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Shopper
Marketing News:
Fuel's gold as million people play cards with Woolworth's
WOOLWORTHS has left the door open for its new discount fuel card to morph into a sophisticated customer loyalty card similar to that pioneered by the British supermarket giant Tesco.
Its Everyday Rewards Card, which completed its national debut in NSW last week, allows shoppers to collect fuel discounts on a plastic card rather than on paper. It also offers entry into a weekly prize draw in stores as well as an intermittent national draw worth $10,000.
Woolworths executives say the uptake of the card has "surpassed expectations" with "well over a million" shoppers registering their details - the first step in harvesting crucial data on what customers buy and when.
Richard Umbers, general manager customer engagement, said there was nothing to stop Woolworths turning the card into a tool that targeted shoppers with offers for specific products based on their shopping behaviour.
"There could be things in the future that might be of value to them [but] we have to make sure we don't send them offers that are of no real value to them," he said. "I haven't ruled it out as direction we are going in but at the moment we are concentrating on building it around the sweepstakes and the four cents-a-litre discount."
Tesco has about 10 million Clubcards operating in Britain, collecting a wealth of data on its customers and informing every aspect of its business, from store layout and merchandising to buying and marketing. Each year millions of coupons offering discounts or promotions are mailed to customers as "rewards".
Mr Umbers said it was unlikely Woolworths would directly follow Tesco's lead. "I see no potential in coldly marketing offers that are simply spam and send [customers] to different brands and products around the marketplace. I don't see a place for that."
He said Woolworths was evaluating a number of options, among them its Frequent Shopper scheme in Tasmania, but any decision would be based on whether customers are asking for something more.
Chatter on the company's blog and online surveys convinced Mr Umbers of the switch from paper to card. "The more involved in the direction it is going the stronger the program will be," he said of customer response.
A Woolworths-branded credit card is to be introduced next financial year and some observers have speculated that the two could be combined into one card, to which a Woolworths spokesman responded: "We are aware of the link between the two but we are not giving away any details."
Source: SMH
Industry split on children's junk food ads
GLOBAL food companies have stalled an overhaul planned by the main Australian advertiser body on food products aimed at children after failing to agree on unified guidelines because of conflicting corporate policies on what constitutes healthy products.
Details are sketchy about attempts by the Australian Association of National Advertisers to tackle the contentious issue of children's food advertising but some observers said the inability of the food industry and the association to push through a revised set of self-regulatory guidelines increased the threat of government intervention.
Britain introduced a total advertising ban on high fat, salt and sugar food and drinks for children under 16 on January 1. Three weeks ago the New Zealand Television Broadcasters' Council voluntarily introduced a new children's food classification system that outlaws the promotion of unhealthy food and drinks products during children's viewing hours.
The criteria for a TV food ad aimed at children are based on the Ministry of Health's food classification guidelines.
Less than eight weeks ago the Australian association was upbeat about changes in its food and beverages advertising and marketing communications code, signalling that food and drink products would have to meet nutritional criteria on salt, sugar and fat before they could be advertised or marketed to children. It is understood some of the resistance to a revised code was from confectionary and fast food companies. It is understood a breakaway group of food companies is considering its own initiative, possibly outside the association's charter, because of the impasse.
Ian Alwill, the association's chairman and the head of marketing at Nestle Australia, was reluctant to confirm any developments yesterday. "At this hour I'm not in a position to comment," he said.
Asked if the failure by the food industry to obtain a uniform agreement on nutritional criteria posed a greater risk of government regulation, Mr Alwill said: "It would be much more favourable if we had a collective agreement."
Some companies suggested a project by the breakaway food group could be signed within weeks, possibly through an initiative by the World Federation of Advertisers. Mr Alwill would neither confirm nor deny the move.
Nic Goddard, another association board member and head of corporate communications at Unilever, acknowledged an alternative program might be unveiled in the "near future".
"The ideal was to have a set of nutritional criteria by which the industry would self-regulate which would determine which foods would and wouldn't be advertised to kids," he said. "That's still the vision of what we are working towards but it's still under discussion, to be honest."
Mr Goddard said that until there was an industry-wide framework, companies like Unilever would adhere to their own advertising policies, which prohibited any marketing to children aged six to 11, unless the product met specific nutritional requirements. These included saturated fat being no more than 13 per cent of total energy and sugar less than 17g per 100g.
