iri's weekly news update - w/c 10th july 2017

IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Friday 14th July

Copyright © 2017 Information Resources, Inc. (IRI). Confidential and Proprietary. 2

Retailer News:• A.S. Watson to open 88 new stores in the UK despite Brexit concerns• Lidl to double UK store openings to 60 a year• Morrisons branches out into online florist market• Sales decline continues at M&S but showing signs of recovery• B&M continues its strong growth• Superdrug sales heat up with Love Island deal

Category News:• Cadbury expanding production at Bournville site following investment• Tate & Lyle launches new sugar range• The UK's biggest beauty spenders revealed

Other News:• Warm weather and food inflation boosted retail sales last month• Beiersdorf to invest €230m in new HQ and research centre in Germany

Weekly News Summary – 10th July 2017


Retailer News


A.S. Watson To Open 88 New Stores In The UK Despite Brexit Concerns

A.S. Watson, the Hong Kong-based retail giant that owns the Superdrug, Perfume Shop and Savers chains, has revealed that it is stepping up its expansion in the UK despite the slowdown in the retail market caused by Brexit uncertainty and rising prices.

The group said it would be creating more than 1,000 jobs across the UK with the opening of 30 more Superdrug stores, 45 Savers outlets and 13 The Perfume Shop sites.

Dominic Lai, A.S. Watson’s Managing Director, said: “We are under a lot of pressure, with Brexit uncertainty and sterling going down, but we will continue to invest in the UK.”

Last week, Superdrug posted soaring profits and revenues for its last financial year. The health & beauty retailer, which operates nearly 800 shops in the UK & Ireland, reported a 10.4% rise in sales and 41% jump in profits, boosted by strong sales of cosmetics.

Source: NamNews 10th July 2017

https://www.kamcity.com/namnews/uk-and-ireland/healthbeauty/strong-year-superdrug/


Lidl to double UK store openings to 60 a year

Lidl intends to open another 60 stores per year in the UK and has amassed a £1.5bn war chest to fund the programme.

Lidl opened 30 shops last year and now has 670, but there are many locations where shoppers do not have a branch sufficiently close, UK chief executive Christian Härtnagel told The Telegraph.

Härtnagel aims to open “at least one shop a week” and said that Lidl has already agreed locations for between 50 and 60 shops a year for the next two years, compared with 30 last year.

“That is the fastest we have ever grown in the UK,” he told the newspaper.

The grocer’s market share now stands at 5% following its rapid growth as shoppers have switched from established supermarkets and headed for Lidl and value rival Aldi.

Approximately 50% of Britons shopped at a Lidl store last year as it made the most of a reputation for quality as well as low prices.

Härtnagel said Lidl’s profits will be lower this year “because of the huge investment figure and the effect of Brexit”.However, he said “we are privately owned and we are still focused on our long-term profitability”.

About 25% of Lidl’s UK staff are from outside the EU and Härtnagel hoped for “clarity” on their status.

He said: “A quarter of our employees have an unclear status at the moment due to Brexit and I hope the significance of this means that the movement of people will have the highest agenda it can have in negotiations.

“We need clarity for our colleagues here but also for our UK employees who are working for Lidl in different countries. I just want to have clarity, because then I can prepare.”

Source: Retail Week 10th July 2017

https://www.retail-week.com/companies/lidl


Morrisons Branches Out Into Online Florist Market

Morrisons has launched an online flower delivery service called Flowerworld.

Brits spend over £2.3bn on cut flowers and indoor plants every year. With over 400 trained florists creating up to 900,000 bouquets a week, and over 260 million flowers a year passing through Flowerworld, Morrisons said it is set to become the UK’s biggest florist.

Morrisons originally acquired Flowerworld in 2011 with its bouquets now be available on www.flowerworld.co.uk, as well as 491 Morrisons across the UK.


http://www.flowerworld.co.uk/


Sales Decline Continues At M&S But Showing Signs Recovery

Marks & Spencer has reported another fall in underlying sales in its latest quarter, with weaker than expected trading in its food unit. However, the figures suggested that performance in its clothing & home division is starting to improve as a result of the turnaround plan being implemented by Chief Executive Steve Rowe.

During its first quarter to 1 July, like-for-like clothing & home sales fell 1.2%. This compares with a 5.9% fall in the final quarter of last financial year. In line with its new strategy, M&S said that full price sales were up around 7% and it had reduced discounting during the period.

