M&S weather forecast-bleak in Britain, sunny in Shanghai

3 10 2008
M&S, Shanghai. Image Copyright M&S

M&S, Shanghai. Image Copyright M&S

Britain’s biggest clothing retailer, Marks & Spencer, announced yesterday (03 Oct) that like-for-like sales for stores including the new ones had fallen by 6%. Although this is’nt as much as John Lewis, who saw its sales drop by 8%, it is still bad. General merchandise, which includes homeware and clothing, saw a fall of 6.4% while food sales fell by 5.9%. This fall in sales is being attributed to consumers switching to cheaper brands offering better value for money. Afterall, when it begins to pinch in the pocket, brand loyalty is bound to be thrown out of the window. On a more optimistic note, M&S said that its promotion “Dine in for £10” was “spectacularly successful” and its online sales had increased by 34%.

On the bright side, the opening of M&S’s store in Shanghai yesterday was’nt any less of a spectacular success either. The store, situated on the Nanjing West Road, saw home-sick expatriates and the affluent Chinese middle-class queue up outside the store waiting to get their hands on traditional British merchandise. Apparently, items such as biscuits, jams, Double Devon Toffees, fisherman’s pie and digestive biscuits were amongst the most popular items. M&S is targeting the fast expanding Chinese middle-class with increasing disposable income. It hopes that its stores situated internationally will in the future account for 15%-20% of its revenues. Ironically, according to the Guardian, about 30% of non-food items that M&S sells are infact manufactured in China, but will have to be re-imported for licensing reasons.

http://business-easy.blogspot.com/2008/10/m-weather-forecast-bleak-in-britain.html





Domino’s sales rise as take-outs become popular

1 10 2008

The credit crunch has meant that eating out is beginning to become a costly affair for most families and so they prefer to stay at home. However, rather than cooking a meal, most are beginning to order take-outs. Domino’s Pizza’s chief executive Chris Moore said that it was benefiting from this trend as the sales for the last 13 weeks had increased by 17.8%.

Supermarkets are doing their bit to attract customers by offering huge discounts and BOGOF offers on ready meals which only has to be re-heated before eating. However, Moore believes that this would not affect Domino’s sales since people do not want to go through the hassle of having to buy the product and re-heat it when ordering in takes roughly a half-hour only. Seems like many still prefer convenience than saving money.





Tesco’s first half profit up 11%.

30 09 2008

Supermarket giant Tesco today announced a 11% rise in its half-year pre-tax profits which rose to £1.44 billion from £1.29 billion last year with sales rising 13% to £25.6 billion. Like-for-like sales grew by about 7% which seems very good especially since consumers are cutting back on their spending and discount retailers like Aldi, Lidl, Netto, Iceland, Wilkinsons, etc. are attracting customers from large supermarkets.

It was reported earlier this month that Tesco’s market share had decreased by 0.2% to 31.5%. However, it still has a much greater market share when compared to stores such as Aldi which has 2.9% market share which allows Tesco to benefit from economies of scale. This means it can buy its stock in relatively large numbers at lower cost which would normally allow it to increase its profit margin, but in the current financial situation, it allows Tesco to reduce its prices thereby attracting shoppers looking to reduce their grocery bills.

Tesco introduced a new discount range of about 400 products aptly named “Discount Range” with the aim to compete with discount stores and offer customers value for money. Tesco’s chief executive Sir Terry Laehy claimed that sales of its discount range was rising faster than that of Aldi or Lidl.





Retail Sales affected by Wet Weather

9 09 2008

According to the figures released by the British Retail Consortium, retail sales fell for the third consecutive month as the wet weather kept most of the shoppers indoors. Like-for-like sales for August were 1% lower than last year. DIY and gardening product sales fell due to the wet weather. However, furniture and home ware product sales fell the most.

 On the other hand, the appalling weather conditions and the fact that many are avoiding eating out due to tightening budgets, meant that many preferred to cook at home which in turn saw the sales of food and drink grow significantly.

http://uk.reuters.com/article/businessNews/idUKL89821720080908

http://www.londonstockexchange.com/en-gb/pricesnews/investnews/article.htm?ArticleID=18770586

http://business-easy.blogspot.com/