UK: Midcounties welcomes 185 new colleagues from four Warner Budgens stores
Midcounties Co-op has welcomed over 185 new colleagues after completing the purchase of four Cotswolds-based Warner Budgens food stores. The acquisitions of the stores, in Bidford-on-Avon, Broadway, Moreton-in-Marsh and Winchcombe, strengthens Midcounties’ presence in the Cotswolds. Group CEO Phil Ponsonby said: “We’re delighted to welcome Warner’s Budgens colleagues to the Midcounties family. They have an excellent reputation for great customer service, product knowledge and will be a valuable addition to the society. The quality of these stores provides us with a fantastic base for ongoing investment in our Food store offering. They will also help strengthen our relationships with local producers, allowing us to continue to develop and grow our Best of our Counties range”.
Germany: Delivery Hero leaps on $4bln food app deal to buy Woowa
Germany’s Delivery Hero agreed a $4bln deal to buy South Korea’s top food delivery app owner Woowa Brothers, ratcheting up consolidation in the industry as it expands in Asia’s fast-growing but crowded market. The deal follows a wave of others in the rapidly expanding sector but is the biggest so far. Woowa said it fell into the arms of its rival as “a survival strategy” in an intensely competitive market. For Delivery Hero, now worth over 11bln euros ($12bln) after listing at a value of 4.4bln euros two and a half years ago, buying Woowa expands its presence in Asia as Europe becomes more competitive. Its shares leapt 18.9% to a record 59.64 euros apiece. Analysts at Barclays said that given the gross merchandise value it acquired, Delivery Hero had agreed “a good price for an asset that gives DH clear leadership in a very attractive market”.
UK: Nisa recruits 500 new stores in 12 months
Nisa, the wholesaling division of Co-op, servicing independent convenience retailers, has revealed that its pace of recruitment has stepped up 40% in 2019. This has added more than 500 stores to the Nisa customer network, pushing the total number of stores serviced over 4,500. A key improvement, making the Nisa offer more compelling for independent retailers is believed to be access to the Co-op private label range, offering significantly enhanced capability in areas like fresh and chilled above all. There are now some 2,000 Co-op branded lines available to Nisa partner retailers, driving private label growth significantly ahead of overall sales. Private label now accounts for over 10% of total Nisa sales, worth some £2.5mln a-week, with penetration notable higher in chilled and fresh categories.
UK: M&S backs farm food waste app
Cogz, an app which provides a marketplace for farmers, growers and producers to sell surplus produce direct to trade buyers before it becomes food waste, is one of six start-ups which has benefited from the M&S and Founders Factory Joint Venture (Founders Factory Retail), designed to identify and accelerate emerging businesses and put M&S at the forefront of industry change and trends. Jeremy Pee, Chief Digital & Data Officer at M&S commented: “M&S is changing to create a more entrepreneurial, empowered and digital first mindset across the business. Expert partnerships like Founders Factory are catalysts for that cultural change - enabling us to work with and learn from the disrupters and not be the disrupted. From subscription delivery models, 3D scanning technology to disruptive new product platform, Founders Factory Retail is parachuting alternative ideas into the business and exposing teams to innovative thinking”.
Germany: Metro achieves strongest growth in a decade
The German Metro group has posted encouraging results in the past year: its Chinese operations have been sold, Real also found a buyer and like-for-like sales have increased by 2.4%, the strongest growth in a decade. "Our origin is wholesale, wholesale is our future", chairman Olaf Koch said when explaining Metro’s new strategy. The German group wants to go back to its core business, now that the sale of the Real hypermarket chain to X+Bricks is on the home straight and partner Wumei is taking a majority stake in Metro China. Once these sales have been completed, 70 % of Metro's turnover will come from wholesale, including both hospitality and wholesale activities. Comparable growth increased by 4.5% in hospitality and catering and 5.1% in the retail wholesale sector. Overall, comparable sales (including China but excluding Real) increased by 2.4%. This is the biggest increase in the past ten years, Koch proudly reports, and Metro now sees itself achieving the top half of its own forecast of "1% to 3%". Including currency effects, total turnover went up by 1.5% to 29.9bln euros.
UK: Sainsbury’s mulls bids for £1.9bln for mortgage book
Sainsbury’s is reportedly taking bids for its £1.9bln mortgage book as part of plans to overhaul its Sainsbury’s Bank division. According to Sky News, the Big 4 retailer has received a number of offers from bidders, including Lloyds Banking Group. The auction is being handled by bankers at BNP Paribas, Sky News reported. The news comes after Sainsbury’s last month said that a recent £35mln cash injection into its financial services arm would be the final such investment as it seeks to make it more sustainable. Valued £1.9bln, Sainsbury’s Bank’s mortgage book is roughly half that of Tesco Bank’s, which was sold to Lloyds over summer.
