retailing Today With the holiday shopping season underway and many retailers bracing for stiff competition, Kohl’s plans on keeping its doors open for more than 100 hours, from 6 a.m. Friday, Dec. 20 through 6 p.m. Christmas Eve, Tuesday, Dec. 24. Although the strategy is familiar to retailers such as Toys “R” Us, it is a first for Kohl’s. The move comes following a comparable-store sales increase of 0.9% for the second-quarter which fell short of Wall Street estimates. “The holiday season is an eventful time for families, and Kohl’s is making it easy for shoppers to wrap up their last-minute gift giving with 24-hour access to Kohl’s stores right up to Christmas Eve,” said Michelle Gass, Kohl’s chief customer officer. “Not only does Kohl’s have the hottest gifts at incredible prices, now shoppers will also have the added benefit of being able to check off their lists, day or night, whenever it is most convenient for them.” In addition to extended store hours, Kohl’s is also touting a variety of incentives to drive traffic into its brick-and-mortar stores. Among these are the retailer’s hassle-free return policy, gift cards and egift cards and free gift boxes. The retailer also has Kohl’s Kiosks located in all its stores so customers can choose from an expanded assortment of styles, sizes, colors and merchandise that may not be available in stores. The kiosks not only bring traffic into the retailer’s physical stores but also to its e-commerce site. As an added incentive, Kohl’s offers free standard shipping in the U.S. on items ordered from in-store kiosks.

H&M gets serious about sport December 04, 2013 | Planet Retail H&M Sport, an expanded concept with a new visual identity, will launch worldwide on 2 January. To accompany this, dedicated areas in selected stores will feature activewear and accessories from the new range. These include windproof and water-repellent running jackets; warm-up tops and workout trousers; yogawear, tennis shorts and protective fleece jackets for outdoor activities.

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Earlier this year H&M announced it would dress Sweden’s athletes for the Winter Olympics and Paralympics in Sochi next year and the summer versions in Rio 2016. The H&M Sport collection has had input from the Swedish Olympic team and features “fashionable” products with a “focus on fit and performance,” the retailer said. H&M first started adding to its sportswear collection in 2012. Last winter, it reintroduced skiwear. The company also signed Czech tennis star Tomás Berdych as brand ambassador, marking the first time H&M clothing was worn on court by a top-ranking tennis player. H&M is also following in the footsteps of Fast Retailing's Uniqlo which offers a range of tenniswear and sponsors tennis champion Novak Djokavic. The company has also moved into golf clothing. The sportswear retail landscape is rapidly changing as chains specialising in yogawear such as Lululemon and Athleta in the US are gaining ground. It is therefore unsurprising that the big chains are also looking to capitalise on this growing market for performance sportswear.

New take on showrooming from NEWEGG December 03, 2013 | Planet Retail The City of Industry area of Los Angeles is home to Newegg’s first physical store. The site is attached to one of the US-based pure-play retailer’s warehouses. Newegg is referring to it as a “hybrid centre”, according to the LA Business Journal. Shoppers will be able to test out new technologies and high-end products in a showroom-style store when collection online orders at the warehouse. Should they get the urge to impulse buy, they can place orders via instore computers or their phone and take it with them on leaving. The company plans to open similar sites next year at its Tennessee, New Jersey and Indiana warehouses. The plan may later be rolled out to other Newegg DCs across the US. We see the move as a smart one for the online retailer, considering the obvious benefits of allowing shoppers to try out big-ticket items before making purchasing decision. The idea of attaching a showroom to a warehouse also means overheads stay very low. However, as warehouses often tend to be in remote locations, it remains to be seen how many will be willing to make the trip when the option of home delivery is available.

Macy’s kicks off holiday campaign December 02, 2013 | Retailing Today Macy’s is kicking off its fifth annual National Believe Day. As part of Macy's nostalgic Believe campaign, which was inspired by the New York Sun's famous editorial “Yes, Virginia, there is a Santa Claus,” National Believe Day was created to spread the season's message of kindness and generosity toward others.

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Macy's and Make-A-Wish will grant more than 50 special “Wishes Across America” to children with life-threatening medical conditions. In addition, on National Believe Day only, Macy's is inviting customers to help deliver a special $1 million day Friday, Dec. 6, customers across the nation will have the opportunity to spread joy and goodwill as Macy's National Believe Day returns for a fifth season of giving. For every stamped letter mailed at a Macy's red Santa Mail letterbox in-store, Macy's will donate $1 to Make-A-Wish, above the existing $1 million campaign goal. This new element of Macy's Believe program will help Macy's reach up to $2 million in total for Make-A-Wish during this year's campaign. Macy's is also encouraging customers to share a photo or video of their moment mailing a letter to Santa at Macy's Believe Station to Instagram, Twitter or Vine using #MacysBelieve, to be considered for the opportunity to be in a Macy's television commercial airing Christmas Eve and Christmas Day. “Macy's National Believe Day continues to bring together communities across the country during the holiday season through acts of true compassion and generosity,” said Martine Reardon, Macy's chief marketing officer. “We are amazed year after year by the overwhelming support Macy's and MakeA-Wish receive from customers nationwide and the program's positive impact on children with lifethreatening medical conditions. With the help of Macy's customers, we hope to do even more good this year and reach our goal to create a million dollar day.” Macy's Believe campaign was inspired by the story of 8-year-old Virginia O'Hanlon, who in 1897 wrote a letter to the New York Sun newspaper inquiring about the existence of Santa Claus. The editor of the Sun, Francis P. Church replied, “Yes, Virginia, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist...” Macy's says its Believe campaign is intended to inspire a national movement toward acts of kindness and goodwill toward others, reinforcing altruism as a holiday tradition. As part of Macy's Believe campaign, children of all ages can drop their stamped letters, addressed to Santa at the North Pole, in the Santa Mail letterbox at their local Macy's. For each letter received through Dec. 24, Macy's will donate $1 to Make-A-Wish, up to $1 million, to help grant the wishes of children with life-threatening medical conditions.