Source: SMH
Harder and harder to be green
The market for eco-friendly products could be hit as people feel the pinch.
Is this the beginning of the end or the end of the beginning for green products? As consumer confidence falls, commentators are divided over whether green products will be squeezed between rising food and oil prices and higher mortgage repayments, or whether rising oil prices will force companies with aspirations to be sustainable to accelerate their plans for green products.
The latest research on American and British consumers shows the environment is taking a back seat to the economy, leading commentators to question the short- to medium-term future of products that purport to be green or sustainable; all the more so given people are asked to pay more for many green products.
The environment has fallen down the list of priorities for three-quarters of Americans and two-thirds of Britons, the Imagepower Green Brands Survey shows. The results of the survey - now in its fourth year - have led the authors, the global-brand identity consultants Landor Associates, to issue a note of caution on the future of green brands, saying that consumers will only "prioritise the environment when all other concerns are equal".
Landor Australia's executive director of brand consulting, John Matthews, says that while the Australian economy appears more robust he would expect much the same results here. Matthews questions the viability of green brands when people have to tighten their belts.
Now the first wave of green products, such as low-energy light globes and water-efficient shower heads, has passed, Matthews says, shoppers' expectations are greater and helping the environment is no longer enough to sell a product.
"The perceived benefits are going to have to be more than just altruistic," he says. "They need to get across the long-term benefits to the consumer in terms of cost savings, and I don't think they are doing that at the moment."
Matthews points to Toyota's groundbreaking electric-petrol Prius, which is still a niche car and is not cheap compared to conventional models. "The debate [around hybrid cars] has shifted away from emissions to the running costs and the jury is out over whether the Prius can deliver those benefits," he says.
That debate co-incides with Toyota's decision to build a hybrid version of its Camry sedan in Australia from 2010, the date by which Holden hopes to have a hybrid Commodore on the market.
The social researcher David Chalke, who runs the Australia Scan panel, questions the motivations behind going green. People's intentions towards the environment have not changed in a decade, he says.
"The ideologically passionate - what we call the ultra-green - still only make up about 11 per cent of the population. They are committed, they always have been, but the only thing that's changed is that they have become more vocal," Chalke says.
He says a further 16 per cent - the dark greens - have installed water tanks and fluoro globes more out of thrift than a desire to save the environment.
The remainder - the mid-greens, at 28 per cent, the pale greens (20 per cent) and the ungreens (20 per cent) - are unlikely to change as a result of any ideological shift.
Chalke says higher petrol prices and rising grocery bills are more likely to bring about behavioural change. But unless consumers believe they can save money - as they do with white goods, where energy-rating stars mean dollar savings - they are unlikely to take up the cause.
"But I can't see someone who is struggling to fill up the Commodore suddenly agreeing to pay more for something that claims to be saving the environment," Chalke says.
However, Stuart Harker,the practice leader in retail and consumer products at PricewaterhouseCoopers, offers a different point of view. Harker is confident that the green marketplace is going to hold up for a number of reasons, not least because consumers expect companies to bring out more sustainable products.
He cites an announcement last week by the American supermarket giant Wal-Mart that it will sell concentrated laundry detergent in an effort to drive waste out of its supply chain, as another example of a large company dictating market conditions. Where Wal-Mart leads, others will follow and the price gap between green and mainstream products will only shrink, he says.
"I am not hearing anything that suggests to me that this is a market that's going to go away. If anything it's an issue of supply rather than demand."
In Australia, Harker points to companies such as Sportsgirl, Country Road, Target and Bonds, all of which are launching or planning to launch clothing ranges made from organic materials, as evidence that even if consumer commitment to going green is faltering, big business's isn't.
Source: SMH
Woolowrth's lifts spend on advertising
Fears of a slowdown in national advertising may be misplaced, with supermarket giant Woolworths set to defy expectations of a retail slump by boosting its marketing budget by 16 per cent this year.
And in a first for Woolworths, it is believed to be placing most of the increased budget exclusively with PBL Media in a cross-platform deal that will range from editorial in magazines, advertising with the Nine Network and online ads with Ninemsn.
The boost, understood to have gained approval at board level, will lift Woolworths' annual advertising spending to $100 million, cementing its place as one of the country's biggest advertisers alongside the federal Government, Telstra and Harvey Norman. Woolworths' move is expected to be welcome in financial markets, as the share prices of most media stocks have fallen to four-year lows this week based ona gloomy outlook for advertising expenditure.
