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Posts tagged to Retail

Government rejects proposals to tackle environmental impact of fast fashion

MarketLine

In June 2018 the Environmental Audit Committee (EAC) launched an inquiry into the sustainability of the fashion industry. The aim of this was to identify the ways in which the fashion industry can alter its practices to be both prosperous and sustainable. The report, published in February 2019, did just that. Had the proposals been accepted, the cost to the fashion industry would have probably been substantial due to the scale of environmental damage that has arisen from throwaway fashion. According to data submitted to the Environmental Audit Committee (EAC),… Read more

The Body Shop: Plans to expand in the growing Indian cosmetics market

MarketLine

The Body Shop is a manufacturer and retailer of personal care and cosmetics products. The company classifies its offerings under seven product categories: face care, body care, hair care, make-up, fragrances and gifts. The Body Shop operations spread globally with a presence in over 65 countries and employs 22,000 people. Prior to being acquired by Natura, The Body shop’s sales were declining in the UK, reflecting the UK high street malaise. Results for 2016 show total sales were EUR920.8m ($1.1bn), down from EUR967.2m ($1.14bn) in 2015. Moreover, competition from an… Read more

CMA blocks Asda Sainsbury’s merger: Ending merger will stifle competition and dissuade future investment

MarketLine

On Wednesday, April 25th 2019 the Competition and Market Authority announced that the proposed merger deal between leading supermarket food retailers, Sainsbury’s and Walmart-owned Asda, would not go ahead. Despite being expected, the decision has shook investors; Sainsbury’s share price fell to a near three-year low on the day of the announcement. It leaves Sainsbury’s CEO Mike Coupe in the unenviable position of having to come up with a strategy for the future of the company as a solo act, a situation made tougher having already invested so much into… Read more

Debenhams: The latest victim of the UK high street

MarketLine

Even though Debenhams has announced store closures under a proposed CVA, the retailer is far from being alone in experiencing high-street woes. Numerous retailers, including House of Fraser, New Look, Next, Arcadia, and Marks & Spencer have been facing increasing financial difficulty on the UK high-street, while others, such as Toys R Us, have exited the market altogether. Debenhams’ difficulties are the result of an often seen tale of too many stores, too much debt, and a failure to keep up with consumer trends. On top of the problems that… Read more

No hope for HMV after second administration in six years: HMV will not be able to survive long-term due to recent difficulties

MarketLine

HMV entering administration was triggered by the current struggle of the retail industry, and now the company will find it difficult to recover in the current retail conditions. Uncertainty over Brexit has caused the value of the pound to drop, which has increased the cost of supplies from abroad. An increase in business costs and online shopping has also put HMV in jeopardy, making it harder for HMV to gain traction in the retail industry. HMV needs to find a buyer that has the resources and ability to turn around… Read more

Angling Direct: Attempt to consolidate fishing industry

MarketLine

Angling Direct is the largest specialist fishing tackle and equipment retailer in the UK. The company had humble beginnings, starting as a single tackle shop in the Norfolk Broads. As of 2018, it sells a comprehensive range of over 21,500 fishing tackle products and associated angling paraphernalia, including its successful own brand, ‘Advanta’, launched in March 2016. In July 2017, the company cast off into the Alternative Investment Market (AIM) on the London Stock Exchange, entering the next stage of growth. The initial public offering raised GBP9m ($11.6m) to fund… Read more

Tesco & Carrefour – Strategic partnership protecting wafer thin margins

MarketLine

All the big traditional supermarkets are trying to cut costs and improve profitability, as they adapt to an array of pressures and changes which are reshaping the industry. Grocers in Europe have come under pressure in recent years from the expansion of Lidl and Aldi, the German discounters that offer a narrower range of products bought in huge volumes at deeply discounted prices. Additionally, traditional grocers are under increased pressure from Amazon fearing the potential disruption it could cause in the grocery sector. As efforts by traditional retailers to shore… Read more