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Finance Germany: Metro reports a wider net loss of 71 million Euro December 13, 2013 | Fresh Plaza German department stores operator Metro AG reported a wider nine-month net loss of 71 million Euro, versus the prior year's loss of 19 million Euro, after adjusting for special items. Excluding special items, profit for the period attributable to the company's shareholders plunged significantly to 9 million Euro, from 160 million Euro last year. Despite challenging market conditions and the resulting price investments in totalling 706 million Euro, EBIT before items climbed to 728 million Euro during the short financial year 2013 and therefore developed in line with the forecast. Adjusted for items, EBIT stood at 703 million Euro, a 294 million Euro increase from the year-ago value. Metro Group says that it aims to significantly improve profits next year by launching a campaign to update its image globally. According to Reuters, investors were left shocked in March when it cut its dividend for the first time in over 14 years. It moved its financial year to start on October 1 to avoid reporting requirements interfering with the key Christmas sales period. The fourth biggest retailer in the world by revenues, which runs cash and carry, supermarkets, department stores as well as an electronics chain, is currently undergoing a strategy of slimming down its portfolio and cutting costs across the organization in order to try reviving its fortunes. “All sales lines have further driven and consistently implemented their strategies during the short financial year – always with a focus on our primary objective of creating value added for the customer. And we are seeing success: in many countries, we have further extended our market share,� CEO Olaf Koch said in a press release. The firm clocked reported sales of 46.3 billion Euro for the nine months, down 2.2 percent from 47.4 billion Euro in the prior-year period, attributable to the continued challenging economic environment in many parts of Europe, the already fulfilled portfolio changes and negative currency effects. Adjusted for portfolio changes and currency effects, sales improved by 0.9 percent, the firm noted. For 2013/14, the firm sees a slight absolute sales growth adjusted for portfolio changes and currency effects, EBIT before items marked up from adjusted prior-year value. Commenting on the future, In like-for-like sales, METRO GROUP said it sees a trend improvement following the level of the comparable prior year period of -1.3 percent and a level of sales that would roughly equal last year's level.

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US: Costco to go slow on expansion after solid Q1 December 13, 2013 | Fresh Plaza Costco has revealed plans to scale down its new-store openings for the year, and said it continues to evaluate its fledgling online shopping offer, but has no major plans to expand the same. The comments came even as the warehouse club giant reported low single-digit growth in profit and sales for its fiscal first quarter. Costco now plans to open 30 new outlets in the current fiscal year, down from 36 previously forecast. Nearly half of the openings will be outside the US, with four in Australia, three in Canada, two of each in Korea, Japan and Spain, and one in Mexico. CFO Richard Galanti noted that the company expects to open its first two stores in Spain this year, and in France, hopefully, the following year. He added: “We've always looked at Western Europe as a good opportunity for us … We provide good high paying jobs where we’re great competitors and frankly, we see the economy a little better than some of the numbers just read about unemployment.” The comments came after Costco said net profit for the quarter ending 24 November grew by 2.2% to $425m, with sales up 5.5% to $24.6bn, on like-for-like growth of 3%. Excluding the impact of gasoline price deflation and currency fluctuations, LFL sales were up 4% in the US and 6% internationally, with group LFL sales up 5%. Galanti said margins in fresh foods were down compared to last year, but added that store traffic was up 4.5% and total membership rose almost 2% to 72.5 million.

Q2 Sales Up, Margins Down at Sobeys December 12, 2013 | Supermarket News STELLARTON, Nova Scotia — Sobeys posted a modest gain in sales and lower profits during the fiscal second quarter, its parent company Empire Cos. said Thursday. Sales of $4.1 billion (U.S.) increased by 2% for the quarter, which ended Nov. 2. Same-store sales increased by 0.2%. Officials said the sales gain reflected investment in its store network and merchandising initiatives, but sales were impacted by low inflation and increased competition. Companywide net earnings of $159 million (U.S.) increased by 84%, due mainly to the sale of 46 movie theaters, which was announced in June. Earnings in Empire’s food retailing segment decreased by 32.5% to $56.3 million in the quarter.

