Thursday, November 04, 2004


ASDA launches ethnic haircare range
A haircare range for black and mixed-race women is launching in Asda in a bid to become the first mainstream UK brand in the £50m sector. Shadez, which is manufactured by Creightons, maker of The Real Shaving Company line, was developed in the US in collaboration with a UK trichologist. It will be backed by a £500,000 promotional budget in its first year. The mixed-race demographic is the (UK's) fastest - growing, but when it comes to haircare, they don't know where to go. The range would fill a gap in the market currently served only by “ethnic market stalls”.
Date: November 2004

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Boots launches Derma-Skincare Advice Centres
UK drugstore chain “Boots The Chemists” began rolling out Derma-Skincare Advice Centres into 80 stores last week. Each location will be equipped with a dedicated counter within the outlet’s skincare area, complete with an advice space and consultant. Derma-Skincare advisors are fully trained to counsel on all aspects of skincare, undertake skin diagnosis and make product recommendations. Boots carries derma-skincare brands RoC, Skin Doctors Dermaceuticals, Avène, Couvrance, A-Derma, Ahava, Eucerin, and starting in spring 2005, Murad.
Another addition for springtime next year will be a skincare diagnostic tool to measure skin moisture, sebum levels, elasticity, pigmentation as well as facial lines and wrinkles.
Date: November 2004

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Tesco checks out wearable computers
Every little helps as retailer equips staff with mobile client workstations
Tesco will equip its staff with $9m worth of wearable computers in a bid to boost fulfilment efficiency for customer orders placed over its website.

The largest grocery supermarket company in the UK has signed a deal to purchase several thousand Xybernaut Atigo mobile and wearable computers for deployment to more than 300 grocery stores within its UK operation.
An initial rollout of 1,300 Atigo units will be shipped pre-configured with Tesco's client workstation and enterprise network applications.
Xybernaut will also configure the units with predetermined wireless communications capabilities optimised for interoperability with existing and planned Tesco communications systems.
"We wanted a product to make our in-store operations better and simpler so we can continue to improve our customer offer," said Mike Yorwerth, head of operations and infrastructure for
"After evaluating several manufacturers, we quickly realised that the Xybernaut Atigo offered us the most flexibility and performance to meet our needs."
The supermarket chain is also evaluating additional Atigo applications for supply chain, logistics, inventory/stock management, promotional efforts, remote register/cashier services and employee productivity.
In addition to the Atigo hardware order, the Xybernaut services team has been engaged to provide Tesco with a customised build and installation process.
Source: Vnuet. November 2004
Write: by Robert Jaques
Picture: $9m worth of wearable computers

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Grocers blame high operating costs for expensive goods
The representative association for 4,500 independent grocers today told an Oireachtas committee that food prices would fall if the high cost of doing business in Ireland is tackled. "Independent grocers are able to invest in their businesses and compete with the multiples because the Groceries Order bans predatory tactics which would wipe them out," RGDATA told the committee. "As far our members are concerned there is no great mystery as to why food prices are dearer here than other countries. The plain and simple reality is that doing business in Ireland costs more than elsewhere throughout the Euro zone," RGDATA Director General Tara Buckley told the committee. "There were no windfall gains being made by independent retailers. The net margin earned by our member’s averages at 2.65%. This is a very hard-earned profit in a very competitive environment."

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Rising prices, taxes blamed for home appliance market slump
Don't look for healthy orders any time soon if you are dealing with a retailer in Poland's embattled consumer electronics market. The sector itself is deeply pessimistic and Euler Hermes Credit Insurance estimates that selling home appliances is now one of the riskiest businesses in the country.
In fact, some are predicting the demise of several retailers with pockets too shallow to deal with drastic marketing and more sophisticated consumer demand.
In particular, the final quarter of 2004 may prove the undoing of companies which are not able to pass on the big supplier discounts that are currently the norm.
Retailers in the south of Poland could be among the worst affected, as that region is predominantly populated by smaller, less powerful distributors, while a new, larger Czech retail network is currently entering the southern sector under the brand OK Polska, hoping to win business with incentive marketing and more attractive prices.
It's a case of a few months making all the difference in the home appliance business, with the watershed coming at the time when the country gained access to the EU in May 2004.
Before that date, retailers were basking in lucrative times. Merloni, the Lodz-based appliance producer, recorded a 50% growth in sales over the first four months of 2004 compared to the same period in 2003.
But an increase in taxes, coupled with soaring retail prices of raw materials such as steel and fuel (to harmonise with EU pricing), produced a very different set of figures for retailers after celebrations for the accession had died away.
Sales dropped significantly following marginally better months in August and September, as companies found themselves with warehouses full of unwanted stock. Now they look none-too cheerfully towards the festive weeks of November/December leading into Christmas as the last chance to salvage a dismal year.
Producers are likely to share in the pain with the country's distributors because it is overall demand that is falling away, a longer-term phenomenon that simple cuts in marketing and advertising are unlikely to solve.
Write: by Ella Sledz, Warsaw Consultant. November 2004

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Gem stones and exaggerated styles in Paris optical fashion - report from Silmo 2004, Paris
The new optical looks into 2005 seemed to dwell on jewellery for the eyes, with refinement and exuberant styles making their mark in a large number of instances, with the 22nd to 25th October international optics and eyewear event of the year in Paris attracting some 40,000 visitors in Paris-Porte de Versailles.
About 90 exhibitors attending the international optics and eyewear exhibition were from Hong Kong, amid a field of 1,000 representative organisations from around the world.

