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31
Oct-18
Wednesday

Halloween retail is big business

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According to the National Retail Federation, Americans will spend approximately US$9 billion on Halloween festivities this year (US$86.79 per US citizen). The NRF’s report shows the rise of social media has promoted massive Halloween spending among millennials (selfie culture), with exponential increases in money spent on adult and pet costumes.

Lovisa persists with global expansion despite soft start to 2019

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The AFR reported that market darling Lovisa has lost some of its shine after revealing a "challenging" start to 2019, with same-store sales slipping 0.9% in the year to date. Off the back of the news, Lovisa shares, which were previously trading about 18 times forward earnings, plunged 22% but then made a small recovery by the close of trading. Despite the soft start to the year, the retailer's leadership team remains upbeat about the company's prospects and continue to work on a pilot program in North America.
30
Oct-18
Tuesday

Kogan.com blames GST for share plunge

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The AFR reported that online retailer Kogan.com has blamed changes to the GST and increased competition for crunched sales and gross margins - less than two months after co-founders Ruslan Kogan and David Shafer sold $40 million of shares. Kogan.com shares plunged by one-third after it revealed that sales from global brands had fallen 27% since the new GST regime came into effect on 1 July 2018. The retailer had cut prices in an attempt to match overseas websites avoiding the new GST rules. We must ask: how can this be an issue? Before no international online retailers were paying GST, now most do. Surely, things should be more equitable holistically now?

NBN ‘not fit for commercial purpose’

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My Business reported that the NBN has been labeled “the silent train wreck” by a commercial property analyst, who claims that property values are increasingly tied to the quality of connection speeds than physical location. The analyst noted that rollout expansion of the NBN “has flatlined in 2018”. He also suggested that the government has prioritised cost-cutting over quality, to the detriment of business customers – particularly SMEs. The negligence of the NBN, AKA White Elephant Network, impacts retailers in many ways. And, fairly the analyst asks, “So where are the critics? The peak industry bodies that should speak out about our failure to compete globally on digital connectivity are silent. No organisation has suggested the unthinkable – the NBN is not fit for purpose.”  
29
Oct-18
Monday

Kogan.com shares drop 30%

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SBS reported that Kogan.com has had about $130 million wiped off its market value after the online retailer flagged declining first-quarter margins and an ACCC investigation into one of its promotions. Shares in Kogan.com were 30% lower at lunchtime today after the company said revenue from sales of global brands in the three months to September 30 was 27.4% lower on the prior corresponding period. The retailer blamed foreign-owned competitors who undercut Australian rivals by avoiding GST, and said margins had also been hit by the weaker Aussie dollar. The resulting sell off sent Kogan.com shares down to their lowest since July 2017 and wiped $35 million from the value of founder Ruslan Kogan's personal stake.

Australia's online grocery market to grow to $4.2b by 2023?

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According to figures released by the IGD today, Australia’s online grocery market is predicted to grow to $4.2 billion by 2023. Over the next five years, Australia will grow at a 15.3% CAGR, taking market share from 2.1% to 3.7%. IGD also predicts that ten leading global online grocery markets will experience combined growth of $227 billion, at an annual rate of 20% in that time frame. It's important to remember that these statistics are forecasts, and we have no visibility of the methodology used to generate them. Stanislav Lem once said that anybody in the forecasting business who in 1990 didn’t predict the Internet should change profession (this means 100% of people).

Apple CEO calls for stricter data privacy laws in the US

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The Wall Street Journal reported that Apple's CEO Tim Cook issued the tech giant’s strongest call yet for US-wide data-protection regulation, saying individuals’ personal information has been “weaponised.” Mr. Cook’s call came in a sharply worded speech before a privacy conference organised by the European Union. Mr. Cook told the audience of EU privacy regulators that the US should enact a comprehensive federal privacy law that follows their GDPR example. “Our own information—from every day to the deeply personal—is being weaponised against us with military efficiency,” Mr. Cook said. His statement comes off the back of recent data breach scandals involving Facebook and Google. Given the critical importance of the Digital Path to Purchase for modern retailing, cybersecurity and the protection of customer details has become an essential focus for the industry.

