Supermarkets Make a Tryst with Record Sales on Independence Day

Top retail chains posted their highestever weekly sales in the six days to Independence Day, when heavy discount offers lured buyers to splurge on daily household products, apparels and consumer durables.

Retailers such as Future Group, Reliance Retail, Bharti Retail, RPG Group’s Spencer and K Raheja Corp’s HyperCITY — helped by active participation of several consumer product companies — offered deep discounts across product categories to push volumes at a time when consumer spending is slowing and there are fears of poor monsoon rains impacting demand.
“Consumers are looking at savings more than ever before,” said Rakesh Biyani, joint MD of the country’s largest retailer, Future Group, whose 164 Big Bazaar outlets across some 90 cities saw more than 8.1 million visitors during the week ended August 15. “We have been working to integrate our supply chain to bring down prices as far as possible.”
Several suppliers, including Coca-Cola, Britannia and Procter & Gamble, participated in special Independence week deals, helping retailers to offer higher discounts than before.
Darshana Shah, business head for marketing at HyperCITY, a hypermarket format run by Shoppers Stop, said increased vendor participation as well as entire malls going for sales helped pull in the crowds. “The sale was definitely better this year as we had stronger and bigger deals since market sentiment was soft,” she said. HyperCITY also increased its spend on marketing this year at around 2% of overall sales. During the week, Big Bazaar outlets sold more than 1.4 lakh packs of a combination of 5 kg of rice and sugar each with 5 litre of edible oil, and more than 1,500 tonnes of detergent. LED TVs, mixer-grinders and induction cookers were among the other top sellers at Big Bazaar, officials said.
Spencer’s Retail said its same-store sales increased 24% year-on-year during August 11-15, driven by beverages, health and beauty, bakery products and staples that saw over 30% sales growth. Sales of FMCG household products grew over 50% while liquor sales rose 30%, Sanjay Gupta, executive director (marketing & business development) at Spencer’s Retail, said.
Such discounting, however, reflects the escalating pressure on retailers, whose sales are slowing during non-discounted periods. “Because of the slowdown sentiment, consumers have been withholding purchases, so companies are trying to push volumes through discount seasons at retail chains,” said Mayank Shah, group product manager at Parle Products, the country’s largest biscuit maker.
But those volumes come at the cost of bottom lines, he added. Earlier this month, credit rating agency Fitch said same-store sales growth of retailers slipped across lifestyle and value-based formats in the quarter ended June, adding that it expects retailers to combat slowing sales by offering discounts.
“However, this may lead to an erosion of gross margins,” Fitch said, while revising the outlook for the Indian retail sector to negative from stable for the first half of this fiscal due to sustained decline in the discretionary spending ability. A slew of factors such as economic slowdown, deepening crisis in Europe, high food and fuel prices has impacted consumer sentiment in the country, slowing sales of everything from cars to carpets.
Some retailers use inflation as a marketing tool. A case in point is Bharti Retail’s “freedom from inflation” campaign at Easyday stores, which help people fight inflation by providing quality merchandise at low prices. Retailers such as Reliance Retail used the week to increase their customer base. Reliance introduced discount offers such as ‘double the difference’ price guarantees across various product categories.

Advertisements

WalMart leads latest m-payments initiative

Store giant joins with two dozen US retailers to take leadership of NFC wave away from Google and Isis

Mobile payments’ progress has been held back by the sheer number of vested interests battling to take the upper hand in driving the platform. This is seen best in the US, where the main parties each have one or more initiatives – three of the top four cellcos in Isis; Google Wallet; schemes led by the credit card giants such as Visa; and separate programs by PayPal and others. Now the retailers, too, want a say, and about 25 stores, including Walmart and Target, have formed a consortium to develop their own m-payment system.

According to a report in the Wall Street Journal, citing several unidentified sources with direct knowledge of the deal, the retailers are eager to limit the influence of either Google or the operators in this area. They would have various advantages in bringing store-based mobile payments, such as NFC-enabled systems, to market. They have an existing trusted brand for consumers, and would get round one of the major blocks in NFC’s path – merchant indifference or unwillingness to deploy terminals.

There are few details as yet, but Target said in a statement to the WSJ: “We are exploring potential solutions that would help us to deliver the fastest, most secure mobile-payment experience possible for our customers.”

However, Google claims 22 large US retail chains now support its Wallet initiative, even though that suffered recently from security issues, and is available only on the Sprint network and the Samsung Galaxy Nexus handset. Google is working with MasterCard and its PayPass network, while Isis is working with most of the major card processors, including Visa, MasterCard and Amex, and will start trials of its services this year.

Retail Chains and Business owners beating tough times with new strategies

Tough times best to expand – pizza chain

Domino’s Pizza Enterprises Ltd has added new products to its menu as tighter household budgets help boost the fast food industry.