Meanwhile, performance in its food division was somewhat disappointing with like-for-like sales slipping 0.1%. This was worse than expected and without Easter falling in April, revenue would have declined further. M&S said its new Simply Food stores continued to perform ahead of its expectations and remained focused on “improving ranging in store and on delivering stronger promotions in a competitive market”.

In total, sales across the whole business, including its international operation, increased by 2.7% to £2.53bn.Rowe commented: “Trading in the first quarter was in line with our expectations and we are on track with delivery of the plan we announced last year.”



B&M Continues Its Strong Growth

B&M has revealed another period of strong sales growth, boosted by the good weather, the later Easter, and robust grocery sales.

Despite “challenging trading conditions”, the fast-growing discounter saw UK like-for-like sales in its first quarter to 24 June jump 7.3%. As well as benefitting from the favourable seasonal weather, B&M said its performance was buoyed by strong grocery sales and the timing of Easter trading, which fell in the quarter this year and added approximately 1% to the headline like-for-like total.

Total UK revenues over the 13-week period increased by 17.8% to £598.4m, whilst sales at its Jawoll unit in Germany rose 23.9% to £57.9m.

The group opened 6 net new outlets during the period, taking its total store count in the UK to 543. B&M expects to open between 40 and 50 new shops this financial year as it pushes towards its recently upwardly revised UK store target of at least 950 outlets.

It added that it also has a “healthy pipeline” of new stores for the following year. The group has been opening more stores in southern England recently after finding its model did well in areas beyond its northern heartland.

Simon Arora, Chief Executive, said: “In these uncertain times, and with inflation returning to the UK market, more and more shoppers are actively seeking out value in our stores and that means our business is strongly positioned to do well and continue its rapid growth.”



Superdrug sales heat up with Love Island deal

Superdrug’s sponsorship deal with British dating reality TV series Love Island is proving to be a scorching success.

According to figures revealed to Cosmetics Business, 200,000 consumers visit the retailer’s website immediately after the show.

Product placement in also included in the deal where Superdrug provides own brand holiday essentials for the contestants to use on their stay on the Island including Solait sun care and bronzing products.

The A.S. Watson-owned retailer has claimed that the arrangement has paid off, as its Solait bronzing range has seen a 76% spike in sales.

“Sales over the last few weeks have really shown that the audience is the perfect demographic for our brand,” Simon Comins, Superdrug Commercial Director, told Cosmetics Business.

“We know our customers follow the latest celebrities and trends and sales are proving that Love Island has had an impact on products such as fake tan and sun care.

“In addition to sales we’ve seen over 200,000 clicks to the website straight after the show for customers searching for own brand holiday products.”

This s is the second summer that Superdrug has partnered with Love Island.

Source: Cosmetics Business 14th July 2017


Category News


Cadbury Expanding Production At Bournville Site Following Investment

Cadbury’s famous chocolate factory in Bournville is to expand production for the first time since Mondelēz International invested £75m to improve productivity levels at the site.

The group revealed that Cadbury Dairy Milk Oreo and Cadbury Dairy Milk Tiffin will now be produced at the Birmingham factory from this summer.

Dairy Milk Oreo is a recent innovation by the chocolate maker and is currently made in Germany. Meanwhile, following a successful limited edition run of Dairy Milk Tiffin last year, the bar is now set for a permanent comeback with Bournvilletaking over production from Poland. The chocolate was launched in 1937 but Cadbury stopped making it in 1972. It then made a return in 1985 but was withdrawn again in 2003.

Glenn Caton, President of Northern Europe for Mondelēz International, said: “I am delighted that Cadbury Dairy Milk Oreo and Cadbury Dairy Milk Tiffin will be made in Bournville. These great tastes are the first additional products that we are welcoming to Bournville following our multi-million pound investment in the UK. It shows that our investment has paid off and that Bournville is now competing in the Premier League of European factories.”


https://www.kamcity.com/namnews/products-promotions/cadbury-bringing-back-dairy-milk-tiffin-following-internet-appeal/


Tate & Lyle Launches New Sugar Range

Tate & Lyle has unveiled a new range of premium brown and golden sugars, called ‘Taste for Adventure’.