French Connection in sale talks

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The Retail Gazette in the UK reported that French Connection has begun discussions with four potential bidders regarding a sale. The developments come two weeks after the British fashion retailer revealed it had started looking for a buyer, with founder Stephen Marks ready to sell his 42% stake in the business he began in 1969. The size of Marks’ stake means that any sale would trigger a takeover offer for the whole group. Shares in French Connection rose 45% on the back of the news on October 8, and 10% again on October 19 after the retailer said in a stock market statement that sales conversations were underway.    
26
Oct-18
Friday

Amazon's stock falls 9% despite standout Q3 earnings

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Business Insider reported that Amazon's stock fell 9%, as disappointing revenue, guidance seems to have outweighed standout Q3 earnings. Yesterday, Amazon declared third-quarter earnings that were more than US$2 a share better than analysts had forecast. However, the company’s revenue for the period was lower than expected, and it offered a disappointing revenue forecast for the fourth quarter. Yet again, Amazon’s cloud business gave it a big boost. AWS’s revenue jumped 46% from the year-ago period to US$6.7 billion. The division’s operating profit, meanwhile, grew 77% over the same time period to US$2.1 billion, accounting for more than a third of Amazon’s total net profit for the period. And the company continued to see success in advertising. Its “other” revenue, which largely comprises advertising sales, jumped 122% to US$2.5 billion.

JB Hi-Fi reaffirms $7.1b sales guidance

196
The AFR reported that JB Hi-Fi appears to be defying the downturn in discretionary spending, reporting stronger same-store sales growth in its Australian and New Zealand electronics stores in the lead up to Christmas. At the annual meeting in Melbourne on Thursday, where the retailer narrowly avoided a first strike against its remuneration report, the retailer's CEO said total sales at JB Hi-Fi stores in Australia rose 5.3% and comparable sales grew 3.4% for the three months ending September. This was a significant acceleration from July, when same-store sales rose just 0.3%. Analysts say trading conditions for discretionary retailers have deteriorated over the last few months – pointing to subdued same-store sales at Nick Scali, PAS Group and Michael Hill and slower growth at Super Retail Group – as low wages growth, rising utility costs and political instability take a toll on household spending.

Alceon now one of the largest fashion retail groups in AU

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Ragtrader reported that Alceon Group’s private equity business has acquired the Pumpkin Patch childrenswear business, adding to its already extensive portfolio of retail brands, including Noni B, Ezibuy, SurfStitch and Cheap as Chips. The business was acquired in March 2017 by its current owner, Catch Group Pty Ltd, from the company’s receivers. Alceon's executive director said the group hopes to revive the brand. Pumpkin Patch will initially be re-launched in New Zealand through EziBuy and will feature in EziBuy’s online and physical stores, planned for the end of October. A full re-launch of Pumpkin Patch into the Australian and New Zealand markets is planned for July 2019. Alceon also plans eventually to launch stand-alone Pumpkin Patch stores.  

The value of Click & Collect

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Recent research conducted by US automation company Bell and Howell looked into the value of Click & Collect for retailers, we've picked out a few of the most interesting findings from the report. In terms of enhancing customer experience, 76% of consumers say that pickup efficiency influences their purchasing decision, while 79% say overall experience influences where and how often they buy. The data shows that consumers expect their orders to be ready for pickup in 24 hours or less, with 53% demanding two hours or less! More than one notification method (email, text message, phone call, etc.) also matters. Additionally, 58% of shoppers make impulse purchases when retrieving an order, and 53% of consumers buy additional items when returning items in-store. For a retailer's bottom line, there is an 85% reduction in shipping costs when orders are shipped to store, e.g. Walmart reduced their shipping costs from about US$5, down to circa US$0.75 per order shipped.