Study: Amazon sees double-digit growth in consumables
Despite a decline in the overall health & personal care (HPC), baby and grocery categories industry-wide, Amazon is grabbing double-digit wallet share.
This was according to the “Health & Personal Care” report from One Click Retail. The company uses a combination of website indexing, machine learning and proprietary software to estimate weekly online sales of individual SKUs on Amazon. The total HPC and grocery markets experienced declines of 1% and 10%, respectively in the first quarter of 2017 due to more consumers shifting away from brick-and-mortar and toward e-commerce for consumables. That said, Amazon’s sales of consumables in the HPC, baby and grocery groups saw double-digit growth for the period.
The report revealed that Amazon is the best growth opportunity for HPC brands, given that total HPC sales in the United States increased only about 1% in Q1 2017. Amazon already earned $1.3 billion, or 27.5% of the total annual sales, in 2016.
The real “MVP” of Amazon's HPC product group continues to be Prime Pantry. With more shoppers buying into exclusive Amazon Pantry access, the growth rate for HPC (and most other product categories) is much higher in Pantry than in the general marketplace — and top categories are multiplying by hundreds of percentage points. The leading Amazon HPC category is hair care in the U.S. (85% growth), and household consumables (440% growth) in the U.K., the report revealed.
For the quarter, total U.S. baby products revenues dropped 10%. This slide mainly took place in offline sales, allowing e-commerce market share to rise from 20% to 22%.
The baby products category enjoyed the highest e-commerce CPG penetration, with Amazon having 43% of the total. First quarter Amazon U.S. sales of diapers increased 30%, baby food 15%, and baby formula 80%. In both the U.S. and the U.K., Amazon saw triple-digit growth of top brands like Pampers (700% increase), data revealed.
According to the report, there was a 30% growth rate in Amazon’s grocery categories averaged across the U.S., U.K. and Germany. This was driven by the growing adoption of Amazon Prime in first quarter 2017.
Traditionally, grocery has been less susceptible to the shift toward e-commerce (in 2016, only 5% of U.S. grocery sales occurred online). According to Amazon sales data calculations for first quarter 2017 however, Amazon's grocery sales outpaced that of the total market 15-fold.
"The popularity of perishables is growing rapidly, not only because consumers are becoming more comfortable with buying their groceries online, but also because Amazon is improving its delivery times and offering more fulfillment options," explains Spencer Millerberg, One Click Retail CEO.
He estimated that there are now more than 65 million Amazon Prime subscribers, “and they are more likely to buy their groceries online than non-subscribers. Last year's sharp rise in Prime membership has continued into Q1 2017,” Millerberg said.
“With more shoppers buying exclusive access to Amazon Pantry, the rate of growth for most consumables is much higher in Pantry than in the general marketplace, with top categories multiplying revenue by as much as five times,” he added. “As Amazon continues to corner the market, CPGs in the U.S., U.K. and Germany would be smart to engage with Amazon Prime members as their target audience."
Walmart shareholders approve directors, compensation
Walmart shared the results of its 47th annual shareholders meeting held June 2.
The company reported that shareholders approved the election of each of Walmart’s 11 director nominees. Each director nominee received affirmative votes from approximately 92.7% or more of the shares present or represented by proxy at the meeting. The approved directors are James I. Cash Jr., Timothy P. Flynn, Carla A. Harris, Thomas W. Horton, Marissa A. Mayer, C. Douglas McMillion, Gregory B. Penner, Steven S. Reinemund, Kevin Y. Systrom, S. Robson Walton, and Steuart L. Walton.
Shareholders voted to approve the compensation of Walmart’s named executive officers, with approximately 98.74% of the shares voting to hold such future advisory votes annually. The board of directors had recommended a frequency of one year, the company reported.
Shares also approved the compensation of the chain’s named executive officers described in Walmart’s 2017 proxy statement, with approximately 83.14% of eligible shareholders voting in favor of this proposal. The board of directors had recommended a vote for this. proposal.
The group also ratified the appointment of Ernst & Young LLP as Walmart’s independent accountants. Approximately 99.23% of eligible shares voted in favor.
The board of directors had recommended a vote against each of the four shareholder proposals, and each proposal failed to receive affirmative votes from a majority of the total shares and, accordingly, they did not pass. These were a request to adopt an independent chairman policy (approximately 15.15% of the shares voted in favor); shareholder proxy access (although the proposal was not formally presented at the meeting 26.24% of the shares voted in support of this proposal); request for independent director with environmental expertise (approximately 2.13% voted in favor), and request for annual reporting of additional demographic information about full- and part-time associates in the U.S. (less than 0.01% of the shares were in favor).
The official voting results for each item voted on by shareholders will be disclosed in a report to be filed next week with the Securities and Exchange Commission, according to Walmart.
Consortium makes ‘stalking horse’ bid for upscale fashion retailer
BCBG Max Azria Group LLC is getting a shot at keeping its brand alive.
A consortium lead by brand licensor Marquee Brands LLC is preparing a stalking horse bid for BCBG Max Azria Group LLC. If successful, this move would allow the U.S. fashion house to exit bankruptcy, according to Reuters.According to sources in the report, Marquee has partnered with Global Brands Group Holding Limited, a spin-off of global exporter Li & Fung Ltd., which already has a licensing agreement for some of BCBG's brands. Liquidators Hilco Global and Gordon Brothers are also members of the consortium.
Other potential bidders include buyout firm Sycamore Partners and brand licensor Bluestar Alliance LLC, the sources said in the report.
According to sources in the report, a successful starting bid for BCBG must total at least $150 million, and a U.S. bankruptcy court judge must approve the final sale. This stalking horse bid would set a floor to ward off low offers among any other proposals in a bankruptcy auction. This event could be held as soon as this month.
The chain, which filed Chapter 11 in March, listed assets in the range of $100 million to $500 million, and liabilities in the range of $500 million to $1 billion. The retailer has already closed 120 stores as part of its restructuring efforts. BCBG currently operates 73 retail stores, and 276 partner shops. If the bid is accepted, it would allow the company to exit bankruptcy with a footprint of 15 to 20 stores, according to the report, which BCBG has neither commented on nor confirmed the report.
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