Brandless The Procter & Gamble for millennials

MarketLine

Brandless, a startup e-commerce consumer packaged goods company, wants to set a landing point for consumers who seek quality and transparency, and want to avoid brand loyalty and choice overload typical for the majority of grocery stores. By selling its products online in no-frills packaging, Brandless claims to save consumers up to 40% by eliminating hidden costs associated with marketing, branding, and advertising for a national brand. Through the principles of its business model, Brandless is creating a direct relationship with its consumers, which most CPG brands do not actually… Read more

Sears seeks to sell assets to ESL Investments: Strategic call of CEO Eddie Lampert is sign of failure

MarketLine

Under CEO Eddie Lampert, Sears has always found enough money to struggle onwards. Now the much criticized hedge fund billionaire is seeking to buy the Kenmore appliance brand from his own company via his own hedge fund, ESL Investments. Lampert himself claims the sale “will provide an important source of liquidity” for Sears and help “to complete its transformation to respond to the challenging retail environment.” Few expect that sort of turnaround. Conventional wisdom dictates a troubled retailer needs to maintain the most lucrative assets under its control, not sell… Read more

Tablet market decline continues: Strong demand for substitutes and low innovation resulting in falling sales

MarketLine

The tablet market has undergone consecutive years of decline in recent years, and the market is expected to continue declining in the coming years as well. This has put intense pressure on players operating in this market, and many such as Dell and HTC have decided to pull out. Overall the market is dominated by Apple, Samsung and Amazon. Several reasons have been given to explain why the tablets market after such a promising start has succumbed to this pattern of decline. An important reason is the way in which… Read more

Toys R Us: Collapse Inevitable as Company Fails to Utilize the Power of the Internet

MarketLine

In recent months, well-established toy retailer Toys R Us has given repeated indications of the state of its finances. In September the US-based parent company announced that it entered into bankruptcy protection proceedings and is planning to close more than ten percent of its US stores in the near future. More recently the UK division made similar announcements, to close nearly a quarter of its stores soon after the New Year. So the recent news that the Pension Protection Fund (PPF), one of the company’s largest creditors in the UK,… Read more

Kindred AI – Putting robots in human shoes

MarketLine

Teaching computers to learn on their own has been the core aim of AI research, with the world’s largest tech companies, including Facebook, Google and Baidu, all racing to develop the best techniques. Although there have been breakthroughs in speech and image recognition, the machines still struggle to handle basic physical tasks. Kindred AI, a Canadian start up, decided to tackle these issues applying a new, innovative approach based on the technique of immersive teleoperation. According to its founders, the best way to make robots as smart as humans, is… Read more

Aldi and Lidl US Expansion: US grocery retailers should be worried

MarketLine

Aldi and Lidl have been responsible for a huge shift in the grocery market across Europe. This has been particularly evident in the UK with the discounters growing their collective share of the market from 2.8% in 2000 to 12% in mid-2017. In a market that was previously dominated by four big retailers, this has been an impressive growth. The low prices offered by Aldi and Lidl, along with clever marketing campaigns and a growing reputation for quality produce, have enabled the discounters to erode the market share of the… Read more

M&S and Debenhams: Online retail to continue its surge while retail outlets continue to close

MarketLine

The growing popularity of shopping via the internet, coupled with both the younger and older generations becoming increasingly tech-savvy, has led to a massive surge in shopping online A bit of rewording would be good so it reads better. – whether it be essentials such as food or clothes, all the way to smaller items. The convenience of doing so has meant that fewer sales have been achieved on the high street for major retailers, and sales revenue have transferred to online equivalents. After recent announcements from M&S and Debenhams… Read more

Tesco’s deal with Booker: Attempt to control the UK food supply chain?

