RETAIL TRADE – AUSTRALIA

Aldi aims to squeeze rivals in SA and WA

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Original article by Simon Evans
The Australian Financial Review – Page: 15 : 3-Feb-16

Aldi will open its first supermarkets in South Australia on 3 February 2016, with plans to open 16 by the end of the year. There is much stronger competition in South Australia’s grocery sector than in the eastern states, with only a few percentage points separating the market share of Coles, Woolworths and Foodland. Aldi’s state MD Viktor Jakupec says market research has found that South Australian shoppers are seeking the same value proposition as Aldi customers in the eastern states.

CORPORATES
ALDI STORES SUPERMARKETS PTY LTD, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS LIMITED – ASX WOW, FOODLAND AUSTRALIA LIMITED, SOUTH AUSTRALIA. DEPT OF THE PREMIER AND CABINET

Woolies turns to Saatchi for brand refresh

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Original article by Sue Mitchell
The Australian Financial Review – Page: 17 : 2-Feb-16

Andrew Hicks has been appointed as the director of marketing at Woolworths, a role he has held in an acting capacity since the resignation of chief marketing officer Tony Phillips in May 2015. Meanwhile, Woolworths has hired advertising agency M&C Saatchi to develop a new marketing campaign for its supermarkets business. Leo Burnett has been the retailer’s creative agency for the last two years, and was responsible for revamping the long-running Fresh Food People campaign. It also developed the not-so-successful Cheap Cheap campaign.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, M&C SAATCHI AGENCY PTY LTD, LEO BURNETT PTY LTD, COLES SUPERMARKETS AUSTRALIA PTY LTD

ALDI ups ad spend as rivals cut back

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Original article by Sue Mitchell
The Australian Financial Review – Page: 30 : 1-Feb-16

Data from Nielsen’s Advertising Information Service shows that ALDI Australia increased its advertising budget from $A15m in 2014 to $A28.9m in 2015. In contrast, Coles and Woolworths reduced their advertising expenditure by 25 per cent and 5.3 per cent respectively in 2015. ALDI has ramped up its metropolitan and regional TV advertising in recent years, and reduced its budget for newspaper advertising.

CORPORATES
ALDI STORES SUPERMARKETS PTY LTD, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS LIMITED – ASX WOW, THE NIELSEN COMPANY (AUSTRALIA) PTY LTD

Investors back bid for Woolworths’ Home

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Original article by Catie Low
The Australian Financial Review – Page: 17 : 28-Jan-16

Allan Gray MD Simon Mawhinney says a merger between Metcash’s Mitre 10 business and the Home Timber & Hardware division of Woolworths could be a good deal if it was secured at an appropriate price. The future of the Home business is uncertain following Woolworths’ decision to exit the ill-fated Masters Home Improvement joint venture. Metcash has been touted as a potential buyer of Home, and it is said to have initiated talks with Woolworths on such a deal in mid-2015.

CORPORATES
METCASH LIMITED – ASX MTS, WOOLWORTHS LIMITED – ASX WOW, MITRE 10 LIMITED, HOME TIMBER AND HARDWARE, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD, WESFARMERS LIMITED – ASX WES, BUNNINGS GROUP LIMITED, LUMINIS PARTNERS PTY LTD, DANKS HOLDINGS LIMITED, LOWE’S COMPANIES INCORPORATED, CLSA AUSTRALIA PTY LTD

Retailers hit with 10pc hike in insurance cover

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Original article by Ruth Liew
The Australian Financial Review – Page: 19 : 28-Jan-16

Figures from commercial insurance comparison website BizCover show that small-to-medium businesses continue to benefit from strong competition in Australia’s insurance market. The retail sector is an exception. An insurance policy for a retail business may cost around $A1,700. A non-retail company would pay $A1,000 for a comparable cover. BizCover’s Small Business Insurance Index rose by five points in the fourth quarter of 2015.

