Halfords acquires Nationwide Autocentres
Halfords has acquired Nationwide Autocentres an independent car servicing and repair operator with 224 outlets nationally.
Halfords is paying £73.2m in cash for Nationwide, which has 224 outlets across the UK. Nationwide will be rebranded as Halfords Autocentres. Halfords intends to boost the size of the chain by a further 200 centres over the next few years.
‘This doubling of scale provides a strong growth opportunity, requires low capital investment and generates working capital inflows. The expansion programme will be funded from the group’s net cash flow,’ Halfords said.
David Wild, Chief Executive of Halfords said “Our expansion into the adjacent car servicing and repair market is an exciting and logical move for Halfords. Car maintenance is a large and highly attractive sector where there is increasing demand from motorists for reliable service at affordable prices. Nationwide is a high quality business and represents an opportunity for significant growth.”
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UK retail sales suffer after snowy winter
The weather was one factor in the surprisingly sharp sales drop
Poor winter weather drove UK retail sales down by 1.8% between December and January, the sharpest drop in 18 months, official figures have shown.
The fall was more than three times faster than analysts had forecast.
However the figures were weighed down by the inclusion of petrol in the official figures for the first time as drivers stayed at home in the snow.
The data, from the Office for National Statistics, adds to concerns about the fragility of the UK economic recovery.
Sales by value were up 0.9% from January 2009.
Fuel sales slipped by 11.1% on the month. When the impact of car fuel sales was stripped out, overall retail sales fell by 1.2%.
Food sales fell by 2.4%, but the ONS said the cold weather had boosted sales of clothing.
‘Double-dip’ risk
The period covers the first month since Value Added tax (VAT) returned to 17.5% after a temporary drop to 15%.
This is thought to have brought some sales forward to December, thereby hurting the January figures.
The data follows on from news that UK inflation had accelerated to 3.5%, that the government borrowed another £4.3bn in January to plug the growing hole in the UK’s finances and there had been an unexpected rise in people claiming Jobseeker’s Allowance.
“January’s retail sales figures round off a pretty awful week for news on the UK economy,” said Jonathan Loynes, chief European economist at Capital Economics.
“Of course, we knew the January sales figures would be bad after the VAT rise and bad weather. But the drop is even worse than the retail surveys had suggested.”
He added that sales could bounce back in the coming months - but that as people’s wages grew only slowly and prices roses, spending growth was likely to slow.
“At the very least, these numbers provide a very weak platform for sales in the first quarter of this year and therefore raise the chances that the economy may succumb to a double-dip (recession),” Mr Loynes said.
The so-called ‘double dip’ refers to an economy in recession returning to growth, then quickly contracting again.
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Shoppers conscious about their carbon footprint
New research undertaken by The Carbon Trust reveals that shoppers now care as much about the carbon footprint of a product as they do about calorie content.
The full extent of consumer carbon consciousness shows that carbon counting now stands shoulder-to-shoulder with calorie counting when it comes to the weekly shop.
When asked about what they put in their shopping trolley, a quarter of people said it’s not just carbs but carbon that now influences their shopping habits.
86% of consumers want their favourite brands to help combat the threat of climate change by reducing their carbon footprint; 43% are actively seeking information about the carbon impact of the products they buy, and 52% would be more loyal to a brand if they could see at a glance they were taking steps to reduce their footprint.
Euan Murray from The Carbon Trust said: “People are increasingly looking for simple ways to reduce their carbon footprint, without sacrificing on price, taste or convenience. They want to protect the environment, but are often confused about how they can make a difference.
“The Carbon Reduction Label is on a wide range of our favourite household brands and is a badge of assurance that consumers can look for to help them decide what makes it into their trolley”.
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Supermarkets steal chunk of children’s clothing market
New research from Mintel shows that more and more consumers are buying children’s clothing alongside their weekly grocery shopping.
The results show, that for the first time, value sales from supermarkets make up the biggest proportion of spend for consumers, beating all other outlets with 29% share of the childrenswear market.
Meanwhile, specialists in the childrenswear sector such as clothing multiples (26.5%) and department stores (7%) have at best only retained market share by focusing on the premium end of the market.
The supermarket is also the first port of call for childrenswear shoppers, with almost seven in 10 (68%) of consumers purchasing their childrenswear there - making it the nation’s leading childrenswear destination.
Michelle Strutton, senior fashion analyst at Mintel, said: “There is increasing evidence of polarisation in consumer purchasing habits, with value retailers and supermarkets profiting at the expense of variety stores and sports stores in particular, which do not have the unique selling points of low price or high quality.
“Although the impact of the economic slowdown since 2007 has raised the profile of discounters and supermarkets, it has been the wider investment by such stores in improving the quality and fashion elements of their clothing that has enabled them to take on existing players in the market so successfully.”
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Asda plans future with smaller stores
Following the briefing on Asda’s 2009 full year results, CEO Andy Bond has stated it’s time to open a new chapter and focus more on its smaller stores.
Bond said: “As part of our strategy to broaden and accelerate our business, you will see us making progress in a number of areas.