US: Target CEO thinks this new food brand will be its biggest brand ever
Target has long been known for its high quality, affordable private label brands spanning the apparel, food and houseware departments. They have been instrumental in Target wrestling market share away from department stores and Big Food. It’s one of the reasons why Yahoo Finance named Target company of the year. So, to hear Target CEO Brian Cornell call out newly launched private label food brand Good & Gather as potentially its biggest brand ever, it causes one to take notice. “I expect it [Good & Gather] to become our single biggest owned brand in our portfolio over the next couple of years”, Cornell told Yahoo Finance. The Good & Gather food brand arrived in Target stores on September 15. By the end of 2020, it will include products ranging from dairy and produce to ready-made pastas and meat. It will replace Target’s Archer Farms line. Target’s expanded grocery selection has kept a steady stream of traffic coming into the stores. “I think food's important, but it's one of many areas we have focused on. But I think the work the food team has done over the past several years, we're really proud of”, Target COO John Mulligan said. Mulligan added: “The quality of our produce has improved markedly. We have team members in-store who are knowledgeable about what's good and what needs to be just taken off the floor, about how much to order. And so we have a little bit more expertise at headquarters around food. We've hired regional food team members to help us interact with people who do deliveries into our stores. So many different elements of the food business have improved. We're proud of that”.
Costco Q1: strong start in China and new ecommerce initiatives
Costco’s Q1 net sales increased 5.6% to $36.2bln, with comparable club sales up 5.0%. Canada led the way with comparable club sales up 5.1%. Comparable ecommerce sales increased 5.7%, with the performance negatively impacted by around 20 percentage points due to the timing of the Thanksgiving holiday. Net income increased 10.0% to $844mln. These results reflect the enduring strength of Costco’s operating model. Membership income continues to grow, with a renewal rate of 88.4% globally. The retailer has benefitted from new club openings, with a focus on signing new members up as executive members. The retailer’s first club in China has exceeded expectations, with a second club set to open in around 18 months. The retailer has signed-up over 200,000 new members, more than double the average number of members clubs in Asia get to after a couple of years. Costco has also started to bring in some successful items from the club in China to some US west coast locations.
US: GreenWise Market opens two new stores in Florida
GreenWise Market opened two stores in Florida, one in Boca Raton and one in Lakeland. The Boca Raton store is located at 8210 Glades Road in the Lakeside Centre shopping plaza. The Lakeland store is located at 4747 S. Florida Ave. in the Lake Miriam Crossing shopping center. “Lakeland is our hometown, and Boca Raton was home to a former Publix GreenWise Market prototype until earlier this month”, said Publix President Kevin Murphy. “Our customers in these communities have been excited to see the difference between what they’ve come to know about us and what we’ve created for them. Our teams are looking forward to sharing this new experience with everyone who comes through our doors”.
Amazon Fresh grocery delivery coming to Tampa, Florida
Amazon Fresh will provide one- and two-hour grocery delivery of meat, seafood, eggs, produce and other fresh items in Tampa, Florida. The service is now free as part of a Prime membership; until recently, it used to cost an additional $14.99 per month. Seattle-based Amazon already offers one- and two-hour delivery of some grocery items via Prime Now, as well as delivering groceries from Whole Foods Market stores via Prime Now. Amazon Fresh will now operate from a separate fulfillment center at 4769 Oak Fair Blvd. in Tampa, a spokeswoman for the ecommerce giant told the Tampa Bay Business Journal.
US: “What’s Next in Fresh” private brand trends for 2020 and beyond
For the past two years, growth in fresh lagged behind center store, making it clear that the methods of old are no longer enough to succeed. The disruptions the industry is facing are all converging to blur and irrevocably change the established norms of fresh strategy and merchandising. Retailers who want to win in the perimeter must adapt to change and listen to their customers in the form of Private Brand development, innovation, and customization. Daymon’s latest report reveals the key trends driving change in fresh and the action steps retailers must take to innovate and lead in 2020 and beyond: Private Brand is a trademark of best-in-class fresh retailers; Plant-based growth is necessitating new approaches to strategy and merchandising; “Craft” sets the new standard for quality across the fresh department; Foodservice provides new opportunities in the digital age.
US: Independent Grocers urge Congress to fix ‘retail glitch’ now
The National Grocers Association (NGA), which represents the independent supermarket sector, has sent a letter requesting that congressional leaders include the Restoring Investment in Improvements Act in any end-of-year spending package. The bill would resolve the “retail glitch,” a drafting error in the 2017 Tax Cuts and Jobs Act (TCJA) that causes interior remodels to independent grocery stores to depreciate over 39.5 years rather than the earlier policy of 15 years. The error, as NGA calls it, also keeps grocers from getting Congress’ intended benefit of 100% bonus depreciation for qualified improvement property (QIP).
US: ALDI caps a busy 2019 in Northeast Ohio with openings of two new stores and one remodel
ALDI is one of the one of the fastest-growing grocery chains in the United States, and it's ending the year in Northeast Ohio on a high note. The discounter has opened new stores in Willoughby Hills (December 5) and Parma (December 12), and on Thursday, December 19, it will reopen a remodeled store in Norwalk. The Willoughby Hills store, at 2821 Bishop Road, and the Parma store, 1770 Snow Road, both are part of an aggressive expansion plan to make ALDI the third-largest U.S. grocery retailer (by store count) by the end of 2022, with a goal of nearly 2,500 stores. ALDI's current store count is at 1,900, in 36 states.