2500 jobs cut as Boohoo buys Burton, Dorothy Perkins & Wallis
Around 2450 Arcadia Group staff are being told today that their jobs have been axed after online retail giant Boohoo bought Dorothy Perkins, Wallis and Burton for £25.2 million. The deal is for the inventory, ecommerce and digital assets of the three brands, which were owned by Sir Philip Green’s retail empire when it entered administration in December. However, it does not include Dorothy Perkins, Wallis and Burton’s 214 remaining shops, which will close, according to administrators from Deloitte.Staff were emailed this morning, and will be informed during the day. Around 260 jobs, mainly head office roles, will be saved as they move with the brands to Boohoo Group. These include jobs in design, buying and merchandising, and the brands’ digital wings. Deloitte added that some other staff will be kept on during a months-long transition period. The deal will see Dorothy Perkins, Wallis and Burton transfer over to Boohoo Group, whose fortunes have increased as those of its high street predecessors waned. Last month the online fashion retail giant bought the brand and website of Debenhams for £55 million. Like its new deal with the remaining brands of Arcadia Group, the Debenhams deal did not take on its 118 stores, meaning around 12,000 jobs were likely to be lost. “We are delighted to announce the acquisition of the assets associated with the online businesses of the three established brands Burton, Dorothy Perkins and Wallis,” Boohoo chief executive John Lyttle said. “Acquiring these well-known brands in British fashion out of administration ensures their heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment. “We have a successful track record of integrating British heritage fashion brands on to our proven multi-brand platform, and we are looking forward to bringing these brands on board.” Boohoo chairman Mahmud Kamani said: “This is a great acquisition for the group as we extend our market share across a broader demographic, capitalising on growth opportunities as more and more customers shop online. “We continue to grow our portfolio of brands and customer base, strengthening our position as a leader in global fashion e-commerce.” Green’s Arcadia Group was long one of the biggest players on the UK high street, but the Covid-19 pandemic dealt a final blow to his retail empire, which had struggled with a shift in shopping behaviour in recent years. In December it entered administration, putting around 13,000 of jobs on the line at the time. While Arcadia Group’s demise has been partly brought about by a shift to online retail, its brands will now continue to live online, after several deals. Last week Boohoo rival and another online retail giant Asos signed a £330 million deal to buy Topshop, Topman, Miss Selfridge and HIIT from Arcadia. Although 300 employees would be transferred to Asos, the future of 2500 Arcadia staff was bleak as the the network of 70 Topshop, Topman and Miss Selfridge stores was not included in the deal. Administrators have now sold all of Arcadia’s brands, raising around £500 million to pay off creditors. There is still some property in the portfolio left to sell.
Government working on excessive profits tax for online retail giants
The government is believed to be working on proposals for an “excessive profits tax” for companies that experienced a surge in profits due to the Covid pandemic, according to The Sunday Times. The Downing Street policy unit is working on a one-off Covid windfall tax to be applied to firms who saw their business boom since national lockdowns in the UK began in March 2020, reported The Sunday Times, citing leaked emails. Amazon’s UK business rates tax to turnover ratio was just 0.37 per cent last year despite it raking in nearly £20 billion, according to research published earlier this month by real estate advisor Altus Group. Throughout 2020 Amazon saw UK sales rise 51 per cent to around £19.3 billion, putting the UK on course to become Amazon’s second largest market. Despite such impressive profits, the retailer paid a business rates tax of around £71 million on its entire UK estate including fulfilment centres, research and development centres, corporate offices in London, Amazon Lockers, Whole Foods Market stores, and delivery stations, which represented a tax to turnover ratio of just 0.37 per cent. Officials at the Treasury are also believed to be meeting tech firms and retailers this month to discuss how an online sales tax would work. The Covid pandemic and the dramatic increase in online shopping it prompted allowed the UK’s ecommerce sector to experience the highest online sales growth in 13 years. Total online retail sales growth for 2020 was up 36 per cent year-on-year – the highest annual growth seen since 2007, according to the IMRG Capgemini Online Retail Index. The meetings come ahead of the March 3 budget announcements, which will likely focus on more short-term relief for the UK, as it continues to combat the knock-on effects of coronavirus and lockdowns. Neither tax rise is expected to be introduced in March, but senior government sources speaking to The Sunday Times said the increases could form a centrepiece of efforts to cut Britain’s debts in the autumn. In July 2020, Chancellor Rishi Sunak was reportedly considering an online sales tax to raise £2 billion a year in an effort to “save” the UK high street in the wake of Covid-19. At the time the government was thought to be considering a two per cent levy on online sales as well as a charge for online deliveries, in order to generate a “sustainable and meaningful revenue source for the government,” The Times reported last year. “He does accept that the way we tax online sales at the moment is killing the high street and something needs to be done on it,” a close ally said, speaking to The Sunday Times this week. The so-called “Amazon tax” would likely come as part of a reform of business rates, which have been suspended for many firms and are subject to a Treasury review. A leaked email cited by The Sunday Times showed the Treasury has asked the Confederation of British Industry and TechUK to contact companies to discuss the “overall risks and benefits” of such a tax, the “effects on business” and “wider customer and macroeconomic impacts” later this month.
