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Aldi retains title of fastest growing UK grocer

The Retail Gazette reported that Aldi has maintained its position as the UK’s fastest growing grocer amid a summer of huge growth in the sector thanks to the hot weather. According to the latest figures from Kantar Worldpanel’s UK Grocery Market Share analysis, the UK's grocery sector grew 3.5% over the period. All of the UK's Big 4 grocers enjoyed growth: Morrisons with a sales increase of 2.7%, Asda reported 2.6% growth, Tesco at 1.8%, and Co-op at 7.8%. However, the German discounters dominated the market with Lidl's sales increasing by 8.6% and Aldi's sales spiking 12.6% (bringing its market share to 7.6%).

EBOS Group coming to terms with massive Chemist Warehouse deal

The AFR reported that the EBOS Group has vowed to maintain standards servicing his pharmacy clients as the company comes to grips with the mega Chemist Warehouse contract it recently won from rival Sigma Healthcare. The pharmacy and animal healthcare company in early July said it had won a five-year contract to supply more than 400 Chemist Warehouse and My Chemist stores in Australia. EBOS CEO told the AFR that its customers wanted to make sure they would not be neglected in favour of the company's big new customer, which is expected to add $1 billion in sales over the next five years from July 1, stating "We are highly confident in our ability to serve all our customers." While EBOS will gain the revenue, will they make any profit? Such ‘super’ deals usually come at a heavy price (unavoidably for its current base of clients too).

Could the worst be over for David Jones?

The AFR reported that David Jones' profit plunged 50% in 2018, highlighting tough conditions in the department store sector. However, a rebound in same-store sales suggests the worst may be over. Sales in the first seven weeks of 2019 rose 3.7% (with online sales up 75%) after growing 2.2% in the second half of 2018. This was a big turnaround from the first-half, when total sales fell 3% and same-store sales fell 3.3%. Excluding $76 million spent on strategic initiatives including the rollout of David Jones' new food offer and costs associated with the refurbishment of the Market Street and Elizabeth Street stores, profits fell 35% to $102 million. The 2018 underlying result excluded a $712.5 million goodwill writedown, which slashed David Jones $2.1 billion book value by one third and sent Woolworths plunging into the red for the first time in 16 years. Woolworths CEO said, "It was a hugely disruptive year, but the major transformational initiatives were now complete and sales momentum was improving in David Jones stores."

Afterpay targets UK expansion

The AFR reported that Afterpay has announced it will enter the UK after a strong start in the US, citing a "retail-led global expansion opportunity" for the payments company. In its first three months in the US, Afterpay has acquired 150,000 customers and 800 US merchants, half of which are currently live with the service. To kickstart its UK focus, the company is raising $108 million in new equity and has acquired UK payments company ClearPay. Afterpay shares have doubled since the start of July sending its market capitalisation to more than $4 billion. Boom times for the millennial shopper favourite.

Woolworths faces $1b backpay claim

The Australian Financial Review reported that The Retail and Fast Food Workers Union has launched legal action to terminate Woolworths' enterprise agreement (EA) and make the grocer liable for an estimated $1 billion in alleged underpayments to staff. The union says that the bulk of Woolworths' 100,000 workforce is paid less than the award and claims that the Fair Work Commission relied on misleading material when approving the EA back in 2012. Coles faced a similar action in 2016, which was ultimately settled. Looks like Woolies could be in very costly trouble.

Lovisa shares take a hit as sales growth slows

The AFR reported that despite posting double-digit growth in net profit for FY18, jewellery retailer Lovisa has taken a hit on the stock market, posting its biggest share price drop in two years after a slowdown in same-store sales growth in the first few weeks of 2019. Until this week, the business had enjoyed a strong run on the ASX with shares rising almost three-fold to more than $11, but the stock fell as much as 9.7% yesterday after the MD revealed same-store sales growth had more than halved since year-end.

Wesfarmers' charred remains in the UK?


The BBC reported that Wesfarmers' failed UK DIY foray, Homebase plans to close 42 stores and cut 1,500 jobs. Restructuring company Hilco, which bought the DIY chain for £1 in May, confirmed it was planning a Company Voluntary Arrangement (CVA). The retailer, which has 241 stores, said the affected outlets would be shut over the next 16 months. A CVA is an insolvency procedure used by struggling firms to close underperforming shops.

Retail spending soars across Australia

The Brisbane Times reported that Queensland is leading the charge as retail spending soars across Australia. Queenslanders are spending on cars, holidays, hotels, motels and retail goods at the highest level in four years. Overall, according to a Commonwealth Bank business sales index report, spending at retail stores has consolidated over the past three months, rising 0.8% a month over the period, with sales up by 16.6% over the year to July 2018, the strongest annual growth rate in 12 years. The report notes that consumers are benefiting from retail deflation, low-interest rates, and job security.

Target US shares surge on in-store boom

CNBC posted that shares in Target US surged after the retailer reported unprecedented growth in foot traffic at its stores, along with second-quarter profit, revenue and comparable store sales that surpassed analysts' expectations. The big-box retailer also said that online sales grew 41% from the same period last year, compared with an increase of 32% a year ago. That said, with the strongest same-store sales growth in 13 years, the boom for Target has been in the brick and mortar stores. It looks like the chain reinvented their stores and product mix, but has also succeeded in telling their consumers about it.

Lovisa reports double-digit growth

In a report lodged with the ASX, jewellery retailer Lovisa posted a 21.4% increase in revenue over of the previous year. The double-digit growth comes off the back of 28 new store openings globally, driving $217 million in revenue for the retailer in FY18, compared to $178.7 million in FY19.

The Reject Shop turns things around

A report lodged with the ASX shows that The Reject Shop has posted a 34.3% year on year increase in net profit after tax in FY18. Net profit has gone up to $16.6 million compared to $12.3 million in FY17, but this is on turnover of $800 million, with EBIT at 3%, which is pretty weak. Overall, a relatively flat but competent performance as the business seeks to recover from a challenging 2017, which resulted in a 28% drop in profit.

Super Retail takes on Amazon

In a results announcement lodged with the ASX this week, Super Retail Group (SRG) reported a 26% rise in net profit to A$128.3 million, up from $101.8 million last financial year. SRG attributes the results to a $60 million investment in 2018 to build the group's omni-channel retail capabilities – launching click and collect, improving customer delivery times and implementing online price monitoring tools. In FY19, SRG aims to "further defend its turf against Amazon" by increasing investment in e-commerce and spending less on bricks-and-mortar stores. Looking at the amount of money invested versus the return, one has to wonder how commercially savvy is the strategic focus? And, with stores being Aussie retail's best defense against Amazon, is divesting from them the best way to keep Amazon at bay?