Fresh & Easy on brink of Chapter 11

Aldi profits dip in UK and Ireland as revenues surge
The company’s latest accounts show profits dipped by £10m despite a £1.6bn, or 31%, surge in revenues compared to the previous year. Group turnover for 2014 came in at £6.89bn compared to £5.27bn for the prior 12 months. Spiralling administrative expenses, which almost doubled to £80.7m in the period, left the retailer with a smaller operating profit. Gains made from the disposal of fixed assets swelled its coffers by an additional €3.2m, however. On the other side of the ledger, the group spent £438m on fixed assets, largely premises, to increase its footprint in both countries, which saw an additional 54 stores opening. Its store network in Ireland grew by eight last year, with three in Cork alone, including its landmark store on the ground floor of the country’s tallest building, The Elysian. (irishexaminer.com)

UK: Booker boss wants more fresh food in Londis and Budgens stores
Charles Wilson has pinpointed three key priorities in his bid to revitalise the Londis and Budgens chains. According to Retail Week, Booker CEO Wilson said the food wholesaler and retailer, which acquired the convenience specialists from Musgrave in a £40m deal last month, will focus on improving the quality of the fresh offer in stores, strengthening the private label propositions and creating a more efficient supply chain. (racplus.com)

US: Fresh & Easy on brink of Chapter 11
Fresh & Easy Neighborhood Market Inc. is preparing its second bankruptcy filing in two years, according to people familiar with the situation. An application could come as soon as next week, said the people, who asked not to be identified because the process isn’t public. The supermarket company could still find a buyer for all or part of the chain, a move that may forestall a filing, the people said. An affiliate of Burkle’s investment firm, Yucaipa Cos., bought most of Fresh & Easy’s assets after it sought protection from creditors in 2013. The chain filed for bankruptcy after suffering from poorly located stores and intense competition in its Southern California home market. The company also cited the effects of the U.S. recession. (Bloomberg)

US: Restaurant spending overtakes grocery spending for the first time
When supermarkets are struggling to sell groceries, the chances are more likely changing preferences than management screwups. Restaurant spending earlier this year overtook grocery spending for the first time on record. That number excludes the superstores that sell far more than groceries, like Walmart and Target, but the trend seems to be the same at those outlets as well. A study released last week by the J.P. Morgan Chase Institute found that the bank’s 25M customers spent more of their gasoline savings on restaurants (18%) than groceries (10%). The consumer price index data released by the Labor Department on Thursday suggests the same thing. Food away from home has grown in price by 2.9% over the 12 months ending September, but food at home has risen just 0.8% over the same time period. (marketwatch.com)

Auchan Russia makes a guarantee to their suppliers
Russia’s biggest retail chain, the french brand Auchan, aims to extend contracts with suppliers from 1 year to 3 years, according to turkrus.com. Auchan Russia has been working with many suppliers for 5-10 years, the company’s CEO Wilhelm Hubner said “We need to give them more guarantees for our future relations. Having long contracts with Auchan will mean our suppliers will be able to get loans from the bank with better conditions.” Long term contracts do not mean that prices will not be revised, they will continue to be adjusted in line with raw material prices.

Supermarket pricing targeted by UK government after watchdog report
The UK government is to analyse how supermarkets can make prices clearer for shoppers after an investigation by the competition watchdog. The department for business said it would consider simplifying price legislation as part of a consultation expected to launch in the next few weeks. It wants to make it easier for shoppers to compare the prices of individual items such as a banana or tomato, which can be priced by number or by weight. (theguardian.com)

US: United Supermarkets provides fruit during supermarket visit
United Supermarkets is drawing kids into its rewards program with a new “Kids Club” that focuses on nutrition, the retailer announced. Perks of the program include a birthday card for a free sweet treat and coupons on party supplies, as well as a free snack-size apple, orange or banana on each shopping trip to eat during the child’s visit. (supermarketnews.com)

AU: Coles sales growth tipped to slow
Deutsche Bank research analyst Michael Simotas expects like-for-like sales growth at Coles of 3.1% in the three months to September, down from 4.3% in the first quarter of 2014/15. (sbs.com.au)

US: Kroger pulls unrefrigerated caramel apples
The Kroger Co. today announced its decision to withdraw from sale of unrefrigerated caramel apples that have been pierced with dipping sticks due to new scientific evidence that the product, if left unrefrigerated, may be at risk for listeriosis. (dispatch.com)

Russian consumers price sensitive, turn to discounters
Russians have become very price sensitive as their purchasing power decreases, experts from Sberbank explain. According to a survey, buyers choose stores with lower prices (as reported by 65% of respondents in the study), they are buying less expensive products (61%) and select the products involved in promotions (55%). As Russians turn to discounters, more expensive chains have to find new ways to keep and win customers: premium retailer Azbuka Vkusa is running a TV ad campaign for the first time in its 18-year history. The company’s representative Andrey Golubov said they are struggling with the reduction in traffic, which amounted to 4.5% in September 2015, compared to 2014. (rbc.ru)

