Amazon to invest $5bn in India | DIA posts increase in Q2 profit

Sainsbury leaves Asda behind as No. 2 UK supermarket

Russian X5 Retail Group expands with 100 stores -
Russian food retailer X5 Retail Group has acquired 100 stores owned by the Soseddushka retail chain in Orenburg, whichs analysts estimated to be worth 1.5bn rubles ($25m). Due to the purchase of SoseDDushki, X5 almost tripled the number of its stores in the Orenburg region.

Philippines: Ayala, Puregold to invest P2B in new grocery chain

Local property giant Ayala Land Inc. and leading grocery chain operator Puregold Price Club expect to jointly invest as much as P2bn to roll out in the next four to five years a new grocery chain under the brand “Merkado Supermarket,” aiming to ride on the country’s increasing consumer affluence, inquirer.net reports. The first Merkado Supermarket is set to open its doors at UP Town Center on Friday. The new supermarket chain will be operated by AyaGold Retailers Inc., a 50-50% joint venture between ALI Capital Corp. and Puregold unit Entenso Equities Inc. In a briefing Monday, AyaGold general manager Cesar Cudala said the plan would be to put up eight to 10 stores, mostly in Metro Manila, in about four to five years.

Sainsbury overtakes Asda as No. 2 UK supermarket
Sainsbury's has returned to its position as the UK’s second largest supermarket chain, according to data released today, yorkshirepost.co.uk reports. The latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending July 19 2015, show a slow growth in the British grocery market. Overall sales have increased by 0.8% compared with a year ago, with stronger growth being enjoyed by the smaller retailers. Fraser McKevitt, head of consumer and retail insight at Kantar Worldpanel, said: “The Co-operative has returned to growth for the first time since July 2014, increasing its sales by 1.0%. The Manchester-based grocer’s focus on its convenience offer has been rewarded with an increase in shopper numbers, which have risen by 133,000. While The Co-operative’s growth is slightly ahead of the market, its overall share of 6.3% has remained the same as last year.” Despite a fall in sales of 0.3%, Sainsbury’s has edged its market share of 16.5% ahead of Asda, which now stands at 16.4%.

Amazon to invest $5bn in India

US-based e-commerce giant, Amazon, is reportedly planning to invest $5bn to update and expand its services in India by introducing Amazon Prime, igd.com reports. Amazon launched in India in 2013, spending $2bn to tap into the country’s growing middle class.

Portugal’s Sonae MC sees growth through smaller stores

Portuguese retailer Sonae MC will give priority to smaller stores as part of its growth strategy, esmmagazine.com reports. In an interview for Diario Economico’s ETV, the chief executive of Sonae MC, Miguel Seixas, said that the company’s strategy is no longer based on opening of large Continente hypermarkets, with one or two exceptions. Growth will now be achieved through the convenience store format Meu Super, using a franchise-led model, as the retailer targets regions of Portugal that do not have these smaller stores.

Spanish DIA posts 5.3% increase in profit in Q2
Spanish retailer DIA has posted a 5.3% rise in underlying net profit to €102.5 million for the second quarter of the year, according to results filed this morning, esmmagazine.com reports. Like-for-like sales growth at the retailer reached 2.9% in the period, with its emerging markets portfolio seeing its sales rise by 20.5%. The period saw DIA announce an agreement to purchase 100% of the shares of El Arbol, a convenience chain in Spain, as well as an agreement with Carrefour over the acquisition of Carrefour France. ”These transactions are perfectly in line with our strategy of concentrating our efforts in market where we can generate the best returns,” said CEO Ricardo Curras.

German Shopwings grocery delivery service to close

Start up investor, Rocket Internet, has announced it will close its grocery delivery service, Shopwings, igd.com reports. The main reasons cited for this move are a lack of cooperation from retailers, and tough regulatory hurdles. The service offers to deliver groceries, within two hours of ordering, from a variety of retailers including Edeka, Aldi, Lidl and Alnatura.

UK: Morrisons appoints new group retail director

Morrisons has appointed former Tesco Northern Ireland boss Gary Mills as its new group retail director, igd.com reports. Gary Mills will join Morrisons with over 30 years retail experience, having begun his career at Stewarts Supermarket in Northern Ireland

South-Africa: Pick n Pay to create 5 000 jobs
Pick n Pay planned to employ 5 000 people a year as it opened new stores in Africa’s most advanced economy, the retailer said on Monday, mobi.iol.co.za reports. Pick n Pay, which opened about 100 grocery stores last year despite subdued retail sales and gross domestic product growth of 2%, was aiming for “a bit more this year”, CEO Richard Brasher said. Pick n Pay employs about 36 000 staff. “Most of these jobs will be in our new stores,” Brasher said. Bigger rival and market leader Shoprite said in February that it had employed almost 7000 more people in the six months to December in several new outlets. The government is desperate to create jobs in a nation where the unemployment rate stands at about 25%.

US: Publix lauches same-day delivery

A Birmingham-based startup that delivers groceries from Publix Super Markets Inc. in as little as one hour is coming to the Tampa Bay region, bizjournals.com reports. Shipt plans to offer its grocery delivery services from Brandon to St. Petersburg, according to its website. Services will launch in beta mode Aug. 4.

Sainsbury Mimics discounters’ tactics to take on Aldi
To bolster its defenses against the unrelenting competition from Aldi and Lidl, J Sainsbury has found inspiration from an unlikely source, Bloomberg reports. Last year, the U.K. supermarket company embarked on a 15-store trial with Danish discounter Netto as a way to tap into the growing budget retail industry. It now believes the main benefit from the venture is just mimicking Netto’s methods, such as baking different types of breads in the same oven. “The Netto venture has given us a deep understanding of the discounter model and how we can bring their best practices into our supermarkets,” CFO John Rogers, who assumes responsibility for the partnership this week, said in an interview in London. “That’s been the most powerful benefit. We underestimated it.”
After plowing hundreds of millions of pounds into price cuts, the U.K.’s biggest grocers are searching for new ways to stop more customers defecting to discounters. Otherwise, they face a further 18 months of ebbing profits and escalating price wars, Moody’s Investors Service said last month. “Sainsbury’s must be careful not to get drawn into a price war,” Mike Dennis, an analyst at Cantor Fitzgerald in London, said by phone. “They don’t need to cheapen their brand to compete with the discounters.” Sainsbury brought Netto stores back to Britain last year by partnering with the discounter’s Danish parent company Dansk Supermarked. Netto had been absent from the U.K. since 2010 following the acquisition of its 193 stores in the country by Wal-Mart Stores Inc.’s Asda. (Source: Bloomberg)

Interesting links about retail:

Target’s struggle to sell Canadina stores
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US: Can Whole Foods Market get its growth back?
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WalMart, thwarted by India’s restrictions, goes big wholesale

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