Welcome to this week's retail round up of news. I hope you enjoy it. Have a good weekend.
Grocery development grows 57% in five years
The economic slowdown means non-food retailers continue to struggle to maintain presence on the high street. Not so for supermarkets. Supermarket development activity now accounts for 38% of all shops in the development pipeline. This is up one quarter on 2008.
During the first half of this year, new supermarket space rose to 5.34 million square foot, according to property firm CBRE. Much of this is due to openings of smaller stores, such as Tesco and Sainsbury focussing on developing in-town rather than out of town.
To hit this point home, data from CBRE shows that some very large stores are struggling to win sales as non-food had proven disappointing. This is despite how supermarkets’ share of the non-food market has nearly doubled to 14% in the last ten years.
John Lewis launches new own brand
John Lewis will launch its biggest-ever own brand online and in shops in September, in terms of investment and number of lines.
Focusing on home, ‘House’ will initially comprise of 600 products, but by sprint next year this could rise by another 300, according to Paula Nickolds, buying director for home at John Lewis.
Illustrating the importance that JLP Chairman Charlie Mayfield places in own brand, John Lewis will open 3,000 sq ft branded shop-in-shops, as well as a branded area online.
Also showing the challenge of John Lewis to M&S, design manager Theo Williams added that the launch is the latest step in making the department store “the destination for great design”
The prospects for the Home range is good, coming at the same time as news sales in household goods stores increased from a year ago for the fourth successive month. Some of this may be down to the struggling housing market. Instead of investing in house moves, some households seem to be investing in new home products.
Mobile commerce triples in a single year
Mobile commerce has jumped a massive 356% in just one year, as payments via mobile devices and tablets have growth in popularity, according to IMRG Capgemini.
At the same time, BRC reports that food was the fastest growing sector for mobile search during the second quarter of this year, climbing 163% year-on-year.
Mobile search is translating into sales, with around 20% of all online spend being on food and drink. Nevertheless, only 4% of total grocery spending happens online. This presents good opportunities for the supermarkets to growth their internet businesses, and this will be a big area of competition between them.
Mobile search has also helped eBay record a 23% increase in revenues to $3.39bn, ahead of Wall Street’s anticipated $3.36bn.
eBay’s chief executive, John Donahoe, said he expects eBay to record $10bn in mobile transaction volume this year, which is more than double 2011 figures.
Iceland opens grocery shopping site
Seven years after it closed down its grocery shopping site, Iceland is due to launch a new shopping site next year. However, given the importance of mobile to grocery search, it needs to optimised for mobile devices. It also faces stiff competition from more established online grocers, most notably Tesco and Sainsbury.
M&S bank to charge customers
Earlier this week, M&S announced it will introduce two current accounts, one charging £20 per month, the other charging £15.
Although it is not unusual for banks to charge for ‘premium’ accounts, this is risky for a new entrant. Although it will provide an automatic £500 overdraft, with the first £100 interest free, I am not certain take-up will be as quick as the department store hopes. For one, it is partnering with HSBC, which was at the centre of the money laundering scandal earlier this week. Secondly, is this going to be enough to tempt people to change bank?
It also comes at a time when the Financial Services Authority has been investigating current accounts with added costs. It is concerned that consumers are spending unnecessarily on services they do not utilise.
Shoppers turn to the discounters as household finances continue to suffer
New figures from Kantar Worldpanel show that Aldi and Lidl have each achieved remarkable sales growth of 26.1% and 11.5% respectively year on year, for the 12 weeks ending July 8th 2012. This translates into them totalling a record 2.9% market share.
This comes at the same time that grocery market growth halved from 4.2% over the same period in 2011, to 2.1 this year.
In a further sign of tough economic times, sales of premium own-label products have declined by 6% year-on-year, while Tesco’s Everyday Value range has seen 13% growth.
Tesco holds a market share of 30.7 per cent, a drop compared to last year’s 31.1 per cent while Morrisons has seen a 0.2 per cent decrease in market share, now at 11.9 per cent.