The new menu includes new pizzas, desserts, dips and for the first time it will be adding a pasta dish to its menu – just as its rival, Pizza Hut, did last month.

“This is a whole menu launch is more than a year’s work,” Domino’s CEO Don Meij told AAP.   Read More

Tough Times Call for New Ideas

The savviest entrepreneurs right now aren’t hunkering down. They’re rethinking their business models and hunting for new strategies based on the assumption that consumer spending won’t be rebounding to prerecession levels and that the types of products and services people want will be much different from before.

For a business owner, this can mean finding new sales channels, trying new marketing tactics and promotions, forming strategic partnerships and introducing new products that appeal to frugal shoppers. Read More

Source: AAP, WSJ.com

New retail chains coming to Serbia

BELGRADE — Trade Minister Slobodan Milosavljević says two large retail chains from Austria and Turkey are coming to Serbia.

However, he did not want to reveal the names of the companies, nor the value of the investments.

“I cannot reveal the names of the companies, but one is Turkish and the other one is Austrian. The decisions have already been made and are pending confirmation by their respective boards of directors. I expect that to happen early this autumn,” said Milosavljević, adding that at about the same time he expected construction of the first shops to begin.

He said that the Austrian retail chain would probably begin building in Subotica or Novi Sad, and then later Belgrade, while the Turkish company would build its first retail outlet in Niš.

Milosavljević said that of the world’s top ten retail stores, only Metro was present in Serbia.

Sears to shore up business units

21 Jan, 2008, 0355 hrs IST, Bloomberg

WASHINGTON: Sears Holdings, the owner of Kenmore appliances and the Mart and Sears retail chains, will appoint executives to run each of its business lines after saying profit may decline for a third straight quarter.

Each unit’s performance will have a designated leader and a group of executive advisers to oversee performance, Sears spokesman Chris Brathwaite said Saturday in a e-mail. He didn’t give details on what each division would do. The company has Lands’ End clothing stores and sells Craftsman tools and DieHard batteries at the Sears and Kmart chains.

The decision follows Sears’s disclosure last week that fourth-quarter profit may drop by more than 50% after US holiday sales fell. The biggest US department store company has reported declining sales in stores open at least a year every quarter since chairman Edward Lampert combined Kmart and Sears, Roebuck in March 2005.

Sears, which declined 39% last year in Nasdaq Stock Market trading, will give “greater control, authority and autonomy” to the individual businesses, Brathwaite said in the statement.

Since putting the retailer together, Lampert has centralised functions, giving executives responsibilities that stretched across the company. The marketing chief for the Sears brand, for instance, reports to Sears Holding chief marketing officer Maureen McGuire. The retailer, which blamed increased competition and “unfavourable economic conditions” for the drop in fourth-quarter profit, posted declines in the second and third quarters, with third-quarter net income declining 99%.

Corwin Yulinsky, executive vice-president of customer strategy, and Senior vice-president Dev Mukherjee briefed executives on the plans on January 17, the Wall Street Journal said Saturday. Lampert, 45, has tried to lure customers by extending products over the whole organisation, adding Lands’ End clothing to Sears stores and Craftsman tools at Kmart.

He boosted technology investments and introduced advertising campaigns this year for both chains while telling shareholders at the company’s annual meeting in May that fixing retail was ‘a priority’. analysts say he’s underinvested in the stores for too long.

“Once people decide they’re not going to shop there anymore, it’s hard to get them to come back,” Jon Fisher, a portfolio manager with Fifth Third Asset Management, said January 14. His firm manages $22 billion in assets, including Sears stock.

The retailer has also lost a senior executive, chief customer officer John Walden, who is no longer with the company after a year at Hoffman Estates, Illinois-based Sears, Brathwaite said.

Of the seven analysts that cover the 122-year-old Sears, only one has a ‘buy’ recommendation, while four advocate selling the shares, according to data compiled by agencies. The remainder advise holding the stock.

Lampert’s ESL Investments bought Kmart debt during the discount chain’s bankruptcy and became its largest shareholder after the retailer’s emergence from court protection in May 2003. Lampert engineered Kmart’s $12.3 billion acquisition of Sears, Roebuck less than three years later to form Sears Holding. His funds hold 48% of the company, according to agencies data.

Sears gained 29% in the eight months after Lampert said in August 2006 that the company may make acquisitions outside the retail industry, sparking speculation that he would run the Sears like a hedge fund. Further sales declines have weighed on the shares since April.

Sears, which rose 50 cents in Nasdaq trading Saturday to $89.43, has fallen 12% this year. Analysts on average predict Sears shares will decline to $74.75 in the next 12 months, according to data.

%d bloggers like this: