SUPPLY CHAIN

Starbucks eyes India

BY CSA STAFF

New York City — Starbucks Coffee Co. said Thursday that it signed a memorandum of understanding with Tata Coffee Ltd., an Indian coffee bean provider, which will allow Starbucks to source and roast coffee beans at Tata’s Coorg, India facility.

In addition, the deal will allow the companies to "explore the development of Starbucks retail stores in associated retail outlets and hotels," Starbucks said in a statement.

“We believe India can be an important source for coffee in the domestic market, as well as across the many regions globally where Starbucks has operations," said Starbucks CEO Howard Schultz.

Tata has supplied beans to Starbucks in the past.

Although India has traditionally been known as a tea-drinking nation, consumers, especially those in the country’s growing middle class, are increasingly drinking espressos and cappuccino at quick-service cafes that have popped up.

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FINANCE

Retail sales in December rise for sixth consecutive month

BY CSA STAFF

Washington, D.C. — Retail sales rose for a sixth consecutive month in December, with big gains in sales of autos and furniture. The increases lifted sales activity for the year by the largest amount in more than a decade.

Sales rose 0.6% last month to a level of $381 billion, the Commerce Department said Friday, less than the 0.8% economists had expected. However, the increase pushed sales for all of 2010 up 6.7%, the largest annual increase since 1999. Excluding autos, retail sales rose 0.5% last month.

December was the best holiday shopping season for retailers in four years. Revenue at stores open at least a year rose 3.8% from Oct. 31 to Jan. 1, according to the International Council of Shopping Centers.

But the gains last month were smaller than the previous two. Retailers began their promotional efforts much earlier this year, which may have dampened last month’s sales. A huge snowstorm in the Northeast after Christmas also reduced demand.

Non-store retailers, which include Internet sales, saw significant sales growth, with sales rising by 2.6% in December following a 1.9% increase in November. The increase in sales by non-store retailers reflected the strongest growth in over two years.

Sales were strong at furniture stores, rising 1%, and at hardware stores, where they increased 2%.

Sales at department stores dropped 1.9% and were down 0.7% at general merchandise stores. The December declines in activity compared to big gains in November.

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News

Union rabble rousing precedes Massmart vote

BY CSA STAFF

Dow Jones this morning reported that South African retailer and Walmart takeover target Massmart Holdings has given assurances it will continue to honor all agreements with labor unions and local labor laws if the buyout goes through. That’s what Walmart and Massmart have been saying since the deal was announced last year but they have to keep saying it because union activists are everywhere in the world. In this case, a shareholders meeting is planned for next week to vote on the deal and the union known as South Africa Commerical, Catering and Allied Workers Union had previously indicated it would protest at the meeting. Protest what? Not exactly sure, but a high profile demonstration at a company meeting is an opportune time to put pressure on new owners to offer more generous pay and benefits. To do so, the South African union is trotting out familiar arguments that sound as if they came straight from the playbook of the UFCW, Walmart’s nemesis in the United States. The Dow Jones report said the union had accused Walmart of being anti-union and pursuing procurement policies that are damaging to local suppliers and economies.

Well duh! Of course Walmart is anti-union, but that doesn’t mean it will, or could afford to, disregard prior union agreements. As for its procurement policies, they have been known to have a detrimental effect on some suppliers, but all the merchandise the company sells has to come from some where which means a boon for other suppliers. It doesn’t seem to matter where Walmart goes in the world it is dogged by the same arguments it has heard domestically for decades.

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