The Power of Retail

Furniture and home giant Ikea is keen to focus on developing markets such as Russia, China and Eastern Europe after the cut down in spending in some of its major markets. At the opening of its 35th store in the US, located in Brooklyn, NYC, Anders Dahlvig the company’s chief executive stated that the housing downturn in the US had led to the slowdown in its global sales and did not expect a recovery for at least two years. He added that growth in many European countries was slowing down and that “A lot of things are going in the wrong direction.”

Besides the US, countries like the UK and Germany have been badly affected and even strong markets such as Spain have been effected with the downturn. The company’s outlets in Spain and Portugal had a record turnover of GBP1.19 billion this year, an increase of 42% over last years figures. So far the company has 11 stores in Spain and will be opening additional stores in Jerez, Granada, La Coruna, Valladolid and Madrid, aiming for a total of 40 stores by 2020. In total Ikea has 279 stores in 36 countries and hopes to reach 300 by the year end.

Popularity: 13% [?]

Sales for the month of May rose higher than forecasted levels showing that consumers did have more cash in their wallets thanks to the US government’s rebate checks that had been distributed. According to the US Commerce Department, there was an increase in retail sales that was more than double of what was expected by economists on Wall Street. On average sales rose 1.2% as compared to the 0.7 % forecasted by economists, even considering the higher prices for gasoline. One of the only sectors that did not see an increase was the automobile sector.

Popularity: 44% [?]

US bookstore chain Borders announced that it will be selling its 30 bookstores in New Zealand, Singapore and Australia to A&R Whitcoulls. The complete deal is valued at up to the amount of $110 million. A&R already operates 260 bookstores and is owned by Pacific Equity Partners, a private equity firm. The troubled book chain had also put itself up for sale in March this year and it’s main competitor in the US, Barnes & Noble stated that it would be considering a purchase.

Popularity: 38% [?]

Retail developers are changing the way they have done business lately. With the weak US economy, which has made developers wary of starting new projects, developers are instead tweaking existing projects to create new retail formats. As one executive calls it, it is the “intensification” or “densification” of shopping centers that are already present as a way to turn the tide away from an over-malled country.

Developers are looking for new formats and underutilized space that they can use to create something different. According to the chairman and CEO of the country’s second largest developer, General Growth Properties, John Bucksbaum, “Intensifying the use of property is certainly the major innovation.” One of the malls being redevolped by the company in Holladay, Utah is getting offices and residential growth as part of being de-malled. The re-done mall will open in 2010, as a mixed use format with shops, restaurants, cafes, grocery stores, condos, townhouses, cinemas, offices, riverside trails as well as a public plaza.

“You need to give people more choices,” said Scott Schroeder, vice president of marketing and communications for Developers Diversified Realty. “Nobody wants to make eight stops to get what they need.” He noted that the performance of certain specialty retailers and smaller “junior” anchors was an ongoing concern for the industry. “The more we can create a hub that combines value and fashion, the more appeal we have and the more customers we will retain.”

Popularity: 21% [?]

Looking for a job is becoming quite a global activity these days. I no longer matters where you are physically located, as you can easily find any kind of job anywhere in the world. So if you are specifically looking for an IT job, just do an IT job search in the country that you are interested in and you can be sure to find several great options. It never used to be quite as easy and quick as this before, but now being in a different location is no excuse for not being able to find a job. The Internet has made so many things so much simpler for all of us. For a small minority, this might not be a good thing, but for the majority of us it is a great advancement. Good luck on your job search!

Popularity: 27% [?]

Barnes & Noble is making a serious plans to take over Borders bookstore, after the latter announced in March 2008 that it would be putting itself for sale. In a statement issues by Borders, the company stated that it was “in the midst of the strategic alternatives process and has not engaged in substantive discussions regarding any specific transaction to date.” The major source of competition for booksellers has been discounters such as Wal-Mart and Amazon lately.

Analysts surveyed by Thomson Financial expected a profit of 5 cents per share on revenues of $1.17 billion. The estimates typically exclude one-time items. The company reported that same-store sales, or sales at stores open at least a year, declined 1.5 percent in the period.

Popularity: 78% [?]

While we’re on the subject of movies, onto news about Netflix, which changed the way home movie rentals were conducted. The company is now offering its 8.2 million subscribers the option to watch movies on their televisions without receiving any movies in the mail. Since Netflix owns part of Roku, which makes a small box for viewing movies on the television, the company will be incorporating the technology for their current subscribers.

The company will begin selling this device which costs $99 through which customers will be able to play movies and shows on the televisions and not have to pay anything else beyond their annual subscription fee. The company had earlier allowd its subscribers to watch moves over streaming Internet.

“It is the most impressive product we’ve seen attached to a TV this decade,” said Richard Doherty, the director of the Envisioneering Group, a consumer electronics consulting firm. He said that the device is easier to use, with better picture and sound, than competing devices. And it costs much less. “There is nothing like this,” he said.

The biggest drawback to the Roku device is the selection available. Right now, Netflix offers instant Internet viewing of 10,000 movies and television episodes, compared with its inventory of 100,000 DVD titles.

Popularity: 81% [?]

Starbucks announced that it would not be opening too many coffee shops in US till the end of 2011, in an effort to adjust to the slower pace of growth in the US economy. The company will focus on expanding its overseas business in this time frame. Starbucks brought back its founder Howard Schultz in january this year to help turn around the company and create a new niche for itself apart from fast food chains such as McDonalds who are capitalizing on the high cost of coffee at Starbucks.

According to Schultz, the mortgage mess in the US has left consumers with less money to spend on leisure items such as specialized coffee. He added “We strongly believe it is not the competition … We don’t believe that we’ve saturated the market, but we do believe that we have a head wind the likes of which we’ve never seen.”

As an international customer of Starbucks, I am certainly looking forward to this strategy and hoping to see a Starbucks nearby!

Popularity: 30% [?]

I have been sorely disappointed with the way Reliance Fresh is functioning. Most of the times, there is no decent fruit or vegetable in the stores, and even the air conditioning is usually turned off to save costs. The oldest and stalest of produce is displayed and unless you ask for fresher stuff, the staff will not bring any out from the back. They insist that you must buy the older stuff, it is at a lower price after all! What the company is not realizing is that they are turning off consumers by the droves, who are willing going back to the street vendors for their weekly shopping trips.

While the prices might be marginally higher, the fruit and vegetables are of a much higher quality and in the end that is what matters. Consumers who want to save money and like the idea of shopping in a modern retail format, might make the effort to go to another organized store such as Subhiksha or Spencers or 6to10, but only if there is one of these stores close by. Distance to a grocery store is of utmost importance and unless consumers can reach the store easily, they will go back to their old way of shopping.

Popularity: 64% [?]

When it comes to anything technical, there is only one person I need to ask anything and everything. While I am knowledgeable about the basics of tech stuff like computers such as CAT6 and so on, when it gets to complicated territory, I give a call to my trusted tech advisor, who is sure to know the best solution for me. Most companies also follow the same principle and leave all their technical issues to a professional, since there can a lot of damage done if one blunders in without knowing all the details.

Popularity: 45% [?]