Global Retail Freeview

GLOBAL RETAIL FREEVIEW
A free synopsis of global retail news and opinion

March 31, 2011

A free synopsis of global retail news and opinion
March 31, 2011
Welcome to the latest edition of Verdicts Global Retail FreeView, in which our analysts bring you a roundup of all the major events, news, and views in the international retail sector. In this issue, we take an in-depth look at Metro Groups plans to expand both online and in growth markets. We are also pleased to introduce our Global Hypermarket Revitalization Strategies report and our Forever 21: Youth Fast Fashion case study.
LATEST GLOBAL RETAIL NEWS ELECTRICALS & HOME
RETAIL VIEW FROM EUROPE
LATEST VIEWS AND OPINIONS
Verdict Research is a retail information specialist within the Datamonitor Group. With over 25 years' experience, Verdict publishes unrivalled independent analysis. Our reports, briefings, consumer research and consulting services provide clients with a complete picture of the UK and increasingly the international retail arena, helping retailers, manufacturers, service suppliers, analysts, and consultants to fully exploit opportunities within the sector. LATEST REPORTS & ANALYSIS
Kingfisher has reported strong results Kingfisher, Europes largest home improvement retailer, saw its FY2010 net income rise by 27.5% year-on-year to 491m (574m) on sales 0.5% lower at 10.5bn (12.3bn). Retail profit was 756.0m (884.0m), up 11.0% on FY2009. Strong results were achieved in international markets, where profits jumped by 34.3% to 171.0m (200.0m), driven by improved trading in Poland, France, and China. The UK and Ireland, however, saw total sales fall by 2.5% to 4.3bn (5.0bn). The retailer confirmed its commitment to further international expansion, especially in Poland and Turkey, with plans to expand its total retail network from 850 to over 1,100 stores by 2014. iPad 2 was launched internationally On March 25, 2011, Apples new tablet, iPad 2, was launched in 25 markets, 21 of which were European countries and the remainder were Canada, Mexico, Australia, and New Zealand. The launch resulted in long queues at Apples flagship stores, with the longest lines reported in London, Berlin, and Sydney, and a number of stores reporting a sell-out in 24 hours. The iPad 2 has been available in US stores since March 11, 2011, and will be launched in South Korea, Hong Kong, and Singapore in April 2011. Tablets are a new product category in consumer electronics, and it is estimated that Apples iPad currently accounts for about 80% of total sales. However, the market is becoming increasingly competitive with a number of new entries, such as Samsungs Galaxy Tab and the soon to be launched BlackBerry PlayBook.
Latest reports
We produce a range of reports analyzing the key players in various retail sectors throughout Europe and the rest of the world.
Forever 21: Youth Fast Fashion Global Hypermarket Revitalization Strategies Service Station and Convenience Retailing Joint Ventures in Europe Global Strategies in Online Fashion Retailing

http://about.datamonitor.com/sectors/retail.htm| t. +44 (0)20 7551 9000 | f. +44 (0) 87 0136 1073 | e. enquiries@verdict.co.uk
LATEST GLOBAL RETAIL NEWS
LATEST REPORTS & ANALYSIS
CLOTHING, FASHION & PERSONAL CARE
FOOD & GROCERY
John Lewis ends returns deadline UK department store John Lewis is scrapping its 28-day returns policy and is instead introducing a never-ending returns limit. To exchange or obtain a refund for a returned item, customers are still required to provide a receipt and ensure that the item has not been used. With the more flexible returns policy, the retailer expects to boost customer confidence during times of austerity. The new returns policy will be especially popular with customers during Christmas, when many gifts are bought in advance and posted to friends and family in other regions. More high street retailers are expected to follow suit by introducing more flexible returns arrangements. Colorado group faces uncertain future The financiers of Colorado Group, the Australian mid-market apparel and footwear retailer, are deciding the companys future, as it continues to experience financial difficulty. Options include placing the business in receivership and breaking it up into individual brands. Colorado Group, which has over 500 stores in Australia and New Zealand, under the Colorado, Mathers, Williams, diana ferrari, Jag, and Pairs banners, has loans of A$387m ($383.9m), while it expects its FY2011 profits to reach just A$18m ($17.9m). On March 25, 2011, Solomon Lew, chairman of Premier Investments, which owns Colorados rival Just Group, confirmed that he was interested in purchasing the whole or parts of Colorado Group, depending on its price. Loewe opens a standalone store in London Spanish luxury brand Loewe has opened its first standalone store on Londons Mount street, in the prestigious Mayfair district. The 120 sq m accessories store opened on March 23, 2011, and was designed by Peter Marino, the interior designer behind Louis Vuittons Maison in London. Peter Marino developed a new store concept for Loewe, according to which every shop is conceived as a gift box hiding precious treasures. The new store concept was introduced in Valencia in December 2009, and the London store is the first international store under the new design. A further roll-out of the new store concept will follow, with Barcelona, Madrid, China, Japan, and Taiwan next on the list.
Supervalu has revised its bagging policies The USs fourth-largest grocer, Supervalu, has introduced stricter rules on bagging to cut down costs. According to the new policy, staff are required to use plastic bags instead of paper bags and start packing at the corners. Furthermore, the retailer does not allow bagging of large items with handles and doublebagging. The new rules can be broken, but only at a customers request. The retailer started revising its bagging policies in 2008, and since mid-2009, it has increased the average number of items per bag, which has helped it save $46m a year, despite the rising price of plastic bags. Metro Group is to launch its cash and carry business in Indonesia Metro Group, the German retail giant, has unveiled plans to launch its wholesale store chain Metro Cash & Carry in Indonesia in 2012. Depending on the countrys economic stability, the group is set to open as many as 20 stores nationally starting in 2012. The retailer is attracted to Indonesia due to its large population and rapidly growing economy, especially driven by booming domestic consumption. Metro Group already has cash and carry operations in 30 countries, including a number of Asia Pacific markets, such as China, India, Vietnam, Pakistan, and Japan. Walmart is to change focus to return to growth Following seven consecutive quarters of domestic like-for-like sales declines, Walmart Stores Inc is to focus on its core customers, as disclosed by William Simon, head of Walmart Stores US division in an interview with The Wall Street Journal. The grocer is set to return to its every day low prices strategy and focus on widening its product range to restore Walmarts reputation as a one-stop shopping destination. The retailer aims to win back some of its core customers, that are low-to-middle income households, which it has been losing to dollar store chains.

