Sobeys: third quarter results

Meijer: Shop & Scan expansion to 23 stores in Chicago area

Sobeys Q3: performance strengthens as it sets to launch FreshCo in western Canada
Sobeys’ third quarter sales increased by 3.6% to $6.2bln, with same-store sales (ex-fuel) up 3.3%. Total sales growth was supported by the acquisition of Farm Boy. Adjusted net earnings fell 18.9% to $72.9mln, reflecting FreshCo conversion costs and labour buyouts. However, the turnaround is gathering speed with improved results broad based, across all regions and all banners. Over the next year it will accelerate cost reductions, sharpen in-store execution and invest in existing stores. Over the coming months, Sobeys will launch its FreshCo discount banner in western Canada. It will open two stores in Manitoba and five in British Columbia, converting existing Safeway stores. The retailer plans on converting 25% of its conventional stores in the region to the discount format over the next four years. These stores will reflect the new FreshCo 2.0 model which has been piloted in the Ontario market. Due to the success of this improved format, all existing FreshCo stores in Ontario will be updated over the next year.

US: Meijer expands Shop & Scan to Chicago area
Following a successful test in Michigan, Meijer is rolling out its Shop & Scan mobile app to 23 stores in Chicagoland. “We’re all challenged by time and busy schedules, so Shop & Scan allows customers the opportunity to truly be in control of their shopping trip, from the moment they walk in our stores to the minute they walk out", said Gerald Melville, Meijer regional VP. “Customers are really responding to the simplicity of scanning and bagging as they go. This allows them to save time and avoid lines, speeding up their checkout experience.” Shop & Scan enables users to scan bar codes on items via a mobile app and place items in their digital cart. A running total of items purchased is available as customers shop throughout the store, scanning and bagging their groceries. Once a customer has completed their shopping, they simply scan their phone at a self-checkout lane and pay, making the checkout experience quick and easy.

Amazon no longer demands the lowest price
Sellers on Amazon are no longer obligated to guarantee their lowest price for the e-commerce platform's own. This decision comes in the wake of fierce criticism from American senator Richard Blumenthal and an inquiry from the German government. Amazon no longer demands its sellers to offer the lowest price on its platforms, Reuters writes based on an anonymous source. Amazon may have changed the policy because it was increasingly under attack: the decision comes in the wake of a letter from American senator Richard Blumenthal to the federal trade commission, in which he argues that the practice "could stifle market competition and artificially inflate prices on consumer goods".

China: Fung and JD launch Hong Kong’s first AI checkout solution
JD has partnered with Fung Retailing Group to unveil Hong Kong’s first AI checkout solution in a retail store environment. The AI-powered checkout technology is a result of a strategic deal between the firms signed last year. It represents the first AI checkout experience featuring image recognition technology in the territory. This technology is currently installed at the AI Retailing Zone in two Circle K stores in Hong Kong. Designed to make the checkout experience as easy and hassle-free as possible, customers can complete checkout using the AI-powered solution in just four seconds with three simple steps, including placing the products on the counter, scanning, and paying via Octopus card. The advanced AI algorithm enables the checkout counter to recognise up to five products within one second with an accuracy rate of more than 97%, reducing the overall checkout time by 30%.

Norway: NorgesGruppen recruits more women in managerial roles
Norway's NorgesGruppen has hired an increasing number of women in the role of merchants and store managers in recent years, the company said. In 2018 alone, the retailer appointed 13 women in managerial roles, it said. Of NorgesGruppen's 1800 grocery stores, around 40% were led by female store managers or merchants in 2018, which is an increase of almost three percentage points since 2014. Chief executive, Runar Hollevik, explained that gender balance is an importance part of diversity in the workplace. "Many of the women who are now merchants have worked their way up the store. Often, they have started out as employees and then take on more and more responsibility", he added. "Working in a grocery store provides development opportunities for those that are looking for them." The company aims to achieve a 40%-60% women to men ratio in senior positions, according to chief executive Hollevik.

Spain's Mercadona: 6% sales growth in 2018
Spain-based Mercadona said it grew sales by 6% in 2018, generating €24.305bln in the year. Profits rose by 84% to €593mln, which came despite the retailer investing €1.5bln in its network and operations. Mercadona said it had invested €962mln in store openings and renovations, €257mln in the automation of its logistics platform, €225mln in its digital transformation and €60mln in its expansion into Portugal. Commenting on the results, Mercadona’s president, Juan Roig, said: “Mercadona is doing very well and this year will be even better”. Roig said the focus on the customer and improvements to its store estate were helping Mercadona to win. Given the success of its efficient store concept, with 400 updated during 2018, Mercadona will continue to roll out the design until 2023. During the timeframe the retailer will invest €10.0bln in its store network to improve and digitise them. In 2019 this will also see the opening of a further 60 stores, the closure of 100 more and the relocation of 400. The investment is aimed at helping support Mercadona’s target of growing sales by 3.7% to €25.2bln in 2019. The retailer said it would invest €2.3bln in the year ahead, while its net profit was forecast to fall by 27% to €435mln.