"They are right on the verge of doing a cross-platform deal with PBL. It is a major endorsement," a source told Media.
"They are clearly moving to take on Coles as (its new owner) Wesfarmers considers its next step. It is going to be (advertising) right across the board."
Sources at Woolworths said the decision to place such a large slice of the budget with one media company was due to PBL "getting what we wanted right". Said one source: "We are hammering out the details at the moment. There have been media companies talking about this sort of cross-media service for a long time, but to our mind nobody has really delivered on it yet.
"This is the first time we have been convinced that they can. It is a changing world and it is incumbent (on us) that we embrace it."
Media planners say the move could change the face of the retail marketing sector with such a large player throwing its weight behind the media company.
"This is a very aggressive push into cross media and a massive increase in their advertising spend," one media analyst said.
"They will still use newspapers and other outlets, but this is about being a big cross-media deal."
News that Woolworths is increasing marketing spending signalled an escalation in the supermarket wars with Wesfarmers. The WA-based retail giant is still in the throes of absorbing Coles' operations into its business, and observers said the timing had been carefully calculated.
Woolworths is expected to use elements of the PBL deal to promote issues such as its drought-relief program and support for rural communities.
During the past year the retailer has launched several marketing initiatives, including weekly market reports on factors, such as weather, affecting the cost of grocery staples
Source: The Australian
Sears brings shopper-centric experience online
Sears is "bringing its shopper-centric instore experience online" through personalised product recommendations powered by richrelevance. Sears.com and Kmart.com are currently running richrelevance’s turnkey solution, which analyses shopper behaviour to customise each shopper’s online experience from homepage through to checkout. “We are committed to providing our customers with the best possible shopping experience, no matter how they interact with us,” said Jim Barr, President, Online for Sears Holdings. “With richrelevance, we’re able to provide our online customers with recommendations that allow them to find what they’re looking for faster and easier.” Richrelevance analyses more than 15 distinct types of consumer shopping behaviour to predict which products are relevant to which shoppers. Attributes analysed include a shopper’s previous purchases, key search terms and specific brand-preferences. Each time a shopper visits Sears.com or Kmart.com, richrelevance will choose the best recommendations at every point in the shopping flow from item selection to purchase completion
Source: Planet Retail
Online shoppers bagging bargains
Shoppers are using overseas websites for retail therapy, with the strong Australian dollar meaning online shopping is doing better than ever.
Local retailers are reporting a massive downturn, and experts say it will get worse.
Consumers are being lured online by the cheaper cost of everything from clothing to fragrance to skin-care products, finding big-name international brands far more affordable when priced in US dollars or pounds.
In some cases, products were more than twice as expensive in local department stores than they were on overseas websites.
While postage and handling costs can sometimes offset savings, many sites offered highly discounted rates, even free shipping.
A 50 millilitre bottle of Gucci Envy Me 2 perfume cost $105 at Myer, but The Sun-Herald found it for $40.60 online.
A 200 millilitre Lancome Tonique Confort moisturiser will set shoppers back $55 in David Jones, yet costs $22 on the web.
A pair of designer Chloe sunglasses were $303 on an American online store, yet at David Jones' Elizabeth Street store they sell for $469.
The apparel sector had been one of the worst hit, said Richard Evans, executive director of the Australian Retailers Association,which represents 1.2 million retail staff.
"There is a lot of uncertainty in the retail sector," he said.
"We have been suffering since about December last year. The likelihood of an upturn is not until September next year. The worst is yet to come."
He said savvy retailers were being urged to review their expenses and cut costs as much as possible. Some have slashed their prices by a third. "The apparel sector, which usually has very strong post-Christmas sales, were doing their post-Christmas sales pre-Christmas," he said.
"We're seeing their winter sales now. They're trying to recoup their [losses]. The cost of holding stock is too high."
He said growth had already slowed to less than 4 per cent this year, down from 7.6 per cent last year. The clothing sector could be under 2 per cent by the end of the year.
But Mr Evans said the near-parity with the US dollar had made domestic technology such as plasma screens and computers more affordable. "Because retail is very competitive, retailers are required to reduce their prices to account for this cheaper import," he said. 'So it's good for the consumer."