Dr Martins' senior staff make millions after £3.7bn IPO
Dr Martens’ stock market listing has reportedly made multimillionaires out of its senior staff, including chief executive Kenny Wilson and chairman Paul Mason. Wilson offloaded some of his holding in the IPO, and has a 1.12 per cent stake worth £54.7 million, while Mason also sold shares and has a 0.79 per cent stake worth £38.6 million, The Times reported. Nevertheless, Dr Martens’ leading shareholders have been revealed as the US’ largest money manager and Singapore’s sovereign wealth fund, following its £3.7 billion float last month. The footwear brand and retailer set a 370p-per-share offer price upon its float on February 3. This gave the company a valuation of £3.7 billion, which made 35 per cent of the business available to investors. US money manager BlackRock has built a stake of nearly 6.8 per cent, while Singapore’s GIC Private, which manages more than $100 billion of Singapore’s foreign exchange reserves, has acquired a stake of just over four per cent in the retailer. Meanwhile, the UK’s Fidelity Management & Research, and Janus Henderson and Jupiter, are also among the prominent investors in Dr Martens. Financial data company Fidelity has a 3.25 per cent stake, Janus Henderson 2.7 per cent, and Jupiter, at 2.03 per cent. Dr Martens sells its products in more than 60 countries and last year shifted 11 million pairs. Shares in Dr Martens were priced at 370p a piece, the top of the previously indicated range and giving it an initial value of £3.7 billion. The stock has risen strongly since then and at the end of last week the business was valued at £4.9 billion — assigned more market worth than Morrisons, the FTSE 100 grocer valued at £4.25 billion. In the year to the end of last March, Dr Martens made a pre-tax profit of £101 million on revenues of £672 million against Morrison’s profit of £435 million on turnover of £17.5 billion. Permira, the private equity investor that sold part of its holding in the share offering, bought the business in 2014 for £300 million.
Co-op to launch vital apprenticeship programmes
The Co-op has announced new upcoming apprenticeship programmes to support young people searching for an alternative route into employment. The retailer has teamed up with analytics solutions for consumer, retail and media companies, IRI, to provide the data science apprenticeship programmes in the UK. The programmes are designed to provide a learning structure and “valuable work experience”. The new courses is aimed at apprentices with an interest in the application of data science and computing to a wide range of theoretical and real-world problems. “We’ve always been committed to education and training and so we want to make sure everyone has an equal chance to fulfil their potential; that’s why we champion apprenticeships,” Co-op head of retail insight Adam Gitlin said. “With more than 1200 positions across our business, apprentices bring a whole new level of energy, enthusiasm and new ways of thinking into the Co-op. “Data science has a crucial role to play as it touches every part of our business. As more businesses undergo digital transformation, interpreting and understanding data will become fundamental to their survival. “When we see other companies, such as IRI, share the same values as Co-op, we’re inevitably drawn towards them so that together we can cooperate for a fairer world.”
