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3
Feb-18
Saturday

Costco Online coming soon?

5
According to The Seattle Times, About 40% of Costco’s new members are millennials.   Craig Jelinek, Costco’s CEO, told the annual shareholder meeting that while the focus is still on expanding the store base, Costco is also adding online channels in more markets.  No doubt, Costco online will be coming to Australia too.

Tesla to sell Powerwall batteries and solar panels at Home Depot

5
Bloomberg reported that Tesla will create branded spaces within 800 Home Depot stores this year, to sell its Powerwall batteries and solar panels. Interesting to see whether Bunnings will follow.  After all, the Bunnings concept was derived from Home Depot…
2
Feb-18
Friday

Coles falling behind Woolworths

6
Sue Mitchel of AFR reflected on comments from Coles’ suppliers that the business lost its way and is falling behind Woolworths.  This doesn’t surprise us.  Over the last few years, we pointed out that Coles’ strategy of making it more like Aldi (generics everywhere) had to backfire.  You can’t be like Aldi if your cost structure is nearly twice as high and the quality of your generics is not top notch.  Once Coles get close to Aldi’s store model, they will have to lose as their net returns will sink.

Half of world’s parcels are delivered in China

5
Nikkei Asian Review wrote about e-commerce in China, stating that half of world’s parcels are delivered in China.  This puts pressure on logistics providers, trying to cope with 28% growth since the year before.  Experts suggest to watch Alibaba, which has potential to become another Amazon…

Valentine's Day spending in the US will rise 8% this year

5
According to the NRF, Valentine's Day spending in the US will rise 8% this year, driven by spending on… pets.  American consumers are expected to spend 27% more on their pets, to reach $751 million. Katherine Cullen, NRF's director of retail and consumer insights, said that "Millennials are the largest generation of pet owners, and they are doting pet parents."
1
Feb-18
Thursday

ALERT: Notifiable Data Breaches Scheme

8
ALERT  Just a reminder: from the 22 February 2018 the Notifiable Data Breaches Scheme becomes effective in Australia.  The relevant Act applies to businesses with an annual turnover of $3 million or more, meaning practically all retailers.  The scheme applies to “data breaches involving personal information that are likely to result in serious harm to any individual affected”.  The phrase ‘likely to occur’ means the risk of serious harm to an individual is more probable than not (rather than possible). ‘Serious harm’ is not defined in the Privacy Act, but in the context of a data breach, serious harm to an individual may include serious physical, psychological, emotional, financial, or reputational harm.  One of the consequences of this new scheme for retailers will be market damage, as the forced disclosure will expose data breaches previously wiped under the carpet… 

NRF: economic inertia relief since Trump took office

7
The National Retailer Federation in the US commented that “the nation has seen a welcome relief from economic inertia since Trump took office”.  It is amazing what can be achieved in the economy by just repealing a few highly restrictive regulations and by realigning the tax system.  Possibly this is a clue for Australian politicians?

H&M announces a 34% decline in profits

5
H&M announced a 34% decline in profits.  A few years ago H&M appeared unstoppable, but the ongoing reshuffle in the fashion market caught up with them as well.  There still seems to be momentum in H&M but it is now more related to new store openings than to like-on-like growth.  The evidence that the latter is weak emerges from the intention to close 170 stores in 2018.

Godfrey’s earnings decline by 42%

5
According to Inside Retail, Godfrey’s earnings declined by 42%.  Sales declined by 6% for the second half in 2017.  The business has been under pressure from online operators, appliance and department stores.  It looks like it needs a serious refresh…  Switch from corporate to franchise model helped a bit, but clearly this was not enough.
31
Jan-18
Wednesday

JB HiFi shares have grow over 25% since November 2017

5
JB HiFi shares have grown over 25% since November 2017, putting short-sellers into a painful position.  The expected heavy impact of Amazon on the JB business didn’t materialise and the business issued a profit upgrade.  We did expect that the initial impact of Amazon would be minimal, as whatever the portion of brick and mortar that was to be shifted online, has already been shifted.  The battle will be most likely within the online space.