Zetland couple Maree and Marco Venturini refuse to shop in stores unless absolutely necessary, preferring the cost and convenience of the internet. Ms Venturini, 33, who runs the Darlinghurst salon Hairmesphere with her husband, said she bought cosmetics, skin-care products, shoes and clothing online. Her husband surfs for cheaper sunglasses and musical equipment.
She said a pair of Versace sunglasses cost $350, plus $10 shipping, from a US website - a $70 saving on the Australian price tag.
"Now that I shop online, I save half my money," she said. "It doesn't hurt so much. We don't even go to department stores any more unless it's something crucial that we need."
She said the only problem was the discounts inspired her to buy more.
Myer apparel director Judy Coomber said online shopping had not affected growth in fashion; designer brands still performed well.
She said shoppers still liked seeing the garments, and "the security of dealing with a trusted retailer.
Source: SMH
Australian
News:
ACC inquiry will show structural impediments
The head of Australia's competition watchdog, the Australian Competition and Consumer Commission (ACCC), has indicated that its grocery inquiry has revealed structural impediments bearing on competition.
"The grocery inquiry has revealed to us some interesting structural impediments, starting at the farm gate, moving right through to the checkout counter,'' ACCC chairman Graeme Samuel said in a speech in Sydney, adding that the information gathered during the inquiry would be useful for advising the Government.
"That information ... will give us the capacity to provide the federal government advice and recommendations on the steps they might take,'' Samuel said.
The inquiry began in April and its findings are scheduled to be handed to the Government by 31 July. The inquiry looked at the grocery industry and the nature of competition at the supply, wholesale and retail levels. "The public hearings enabled us to put some people under the pump to find out just what was going on,'' Samuel added.
The ACCC inquiry precipitated a war of words between the National Association of Retail Grocers of Australia (NARGA), which represents independent retailers, and Australia's two dominant food retailers, Woolworth's and Coles, regarding the disputed market shares of the market leaders and the extent of fair competition in the Australian food retail sector
Source: Planet Retail
Costco confirms Australian store opening programme
Costco Australia’s managing director, Patrick Noone, has confirmed that the retailer is looking at Sydney for its next store. The retailer has only just confirmed the site for its first store in Australia (in Melbourne’s Docklands area) last week. Speaking of the Melbourne site, Noone said, “It is a natural transport hub, with the freeway running right by and tentacles stretching to Melbourne’s suburbs and the Spencer Street station very nearby; so to have those advantages and be very near the Melbourne CBD is fantastic.” Noone noted that the retailer is still working out the details of the concept, such as how much to charge for a membership fee. “We haven’t determined what it is here yet but it probably won’t be dramatically different [from the USD50 charged in the US] and you can come and shop all year long and then every year you re-new that membership… We’ll probably start off with a Business and a Gold Star membership system and we’ll develop it from there.” Costco is currently in discussions with major brand suppliers to get their products on its shelves. “We’re looking for their [supplier’s] assistance in terms of packaging but we haven’t got into specifics yet,” he said. “It will be the same brands you see everywhere else but we work with providing the best value with each of the manufacturers. That value may include upsizing to a larger pack size or a different type of packaging that’s out there in the retail market right now. Certainly the shopping experience of Costco is to buy brand-name merchandise at dramatic savings, so we work with the vendors to enable us to get the savings for our members
Source: Planet Retail
Nestle sells yoghurt business to Fonterra
Nestle Australia has sold its yoghurt and dairy dessert business, including its Echuca factory, to Fonterra.
Financial terms were not disclosed but the companies said that the agreement becomes effective on 1 September.
Under the agreement, Fonterra will also acquire the long-term rights to manufacture, market and sell Nestlé's yoghurt and dairy dessert brands in Australia under licence, alongside its own existing brands.
The Ski brand, which is currently under licence to Dairy Farmers reverts to Nestlé in 2012, and will then be licensed to Fonterra.
For Fonterra this represents a significant step towards achieving its growth strategy in Australia, said John Doumani, managing director, Fonterra Australia New Zealand.
"We currently do not have a national presence in Australia's yoghurt and dairy dessert sector. By acquiring Nestlé's yoghurt and dairy dessert business, it provides us with a national position and complements our existing portfolio where we hold leading national positions in cheese and spreads through our Mainland, Bega and Western Star brands.
"This agreement builds on Fonterra's long and successful global partnership with Nestlé and makes good business sense for both parties," said Doumani.