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“In the second quarter, we achieved same-store sales growth in an environment which remains very competitive,” Marc Poulin, president and chief executive officer of Sobeys, said in a statement. “Although the current market dynamic did impact our overall gross margin, the impact on our adjusted net earnings was largely offset as a result of operating cost control.” Poulin, who is also president and CEO of Sobeys, said the company had begun the integration of Safeway Canada, which it acquired earlier this year, and was advancing its business through its “Better Food for All” health and wellness initiative and new formats including its first Sobeys Extra store which opened recently in Burlington, Ontario. Sobeys is also planning a new small format banner in Quebec called IGA Express. It described it as “a cross between a supermarket, convenience store and a fast food restaurant.”

SAKS buyout hits HUDSON'S BAY Q3 profits December 12, 2013 | Planet Retail Despite positive sales trends, Hudson’s Bay Co. reported a larger net loss in in the third quarter ended 2 November. A portion of the loss – CAD124.2 million (USD117.1) compared with CAD14.4 (USD13.6 million) in Q3 2012 – was attributable to costs associated with the Canadian retailer’s acquisition of Saks in late July. Sales increased 5.8% from the third quarter of 2012 to CAD984.1 million (USD927.9 million). Comparable store sales increased 5.7% (+3.8% on a constant currency basis), with the flagship Hudson’s Bay banner generating a 6.4% gain and Lord & Taylor reporting a 1.6% increase on a US dollar basis, its first quarterly gain since the same year-ago quarter. E-commerce sales also proved to be a bright spot during the quarter, sales surging 58.3% from a year ago to CAD48.9 million (USD46.1 million). HBC is looking toward a very busy 2014, with the full integration of the Saks business to complete, which should deliver CAD100 million (USD94.3 million) in synergies during the next three years. The company also plans to introduce the Saks Fifth Avenue banner into Canada, which is also slated to welcome its first Nordstrom location in 2014.

THE PANTRY awaits upgrade impact December 11, 2013 | Planet Retail North Carolina-based convenience operator The Pantry saw Q4 revenues fall 3.3% to USD2.02 billion, while merchandise revenue rose 1.3% to USD475 million. Comparable store merchandise revenue increased 2.0% for the fourth quarter while adjusted EBITDA decreased 7.2% to USD49 million.

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For the full fiscal year, total revenue declined 5.2% to USD7.82 billion, while merchandise revenue dropped 0.5% to USD1.8 billion. Comparable store merchandise sales increased 0.9% for the fiscal year and adjusted EBITDA decreased 3.6% to USD 202.4 million. Store upgrades have been on the agenda for this regional convenience retailer which trades principally through its Kangaroo Express banner. In Q4 it opened two new stores, rebuilt one location, completed 31 remodels and added five new QSR foodservice outlets. The company also stated it had completed a strategic review of its markets which was “guiding our investments and initiatives to improve existing stores�, according to CEO Dennis Hatchell. However, with full-year revenues showing a marked decline and a relatively small market footprint in a tightly-confined catchment area, we have to consider whether The Pantry can withstand the intense period of consolidation the US convenience sector is currently undergoing, with larger chains in an acquisitive mood and seemingly keen to expand their territories wherever possible.

INDITEX exhibits underlying strength December 11, 2013 | Planet Retail Nine-month net profit rose 1% on last year as Inditex opened more stores and began online operations in Russia. The nine months to 31 October saw profit climb to EUR1.67 billion (USD2.3 billion) from EUR1.66 billion (USD2.21 billion) in 2012. Sales rose 5% to EUR11.93 billion (USD16 billion), although weighed down by currency effects. Without these, sales would have been up 8%. Inditex increased gross margin over sales by 10 basis points to 62.2% on a quarterly basis, the highest quarterly margin yet achieved by the Spanish company. Sales excluding the impact of currency fluctuations between 1 November and 8 December increased 10%, an indication that growth is accelerating, the company added. Inditex plans to open around 500 new stores for the full year, roughly in line with previous estimates. It also plans to launch online Zara stores in Mexico and South Korea within the next fiscal year. Inditex has been one of the few companies that has been able to manage the move of shoppers online while still achieving bricks and mortar success. While profit has been, to a certain extent fairly flat, sales have upheld their strong trajectory as a result of the company's ability to target a wide demographic, react quickly to consumer demand and ongoing international expansion. The results overall have been good and in line with expectations for the group. Commenting on the important Christmas period, Inditex pointed to positive results in the first six weeks of the fourth quarter which bodes well for the full year.