US: Walmart adding online grocery ordering in Florida
Walmart plans to offer free online grocery shopping in around 20 Florida cities by the end of this month as part of a national push by the struggling retail giant to become more competitive in the emerging web-driven business of delivering food orders to busy customers. (tampabay.com)

US: Bi-Lo drops prices to attract shoppers
Bi-Lo has slashed prices on more than 1,000 grocery items by an average of 17%. Those price cuts are now in effect at all 182 Bi-Lo stores in the Carolinas and Georgia. “Research consistently tells us that customers are seeking lower prices, wherever they shop, particularly those hard-working families shopping on a budget,” says Ian McLeod, president and CEO of Southeastern Grocers. (bizjournals.com)

Carrefour sales growth meets estimates
France’s largest retailer Carrefour SA reported further gains in revenue during the third quarter, boosted by accelerating growth in countries such as Spain. Revenue rose 2.2% to €21.5bn, Boulogne-Billancourt, France-based Carrefour said Friday before European markets opened. That matched the median of 17 estimates compiled by Bloomberg, as did sales in the grocer’s biggest market of France, which rose 2.3% to €10.3bn. The retailer had a strong quarter in Europe, led by advances in Spain and Italy, which returned to growth. Spain was “the star performer,” said John Kershaw, an analyst at Exane BNP Paribas in London. Italy “was the biggest surprise.” Revenue rose 4.6% in Spain on a like-for-like basis, excluding fuel and calendar effects, beating the 3.5% median of analysts’ estimates. Italy surged 5.9% on the same basis, exceeding the 2.5% predicted gain. (Bloomberg)

UK: Booker boss wants more fresh food in Londis and Budgens stores
Charles Wilson has pinpointed three key priorities in his bid to revitalise the Londis and Budgens chains. According to Retail Week, Booker CEO Wilson said the food wholesaler and retailer, which acquired the convenience specialists from Musgrave in a £40m deal last month, will focus on improving the quality of the fresh offer in stores, strengthening the private label propositions and creating a more efficient supply chain. (racplus.com)

UK: Booker H1 sales down, profit rises
Booker has announced its results for the first half of 2015/16, showing sales down 1.0% in the period. However, despite falling sales, profitability increased markedly, with operating profit up 10% and gross margin improving from 4.8% to 5.1% over the same period in 2014. (igd.com)

US: Publix names new fresh product leader
Publix has appointed a new VP of fresh product business development as David Bridges, who currently holds the position, is set to retire Jan. 1 after 49 years of service to the company. Chris Litz, Publix’s current Atlanta division regional director, will take on the role. (theshelbyreport.com)

UK: Tesco sells mothballed supermarket sites for £250m
Supermarket giant Tesco is selling off more than a dozen sites that it no longer wants to develop to a property company in a £250m deal. They are part of nearly 50 projects which Tesco said earlier this year it was abandoning, many of which are now derelict. (BBC)

A&P bankruptcy: Union backs down on demands
Labor leaders representing A&P workers have backed down from demands that the soon-to-be-defunct supermarket chain sell its stores only to grocery store operators with union contracts. Instead, the latest demand is that buyers of stores that continue to operate as supermarkets should agree to hire nearly all of A&P's employees. If A&P and its buyers agree to those terms, union leaders said they will withdraw all of its objections to the sales. The watered-down demand — which will be brought up in U.S. Bankruptcy Court in White Plains on Friday when a judge will be asked to approve the sale of up to 72 A&P supermarkets to various buyers — is a recognition that the union has few choices left, officials said. (lohud.com)

Major Russian retailers continue to lose customers because of the crisis
In the first nine months of this year, many grocery retailers continue to show a decrease in traffic, reports rbc.ru. Magnit, X5 Retail Group and Dixi published their 9 month operation figures: from January to September 2015 compared to the same period in 2014, customer flow for Magnit decreased by 0.69%, and for Dixi 4.3%. Only X5 Retail group showed a growth in public traffic, of 2.2%. X5 generally showed the best results: in the first nine months of 2015 growth in its revenues amounted to 27.6% and comparable sales increased by 15.2%.

Maltese families spent €557M on food in 2014
In 2014, final household consumption expenditure on food in the domestic market was estimated at €557M by NSO. In 2014, the total agricultural production was estimated at 143,040 tonnes, an increase of 2.1% over 2013. The production of vegetables amounted to 74,410 tonnes, an increase of 0.6% over the previous year and contributed to 52% of the total final production. (maltatoday.com.mt)

Coop Danmark: new range with 150 items
In Denmark, where organic has risen up the agenda, Coop Danmark is rebranding and extending its current organic range to include 150 items, 34 of which are already in store. The name of the new range is 365, ‘chosen because it should be easy to live ecologically every day’. (igd.com)

Choppies plans African expansion
Choppies Enterprises, plans to open about 30 stores in the year to end-June and may also expand via acquisitions as it seeks to increase market share in the region. "We will open stores through organic growth in Botswana, SA, Zimbabwe and Zambia," CEO Ram Ottapathu said on Thursday. The retailer was also seeking to buy companies and may enter Tanzania and Kenya. (bdlive.co.za)

US: Shipt grocery delivery app expanding fast in Florida
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'Amazon is about to seriously disrupt UK supermarkets'
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