M&S announces 2 new clothing execs in wake of Jaeger takeover
Marks & Spencer has announced two new appointments to the senior leadership team of its clothing and home division in the wake of its recent Jaeger takeover. Anna Braithwaite has been appointed clothing and home marketing director, while Fiona Lambert will join M&S as the managing director of Jaeger, which it acquired out of administration from Edinburgh Woollen Mill last month. Both Braithwaite and Lambert will report to M&S clothing & home managing director Richard Price, and their appointments form part of the retailer’s wider Never The Same Again business strategy. Braithwaite’s remit will be to lead the division’s marketing team, with a focus on M&S’s conversation and engagement with customers, as well as an emphasis on hero categories, such as denim, and opportunities for growth, such as kidswear and casualwear. On the other hand, Lambert will join M&S later this month, wit a remit to lead the brand’s re-positioning and reviving its heritage in a relevant, contemporary and commercial way. While Jaeger will be part of the M&S group, operating as a separate independent business, it will still reporting directly to the retailer’s clothing & home division. M&S purchased the Jaeger brand, products and supporting materials last month as part of a £5 million acquisition deal with administrators of the collapsed Edinburgh Woollen Mill Group last month. The deal did not include Jaeger’s remaining 63 stores and concessions. As a result, all 211 store staff were made redundant, as well as 22 head office staff. M&S now plans to use Jaeger to help turbocharge growth on its ecommerce operations through selling complementary third party brands, especially since it has reportedly struck deals with Phase Eight, Joules, Hobbs and Seasalt. “Our Never the Same Again programme is about being more relevant, more often to our customers,” Price said. “Showing up as a brand with energy, confidence and style is crucial to this and so I’m delighted Anna Braithwaite is joining as our new clothing and home marketing director to lead how we talk to our millions of customers across the UK, however they choose to shop with us. “Alongside this, as we turbocharge our online proposition with new brands, we’re committed to reinvigorating Jaeger whilst retaining its much-loved brand heritage – and we’ll do this through a dedicated team led by Fiona Lambert, who is experienced in transforming clothing brands. “As a wider team we remain committed to offering our customers relevant products & services for how they’re living and working both today and in the future, and we’re looking forward to Anna and Fiona playing a role in our accelerated transformation.”
Clothing retailers cut orders as unsold stock from 2020 mounts
Clothing retailers have cut fashion orders as Covid-19 restrictions and slow rollouts of vaccines continue to reduce sales. Despite the grim outlook, the KPMG/Ipsos Retail Think Tank said the UK retail sector can still expect to recover, given the pent up savings and demand. Primark said it still has around £150 million worth of 2020 spring/summer stock and £200 million from autumn/winter – which otherwise would have been sold in clearance sales. Meanwhile, Marks & Spencer and Hugo Boss said they had placed smaller orders than usual for this year’s spring collection. Hong Kong-based sourcing agent Li & Fung, which manages more than 10,000 factories in 50 countries for retailers, said that some retailers had requested later payment terms. Major garment manufacturing centres such as Bangladesh are impacted as their economies rely on textile exports. Fifty factories surveyed by the Bangladesh Garment Manufacturers and Exporters Association said they had received 30 per cent fewer orders than usual this season, due to pre-Christmas lockdowns in most of Europe.
Notonthehighstreet acquired by US investor
Notonthehighstreet has announced that it has been acquired by US-based growth equity firm Great Hill Partners for an undisclosed sum. As part of the deal, Great Hill Partners will become the majority shareholder in the online retailer, which specialises in personalised gifts such as books, jewellery, prints and toys. Existing investors Burda Principal Investments and Industry Ventures will also remain as shareholders in Notonthehighstreet. The takeover comes after Notonthehighstreet saw revenues surge by more than 50 per cent last year as a result of the Covid-19 pandemic. The retailer also attracted almost a million new customers, bringing it to a total of 3.6 million, and added 500 new small business partners to its marketplace. Notonthehighstreet said its investor base will help further advance its growth – expanding its reach in the UK’s small business community, and developing and diversifying the range of products offered through the marketplace in order to meet growing customer demand for categories such as homeware, gardenware, and food & drink. The transaction with Great Hill Partners is also a catalyst to expedite Notonthehighstreet’s tech and product roadmap for both sides of its business, evolving the experience of its small business partners, and helping customers find products through the evolution of onsite and in-app discovery tools and algorithms. News of Notonthehighstreet’s potential sale first emerged last October, when the online retailer reportedly drafted in Evercore to work on an auction process. While the value of Great Hill Partners’ takeover deal could not be disclosed, when the auction process first started in October, reports suggested Nothonthehighstreet could be valued at £200 million. “Notonthehighstreet has been the online home of the UK’s best creative small businesses since 2006, and business has boomed for our marketplace in the past 12 months,” chief executive Claire Davenport said. “With more people shopping online and choosing to support small businesses than ever before, Notonthehighstreet has become a go-to platform for people across the UK who are seeking unique ways to improve their home environment, discover new ways to spend their time and find thoughtful ways to stay connected with loved ones. “We’re incredibly grateful to our founders and past shareholders for all they’ve done for the business to date, and we are delighted to work with digital growth experts Great Hill Partners, Burda and Industry for the next exciting stage of our growth. “Each brings considerable expertise that will help us to build on the success we’ve seen so far.” Great Hill has actively invested across ecommerce for nearly 20 years, backing various online marketplaces and retailers, notably Wayfair.