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Dollar General accelerates expansion, again December 05, 2013 | Retailing Today A record 700 new Dollar General stores are slated to open in 2014, the company announced Thursday morning after reporting third-quarter results and tempering its full-year sales forecast. Same-stores sales at Dollar General increased 4.4% and total sales increased 10.5% to $4.38 billion during the third quarter ended Nov. 1. Profits increase 14% to $237 million from $208 million and earnings per share increased 19% to 74 cents from 62 cents. “Dollar General once again delivered strong results in the third quarter, even in the face of an ongoing challenging consumer environment,” said Rick Dreiling, Dollar General's chairman and CEO. “Our merchandising initiatives have continued to be successful in driving traffic and sales. We had solid financial performance across key metrics, including better than anticipated gross margin performance and solid SG&A leverage. As a result, we are now forecasting full year adjusted earnings per share of $3.18 to $3.22.” The company’s revised profit forecast essentially takes the low end of earlier guidance of $3.15 to $3.22 out of play. Conversely, the company reduced the upper end of its full year sales forecast by indicating it expects full year sales to increase between 10% and 10.5% versus an earlier forecast of 10% to 11%. In addition, the company expects full year same store sales to range from 4% to 4.5% after earlier guidance called for a gain in the 4% to 5% range. The third-quarter comp increase was driven by a desirable blend of increases in both customer traffic and average transaction size. The company said consumables sales continued to increase at a higher rate than non-consumables with the most significant growth due to strong sales of tobacco products, perishables and candy and snacks. Same-store sales growth was said to be solid in seasonal and home products, while apparel sales were affected by a planned merchandising initiative that reduced apparel inventories in more than 4,000 stores during the 2013 third quarter. “Looking ahead, while we are cautious on the current macroeconomic trends, we remain excited about the long-term growth prospects for our business,” Dreiling said. “Dollar General is committed to delivering everyday low prices and convenience for our customers, which has proven to be a winning formula given our long track record of success.” To maintain its momentum in 2014, Dollar General is relying on a familiar strategy of new store expansion and remodeling and relocation activity. During the first nine months of this year, the company opened 577 new stores and remodeled or relocated 534 units as part of a full-year plan to open approximately 650 new stores and remodel or relocate another 550 locations. The company said it operated 11,061 stores as of Nov. 1. As if those figure weren’t large enough, in 2014 Dollar General plans to open 700 new stores and remodel or relocate 525 stores resulting in square footage growth of 6% to 7%.

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Kroger Marks 10 Years of Positive Comps December 05, 2013 | Supermarket News CINCINNATI — Kroger Co. here on Thursday posted its 40th consecutive quarter of identical-store sales growth, and also reported third-quarter earnings in line with analysts’ estimates. The ID-store milestone prompted outgoing Chief Executive Officer David Dillon to conclude the company’s earnings conference call with a “thank-you” to the company’s employees. “Ten years of positive identical-sales growth is simply amazing,” he said. “I'm proud to be a part of the organization that is committed to serving our customers and enriching the lives of others. Each of us had a role to play in reaching this milestone. It is one you should each be proud of.” Kroger said net income for its fiscal third quarter, which ended Nov. 9, totaled $299 million, down 5.7% from the year-ago quarter, which included one-time gains from a credit-card lawsuit settlement and a reduction in pension-fund contributions. Excluding these items, Kroger's earnings per diluted share would have been $0.53 in the third quarter, a 15% increase over last year's thirdquarter adjusted earnings per share of $0.46. Sales increased 3.2% to $22.5 billion in the third quarter, and identical-store sales, excluding fuel, rose 3.5%. Through three quarters, net income rose 6%, to about $1.1 billion, on a sales increase of 3.7%, to $75.3 billion. Kroger said it expects IDs of 3% to 3.5%, excluding fuel, in the fourth quarter, but was cautious in its earnings guidance for the year, citing uncertainty around the economy and the impact of the 5.5% cut in Supplemental Nutrition Assistance Program benefits, effective Nov. 1, among other factors. “So far in November you can see were SNAP dollars are down but customers are substituting and buying with cash [what they otherwise would have spent using SNAP],” said Rodney McMullen, president and chief operating officer, in the conference call. J. Michael Schlotman, senior vice president and chief financial officer, said sales results in the final two months of calendar 2013 could be impacted by several unusual factors in addition to the SNAP cuts, including the shortened time between Thanksgiving and Christmas this year, unease over the impact of health care reform and the sluggish economic recovery. In projecting its performance for the full year, Kroger gave a wide earnings estimate — between $2.73 and $2.80 per share — that it said reflected this uncertainty. The wide guidance range might have contributed to a pullback on the stock on Thursday, according to analysts.

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“Management’s cautious tone about Q4 is clearly having some impact on Kroger shares,” said Ajay Jain, an analyst at Cantor Fitzgerald, New York.

TESCO underwhelms again in Q3 December 04, 2013 | Planet Retail In line with Planet Retail’s predictions, Tesco has reported a subdued domestic performance in Q3. UK like-for-like sales (excluding VAT and petrol) fell 1.5% during the third quarter (13 weeks ended 23 November). During the quarter Tesco continued overhauling the UK business, successfully relaunching the premium Finest range. Tesco has also individually tailored the range of the 1,600 Express stores to the needs of their local areas. Over 1.8 million square feet (167,000 square metres) of existing space was refreshed in the quarter and recent sales uplifts are continuing to outperform average results for the scheme to date. Tesco is also continuing to improve the grocery e-commerce offer – having introduced one-hour delivery slots to over 98% of the UK population. Grocery click & collect is now available across more than 200 stores. Conditions remained challenging in International, particularly in Thailand and Ireland. Total sales in Asia grew by 1.1% at actual exchange rates and by 0.5% at constant rates. Like-for-like sales in Asia declined by 5.1% - driven by a slowdown in Korea as a result of regulatory restrictions on opening hours and dampening sales in Thailand. Total sales in Europe excluding petrol declined by 1% at actual exchange rates and by 2.9% at constant rates. Like-for-like sales performance for the region as a whole improved slightly from the second quarter, up 4%. In Poland, like-for-like sales improved following the decision to invest in the offer. Turkey also saw an improved performance, with the business continuing to benefit from additional focus – albeit sales remain extremely challenged. Philip Clarke, Chief Executive, said: “The actions we have taken to position the business for the future – including the work currently underway to transform our general merchandise offer and our decision to significantly reduce the amount of new space we open – are also holding back our sales performance in the short term.” He added: “Overseas, the near-term trading environment also remains tough, most notably in Thailand, but we have been able to drive a better performance in Poland and Turkey following the actions taken in the first half.”

