RETAIL NEWS

Tesco: big in America…Post-holiday blues…Wal-Mart’s customer relevancy…Wild west retailing…Organic fizz at Waitrose

Tesco: big in America

Amid much speculation about Tesco’s plans for its “invasion” of the US, it seems that the retailer’s designs might be grander than first expected.

Last month the supermarket purchased a former Albertsons store in Los Angeles that covers an area as large as 32,500 square feet. If this is an indication of the size of the stores it intends to build, Tesco’s objectives may exceed what was previously predicted by analysts.

Tesco is reported to have had plans to open a number of small convenience stores, starting next year, and focusing  on the US West Coast.

Consultants Bain & Company speculated in an article for The Wall Street Journal that the stores would be similar to Tesco Express stores, not only in size, but in the products stocked. The site in Los Angeles would cater for a much larger store.

Back in Tesco’s home market, the supermarket’s wine festival gave consumers discounts of up to 50% last month.

The Tesco Wine Festival in the UK is a biannual event, with offers available both in-store and online.

A number of Champagnes and sparkling wines were included in the festival, such as a Bricout Cuvée Prestige Reserve Champagne Brut, down from £142.44 to £71.19 for six bottles.

Wine brands such as Hardys, Codorníu and Kendermanns were also offered at discount prices by the retailers.

Post-holiday blues

retail monitoring agency FootFall confirmed last month that the high street had suffered the predicted post-holiday decline in shopper levels.

FootFall’s Natasha Burton attributes this traditional decline (-5% week on week for the beginning of September) to a number of factors. She suggests that this is a time when consumers begin to focus on paying off summer credit card bills, as well as beginning to address the expenses associated with the new school term.

In addition, Burton believes that “prolonged warm weather continues to stifle demand for autumn clothing ranges, and living costs have risen, largely due to higher domestic fuel and mortgage bills”.

Burton explains that shopping activity is likely to increase towards the half-term holidays and Halloween, and is optimistic for retailers.

The year-on-year 3% decline in shoppers puts 2006 in line with 2004.

Wal-Mart’s customer relevancy

us-based supermarket chain Wal-Mart’s new strategy involves customising stores’ layout and goods depending on various consumer groups.

The group’s strategy will segment customers into six groups, such as Hispanic, African-American, or affluent, over the next two years. The plan will involve all 3,256 Wal-Mart stores.

The strategy will be to customise about 3,000 SKUs for each of the six groups.

The retailer is apparently testing the approach in as many as 40 stores. A Hispanic store, for example, offers specifically Hispanic groceries, a fresh bakery, and will sell over 300 breakfast tacos every day.

This strategy is based on a belief of Wal-Mart’s CEO, Eduardo Castro-Wright, that “driving customer relevancy will drive growth”.

The new initiative is a response to competition from other chains, such as Target Corporation, as well as a reaction to the company’s first quarterly profit drop in a decade.

Wild west retailing

shopping in west London will never be the same again, thanks to new plans for a £1.6 billion regeneration of the area. A proposed shopping mall, The Westfield Centre, is intended to “break the mould of shopping centre entertainment” according to Michael Gutman, managing director, Westfield UK & Europe. In addition to about 270 planned shops and 4,500 parking spaces, the centre will also feature a number of restaurants, a cinema, an area for live events, and other lifestyle elements.

Waitrose, Marks & Spencer and Debenhams are among the retailers with a presence in the mall. The restaurants will be a major focus, catering for various styles. The centre will span 150,000 square metres, located between Shepherd’s Bush and White City.

Westfield, an Australian company, has had previous success with incorporating food and lifestyle elements into shopping malls in the US, Australia, New Zealand and elsewhere in the UK.

The plans also include a new rail and tube station for The Westfield Centre.

Organic fizz at Waitrose

with the launch of Waitrose’s new organic range, the supermarket has reinforced its commitment to this sector of food and drink retailing.

Waitrose now offers 1,500 organic products, claiming 16% of organic sales in the UK, despite having less than 4% of the total UK grocery market.

The organic range is not limited to staple foods, but includes organic fine foods and, notably, an organic Champagne. The estate where Champagne Fleury is produced was fully converted to biodynamics in 1992.

The new look organics range was launched last month.

© db October 2006