John Lewis expands fashion & beauty offering with 50 new brands
John Lewis has revealed plans to expand its fashion and beauty offering with the addition of 50 new brands in response to the “casualisation” trend from the Covid-19 pandemic. The department store chain said lifestyles have changed over the past year, and the demands for wardrobes have evolved as many opt for comfortable, casual attire over more formal styles. John Lewis said that as this trend for “casualisation” accelerates further, the 50 new brands it has added to its womenswear, menswear, childrenswear and beauty departments form part of its plans to continue modernising its offering. Last week, John Lewis launched high street favourite Mango across womenswear, shoes and accessories. The retailer said it was also bringing onboard emerging, independent and predominantly online brands in the coming weeks, such as Ro&Zo, Kemi Telford, Johnny Urban, Nubian Skin, Aab Collection, Honey & Toast and AAKS. Meanwhile, fitness equipment at John Lewis saw year-on-year sales skyrocket by 104 per cent in 2020. In response to this, the department store launched a new athleisure concept in August and will now add Girlfriend Collective, Ninety Percent and New Balance to the line up that already includes Sweaty Betty and Athleta. Sustainability and conscious shopping also continues to be at the forefront of many customers, prompting John Lewis to add sustainable labels Baujken, Thought, and L&T Heirlooms ranges. “The pandemic has accelerated the casualisation of our wardrobes that was already in the making – great puffer jackets, elevated loungewear and relaxed-fit dresses, have become staples in our everyday dressing,” John Lewis head of womenswear Jo Bennett said. “We continue to evolve our fashion offer as our customers’ lifestyles shift and the new brands we are launching have been carefully curated to boost our mood and help us dress for the way we live now. “Offering great style and a wide range of prices, we are delighted to work with emerging, independent brands, championing them and providing them with access to our nationwide platform. “We are excited to share these new brands, many with brilliant sustainable credentials, and are also thrilled to offer our customers the first chance to shop Albaray, a new sustainable brand from some of the team behind Warehouse, boasting modern, effortless style for everyday wear.” This spring will also see John Lewis launch more brands across menswear, including Community Clothing by Patrick Grant, Arc’teryx, Rapha, Champion, Fat Face and Napapijri. In beauty, John Lewis recently launched It Cosmetics and have further launches to come this year – although they will be confirmed closer to launch. Across childrenswear, the retailer is adding Mango Kids, Scotch & Soda, Fat Face, and AO76 to recently-launched brands Hugo Boss, Timberland, Billieblush, DKNY and Carrement Beau. In nursery, brands such as Little Acorns, Kit & Kin, SilentNight, Halo, Woodlife Project UK forestry weaning products and Egg2 and My Babiie strollers and prams will be available in the coming months.
Ocado saw retail profits skyrocket 266% last year
Ocado Retail saw its underlying profits skyrocket 266 per cent last year thanks to the “dramatic channel shift in grocery” during the pandemic.
Ocado’s joint venture with Marks & Spencer, now its sole direct-to-consumer retail operation, enjoyed staggering growth during the year to November 29, 2020.
Retail revenues jumped 35.3 per cent to £2.18 billion, driving EBITDA from just £40.6 million in 2019 to £148.5 million last year.
Despite this the wider Ocado Group, which includes both its logistics and solutions arms, still struggled to turn a profit for the full year posting an overall loss before tax of £44 million.
While its UK solutions and logistics arm saw a 13.8 per cent rise in revenues, EBITDA dropped nearly 40 per cent to £44.4 million due to “investment in more capacity and technology”.
This included the launch of numerous customer fulfilment centres (CFCs) across the UK including two in London and one in Bristol.
Its international solutions arm, which has rapidly become Ocado’s key focus for growth as it moves away from consumer-facing retail, saw losses increase over 50 per cent to £83.3 million.
This loss was due to major investments in international CFC’s for third party retailers including Sobeys, Kroger and Groupe Casino.
While group EBITDA rose nearly 70 per cent to £73.1 million, “other” significant expenses hammered margins during the year.
An ongoing legal dispute with AutoStore, which is suing Ocado for copyright infringement incurred significant legal costs which the company expects to rise significantly next year.
Major acquisitions of tech companies including Kindred Systems and Haddington Dynamics also impacted profitability, as did the addition of 500 colleagues.
This investment strategy is due to continue into next year, when Ocado says it plans to spend £700 million on new projects for its technology clients.