Walgreens comps climb December 04, 2013 | Retailing Today This year's November had one additional Saturday and one fewer Thursday compared with November 2012. Despite these calendar shifts, Walgreens still saw comparable store sales climb for the month.

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The company reported November sales of $6.1 billion, an increase of 4.1% compared to the same month last year. Total front-end sales increased 3.2%, while comparable store front-end sales increased 1.9%. Customer traffic in comparable stores increased 0.8% and basket size increased 1.1%. The company said that a meaningful increase versus prior quarters in promotional investment contributed to the improvement in traffic and comparable store front-end sales for November and throughout the quarter. Prescriptions filled at comparable stores increased by 1.4% in November and increased 3.7% on a calendar day-shift adjusted basis. Calendar day shifts negatively impacted prescriptions filled at comparable stores by 230 basis points. Prescriptions filled at comparable stores were positively impacted by 40 basis points due to more flu shots versus last year but were negatively impacted by 70 basis points due to the slowest start to the flu season in six years, Walgreens reported. Flu shots administered at pharmacies and clinics season to date were more than 6.1 million versus nearly 4.6 million last year. November pharmacy sales increased by 4.7%, while comparable store pharmacy sales increased 4% and increased by a calendar day-shift adjusted 6.3%. Sales in comparable stores increased by 3.2% in November. Calendar day shifts negatively impacted total comparable sales by 150 basis points, while generic drug introductions in the last 12 months negatively impacted total comparable sales by 60 basis points. Total sales for the first quarter of fiscal 2014, which ended Nov. 30, were $18.4 billion, up 6%. Comparable store sales for the first quarter of fiscal 2014 increased 5.5%, while front-end comparable store sales for the quarter increased 2.2%. Prescriptions filled at comparable stores increased 5.6% in the first quarter and comparable pharmacy sales increased 7.5%. Walgreens opened 22 stores during November, including nine relocations, acquired a net total of 55 stores and closed one.

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Technology CAR to drive DM store systems December 13, 2013 | Planet Retail Having operated a decentralised store merchandise management system for years, dm is moving to a centrally-managed system. The German drugstore operator’s IT subsidiary Filiadata is using SAP software. The new system is based on HTML5, allowing flexibility in choosing terminal equipment, Lebensmittel Zeitung reports. In creating the new system, dm will be among the first retailers to use the SAP module CAR. This provides fast mass data processing thanks to its in-memory technology. According to dm CIO Roman Melcher, being an in-memory early-user will help dm find new ideas for other benefits the technology might offer. CAR is a software module for transactions and analysis, collecting a retailer’s entire transactional data in real time. CAR exchanges data - for instance on inventory - with the SAP Retail merchandise management solution. CAR includes a module for POS data management, amassing full POS data to provide an overview of current inventory. In-memory helps create fast analysis, prognosis and simulations. Melcher estimates full programming will take up to 1,000 days. It will be implemented in pilot stores in 2014. An international roll-out is planned for 2015.

LECLERC makes mobile payments moves December 13, 2013 | Planet Retail Four stores in Toulouse and Moselle are being used by Leclerc to test mobile payments, reports Le Figaro. The Paiement Flash application, available for Android and Apple devices, enables customers to pay with phones after creating an account. At checkout, shoppers must scan a QR code for payments to be made via a registered credit card. Banque Edel, a subsidiary of Leclerc, has developed the application. Wider roll-out is scheduled to take place in the first half of 2014. Compared to its peers in French retail, Leclerc is relatively late in its efforts to gain a handle on the technology. Since December 2012, Auchan has been offering mobile payment in some of its outlets in France. Carrefour, IntermarchĂŠ and Casino have also been trialling mobile payment schemes since last year. However, adoption of innovative transactional methods has been slow in France as nationwide standards are still to be determined and consumer confidence in the methods remains low.

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Safeway Website Now Serves Visually Impaired Shoppers December 13, 2013 | Progressive Grocer impaired_shoppers/ Safeway Inc. has launched a comprehensive initiative to make its online grocery shopping website more accessible and usable for visually-impaired shoppers, using the Web Content Accessibility Guidelines (WCAG) version 2.0 level AA as its accessibility standard. “Safeway has a long history of supporting our communities and people with disabilities,” said Larree Renda, Safeway EVP. “This decision is an important step towards helping our customers who are blind or visually impaired have a better shopping experience.” About the WCAG The WCAG 2.0 Guidelines are promulgated by the Web Accessibility Initiative (WAI) of the World Wide Web Consortium (W3C) and ensures that online content is more accessible and usable to persons with visual and other disabilities. The Guidelines do not affect the content or look and feel of a website. They are of particular benefit to blind computer users who use voice output or magnification technology on their computers and mobile devices and who, like some individuals with mobility impairments, rely on a keyboard instead of a mouse for navigation. The W3C is an international community that develops open standards to ensure the long-term growth of the Web. The Web Accessibility Initiative is a program of the W3C that works with site owners, developers, people with disabilities and other interested parties to develop accessibility standards. Pleasanton, Calif.-based Safeway operates 1,406 stores in the United States.