Graham Campbell, managing director at Nestlé Australia, said having a significant ongoing Nestlé brand presence in the yoghurt and dairy dessert cabinets of Australian supermarkets is a key element of its strategy.
"We have a successful track-record of marketing through arrangements of this kind, both in Australia and overseas," Campbell said. "We believe that this new operation creates a soundly-based commercial entity that is well placed to be one of the leaders in the yoghurt and dairy dessert sector, and we are delighted that the vast majority of employees will be moving across to Fonterra."
In 2005, Nestlé and Fonterra completed a similar arrangement. Nestlé moved out of the collection of milk from farmers and the manufacture of powdered milk in Australia, selling to Fonterra its Dennington factory in Victoria.
However, Nestlé continues to market milk powders, manufactured by Fonterra, to both local and export markets
Source: Just-food
Foster's hangover not over yet...
That Foster's share price rallied on an otherwise dismal day for every sector save oil and gas shows the board did the right thing to squeeze out chief executive Trevor O'Hoy, belatedly.
It is also a timely reminder that most big acquisitions do not work for shareholders.
For Foster's, both the acquisitions of leading Australian winemaker Southcorp and US winemaker Berringer Blass have failed.
Billions of dollars have been smoked on the altar of executive caprice and the company's declaration of $600 million to $700 million in writedowns barely touches the sides.
There will be more to come when new management does its inevitable strategic review and swings the axe around. In both cases Foster's paid too much for its big acquisitions and eked out too little a return.
It should be stressed that wine stocks have been decimated by the global grape glut for three years.
Still, Berringer in particular was a disaster. It underperformed its US peers. Having splashed some $3 billion in capital over five years on this business, Foster's is staring at a paltry return this year of barely $US200 million, according to Merrill Lynch's numbers.
As for the acquisition of Southcorp, O'Hoy made the near fatal mistake of discounting some of Southcorp's famous flagship brands and tore up earnings for a time, particularly in the UK.
Merrill's analyst David Errington has been scathing on the Foster's strategy and has led calls for change, and O'Hoy's scalp.
It is worth noting that Errington has also been the most critical analyst on Wesfarmers' acquisition of Coles. If he has this one right too, Wesfarmers' shareholders had better watch out as its boss Richard Goyder has more or less bet the company on Coles at the top of the business cycle, employing shovel-loads of debt to boot.
O'Hoy lost the confidence of institutional investors last year when it became painfully clear his multi-beverage strategy had failed. The thinking behind this was, broadly, that if you had more beverages in your portfolio - read beer as wine as wine - you would build more market power with distributors and could therefore charge more for your product.
Up against the formidable market might of retailing duopoly Coles and Woolies, which has moved into pubs and bottle'os en masse, this was always a big ask.
Naturally the buyers thought they deserved a discount for buying extra product and besides, wine and beer are vastly different products even though they deliver the same effect.
Source: SMH
Coca-Cola gives Mother another chance...
Coca-Cola is becoming increasingly desperate to crack the booming energy drinks market, with the company announcing the relaunch of its energy drink Mother after a spectacular flop last year.
Next month, a multimillion-dollar marketing campaign will signal the return of Mother and the company's fifth attempt to establish a beachhead in a market dominated by V and Red Bull.
Since 2001, Coke has released a number of products - Lift Plus, Burn and Recharge by Sprite - all of which failed.
Early last year, ads featuring a cast of wide-eyed animals proclaiming Mother's energy-boosting properties, underscored with the line "100 per cent Natural", positioned the drink, which contained a potent Amazonian berry, acai, as an all-natural alternative to the caffeine- and taurine-loaded rivals.
But the $15 million marketing campaign, including two large sampling campaigns and heavy discounting in stores, failed to lift sales. At its peak, Coca-Cola's share of the energy drinks market, which IBIS World analysts put at $325 millionin 2007, stood at 6.3 per cent. Since then, sales have dwindled prompting Coke to rerelease the brand.
The campaign by one of its agencies, Publicis Mojo, failed because the core target market of 18- to 24-year-old males was not looking for a "natural high" but a "chemical one", according to sources. Those who tried it didn't come back largely because of the taste. "It [the drink] lacked the efficacy of potency and that's exactly what the market wants in these drinks," one source close to Coke said.