Asics recognised for supply chain transparency
Asics has been named as a global leader for engaging with its suppliers on climate change, as retailers scurry to be more transparent in their supply chains. The sportswear retailer has been awarded a position on the Supplier Engagement Leaderboard two years in a row, by global environmental impact non-profit CDP. Asics was recognised for reducing emissions and managing climate risks in its supply chain in the past reporting year. CDP has assessed over 7000 companies in total and has given them a Supplier Engagement Rating, based on answers to selected questions about governance, targets, scope 3 emissions, and value chain engagement of their response to the CDP 2020 climate change questionnaire. Asics is among the top seven per cent of organizations assessed by CDP, one of almost 400 companies on the Leaderboard this year. The Japanese brand was also included in Sustainability Yearbook 2021 published by S&P Global, which showcases the sustainability performance of the world’s top 15 per cent companies in each industry. Asics said it is committed to being a sustainable business across all aspects. Separately, the retailer saw a drop in its sales as it struggled with trading amid the Covid-19 pandemic. It posted a 21.5 per cent sales drop to ¥146.89 billion (£1.06 billion) in its second quarter that ended on June 30. Asics also recorded an operating loss of ¥3.87 billion (£280 million) compared to operating income of ¥8.58 billion (£620 million) in the same period last year. Gross profit slipped 20.7 per cent to ¥70.5 billion (£51 million) and the ordinary loss during the quarter was ¥3.87 billion (£28 million). Despite its losses, Asics recorded an online sales rise of 139 per cent in Europe.
Asos, Boohoo, Ocado & Amazon all see shares drop amid threat of "amazon tax"
Asos, Boohoo, Amazon and Ocado’s share prices dropped yesterday following news that a new “Amazon Tax” could soon be imposed on online players.
Yesterday reports emerged that chancellor Rishi Sunak was considering announcing a new online sales tax during the spring Budget next month, in a bid to “level the playing field” between online and physical retailers.
Separately a group of prominent retailers piled pressure on the government to reform business rates, while Tesco publicly called for a one per cent levy on online sales.
Together these sent shares in some of the UK’s leading online retailers tumbling.
Boohoo, the rapidly expanding fast fashion retail group, saw share prices drop 5.18 per cent to lows of £3.46 yesterday before recovering slightly to £3.53 this morning.
Meanwhile its key rival Asos saw shares drop four per cent to lows of £47.04 yesterday, though its price has now fully recovered to £49.70.
Ocado, which today posted a 266 per cent rise in retail profits, saw prices drop nearly 4.45 per cent to £26.30.
Even the online behemoth Amazon, which the proposed tax is loosely named after, saw share prices dip 1.5 per cent on the news.
While Amazon depends far less on the UK than Asos or Boohoo for its revenues, the UK is close to becoming its second largest market and a hit to its profits here could have ramifications for the larger company.
“This may raise a question about opportunistic tax policy (the government is meant to be pro-business), however most people feel online retailers are not paying their fair share and the burden is falling too much on struggling high street stores,” Markets.com analyst Neil Wilson told Investors’ Chronicle.
“It’s never made sense that bricks-and-mortar businesses pay more in tax than the very rivals who are stripping away their market share.
“A possible tax hike aimed squarely at online sales presents a near-term overhang for these stocks, but they remain structurally well positioned to capture more sales as consumer habits continue to shift online.”
Dunelm enjoys profit & sales boost in interim results
Dunelm has hailed a surge in interim profits and sales, prompting it to resume dividend payments and express optimism about its future. The furniture retailer said pre-tax profit reached £112.4 million in the half-year period ending Boxing Day – representing a 34.4 per cent year-on-year increase. This was achieved on the back of revenue of £719.4 million, up 23 per cent year-on-year, despite losing some market share and stores being forced to close because of the Covid-19 pandemic in the second part of the period. Nonetheless, the figures were pushed up by online sales – which soared 111 per cent – and overall, Dunelm said it “significantly outperformed the market”. The retailer also confirmed it would start paying dividends again, with an interim pay out of 12p due to shareholders. The retailer also finished the half-year period with a net cash position of £141 million – a stark contract to the net debts of £68m for the same period the year before. Free cash flows had also increased year-on-year to £98 million. Dunelm chief executive Nick Williamson hailed the interim results and said he had “never been more confident about the future” of the retailer. “Sales were particularly strong in the first quarter, before we had to navigate the various restrictions which impacted the remainder of the period,” he said. “These restrictions have become more severe in the second half of our financial year, with all but one of our stores currently closed, although we continue to serve customers through our digital channels, which have significantly advanced during the last year. “Beyond the near-term uncertainty, we have never been more confident about the future. “Dunelm is a market leader with a challenger brand mentality in a large and growing segment. “We have a clear runway to grow active customers and their frequency across our total retail system and to realise our long-term ambitions.” Wilkinson added that he agrees with rules that allowed his supermarket rivals to keep selling homewares while Dunelm was forced to close. He said that from a customer standpoint, it made very little sense to cordon off the aisle selling products for the home in essential shops, including supermarkets. “We’d like to be open soon, we think our stores are safe. But we think it’s absolutely fine that stores that are open are permitted to sell homewares. Because otherwise it’s just a bit odd, isn’t it?” Wilkinson said. “Some local districts tried to prevent that happening, but customers just said: ‘Look, I’m here, why can’t I buy a saucepan?’ And I think from a customer point of view, I’m sort of with them.” After further lockdown restrictions which started in January, all but one of Dunelm’s shops – one in Jersey which opened last week as restrictions changed – are closed, Wilkinson added. At the moment, Dunelm staff are on what the company calls a “furlough equivalent” scheme, which covers 80 per cent of an employee’s salary when they cannot work. However, the business has been able to find meaningful work for most of its approximately 10,000 staff. Dunelm’s curtain factory in Leicester also produced 65,000 medical gowns to help fill a gap in personal protective equipment during the pandemic. Shares in the retailer rose 6.9 per cent this morning.
