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Accenture: Retailers are scaling back global expansion

BY CSA STAFF

NEW YORK — The world’s largest retailers have been scaling back their global expansion activities, particularly in Asia, and turning their attention inward by integrating operations and strengthening their store, Internet and mobile sales channels, according to a new report by Accenture.

The Accenture Globalization Index, which analyzes Planet Retail data for nearly 500 of the largest global retailers and examines their entry into new markets, reveals that retailers entered 17 markets in the October 16, 2012 — January 15, 2013 quarter, down from 43 markets in the year-ago period. (New-market entries include the opening of a new retail format — physical store or website, launch of a new country-specific website, acquisition of a company in a target market, creation of a joint venture or launch of a franchise in a target market.)

Big retailers made five market entries in the United States in the July 15 — Oct. 15 quarter. Additionally, U.S. retailers launched the highest number of overseas expansions — 14 out of a global total of 43 — during the period, as well as in the Oct. 16 — Jan. 15 quarter, accounting for seven out of 17 expansions globally.

“It (the U.S. market) continues to be an extremely attractive established market for retailers to enter, either as a location for a flagship opening or as part of a larger market-entry strategy,” said Chris Donnelly, global managing director of Accenture’s Retail Practice.

Retailers were less focused on expansion into Brazil, Russia, and India in the first quarter. In fact, Brazil and Russia recorded just one new retail market entry each and India had no recorded retailer market entries. Market entries into Brazil did increase slightly, however, with three market entries recorded in the second quarter.

“These findings suggest that retailers are already eyeing the next big thing for international growth,” said Donnelly. “Previously, Brazil, Russia and India were a greater focus for retailers seeking to expand into new markets. The experiences of the early retail entrants shed light on the challenges they faced and provided the next wave of entrants with more information about the risks and rewards.”

Moves by retailers into the six key emerging Asia markets — China, Indonesia, Kazakhstan, Malaysia, Pakistan and Thailand — fell significantly — from 13 out of the 43 new-market entries during the first quarter to just two in the second quarter. Accenture believes the drop indicates a retrenchment by retailers as they turned their attention from international expansion to multichannel reorganization.

“The operating model and supporting infrastructure required by retailers to meet their customers’ expectations for a seamless experience across all available channels is both time- and capital-intensive,” Donnelly explained. “These results suggest that retailers are focusing more on getting it right at home before exporting it internationally. Part of their effort to integrate the ecommerce experience into the main business may require a reorganization of the roles and responsibilities of the company’s top management team, which may be reflected in the decline seen in international expansion as retailers turned their attention to strengthening their internal structure.”

Other highlights of the study include:

The most popular modes of market entry globally in the first quarter were organic growth — 17 of 43 market entries — followed by website launches with 13 market entries.

During the second quarter, franchise expansion was the leading mode of market entry, with eight entries recorded. However, organic growth and website launches accounted for the vast majority of the other market entries during this period.

Apparel retailers recorded 15 market entries in the first quarter of monitoring and also led the market entries in the second quarter, representing five of the 17 entries recorded.

Of the entries recorded between July and Oct., 13 were conducted through physical store openings and two through website launches.

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Safeway milks social media with dairy contest

BY CSA STAFF

PLEASANTON, Calif. — Safeway’s Lucerne brand cow is the face of the company’s eighth annual Lucerne: The Art of Dairy art contest. Safeway chose nine student finalists whose life-size fiberglass cows stand to win one of them a $30,000 grand prize.

According to Safeway, the contest joins nutrition with artistic talent and ingenuity, but it is also a way for the company to engage shoppers via the contest’swebsite, where the public is invited to vote for their favorite cows. Voting will continue through Friday, May 17.

Safeway is giving potential voters some additional incentive to vote. Every 100,000th voter will receive a $100 Safeway gift card, up to the one millionth voter. Furthermore, Safeway is inviting the public to tweet a picture of their favorite Lucerne product from now through May 17 with hashtag #artofdairy, along with the reason they love that product, for a chance to win one of 10 Safeway gift cards valued at $100 each.

Since the inception of the Art of Dairy contest in 2005, Lucerne has contributed more than $373,000 to schools, teachers and students. This year, more than 6,400 entries were received from schools across the country.

In May, Safeway’s YouTube page will chronicle the artistic process of each of the finalists. The finalist cows will be on display in stores, and winners will be announced in early June.

The contest winners will share approximately $46,000 in prizes with their art teachers and their schools’ art programs. The grand prize winner will receive $20,000 for his or her school’s art department, plus $5,000 each for the winner and teacher. The first prize winner receives $5,000 for his or her school’s art department, plus $2,500 each for the student and teacher. In addition, one honorable achievement winner and teacher will each receive $1,000. The remaining six finalists will receive $500 gift cards. Plus, the high school that sent in the most entries per capita won $1,000 as part of the Teacher’s Incentive Contest. This year’s winner, Kearny High School of San Diego, Calif., took the prize with an impressive entry submission rate of almost 8%.

The Art of Dairy 2013 finalists are Gissella M., Weber Institute, Stockton, Calif.; Hagen A., Northwest Career and Technical Academy, Las Vegas, Nev.; Rachel R., Sehome High School, Bellingham, Wash.; Sierra N., Sandy High School, Sandy, Ore.; Kayla A., Northwest Christian School, Phoenix, Ariz.; Yul J., La Veta High School, La Veta, Colo.; Melissa P., Tinley Park High School, Tinley Park, Ill.; Riley K., Loudoun Valley High School, Purcellville, Va.; and Nhung (Julie) L., South Grand Prairie High School, Grand Prairie, Texas.

Safeway operates 1,641 stores in the United States and western Canada.

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Canadian hardware retailer appoints new EVP

BY CSA STAFF

BOUCHERVILLE, Quebec — Canadian hardware retailer and one-time Lowe’s buyout prospect Rona has appointed Alain Brisebois the company’s new EVP and chief commercial officer.

Brisebois will seek to improve operational efficiency and synergy among the company’s purchasing, merchandising, procurement and marketing activities.

"I’m happy to rely on Alain’s extensive experience in retail to help us review our business processes, improve our efficiency and offer our customers a better shopping experience," said president and CEO Robert Sawyer.

Alain Brisebois is a retail veteran and has held numerous strategic positions at major retailers for 30 years. He worked for Couche-Tard since 2008, where he served as VP of purchasing and supply chain, then as SVP of operations in 2010. He also occupied key positions at Metro Inc., including SVP of the Ontario division.

Brisebois has a bachelor’s degree in business administration from HEC Montréal.

Rona is the largest Canadian distributor and retailer of hardware, home renovation and gardening products. The company operates a network of more than 800 corporate, franchise and affiliate retail stores of various sizes and formats under different banners, and a network of 14 hardware and construction materials distribution centers. Rona is also a leader in the specialized plumbing and HVAC market, primarily serving commercial and professional customers with a network of close to 60 sales outlets and four distribution centers across the country. With close to 28,000 employees, the RONA store network generates consolidated sales of $4.8 billion. Sawyer was named president and CEO of the company in March.

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