Yesterday, Coke put out a short statement admitting it had got it wrong - unusual for a company that rarely, if ever, acknowledges defeat. "It will taste nothing like the old one and will deliver double the energy kick, making it the most potent energy drink in Australia," it said.
Even the top of the can will be emblazoned with: "Tastes nothing like the old one."
The sources said Coke will not step away from a market that has grown by 62 per cent in the three years to 2007.
But commentators are far from confident it can succeed. Red Bull and V have almost 90 per cent of the market.
Beverage analyst for IBIS World, Audrey Riddell, said: "Because it's an innovative product, the first mover advantage is important and because they [Red Bull and V] were able to come in with appropriate marketing early on in the piece, they've made it difficult for others to come in. Coke will be playing catch-up."
Broking house UBS tempered advice to investors in Coca-Cola's Australian bottler, Coca-Cola Amatil: "CCL [Coca-Cola Amatil] hopes to recover with improved sales but we are cautious on the company's ability to succeed against Red Bull and V."
Coke is not alone. Foster's Torque bombed and its successor, Battery, is making little headway.
Coca-Cola confirmed the task of relaunching Mother had shifted from Mojo to another of its rostered agencies, Smart, which last year merged with an established Coke agency, Kindred, which had worked on its most successful launch, Coca-Cola Zero.
Source: SMH
Global
News:
US: Inbev launches $50b bid for owner of Budweiser
INBEV, the maker of Stella Artois beer, has launched an audacious $US46.9 billion ($50 billion) takeover bid for America's biggest brewer - Anheuser-Busch, the owner of Budweiser.
The $US65-a-share unsolicited bid from Inbev, already the industry's biggest player, looks set to trigger a series of mergers and acquisitions across the global brewing sector.
Anheuser said its board would evaluate the cash offer "carefully" in the context of its "long-term strategic plan".
Inbev has ready a $US40 billion funding package from Barclays, BNP Paribas, Deutsche Bank, Fortis, ING, JP Morgan, RBS and Santander, evidence that the world's biggest companies are still able to raise mega-financing despite the pressures of the credit crisis.
A successful takeover would mark the latest phase of industry consolidation after European rivals Carlsberg and Heineken acquired Britain's Scottish & Newcastle earlier this year in a deal worth £7.8 billion, and the world No.2 brewer, SABMiller, set up a joint venture with Molson Coors.
Anheuser's share price rose $US4.42 to $US62.77 in after-hours trading. The brewer's shares have climbed 19 per cent since news of Inbev's interest leaked towards the end of May.
The bid is not expected to be well received by Anheuser's board, while a takeover of the iconic US brewer would likely get a hostile reception in its home state of Missouri.
Anheuser's chief executive, August Busch IV, is reported to have said a takeover would not happen "on my watch".
The Busch family has a stake of less than 4 per cent in the brewer, but has managed to retain indirect control of the board since Anheuser's inception in 1860.
Analysts believe Inbev's management - which has built a reputation as a ferocious cost-cutter following the Interbrew-Ambev merger that formed the company - would take a similarly aggressive approach with a takeover of Anheuser.
In a sign that Inbev is looking to play down fears, the brewer said it would retain Anheuser's headquarters in Missouri, and had no plans to close US breweries.
The Belgian-Brazilian company also said the name of any combined company would "evoke Anheuser Busch's heritage", it planned to position Budweiser as the company's flagship brand, and it would invite some of Anheuser's directors on to its board.
Inbev is thought to have spent the last few weeks drumming up support from Anheuser's shareholders, who include the Wall Street investor Warren Buffett with a 5 per cent stake.
Acquiring Anheuser would give Inbev the No.1 position in the US beer market as well as a 50 per cent stake in Modelo, a leading Mexican beer company, and a 29 per cent holding in Tsingtao, China's biggest brewer.
Anheuser could seek possible white knight partners in a bid to avoid Inbev's grasp.
They could include the British drinks giant Diageo or the European rival Heineken, analysts said
Source: SMH
UK: Tesco & Sainsbury lose ground as belts tighten
Tesco & Sainsbury have marginally lost their share of the UK grocery market, according to the latest figures from research analysts TNS Worldpanel.
Tesco and Sainsbury's grew sales by 5% and 4% respectively during the 12 weeks to 15 June but TNS said the UK grocery sector as a whole grew by 6%.