Shareholders target Tesco to cut junk food sales
Investors are trying to pressure Tesco into boosting its sales of healthy food and drink amid growing evidence that the UK’s obesity problem has worsened during the Covid-19 crisis. A consortium of investors, led by responsible investment NGO ShareAction, has filed what is thought to be the first nutrition-based shareholder resolution at a FTSE 100 company. There is growing concern among some investors about the long-term impact actions big retailers are having on public health, ShareAction said. Tesco is the UK’s biggest grocery retailer, with market share of just under 27 per cent. The shareholders are calling on the retailer to cut its reliance on junk food for sales growth, emphasising that new health regulations likely to be imposed following the pandemic pose a risk to profits. If passed at its AGM this summer, it would force Tesco to disclose what proportion of its overall food and soft drink sales are made up of healthy products. It would also require the chain to develop a strategy to significantly increase the ratio of healthy to junk food sales by 2030, and publish a review of its progress each year from 2022. The issue of setting out a healthy food strategy was raised at Tesco’s 2020 AGM, ShareAction said, but the retailer refused to commit to making changes. It said the resolution was a “marked escalation” in pressure from shareholders. Before the pandemic, around 90,000 people died from diet-related diseases in the UK every year, according to a 2019 study. An estimated 4.7 million people have diabetes – 90 per cent of which is type 2. Obesity has now emerged as one of the biggest risk factors for acute cases of Covid-19, with severely obese people three times more likely to be admitted to intensive care with the virus. The first phase of the government-commissioned National Food Strategy, published last summer, noted: “The fact that we went into the Covid-19 crisis with such high rates of obesity and diet-related disease has undoubtedly contributed to the UK’s appalling death rate.” In response, the UK Government is considering a series of measures to tackle the problem, including legislation to curb sales of junk food. Among the proposals are an end to promotion of foods high in fat, salt or sugar by restrictions on offers such as buy one, get one free. There could also be limits on placing junk food products in prominent positions, both in physical stores and online, to reduce impulse buys. Elsewhere, other big British retailers have already established a strategy to increase sales of healthy products. Marks & Spencer’s “Plan A” sustainability programme includes a target of 50 per cent of sales on its own-brand items to be generated by healthier products by 2022. Forty-three percent of Sainsbury’s food and soft drink sales came from healthier products in 2019/20, and it has committed to reporting its progress twice yearly from 2021 onwards, ShareAction said. The proposed resolution with Tesco is being backed by seven institutional investors managing more than £140 billion in assets, along with 101 individual investors. “As the UK’s largest food retailer, Tesco’s actions are of systemic importance in tackling obesity,” ShareAction senior manager Ignacio Vazquez said. “But its prime market position has not yet translated into leadership on this critical issue. “We hope that Tesco’s board will endorse the resolution and grasp the opportunity to help build a healthier UK post-Covid, while also improving its financial sustainability in the long term.” Guy’s and St Thomas’ Charity chief executive Kieron Boyle said: ”Evidence shows that families spend most of their food budget in supermarkets. “We know that the products sold there, how they are priced, placed and promoted have a big impact on what families buy and, as a result, on children’s diet. “Supermarkets like Tesco have a significant opportunity to show real leadership by disclosing and, where needed, improving their efforts to help families to keep healthy.” A Tesco spokeswoman highlighted several Tesco campaigns to encourage healthy eating, including cutting calories from its product and offering free fruit to children in-store, as well as Tesco’s plans to increase sales of plant-based meat. “We keep our targets under review to ensure they are sufficiently stretching, reflecting feedback from a wide range of stakeholders, and will share our latest health ambitions ahead of publishing our next Little Helps Plan update,” she said. “Looking forward, we have strong plans to make Tesco the easiest place to shop for healthy and sustainable food, to encourage increased consumption of fruit and vegetables, and to raise awareness of healthier choices.”