UK fashion retailer Ted Baker has revealed plans to expand its operations to China with the opening of a Beijing store in 2011. The announcement comes as Ted Baker reports that full-year profits have risen by almost a quarter, a result of strong performances in both its domestic and international markets in the US, continental Europe, the Middle East, and Asia. The brands international performance emphasizes its global appeal and reaffirms its plans to expand further.
Russian grocer X5 intends to increase the volume of locally produced and private label products it sells in stores. X5 plans to increase the number of own-label SKUs from 12% to 50% in its discounters, from 6.5% to 25% in its supermarkets, and from 5% to 10% in its hypermarkets over the next three to five years. The initiative will prove beneficial to the local economy, creating local demand and reducing X5s delivery costs.
Global beauty group AS Watson has announced plans to expand its UK store-instore format at its The Perfume Shop and Superdrug stores. In July 2010, the group converted 11 Superdrug perfume counters into The Perfume Shop concessions. The transformation involved the perfume counters being rebranded and staffed by The Perfume Shops employees. The move gives Superdrug a competitive edge over Boots and supermarkets operating in this space.
German discount grocery chain Penny Market has announced plans to expand its presence in Romania. The company will open 20 new outlets, adding to its existing network of 100 stores. The decision comes after the Romanian market delivered a 4.3% increase in turnover in 2010.
Spanish retail group Inditex has released its FY2010 results. The group reported a total net income of 1,732m, a 32% increase on FY2009. Today, the group operates in excess of 5,000 stores in 77 countries worldwide.
German DIY chain Bauhaus has made moves to enter the Serbian market by signing a contract with Serbian property developers Delta Real Estate. The company intends to open its first store with a sales area of 20,000 sq m in the capital Belgrade by autumn 2012.

MEDIA SATURN: LOOKING TO EXPAND BOTH ONLINE AND IN GROWTH MARKETS

Metro Group, the world's fourth largest retailer, is to accelerate its expansion into growth markets and the development of its brands' e-commerce offerings. It is increasing its capital expenditure to E2.2bn for 2011, up from E1.9bn in 2010, with a particular focus on expanding the store networks of its Metro Cash & Carry, and Media Markt and Saturn banners in China, India, and Russia.
The group is set to open at least 70 consumer electronics stores in 2011. In November 2010, the group's electricals arm, Media Saturn, opened its first store in Shanghai, China, under the Media Markt banner, which generated revenues of E9m to the end of December. The second store in Shanghai followed in February 2011, and the retailer aims to expand its retail network in the city to up to 10 stores by 2012. China is a very attractive market and could become a strong revenue source for Media Saturn, as long as the company invests resources into understanding the Chinese market, and adapts its business model accordingly. In 2010-11, a number of international players, including Best Buy, Home Depot, and Mattel divested their operations in the country, mainly due to a lack of market knowledge. Other growth markets for the arm include Turkey and Russia. Additionally, Metro Group confirmed its commitment to launch an online shopping platform for the Saturn banner in Germany in the second half of 2011, and for Media Markt some time later. Both consumer electronics fascias have had online shops in the Netherlands and Austria since the first half of 2010. In response to a recent rumor of a potential acquisition of a pureplay consumer electronics retailer, such as Redcoon, the retailer said that it would make a "very short-term decision." In contrast to its key rivals in electricals retailing, including Kesa and Dixons, Media Saturn has been very slow to adopt e-commerce. The absence of a convincing online strategy so far has allowed pureplay retailers, such as Redcoon, Dixons' Pixmania, and Amazon, to build a considerable presence in its core markets in Western Europe. Following Media Saturn's weaker than expected Q4 2010 performance, Horst Norberg was appointed as new CEO to modernize the retailer's strategy. The company's increased commitment to growth markets and the online channel is undoubtedly the result of this recent management overhaul, along with competitive pressures. Since Germany accounts for almost half of Media Saturn's total revenues, it is crucial for the retailer to satisfy its German customers, and launching a transactional website is a key strategic move to achieve this goal. Furthermore, dependence on a handful of Western European markets makes Media Saturn vulnerable to the economic cycles in the region and limits its future growth. Therefore, further international expansion, especially in growth markets, is certainly a sensible strategy.

