Get the latest retail news straight to your inbox

    Don’t go searching for insights in the retail space, we deliver them direct.

Google faces a $5 billion penalty

The Wall Street Journal reported that the European Union has hit Google's parent company Alphabet with a record antitrust fine over its Android operating system. The EU's regulator has been investigating whether Alphabet abused Andriod's market dominance to promote its products. As we have suggested before, the market dominance of technology giants means that they will face ever-increasing pressure from anti-trust laws globally.  

Amazon's US site crashes on Prime Day

The AFR reported that Amazon's US site crashed under unprecedented demand minutes into the launch of its annual Prime Day promotion. Much to the anger of its patrons, glitches prevented many Prime members from accessing time-limited deals for several hours. Down under, despite small Prime membership numbers, Amazon's Prime Day faired better with sales surpassing the e-commerce giants Boxing Day performance.

Hong Kong retail soars


The South China Morning Post (SCMP) reported that eight out of 10 Hong Kong retailers plan to expand as sales in the first half have increased appreciably and are expected to grow further, thanks to a rise in tourists and an uptick in local consumption. This is up from six out of 10 a year ago, according to a JLL survey. Retail sales recorded a fourth consecutive month of double-digit growth in May, jumping 12.9% to HK$40.5 billion (US$5.1 billion), according to The Hong Kong Retail Management Association. The growth is led predominately by the luxury sector, and the adoption of millennial-centric strategies that focus on experiential shopping and digital platforms by retailers and shopping malls.

Are US retailers using new tariffs to grab extra margin?

According to a Wall Street Journal report, washer and dryer prices in the US climbed 20% in the three months through June - the steepest rise in at least 12 years. It appears as if US retailers are increasing prices in excess of what would be expected from the impact of the recently introduced tariffs. Are they using it as an opportunity to grab extra margin?  A 20% tariff applies to the cost price, so its impact on the retail price should be considerably less.

Netflix subscriber growth slows

The Wall Street Journal reported that Netflix added 5.2 million paid subscribers during the second quarter, which was around one million subscribers shy of the company's forecast. Despite its slowing momentum, Netflix still confirms, as evidenced by Blockbuster's demise, that certain retail verticals will progressively shift exclusively online. Netflix isn't the only video content streaming service, and every customer that shifts to digital in this space means fewer DVD sales.    

Google's AU chief engineer calls for AI rules

The AFR reported that Google's chief Australian engineer has called for government and businesses to decide rules for Artifical Intelligence (AI), sooner rather than later. The article notes that there are many ethical, societal and economic questions about AI that still need to be resolved. For example, governments are grappling with the impending challenge of automation-led jobs disrupting multiple sectors and the increasing sentience of systems will soon pose science-fiction-like ethical questions about how humans should interact with AI. Contradictory to many media reports, and inline with our own thinking, the Google boss believes that AI should be viewed as a multiplier of human ingenuity and not a replacement for it.

Two sides to the supermarket plastic bag ban

In an attempt to quell the backlash over phasing out single-use plastic bags, Inside Retail reports that Coles and Woolworths have accelerated efforts to acclimatise shoppers to their bans on single-use plastic bags. Coles are offering increased Flybuys points to customers until 17 July, while Woolworths will allow customers to earn bonus Woolworths Points, at a rate of 2 per bag (up to 30 bags), until 31 December. The fact remains that research by Queensland University of Technology estimates that an extra $71 million in gross profit is on the table for Woolworths and Coles from the sale of 15c bags.  

US retail figures

The Wall Street Journal joined the dopey group of media outlets that analyse retail sales by comparing monthly sales to the month before. We had to do some serious digging to find the relevant number: Market Watch reported that retail sales growth in the US over the last 12 months was a whopping 6.6%.  Even with inflation at 2.9%, this is a solid number. As usual, the growth was uneven, with declines in the clothing, electronics, department stores and grocery sectors. The US economy continues to boom, despite the potential for a serious trade conflict with China.

Sussan still on the market

The AFR reported that Naomi Milgrom, who controls Sussan, Sportsgirl and Suzanne Grae fashion chains, has invited investment bankers to pitch for a role in helping to sell the business. Previously, Citigroup was tasked with finding buyers and did not succeed, indicating that the task won’t be easy. The AFR quoted figures from FY2016 and 2015 for the ARJ Group Holdings, which owns the retailer: the EBITDA shrunk between these two years from $61 million to $12 million. Industry sources estimate the value of the business somewhere between $300 and $400 million.

The end of Blockbuster

This week the video rental company will have only one location left in the US.  In 2004, at its peak, Blockbuster was employing 60,000 people and operating 9,000 stores worldwide. At the time, its market value was $5 billion and revenues were close to $6 billion, but in 2010 it failed for bankruptcy.  In the continuing discussion about the percentage of retail that will shift online, the disappearance of Blockbuster reinforces the point we made a fee weeks ago: all such statistics are irrelevant unless analysed by category.  In the video rental space, the online will surely take 100% of trade.  Anything that can be delivered electronically will ultimately end up in the pure play space.  But, other categories will continue to be dominated by brick and mortar.

Twitter to shut millions of accounts

The AFR reported that embattled social media platform, Twitter will cull tens of millions of suspicious accounts from users' followers, in an effort to restore trust and address a pervasive form of social media fraud. Many Twitter users have inflated their follower counts with automated or fake accounts, effectively buying increased relevancy to bolster their political, business or entertainment careers. The Washington Post reported last week that Twitter suspended more than 70 million accounts in May and June. Following Facebook's recent UK penalty for a data breach, this is another example of the squeeze felt by big technology companies from all angles - social, regulatory and the media.

Old Navy merging digital and physical

The NRF reports that, after months of experimenting and testing, Old Navy has rolled out a strategy integrating physical and digital retail to all stores, allowing its customers to "order online and collect in store" and "make immediate purchases from employees in-store using mobile checkout capabilities". Of course, the initiative is needed to ensure the retailer's relevancy in the market, but we're just not sure how the story made the headlines. Our clients have been offering click & collect and trading off the shop floor with mobile POS for years.