Home Depot to invest in tech and supply chain upgrades December 12, 2013 | Retailing Today The Home Depot reportedly plans to invest $300 million on technology and supply chain upgrades during its fiscal year 2014, which begins in February 2014. According to the Wall Street Journal, the results will include three new fulfillment centers in California, Atlanta and Ohio by 2016, as well as same-day delivery for some online orders.

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The same-day delivery service would allow customers order from an assortment of 100,000 items by 5 p.m. local time and have it delivered on that same day, with status updates sent to their mobile phone. At its annual investor conference on Dec. 11, Home Depot also said it plans to start fulfilling 90% of online orders from stores rather than from distribution centers. The move would reduce average online delivery time from two to seven days to less than two days. Home Depot’s total sales are expected to reach $79 billion during fiscal 2013, aided by a boost is online sales. Other new programs for the upcoming fiscal year may include expanded in-home assembly and installation services.

DECATHLON ramps up RFID December 12, 2013 | Planet Retail Following several years of tests, Oxylane Decathlon is to expand RFID application for its product lines. Of the items sold at the French sporting goods retailer 85% will now be equipped with RFID tags by next spring. By 2017, the retailer expects to achieve 100% tagging. The company demands all suppliers to source-tag all products shipped by 2019. This will be the case not only for private labels but also for branded goods. RFID tags are encoded with the same unique product number printed on the label, using the GS1 Databar. The aim of Oxylane is to improve product on-shelf availability rates. Immediate transparency of inventory can be achieved by scanning the shelves with mobile reading units connected to a smartphone. Decathlon is currently equipping all checkouts with RFID readers, making barcode scanning redundant. The RFID tags will also be used for theft protection. The banner has already created a database, monitoring all items along the supply chain through all stages of its lifecycle. The move will enable Decathlon to improve productivity in logistics and also make instore processes, such as stock-taking and replenishment, more efficient and reliable with the added future potential of speeding up checkout processes. The latter can only be fully realised when 100% of the products are tagged. In the meantime, cashiers will still have to scan barcodes.

Costco Takes Wait-and-See Approach to E-Commerce December 11, 2013 | Supermarket News ISSAQUAH, Wash. — Costco Wholesale Corp. here said Wednesday it is taking a wait-and-see attitude on e-commerce, including home delivery. “E-commerce is certainly an important component of what's out there and what's growing, and as a retail competitor, we recognize it's part of the landscape,” Richard Galanti, executive vice president

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and chief financial officer, told industry analysts during a conference call. “But we're very much a brick-and-mortar company, with 97%-plus of our business done in-store, not online. People actually do like to go out and shop.” Asked about potential threats from e-commerce operators like Amazon who do home delivery of food, Galanti said, “We'll keep looking at it, though we have no plans currently to deliver to homes. Anything through e-commerce tends to be nonfood items, with very limited foodstuffs and certainly not fresh foods. “We enjoy watching the landscape as others are getting into those types of businesses. Google is doing a test in the Bay Area with a number of brick-and-mortar retailers, including us, where they deliver through Google mail, but it's only a small test, and there are going to be a lot of changes over time. “Getting overnight delivery or same-day delivery is great, but ultimately you've got to pay for it. There's probably a market for it, but we'll see how big a market that is. We plan to keep doing what we're doing in terms of value, and if things change dramatically, we'll figure it out.” In response to a question, Galanti said home delivery by Amazon in the Seattle market has not affected Costco's business. “My sense is probably that Amazon is taking market share more from supermarkets where people shop two-and-a-half times to three times a week. People come to Costco to buy a lot of key bulk items on the fresh food side, and we know our most loyal members are still getting several things at supermarkets or other forms of convenience, and Amazon will be just one of those. We recognize convenience as a value, but you're paying for that convenience. And there are still a lot of things people are going to buy at our place, and if we can get them to keep coming in, then we'll get our share of that.” For the fiscal first quarter, which ended Nov. 24, net income rose 2.2% to $425 million, while sales increased 5.5% to $24.6 billion and comparable store sales rose 3% for the total company, including 3% in the U.S. and !% internationally. Excluding the impact of gasoline price deflation and foreign exchange, comps rose 4% in the U.S. and 6% internationally for an overall company increase of 5%. In other comments during the call: •

Galanti said margins in fresh foods were down year-over-year, though they were down less than in the fourth quarter. “We've maintained key prices on some very high-volume items like rotisserie chickens as some of the underlying costs have down a little from their peak, which helps margin a little bit. But we're very diligent about being competitive.”

He said the company plans to open 35 new warehouses this year, compared with 26 last year, “and we could expand that out if the opportunities still present themselves.”

The company expects to open its first two stores in Spain this year, “and France hopefully the following year,” Galanti said. “We've always looked at Western Europe as a good opportunity for us.”

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Costco is testing expanded cosmetics at a couple of locations in Los Angeles, “and we still would like to get more brands to sell to us. But we're scrappy, getting a few things in ourselves.”