Inspired by flavours from around the world and containing Fairtrade pure cane sugar, the range is aimed at consumers who pride themselves in being adventurous in the kitchen. It includes five sugars – Dark Soft Brown (RRP £1.75), Organic Dark Soft Brown (RRP £2.50), Golden Caster (RRP £1.75), Organic Golden Caster (RRP £2.25), and Demerara (RRP £1.75).

The sugars come in stylish packaging that includes descriptors for each sugar, illustrations that take inspiration from around the world, and visual cues to help consumers pick the right product for the relevant recipe.

The resealable pouches ensure that the freshness and flavour remains locked in.



The UK's biggest beauty spenders revealed

Leeds has been named the UK’s biggest beauty spender, with consumers in the northern city spending an average of £7,000 each a year on their looks.

According to research by TotallyMoney, at just over £1,000, teeth whitening is typically the biggest category while skin care products come a close second at £916.

Beauty fans in the region also spend the most on colour cosmetics, at £280 per person.

London and Coventry were neck and neck for the second spot, with an average spend of £6,300 and £6,268 respectively. Those in the British capital focused primarily on fitness – they spent the second most in the UK on gyms, at £601 yearly per person.

People in Coventry were more concerned about having their hair done (£750), shaving (£338) and manicures (£206). The figures by the comparison website revealed that 70% of people admit to being beauty conscious; the average Brit spends £4,454 on their looks annually.

“The piece isn’t just about the total spend,“ said Joe Gardiner, TotallyMoney’s Head of Brand and Communications. ”It’s interesting to see the breakdown and understand which cities value which parts of their appearance the most.”



Other News


Warm Weather And Food Inflation Boosted Retail Sales Last Month

The arrival of warm summer weather provided a welcome pick-up to sales growth in the UK retail sector last month. Data from the BRC & KPMG showed that June sales increased by 1.2% on a like-for-like basis compared to the same month last year, buoyed by strong growth in the food sector. Total sales rose 2%.

Over the three months to June, food sales increased 3.6% on a like-for-like basis with total growth of 4.7%. This was the strongest three-month average in five years and comes as the devaluation of sterling drives up shelf prices.

Meanwhile, despite the difficult trading conditions, non-food retail sales rose 0.9% on a like-for-like basis with total growth of 1.2%. This was the best three-month average since December and was helped by consumers spending on summer clothing, beauty products and outdoor toys.

Helen Dickinson, Chief Executive of British Retail Consortium said June’s strong performance painted a slightly rosier picture for retail sales. However, she stressed that rising food prices were responsible for the main component of growth and has prompted more cautious spending towards discretionary non-food items.

“Looking ahead, there’s a question mark over whether this spending momentum will last, as household expenditure is increasingly squeezed from rising inflation and slowing wage growth,” she said.

Commenting on the food & drink sector, Joanne Denney-Finch, Chief Executive at IGD, said: “According to the Met Office, England enjoyed the second equal warmest June on record. Alongside rising inflation, this helped the food and grocery sector to experience a three-month growth trend that is now at its highest since March 2013.

“The inconclusive election result has introduced further uncertainty and this will test the sector’s momentum. However, there has also been a further injection of shopper patriotism with 47% saying it is very important to support British producers, up from 41% last September.”



Beiersdorf to invest €230m in new HQ and research centre in Germany

Beiersdorf, the parent company of Nivea, La Prairie and Eucerin, has announced plans to build a new €230m headquarters and research centre in Hamburg-Eimsbüttel, Germany.

The new buildings, spanning 100,000sqm, will be located on the company’s existing Troplowitzstrasse site between Stresemannallee and Wiesingerweg. The new headquarters will replace the one currently situated between Unnastrasseand Quickbornstrasse.

Stefan F Heidenreich, the CEO of Beiersdorf, said the project demonstrates Beiersdorf’s commitment to Hamburg and Germany as business locations. “Beiersdorf and Hamburg are connected by their open-mindedness and internationality. It’s a good fit,” he said.

“With the construction of our new headquarters… Beiersdorf is sending a clear signal about its future growth. We have been very successful in recent years.

“We have significantly expanded our international business, developed outstanding innovations and put Beiersdorf on a stable and profitable growth path. This is the result of all our employees’ hard work.”As well as a head office and research centre, Beiersdorf will build a two-level underground car park.


IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Friday 14th July