MarketLine

The deal, announced in January 2017, grants several benefits to Tesco. It means that the incumbent retailer can expand even faster in the UK food convenience sector, the fastest growing part of the grocery market for a number of years. The merger with Booker will also give the retail giant the access to a new territory – the “out-of-home” eating market, as it will be taking over the supplier to a string of restaurants and cinemas. This is a new area for Tesco, but one that accounts for around a… Read more

Physical Book Vs. E-Book: Traditional book not ready to die out just yet

MarketLine

There has been much debate in recent years regarding the physical book vs. the e-book. Many commentators have outlined a sad situation in which the traditional book is dying out as the rapidly growing proliferation of digital technology replaces it. However, the situation is not quite as clear-cut as this. While it is undeniable that there have been declining book sales in recent years, this is not necessarily wholly linked to the explosion of e-books in the market. E-books are undoubtedly a more convenient way to store and carry around… Read more

Primark expansion: The impact of Brexit on its profit margins

MarketLine

Primark, first established as Penneys in 1969 now has over 290 stores in Europe and the US collectively. In 2017, AB Foods the parent company of Primark has stated a further 16 Primark stores are to open across Europe and the US. Following the loss of BHS in 2016, a niche in the market was identified, a niche which Primark intends to capitalize on. Primark has been identified as the leading low-cost clothing retailer in recent years competing against the likes of ASDA and H&M. The branches in Europe were… Read more

Next alone in its Christmas disappointment

MarketLine

The Christmas trading period is the most important time of the year for retailers, accounting for a significant proportion of a company’s sales and profit. In January 2017, numerous UK retailers revealed their Christmas 2016 trading results, with many high street retailers hailing the festive period a success. A notable exception to this was Next PLC, which revealed it had faced a difficult Christmas trading period and warned of a problematic retail environment in the UK as a whole. On 4th January 2017, Next was the first high street retailer… Read more

Sports Direct: Working conditions scandal fallout must be managed to minimize damage

MarketLine

Recent revelations about Sports Direct’s working practices have been largely made via exposé reporting from The Guardian. Secret filming in the company’s Shirebrook warehouse led to claims of a culture of fear, pay of less than the national minimum wage, unpaid after-hours work, and questionable punitive practices. This was then followed by written reporting and interviews with workers, both from the warehouse and from stores. Although terminology like ‘Victorian workhouse’ and ‘Gulag’ is sensationalist and unwarranted, Sports Direct was forced to respond to the claims in a bid to limit… Read more

Supermarkets facing up to the discounters; Asda left behind?

MarketLine

Supermarkets in the UK have faced a tough marketplace in recent years. The recession, and the accompanying squeeze on incomes, has led to many consumers becoming shrewd in their purchases and increasingly looking to find the cheapest option. This has led to a climate in which discounters, and in particular Aldi and Lidl, have been able to thrive. The impact on the big four supermarkets has been evident. Tesco, Sainsbury’s, Asda, and Morrison’s have all seen sales fall and profits eroded. Asda, Tesco, Sainsbury’s, and Morrison’s all responded to the… Read more

Big retail takes control of Russian food market

MarketLine

The Russian food market is amongst the largest and most populated globally. As the population of 146 million people continues to grow, they are also buying more food. There are a lot of opportunities for further development, especially in the convenience segment, as the grocery retail market is significantly less saturated than in Western Europe. Changes in tastes and technology have opened up the sector to new suppliers and new ideas. However, after almost a decade of double digit growth, this over $300bn market has seen a significant deceleration recently… Read more

The dichotomy between H&M’s fast fashion business model and sustainable cotton

MarketLine

H&M is a fashion retailer with over 4,000 stores in 61 markets worldwide. The adoption of the fast fashion business model has been key to the company’s huge expansion since 2000. Fast fashion has a four to six week turnaround, much quicker than traditional collections which were released two to four times per year. As a result, clothing is more on-trend but it also more throwaway. The production of clothing has a huge environmental impact, particularly in the case of cotton. Cotton uses a huge amount of fertilizers and pesticides… Read more