China: Sun Art Retail Group appoints new chief executive
Chinese hypermarket operator Sun Art Retail Group has appointed Huang Ming-tuan as its new chief executive, with his appointment set to be confirmed at the group's AGM in May. Sun Art, which is a joint venture between Auchan and RT-Mart, posted a 2.9% decrease in revenue last year, while gross profit was up 1.6%. “In front of fierce competition in China’s retail market, Sun Art will continue to deeply develop three key strategies of the Group and focus on integration of two headquarters", Ming-tuan commented. "Leveraging technology and data-driven, we will make efforts to develop online business and renovate and upgrade the existing stores.”

Greece: Retailer Jumbo 6-month profit rises 9%
Greek retailer Jumbo posted a 9% rise in net profit for the six months to December 2018, thanks to strong growth in foreign countries. Jumbo said net profit came in at 98.7mln euros ($111.23mln), up from 90.4mln euros in the same period a year ago. The retailer said it would pay an interim dividend of 0.19 euros a share. Six-month group sales rose 7.6% to 476.8mln euros. Jumbo operates 51 stores in Greece and another 26 stores in Romania, Bulgaria and Cyprus.

France: Carrefour CEO applauds Google tax
Store chains pay far more taxes than internet platforms, which is untenable - according to Carrefour CEO Alexandre Bompard. He is therefore in favour of a tax that will bring an end to this fiscal imbalance, which is tabled in France but rejected for the whole EU. In an interview with Le Journal du Dimanche, the CEO welcomes the fact that a such tax is finally coming: "It is necessary to end the fiscal imbalance between brands like ours and American or Chinese universal platforms", he believes. "We pay 83 different taxes. With a comparable turnover, we create four times as many jobs. Meanwhile, they dump their products on the market without even paying any VAT, and hardly any taxes. That is untenable. I am not asking for a favour, but a simple principle: equal turnover, equal taxes."

Switzerland: Coop opens FOOBY concept store in Lausanne
Coop Switzerland has opened a new concept store, FOOBY, in Lausanne, the first opening under a new banner launched by the retailer. FOOBY, which is located in the former Kursaal theatre, is focused on culinary expertise and regionality, as well as sustainability. The store boasts a wide offering of fresh products, as well as a number of specialities from about twenty regional producers. Most of FOOBY products (70%) are of sustainable origin. The Coop concept store will also launch a new line of products under the FOOBY brand, which will only be sold in this store.

UK: Nisa boosts retailer field support
Wholesale distributor and Co-op subsidiary, Nisa has expanded its field team of retail development managers by more than 40% since the beginning of 2019, to bring increased support and contact to its independent retail customers across the UK. Retail development managers act as a key interface between Nisa head office and Nisa retailers, liaising with central functions, such as IT and logistics, to ensure Nisa service is efficient and effective. Through regular scheduled visits RDMs work to retain retailers and drive loyalty by advising them on how to optimise opportunities for increased sales and profitability and how to develop their businesses further.

UK: Asda to remove 6,500 tonnes of plastic packaging
Asda has announced it has removed 6,500 tonnes of plastic from its own brand packaging since February 2018. The milestone marks a significant step towards the supermarket’s ongoing commitment to reducing the amount of plastic used in product packaging. Through product innovation and redesign, Asda has reduced plastic in almost 1000 individual product lines - from fresh fruit and veg to electronics and homewares - removing the equivalent weight of 600mln empty plastic bottles. Some of the changes that have been implemented over the last 12 months include: swapping family chilled ready meal trays from black plastic to foil; changing pizza bases from non-recyclable polystyrene to fully recyclable cardboard; replacing 5mln plastic bags on its bedding range with a cardboard band; taking plastic covers off over 50mln greetings cards; removing plastic windows and film from over 1.6mln mince pies at Christmas. In addition, Asda has taken steps to make its packaging more recyclable, including changing all of its fresh produce trays from black plastic to clear, as it moves towards making all of its packaging 100% recyclable by 2025.

Cyprus: Papantoniou Supermarkets announce agreement with Sainsbury’s
Papantoniou Supermarkets have entered into a cooperation agreement with Sainsbury’s to sell the British retail giant’s products in Cyprus. The agreement was announced in Nicosia in the presence of Sainsbury’s director of business development Michael Luck. It covers food, drink, cosmetics, personal care items, cleaning materials and pet food and pet products. Papantoniou Supermarkets operates five hypermarkets in the Paphos district. It also has a hypermarket and two medium size supermarkets in the Limassol district.

Tesco Group to open service centre in Hungary
The Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó has announced that British retail giant Tesco Group will open a new business and technological service centre near Budapest. Mr Szijjártó said the new service centre will provide jobs for young university graduates with good foreign language skills within the fields of payroll services, human resources administration, sales and customer services. “The fact that more and more companies are setting up service centres in Hungary, where they are moving increasingly complex tasks that require more knowledge, is proof that the Hungarian economy is successfully transitioning into a new dimension”, Mr Szijjártó told the Hungarian press.

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