Morrison's the UK's fourth-largest grocer, saw sales rise by 8.1%, while Asda sales were up 7.5%, according to TNS.
Edward Garner, director of research at TNS, pointed to "very strong year-on-year growths" at discount retailers Aldi and Lidl, which saw sales rise 21% and 13% respectively.
Tesco, however, still enjoys double the market share of its nearest rival Asda, according to TNS. Tesco accounts for 31.2% of UK grocery sales, TNS said, while Asda's share stands at 16.8%.
Meanwhile, Garner added that, although some food prices in the UK had "rocketed", food inflation in the UK was not standing at 20% as had been reported.
"TNS believes that it is more relevant to look at the average household shopping basket, taking account of sales levels and promotions and, as a result, state that price inflation in grocery stood at 4.6% for the 12 weeks ending 20 April," Garner said
Source: Just-food
US: Pepsi boss calls for action on commodity pricing
The head of PepsiCo has called on the US government to take action over rising commodity prices, warning that she sees no end in sight to the trend.
Speaking at a Wall Street Journal conference in New York, Indra Nooyi said: "There is no bust in prices in sight. It is very worrisome, and what really surprises me is that I've not seen anyone in Washington saying this crisis is the biggest we've had. I just don't see the leadership."
She added that the authorities need to "figure out what they're going to do about it", before US consumers begin to slow their spending.
Nooyi, however, said that PepsiCo has been largely been unaffected by the rises so far because consumers look at many of the company's products as comfort food
Source: Just-food
US: Wal*Mart jumping to Tesco's beat of the drum
Reports in the FT suggest that Wal-Mart’s new small format Marketside grocery stores may be less focused on price than Tesco's rival Fresh & Easy chain, according to recent job advertisements from the company. The advertisements say the new 1,395 square metre stores be a "premium" format, an apparent contrast with Tesco's hard-discount approach. The FT adds that Wal-Mart has already indicated that the neighbourhood stores will be focused on delivering meal solutions. Store planning documents indicate that food will also be prepared and served on the premises, in contrast with the minimalist approach of Tesco's Fresh & Easy stores. Positions for hourly employees at the new stores will include "meal specialists" whose work is described as including preparing and serving food, as well as working as cashiers and working on store presentation. Marketside ads for senior buyers also say that the new stores will include a unique private-label assortment, indicating that the retailer is developing new private label brands exclusively for the small stores, rather than relying on its existing PL brands. The new stores will be run out of an office in Phoenix by Wal-Mart's new business development unit, which is headed by David Wild.
In an interview with the Financial Times, the chief executive of Tesco’s US operation, Tim Mason, has indicated that the retailer is preparing to expand beyond the West Coast. Mr Mason said that Fresh & Easy was thriving, in spite of suggestions of poor early results and added that the decision to bring in US-born Jeff Adams as an operations director was about preparing for the future, rather than a signal that the new business was struggling. “We have always known we will need more executive vice-presidents in operations because this country is so big that as soon as we go into a new geography, we will need someone to run it, so we have brought him in a little early,” adding that rumours he was returning to the UK were a “complete fabrication”.
In the interview, Mason dropped heavy hints that Adams would be deployed to another part of the US – most likely to be in the Chicago and the Midwest – once the 61-strong chain reaches critical mass in California, Nevada and Arizona. Asked whether Tesco was ruling out a move beyond the West Coast until after 2012, Mason said: “I wouldn’t say that. We wouldn’t do anything else until we have explained how we are doing here
Source: Planet Retail
US: Fritolay launches nut snack range
Frito-Lay, PepsiCo's snacks division, has launched Truenorth, a range of "natural nut snacks", in the US.
Unveiling the range, Frito-Lay described Truenorth as a "contemporary line of 100% natural nut snacks offering different snacking experiences for a wide range of occasions".
The range comprises three different kinds of snacks: nut clusters, nut crisps and nut crunches.
"While consumer demand for the nut category continues to be positive, the options have been limited and uninspiring," said Regan Ebert, vice president, general manager, Frito-Lay North America. "TrueNorth creates nut snacking options that range from reinventing the traditional to new twists that feature nuts as a crisp, which is reminiscent of a cracker."
TrueNorth Nut Clusters, which are clusters of roasted nuts, come in three varieties: roasted peanuts, toasted almonds or a pecan-almond-peanut mix.