A new meaning to window shopping at TESCO December 10, 2013 | Planet Retail Shoppers at the Tesco London Regent Street store, as well as in 11 other UK Metro outlets, can now scan and buy products directly from the window using their smartphones, according to Retail Week. When QR codes are scanned from the window display, the product details are sent to the phone using augmented reality technology. The app offers shoppers product demo video or links to ads and trailers. Customers can then click to buy the product and collect it from the store the next day. The interactive windows are part of a wider campaign to make Christmas shopping easier for customers. It also represents a novel approach to the concept of virtual shopping walls, first introduced by Tesco’s South Korean operation which has since spread virally across the retail world. Enhancing the shopping experience with augmented reality technology takes the idea to a new level. We may not have to wait very long for more shops to jump on the bandwagon.

Unified to Use Nielsen Analytics December 04, 2013 | Supermarket News LOS ANGELES — Unified Grocers here said Wednesday it has selected Nielsen as its analytics and insights provider to provide information for the exclusive use of its retail members. According to Sue Klug, senior vice president and chief marketing officer for Unified, “Using Nielsen's best-in-class analytics services is a game-changer. The relationship with Nielsen gives our retailers a real strategic advantage. The sophisticated tools available through Nielsen mean we can help our retailers drive their top line sales, and that's a win-win because when our retailers sell more, we do too.” Klug said approximately 700 stores have agreed to allow Unified to collect their point-of-sale data as part of the new “Scan Advantage” program — data for which Unified will apply Nielsen's analytics to help the stores gain deeper insights into customer purchasing patterns and more quickly identify growth opportunities.

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Strategy DEICHMANN takes Russia route December 13, 2013 | Planet Retail As it further internationalises its retail store network, Deichmann is to open its first stores in Russia. The idea was backed in May by CEO Heinrich Deichmann, who spoke at the time of the potential for “some 100 outlets in the foreseeable future.” The first stores will open in Moscow and St Petersburg in 2014. In total, the Germany-based shoe retailer will be looking to launch some nine to ten outlets in the upcoming year. Reports suggest the retailer will focus on the Moscow and St Petersburg metropolitan areas and has no plans for Russia’s other regional markets at present. Planet Retail finds it difficult to assess the market opportunity for the family-owned shoe retailer in Russia. However, Deichmann’s format, consisting of a wide range of shoes in the value segment as well as a high quality shopper perception courtesy of the company’s German origin, may serve the retailer well in its new venture.

ZALANDO going public in 2014 December 12, 2013 | Planet Retail Five years after its genesis, Germany-based online clothing and footwear retailer Zalando is to become a public company in 2014. The business has already changed its corporate structure and will soon start trading as an AG (public company). Zalando confirmed its intention when questioned on the matter. It has also become known that the newly installed six-member board is to be headed by Mia Brunell Livfors, Head of major Zalando shareholder Investment AB Kinnevik from Sweden. According to insiders quoted in Lebensmittel Zeitung, the retailer has already conducted talks with investment banks on launching an IPO in the first half of the next year. The value of Zalando is now estimated at EUR3-4 billion (USD4 - 5.4 billion).

Cheesewright to Head Walmart International December 10, 2013 | Supermarket News BENTONVILLE, Ark. — Wal-Mart Stores here said it has named David Cheesewright as president and chief executive officer of Walmart International.

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David Cheesewright He succeeds Doug McMillon, who was named to succeed Mike Duke as the company’s president and CEO, effective Feb. 1. Cheesewright, 51, is president and CEO of Walmart’s Europe, Middle East, Africa and Canada regions. The company said it will name a successor at a later date. According to McMillon, “David will lead the division at an exciting time. We have strengthened our business and gained market share in the majority of international markets, and he had a key role in that success. He brings a wealth of experience and a proven track record of innovation and governance, *and+ David’s passion for sustainability will drive change that will help improve our world.” Cheesewright joined Walmart in 1999 through Asda in the United Kingdom, where he held positions in operations, merchandising, logistics, strategy and format development. He was subsequently named chief operating officer for Walmart Canada and Asda before being named CEO of Walmart Canada; he added responsibilities for Europe, the Middle East and Africa in 2011. Prior to joining Walmart Cheesewright was with Mars Confectionery in the U.K.

Giant Eagle Acquires Specialty Pharmacy December 09, 2013 | Supermarket News PITTSBURGH — Giant Eagle has acquired Rx21 Specialty Pharmacy, a move that will allow it to provide enhanced services to hepatitis C and organ transplant patients and providers under its Giant Eagle Specialty Pharmacy, the retailer said. “We greatly value the expertise gained with the new acquisition of Rx21, particularly at a time when two significant new hepatitis C treatments are becoming available,” Brett Merrell, senior vice president of health and wellness of Giant Eagle, in a statement. The Food and Drug Administration recently approved Olysio for use as a treatment for those with hepatitis C, and is expected to approve a similar new drug, sofosbuvir. Approximately 3.2 million people in the U.S. have hepatitis C, a viral condition that causes inflammation of the liver and can lead to permanent liver damage, liver cancer, liver failure and cirrhosis, according to the Centers for Disease Control. In addition to access to Rx21's expertise and clinical support, Giant Eagle Specialty Pharmacy customers suffering from Hepatitis C and transplant conditions will have 24-hour-a-day access to pharmacists ready to provide counsel on medication management.