“Through a combination of new formats - both smaller supermarkets to meet the needs of local communities, and through Asda Living, we will broaden our business reaching more customers in markets that are currently under-served by Asda.
“Towards the end of last year, we created a separate division for 21 of our smaller stores all of which are under 25,000 sq ft.
“This is allowing us to focus much more clearly on the needs of shoppers in those locations, ensuring the range and offer is right.
“Last year we acquired three smaller, former Co-op stores which range from 10,000 sq ft to 17,000 sq ft. Despite being small Asda stores - customers tell us they are able to do a full weekly shop.
“I’m confident we have a model that we can now accelerate in this market.”
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Fake ID card warning issued to retailers
Thousands of teenagers are able to buy alcohol and cigarettes by snapping up fake IDs off the internet for as little as £10, according to a survey of 1,200 youngsters.
The research, by software company Clarity Commerce, said half the young people interviewed had attempted to buy alcohol and about 20% of teenagers had fake ID, usually in the form of UK or foreign driving licences.
Proxy purchasing remains a big problem, with 45% admitting they have asked older brothers, sisters and friends to buy them alcohol and 20% managing to borrow ID to buy booze.
Clarity Commerce claimed ID schemes have “had their day” and the retail trade needed to use technology in the battle against under-age sales.
Andrew Chevis, chief executive at CitizenCard, said demand for proof-of-age cards was growing, but he acknowledged there were plenty of fake ID cards available as well.
He urged retailers to ensure they did not sell to under-age teenagers and said they should look for the PASS hologram on proof-of-age cards.
“There hasn’t been a single incident where a fake card has been seized with a fake PASS hologram,” he said. “They [retailers] should accept a PASS card before anything else.”
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Nestle predicts higher growth for 2010
Nestle has reported a net profit of 10.4bn Swiss francs ($9.5bn; £6.2bn) for 2009 and said it expected to achieve higher growth this year.
The profit fell below the 18bn francs the Swiss giant made in 2008, which included profits from the sale of part of its stake in eye care company Alcon.
Sales rose by 4.1% to 107.6bn francs. Nestle said it had grown “substantially faster” than its industry as a whole.
Nestle’s brands include Nescafe, Kit Kat, Perrier and Haagen Dazs.
The company said its performance was “broad-based across all categories and regions”.
Bottled water was the only sector which saw a drop in sales - falling 1.4% on the previous year.
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Retailers call for trade credit insurance top-up to be extended
According the British Retail Consortium, 92% of large firms and 74% of small and medium sized firms also feel that trade credit insurers do not asses risk accurately.
One retailer criticised credit insurers for applying “industry-wide criteria to individual companies without looking at specific company circumstances. It is easier for the risk assessors to just repeatedly say ‘No cover’ rather than argue for the insured company.”
The temporary Trade Credit Insurance Scheme introduced by the government in its April budget comes to an end on December 31 and 77% of large businesses and 59% of smaller retail businesses believe this should be extended.
Several retail businesses including Woolworths were severely impacted by the withdrawal of credit insurance, a move partly blamed for the collapse of the 800-store chain.
BRC business environment director Tom Ironside said: “It’s vital to retain credit insurance – especially in the important run-up to Christmas period and beyond.
“The top-up insurance scheme is due to finish at the end of this year and VAT is returning to its higher level at the same time. To prevent the retail recovery and the three million jobs provided by the sector being undermined, the top-up scheme must be retained into 2010.”
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Zavvi.co.uk becomes Zavvi.com to push European sales
Zavvi has switched its web domain from Zavvi.co.uk to Zavvi.com in an attempt to capture a share of the European market
The entertainment retailer, owned by The Hut, aims to generate half of its sales from Europe by September 2010.
To support that objective it is setting up local distribution centres across Europe and developing a multilingual website.
Zavvi said: “This international expansion is a key part of The Hut Group’s plan to win new partnerships with major retailers across Europe to emulate the success from working with some of the UK’s largest retailers.”
In the run up to Christmas 2009, Zavvi will offer customers daily deals and free delivery on all items bought from the site.
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Debenhams sets up online stores with Amazon and eBay
Debenhams has become the first department store to open dedicated online stores on both Amazon and eBay’s UK sites.
Debenhams deputy chief executive Michael Sharp said: “A strong presence on the web is essential for any modern day retailer. Our use of Amazon and eBay, as well as Debenhams.com, opens the door to millions of new customers allowing them to shop from our fantastic range of products wherever they are in the UK, all from the comfort of their own home.”
Debenhams, which will report its preliminary results on Thursday, will sell its Designers At range including Jasper Conran, John Rocha, Ben de Lisi, Matthew Williamson, Betty Jackson and Julien Macdonald on Amazon.co.uk.
Amazon.co.uk managing director Brian McBride said: “Amazon is delighted to be working with Debenhams and its range of clothing, shoes, accessories and homewares represents a fantastic addition to Amazon.co.uk, ensuring that customers continue to benefit from the widest selection of products from the biggest brands.
Debenhams eBay is part of eBay’s new Outlet store and the department store is selling its homewares, electricals and gift ideas on the site.
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