GLOBAL HYPERMARKET REVITALIZATION STRATEGIES

This report is an in-depth evaluation of the challenges facing hypermarket operators across the world, the strategies being adopted by the leading players, and the key action points for retailers wishing to revitalize sales in their large format stores.
Features and benefits

Uncover range assortments and complementary instore services that can be used to attract shoppers and revive sales in large format stores. Identify a variety of new ways to reinvigorate the layout of your hypermarket or supermarket by uncovering how other retailers have managed to do it. Adapt the hypermarket size according to trends surrounding urbanization and household sizes by accessing demographic data covering global markets. Develop innovative multi-channel strategies and consider alternative store formats by identifying the strategies of your competitors.
CHANGE IN SALES AREA

GLOBAL LUXURY RETAILING: MARKET SIZE, RETAILER STRATEGIES, AND COMPETITOR PERFORMANCE
This report gives a comprehensive assessment of the global luxury retail sector outlining regional expenditure and five-year forecasts. It provides an in-depth analysis of the key strategic issues facing the sector, as well as offering market shares and profiles of the leading luxury retailers.
Features and benefits

Make informed regional investment decisions with forecasted luxury expenditure to 2015 based on a range of inputs including the number of wealthy individuals. Benchmark your company's performance by accessing profiles of nine leading luxury retailers including their key operating details and global market shares. Ensure marketing and distribution strategies are up-to-date by uncovering competitor activity in areas such as ecommerce and social networking.
International expansion Link with art and culture Adoption of e-commerce
Focus on heritage
Key Strategies
2011
Embracing technology
Celebrity endorsement Localized products
Launch of new product categories

RETAIL INNOVATIONS CASE PROFILES

Verdict launched its Retail Innovations case studies in 2010. Each profile provides an evaluation of a company that stands out due to a set of unique characteristics, or a particular strategic initiative. Verdict outlines the background of the company, discusses the strategy, provides details of operational implementation, and outlines action points for retailers keen to replicate some of the initiatives.
Recent retail profiles

Forever 21: Youth Fast Fashion Carrefour: Hypermarket Reinvention Costco: The Pinnacle of Value H&M: Designer Collaborations
Recent consumer packaged goods profiles

Crabbie's Alcoholic Ginger Beer Case Study: Finding an untapped niche in the post-recessionary beer market Craft Beers in the US and UK Case Study: How mainstream brewers can benefit from the trend towards craft beers Gatorade Case Study: Using consumer segmentation and social media to drive market growth
Carrefour's approach to revitalizing its hypermarket format and key action points for retailers looking to improve their large format store sales
Insight into Costco and lessons for those considering elements of the warehouse club model

Verdict produces a range of reports analyzing the key issues affecting retail sectors throughout Europe and the rest of the world
Sectors, channels, and locations
Retail market entry

Retailing in Russia: Long-term potential prevails Retailing in Eastern Europe: Westwards expansion Retailing in Romania: Developing retail market Retailing in Czech Republic: First phase complete Retailing in Poland: Non-food opportunities Retailing in Slovakia: Continues to shine Retailing in the Baltic States: Prospects dampened Retailing in Bulgaria: Opportunities for growth Retailing in Hungary: Retail expenditure squeezed Retailing in Spain: Improving situation Retailing in Italy: Tough market with opportunities Retailing in France: Growing liberalization Retailing in Germany: Consolidation begins Retailing in Ireland: New space, new opportunities
Strategic retail insight

Global Hypermarket Revitalization Strategies Service Station and Convenience Retailing Joint Ventures in Europe Global Strategies in Online Fashion Retailing Private Label Strategies in Global Electricals and DIY Retailing The Future of European Convenience Retailing Internationalization Strategies of CEE retailers The Impact of the Credit Crunch on European Retail Private Label in European Retail
Global Luxury Retailing Global Airport Retailing Global Jewelry Retailing DIY and Home Improvement Retail in Europe Health and Beauty Retail in Europe Global Department Store Retailing Childrenswear in European Retail Value Clothing in European Retail The Future of European Discounters European Shopping Centers European Grocery Retailing European Electricals Retailing European Clothing Retailing European Furniture Retailing
Retail innovations case profiles

Forever 21: Youth Fast Fashion Carrefour: Hypermarket Reinvention Costco: The Pinnacle of Value H&M: Designer Collaborations
For more information on our reports and future projects please contact us at enquiries@verdict.co.uk


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GLOBAL RETAIL FREEVIEW

A free synopsis of global retail news and opinion