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YUM! BRANDS reveals 2014 masterplan December 06, 2013 | Planet Retail Yum! Brands has disclosed several new strategies for 2014 during its annual Analyst Day. The company identified India as a core focus for development. Niren Chaudary, CEO of Yum! Brands India, said: “Our vision is to be the number one restaurant company in every category in which we operate. Yum! India has tripled in size in the last five years and the goal is to triple again by 2020.” Much of the growth will come via the KFC banner which has recently introduced new vegetarian offerings, suited to local requirements. Pizza Hut has also been developing and expanding its menu mix. In addition, the banner is testing a new store-in-store concept called Hut Café, featuring coffee, beverages and desserts. In the US the company is to expand Pizza Hut’s WingStreet concept, diversifying its product offering by adding chicken wings and a range of sides. For Taco Bell, CEO Greg Creed anticipates sales to jump from USD7 billion to USD14 billion by 2022. This is to be achieved through expanding dayparts and more menu innovations, as well as adding 2,000 new restaurants within the next 10 years. Other initiatives for 2014 include a focus on USD1 offerings, afternoon daypart snacks and breakfast. Another initiative scheduled for next year will be the roll-out of a full-scale digital ordering platform. Planet Retail has a lot of belief in Yum! Brands future strategy as India is a key market for foodservice players to crack. The sheer size of the population and the fact that the Indian foodservice market is so far very underpenetrated makes this a highly attractive and positive move for the company. If it is really to triple in size in the market, Yum! Brands’ Indian restaurant count will be around 2,000.

SEVEN & I makes bold fashion statement December 04, 2013 | Planet Retail Seven & I in Japan is expanding its clothing business via two acquisitions, Japan Times reports and Nikkei Asian Review report. With the double move, the group is seeking to strengthen its online sales channels and bolster its luxury clothing business. Seven & I will acquire a majority stake in Japan-based catalogue and online clothing retailer Nissen Holdings. A 50.1% stake will be purchased through Seven & I’s information and technology unit, Seven & I Net Media. The total cost will be JPY12.6 billion (USD127.1 million) at JPY410 (USD4.1) per share.

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Additionally, Seven & I will acquire a 49.9% interest in luxury retailer Barneys Japan as of January for an estimated JPY6 billion yen (USD60.5 million). The group intends its subsidiaries, department store operators Sogo and Seibu, to collaborate with Barneys Japan on stock purchasing and setting up sales space. It is also mulling opening smaller Barneys locations with reduced selections in department stores. Seven & I also plans to add Barneys' luxury clothing brands to its own e-retail portal, and is considering establishing a collection system at 7-Eleven convenience stores for orders placed on the Barneys website. The move will further cement Seven & I’s position as a leading Japanese multi-format retailer and should lead to a boost to its clothing sales, which have until now contributed least to total revenues. Synergies gained from Nissen’s e-commerce expertise could also see the group revolutionise the luxury online sales market in Japan, which remains relatively low despite its status as one of the world’s leading luxury markets.

CONFORAMA strategises for survival December 04, 2013 | Planet Retail As it attempts to resist IKEA’s dominance in France, furniture specialist Conforama is to enter a strategic partnership with Fly, a banner of the Mobilier Européen group. The agreement provides for the acquisition of 19 outlets of Mobilier Européen’s Swiss subsidiary Fly, Les Echos reports. Those outlets account for EUR100 million (USD133 million) in turnover. Conforama, acquired by South Africa’s Steinhoff in 2011, will also take over “ten French stores” from its new partner. In a second step, Mobilier Européen will use the sourcing capabilities and logistics platforms (six in France) of Conforama. There is a possibility of Conforama acquiring Fly France entirely within the next three to five years, according to Conforama CEO Thierry Guibert. He will also join Mobilier Européen’s supervisory board. The transaction is subject to competition authority and employee representative approval. For Planet Retail, the deal should inject new stimulus to Conforama’s market power in France as it will add 114 Fly stores to its current network of 207 outlets. While the move would also diversify Conforama’s product offerings, it would also enhance supply chain synergies in a challenging market environment. As a welcome side-effect, any future acquisition of the Swiss stores would also significantly boost Conforama’s market presence in Switzerland.

Safeway sells 11 Dominick's stores to Roundy's December 03, 2013 | Retailing Today Safeway has reached a definitive agreement to sell 11 of its Dominick's stores in the Chicago metropolitan area in a cash and lease assumption transaction to Roundy's. Roundy's will take possession of the stores during a transition period that will take place in the next two months.

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The transaction is subject to customary closing conditions. Earlier this year, Safeway announced its decision to exit the Chicago market and focus its efforts in other operating areas where its business is stronger. The company continues to be actively engaged in a process to identify purchasers for its remaining stores in the Chicago market. Safeway previously announced the sale of four stores in the greater Chicago area to New Albertsons, which operates Jewel-Osco grocery stores.

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Sutherland insights retail news flash dec 16, 2013  
Sutherland insights retail news flash dec 16, 2013