Lidl launches WhatsApp customer care messaging support service
Lidl is launching a WhatsApp Customer Care messaging service offering rapid support for day-to-day queries “for on-the-go shoppers”.
Lidl launched the service, which will enable customers to chat in real-time with Lidl support staff, earlier this week for its customers in Ireland.
While no plans have yet been announced to roll this service out across the UK, its worth noting that its popular Lidl Plus app was first piloted in Ireland before being introduced to England, Scotland and Wales, and the discounter is expected to be following a similar model here.
“The launch of our of WhatsApp messaging service is another addition to our suite of digital customer touchpoints that allow us connect, build and maintain strong relationships with our loyal shoppers,” Lidl Ireland and Northern Ireland’s head of customer service Eoin Comerford said.
“Designing a fast, convenient and satisfying customer experience is at the core of our business model and we’re delighted to now continue this momentum from our bricks and mortar stores through to our digital presence in an innovative and seamless way.”
In May 2020, Lidl launched an online chatbot via WhatsApp so customers could avoid queues and find the quietest time to shop.
Customers can send a message to Lidl through the Facebook-owned messaging app informing the chatbot of the day and time they intend to visit.
The chatbot will then inform them if this is generally a quiet, average or busy time to visit.
This was not Lidl’s first chatbot, having launched its “virtual sommelier” chatbot through Facebook messenger in 2018.
Dubbed “Margot”, the artificially intelligent chatbot is said to “perform the role of shopper’s virtual wine consultant”.
Lockdown fuelling £2.4bn returns crisis
Unreturned items with a total value exceeding £2 billion have built up across the UK as shoppers are “struggling to return goods during the current restrictions and lockdown”.
UK shoppers are sitting on around £2.4 billion in unreturned goods, according to a new data from locker network InPost.
The data suggests that lockdown restrictions have prevented shoppers from returning unwanted items throughout January, with 57 per cent stating returning online goods was time consuming and a hassle.
Those with unwanted purchases have an average of three items waiting to be returned each, with an average estimated value of £165 per person.
More than half of shoppers surveyed (54 per cent) said they were concerned about coming into contact with other people at Post Offices, parcel drop off spots or stores when making returns.
A further 65 per cent said they did not want to spend time queuing, while 62 per cent said they thought retailers needed a contact-free returns option.
“It’s clear that shoppers are struggling to return goods during the current restrictions and lockdown,” InPost UK’s chief executive Jason Tavaria said.
“With no firm end to these in sight, it’s vital that retailers make it easier for people to return goods during this period by offering a wider range of returns options, including local parcel drop-off points such as lockers.
“Not only will they be rewarded with better stock control and improved customer loyalty, they will also be well positioned with customers once restrictions lift and spending increases again.”
Westfield owner to reduce US presence and focus on UK estate
The new management team of Westfield owner Unibail-Rodamco-Westfield is seeking to offload real estate in an effort to alleviate long-term debt problems during the Covid-19 lockdown. The business will reduce its US presence and complete a remaining €3.2 billion worth of European asset disposals before the end of 2022. Despite the plans, Unibail-Rodamco-Westfield (URW) is focusing on its UK estate, with a new-look management board which includes the recent appointment of Scott Parsons as chief operating officer of Westfield UK. “At the end of the day, the exposure to the US will be minimal, if not zero,” chief executive, Jean-Marie Tritant said. Tritant, who previously ran URW’s US business, joined in January after a group of rebel investors won shareholder support in a push for a more European focus. He said the company was “100 per cent committed” to retaining the two London Westfield malls, considering them its best assets in Europe and among the top globally. Unibail, which had gross financial debt of €26.4 billion at the end of December, has been selling prime assets and taking out more long-term debt as it seeks to refinance its upcoming maturities. URW – which also owns Forum des Halles in Paris and Madrid’s La Vaguada – did not give earnings guidance for 2021, due to Covid-19 uncertainties. The commercial real estate company posted 2020 recurring net profit of €1.06 billion, down 40 per cent, as a year of on-and-off store closures under lockdowns had a knock-on effect for mall owners due rent.