TrueNorth Nut Crisps are crisps made from either roasted peanuts, toasted almonds or pistachios, along with other 100% natural ingredients, that are baked together to create a crispy cracker-like texture. TrueNorth Nut Crunches are oven-baked nut snacks which have an outer crunchy coating. Honey wheat peanut and toasted sesame peanut variants are available.
Frito-Lay is rolling out the range nationwide during the second quarter of 2008. The launch is being supported by a fully-integrated marketing campaign including print and TV, sampling and free standing inserts, Frito-Lay added
Source: Planet Retail
NZ: Economy on brink of recession
New Zealand's economy contracted in the first quarter, putting the nation on the brink of a recession as soaring credit costs damp domestic demand and a drought crimps exports.
Gross domestic product fell 0.3% from the fourth quarter, when it gained a revised 0.8%, Statistics New Zealand said in Wellington today. That matched the median estimate of 13 economists surveyed by Bloomberg News. The economy expanded 1.9% from a year earlier.
Seven economists expect the economy also shrank in the second quarter, pushing New Zealand into its first recession since 1998. The first contraction in two years adds to signs Reserve Bank Governor Alan Bollard will cut the benchmark interest rate from a record-high 8.25% within the next three months.
''This isn't just a pause, it's the start of a long process of economic correction,'' Craig Ebert, senior markets economist at Bank of New Zealand, said before the report was released. ''Growth, or the lack of it, will start to dominate the Reserve Bank's thinking.''
New Zealand's dollar fell to 75.37 US cents from 75.52 cents immediately before the report.
Bollard on June 5 forecast a 0.3% first-quarter contraction followed by 0.2% growth in the three months to June 30. He said he couldn't rule out a recession.
Rate Outlook
The central bank Governor, who has kept the benchmark interest rate unchanged since July last year, said it is ''likely'' he will reduce borrowing costs this year because slowing growth will stem inflation.
Ten of 13 economists surveyed by Bloomberg say Bollard will lower the benchmark lending rate in September. Two expect a cut as early as the next review on July 24, while one predicts a reduction in October.
Adding to signs the economy won't recover quickly, consumer confidence slumped to a 17-year low in the second quarter, and house sales fell in May to a 16-year low.
Briscoe Group, an Auckland-based sporting goods and home-ware retailer, said yesterday profit in the six months ending July 27 will probably fall 80% from a year earlier.
Managing Director Rod Duke said ''extremely difficult trading conditions'' and increased costs have crimped sales and narrowed profit margins.
Finance Minister Michael Cullen said last week rising fuel and food costs meant the economy is ''facing some quite significant headwinds.'' The Treasury Department also forecast a contraction in the first quarter.
Spending, Building
The first-quarter decline in GDP was led by a slump in consumer spending, home building and exports, the statistics agency said in today's report.
Household spending, which makes up 60% of the economy, fell 0.4% from the fourth quarter, the first contraction in four years. Purchases of durable items declined 3.4%, led mostly by cars, furniture and household appliances. Spending on alcohol, food and other so-called non- durable goods was unchanged.
New Zealanders are cutting back on purchases of cars, computers and appliances as they pay higher interest costs on their mortgages and credit cards. The lending rate on a two-year fixed home loan was 9.6% in April compared with 8.8% a year earlier.
Spending on new housing fell 5.5% in the first quarter, the statistics agency said.
Business investment declined 1.2%, led by commercial construction while spending on plant, machinery and equipment increased. Inventories held by retailers and the distribution industry also rose.
Dairy Exports
Overseas shipments of goods and services declined 1.8% in the quarter as dairy product sales fell. Imports volumes rose 1.2%.
Fonterra Cooperative, the world's largest dairy exporter, said in February that farmers were producing less milk than it had forecast because of drought in much of the country. Dairy exports declined 3.8% in the first quarter. Sales of butter, cheese and milk powder make up about one-fifth of New Zealand's exports.
Farm production fell 5.6%, the biggest decline since 1998, as the drought forced many farmers to stop milking cows. Mining and forestry output also declined. Manufacturing declined 1.2% led by food processing as less milk was supplied to factories. Output from the construction industry slumped 5.2% led by home building.
The GDP deflator was 4.9% in the year ended March 31, the statistics agency said.
An alternative measure of the economy, expenditure on GDP, fell 0.6% and rose just 0.7% from a year earlier
Source: SMH |