CORPORATES
BIZCOVER PTY LTD, ALLIANZ AUSTRALIA LIMITED, AIG AUSTRALIA, QBE INSURANCE GROUP LIMITED – ASX QBE

Woolworths struggles to hire CEO

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Original article by Michael Smith
The Australian Financial Review – Page: 1 : 22-Jan-16

An overseas candidate is likely to succeed Woolworths CEO Grant O’Brien, after no local executives expressed interest in the role. Woolworths is believed to have identified about five potential candidates from the UK, Europe and North America. Chairman Gordon Cairns had originally indicated that he aimed to install a new CEO by March 2016, but he has conceded that the selection process may take longer as overseas candidates are being interviewed in person rather than by video link.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, COLES SUPERMARKETS AUSTRALIA PTY LTD

Masters rollout ‘too aggressive’

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Original article by Patrick Hatch, Sue Mitchell
The Australian Financial Review – Page: 18 : 20-Jan-16

Australian-listed Woolworths and US-based Lowe’s have invested some $A3.48bn in the Masters hardware joint venture since 2009. The 33.3 per cent stake of Lowe’s has a book value of nearly $A900m, and the company has advised that its accounts for the December 2015 quarter will include a write-down of its investment. Meanwhile, Colleen Penhall of Lowe’s says the joint venture partners were too aggressive in their initial approach to opening Masters stores.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, LOWE’S COMPANIES INCORPORATED, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, HYDROX HOLDINGS PTY LTD

Woolies’ $2b Masters sale

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Original article by Sue Mitchell
The Australian Financial Review – Page: 1 : 19-Jan-16

Woolworths has decided to exit home-improvement market by selling or winding up the Masters chain. Investors welcomed the decision of the board, with Woolworths shares rising 4.3 per cent to $A23.65 on 18 January 2016. Masters generated operating losses of $A245 million to $A300 million a year.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, LOWE’S COMPANIES INCORPORATED, COLES GROUP LIMITED, KMART AUSTRALIA LIMITED, ALDI STORES SUPERMARKETS PTY LTD, BIG W DISCOUNT STORES, PERPETUAL INVESTMENTS, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S CORPORATION, BUNNINGS GROUP LIMITED, WESFARMERS LIMITED – ASX WES, BIG W DISCOUNT STORES, HOMEBASE, HOME TIMBER AND HARDWARE, DEUTSCHE BANK AG, MITRE 10 LIMITED

The Dick Smith dilemma

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 14-Jan-16

A Roy Morgan Single Source survey has found that 1,121,000 Australians aged 14+ shopped at a Dick Smith store in any four weeks during the year to September 2015. Some 82 per cent reported that they were satisfied with their retail experience. Both of these figures are down since September 2011, when some 1,511,000 shoppers passed through the Dick Smith check-outs in an average four weeks, with an 83 per cent satisfaction rating. Betta Home Living, Harvey Norman and Retravision have also seen their customer numbers fall over the last few years (although Betta still managed to increase its satisfaction rating from 83 per cent to 93 per cent during this time).

CORPORATES
ROY MORGAN RESEARCH LIMITED,{SPAC}DICK SMITH HOLDINGS LIMITED – ASX DSH,{SPAC}BETTA HOME LIVING,{SPAC}HARVEY NORMAN HOLDINGS LIMITED – ASX HVN,{SPAC}RETRAVISION (AUSTRALIA) PTY LTD,{SPAC}JB HI-FI LIMITED – ASX JBH

Will three new Costco stores propel the retailer past a million Aussie shoppers in 2016?

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 14-Jan-16

A Roy Morgan Single Source has found that in the year to September 2015, a total of 667,000 Australians aged 14+ (3.4 per cent) were Costco shoppers (people who visit in an average four-week period and/or say they mainly or sometimes shop there). Of all these Total Costco shoppers, 420,000 (63 per cent) actually shop there in an average four weeks – a proportion well below the 80-90 per cent among Woolworths, Coles, IGA or ALDI shoppers. Each new Costco store adds new shoppers overall, with growth strongest when a new city gets its first outlet. The survey also shows that the wealthiest fifth of Australians by socio-economic status are almost 50 per cent more likely than average to shop at Costco. This AB quintile makes up 29 per cent of all Costco shoppers, and another 25 per cent are in the second-to-top C quintile.

CORPORATES
ROY MORGAN RESEARCH LIMITED,{SPAC}COSTCO WHOLESALE AUSTRALIA PTY LTD,{SPAC}WOOLWORTHS LIMITED – ASX WOW,{SPAC}COLES SUPERMARKETS AUSTRALIA PTY LTD,{SPAC}IGA,{SPAC}ALDI STORES SUPERMARKETS PTY LTD