Homebase to open 3 small-format stores in Walton-on-Thames
Homebase has unveiled plans to open a series of new small-format stores in Walton-on-Thames in spring this year. The three new stores will be located along New Zealand Avenue. The first will involve Homebase’s existing bathroom showroom to now feature Kitchens by Homebase following a successful launch of the latter in Guildford. The unit next door will become Decorate by Homebase, building on the success of a similar fascia in Cheadle and Sutton. The retailer said that this site would also house Homebase’s first pop-up store
M&S reveals new denim range as 58% of customers seek sustainability
Marks & Spencer has begun replacing its denim items with more sustainable indigo dyes as part of plans to stick to its new sustainability standards. Almost 50 per cent of the new denim range uses 86 per cent less water compared to the industry average for denim finishing. M&S said it found that 58 per cent of customers agreed that sustainability is a key consideration when shopping for denim. M&S’s research also found that 75 per cent of customers are looking for jeans that are made to last. The new range has launched online across womenswear, menswear and kidswear, and all products are made of 100 per cent responsibly-sourced cotton. M&S said it is currently selling one in 10 pairs of jeans to customers across the UK, and the new standards are part of its wider approach to sustainable clothing. The retailer has partnered with sustainable technologies company Jeanologia to work with its suppliers and address these challenges. M&S also said it is going to increasingly focus on its casualwear given that demand as risen thanks to more people working from home. “Denim is a wardrobe staple for our customers – but we know now more than ever they want style where sustainability is built in as standard,” M&S clothing & home, head of product technology, Monique Leeuwenburgh said. “By taking collaborative action with our denim suppliers, we can give our customers the confidence that every pair of M&S jeans they buy for the family are not only stylish, great quality and fantastic value – but have been responsibly made too. “Our new Spring/Summer denim campaign brings that trusted value promise to life across our digital channels.”
Boohoo seeks bigger London office after Debenhams & Arcadia buying spree
Boohoo Group is reportedly looking to expand its office presence in London in the wake of an acquisition spree that saw it add Debenhams and three labels from Arcadia Group to its stable. The online retail giant, which is based in Manchester, currently occupies around 15,000sq ft of space in Euston Tower in central London, but the Evening Standard reported that it was now looking to upsize. Options include a satellite headquarter of between 60,000sq ft and 80,000sq ft, and possibly in the West End. Boohoo has not yet provided a comment. The news comes after the online retailer bought the brand and online businesses of collapsed department store chain Debenhams, and high street chains Dorothy Perkins, Wallis and Burton. These brands are historically based in London. While Boohoo said around 260 jobs from the former Arcadia Group brands will be saved as they move to new ownership as part of its deal, it is not clear how many from Debenhams’ officers will be transferred over. The Evening Standard reported that the roles in question being transferred to Boohoo include “some from the buying, design and digital teams”. Despite these jobs being saved, it’s estimated that more than 12,000 jobs will be lost from the takeover deal, as the physical store estate for Debenhams, Dorothy Perkins, Burton and Wallis were not included. Boohoo has also previously bought a number of other well-known high street brands out of administration, turning them into online-only operations, including Oasis, Warehouse, Coast and Karen Millen.
Aldi could be considering online grocery launch amid £1.3bn digitisation project
Aldi is rolling out a £1.3 billion digitalisation initiative across its vast international store estate as it continues to push into the online grocery space.
Aldi Süd, which has around 10,000 stores in 20 countries including the UK and the US, is rolling out a globally standardised IT system across its store network.
According to Lebensmittel Zeitung, Aldi’s major investment is set to lay the groundwork for an effective ecommerce operation.
Part of its new “global transformation” project would be the creation of a uniform infrastructure for customer communication, covering internet channels and physical stores alike.
This reportedly includes a globally standardised template for ecommerce, which Aldi only offers in a strictly limited capacity in the UK, despite huge demand for the service.
While Aldi UK and Aldi US have long been calling for the wider brand to introduce an online grocery option to meet this demand, managers at Aldi’s headquarters have fought back stating that online delivery could only be realised at a loss.
However, with the two national Aldi branches introducing click & collect options and delivery via third party companies like Deliveroo and Instacart, the discounter could now be reconsidering its position.
Aldi Süd told Lebensmittel Zeitung that the aim in ecommerce us “suitable and market-driven solutions for all countries of the Aldi Süd Group in order to be able to flexibly serve the omni-channel requirements from our markets”.
The grocer is also understood to be considering the rollout of a loyalty app to rival the recently launched “Lidl Plus” app.