Eyewear is very much an integral part of fashion and follows its twists and turns at every step.
A look at the trendsetting Italian eyewear fashion runway organized by ICE (the Italian Institute for Foreign Trade) and Anfao (the Italian Optical Goods Manufacturers' Association), offered a preview of the new collections for Spring/Summer 2005 by leading Italian companies during a fashion event just prior to Silmo.

Among the main themes was a trend towards rhinestones and other gems, which are set to glamorise faces again, often in an exaggerated, almost surreal way. Sometimes glasses highlight complicated design, on other occasions emphasising simple and pure lines, transforming eyewear into jewellery.
Decoration was taken to the extreme at Silmo, emphasising personal or exclusive touches. The message was all about seduction and luxury! A special emphasis has been placed on logos, which are becoming part and parcel of eyewear.

Sport and fashion fusion, concepts in eyewear
The concept often seen was of refined sport and fashion expressed by way of a new, blatantly elitist attitude. This trend reeked of exclusivity. Glasses were exaggerated, wraparound, and clearly sporty, with some items harking back to the 1970s or 1980s.

Gardens and life sustaining opportunities were conspicuous. The romantic and emotionally-striking nature of a wild garden, together with the harmony of natural shades in green, transparencies, lilac, pink, pale colours - as well as deeper or more vibrant hues - were all closely followed by buyers.

In fashion, the romantic garden style finds expression in light and almost impalpable and romantic fabrics like jersey, silk and cotton voile. In eyewear, it is characterized by undefined and overlapping colours, the marriage of nature and technology.

Styles, motifs, cultures, places, eras - concepts and their opposites combined freely. Colours represented energy, sharp and warm such as purple, spicy reds, orange, blue, fuchsia and yellow. There were also motifs such as checks or stripes, to make styles personal. By contrast, this approach followed pop music and the Matrix generation.

Red pervaded many of the eyewear collections. The colour is not always expected to be matched with others in clothing, but is perfect when worn on its own to create strong contrasts, as an attention-grabber. Red communicates a certain mood and transmits positive energy to materials and renews minimalist lines, with an eccentric touch.

Inspired by TV characters and cartoons, Silmo was again a child's world. Gone were the models inspired by adult styles and "in" was eyewear that respects the shape of children's faces. When it comes to colours, anything goes - the brighter the better, such as orange, red, yellow, pink, blue and light green.

Oakley presented its new Monster Doggle in white for a new lifestyle generation of urban eyewear - basically, "hybrid" male and female. The model is featuring an O Matter frame - light and comfortable - from injected and molded plastic. The plutonite lens is made from polycarbonate. The geometry features 8.75 base curve and is spherical, with two lenses. The model will be available within weeks, retailing at between Euros 110 and Euros 180 (US$132 and US$216).

The new Boutique fashion sun wear from Daniel Swarovski was crystal and extravagant. Different crystal colours were smartly blended in sophisticated mosaics, with an almost textile-like look and feel. The Boutique collection came in seven different styles and in four colours, with the shimmering crystal elements linking the lenses to the extra-wide temple. The Boutique models retail at between Euros 600 and Euros 700 (US$720 and US$840).

Gravity-defying lightness was demonstrated by the filigree frame model R 4532 from the Ti-Lite line by Rodenstock. The actual frames of high-quality beta titanium weigh only 3 grams, and with glass about eight grams. Thanks to advanced technology, no weakening welding points are necessary.
The new models are now available in fresh colours from gold to graduated shades in red, blue and brown at around Euros 290 (US$348) and available to the specialist trade by the end of 2004.

Launched just a month before the show, on display was a fascinating new design concept from Rodenstock, combining plastic with steel. The metal frames were equipped with temples of Trogamide®, a high-tech plastic, providing translucent colour, very high break resistance and durability. Metallic inlays in the temples are not necessary any more. The new models will be available at about Euros 170 (US$204) to the specialist trade.

Anti-fog and youth designs more visible
ClimaCoolTM technology from Adidas is a dynamic ventilation technology, allowing for air to be directed in a way that does not disturb the eyesight but rather manages moisture and prevents fogging. The ClimaCoolTM item, being especially designed for running, will be available on retail from between Euros 170 and Euros 185 (US$204 and US$222), while the optical clip to be worn with the glasses will cost about Euros 32 (US$38.4).
The growing independence typical of today's youth inspired Adidas to create its collection, Urban Youth, featuring PowerflexTM and Performance SteelTM - an ideal match for the tastes and styles of modern kids and teens. Adidas holds the worldwide patent for using Performance SteelTM and will sell the different models at a recommended retail price of Euros 123 (US$147.6).

Bobby To, managing director of Best Work of Hong Kong, presented his collection of sunglasses for the new season, aiming at innovative and original solutions - and with some surprising effects.
To sees rising demand in sunglasses as a true fashion accessory and component of style. For the coming season he relies on contrasting colours and sees a tendency for bigger frames. Depending on the country, To's eyewear retails at about Euros 40 (US$48).

From New Henry Optical Manufactory based in Hong Kong, Eric Yip, sales and marketing manager, said the coming season will see a strong increase in plastic eyewear for sunglasses and optical eyewear.

The colour red, along with colour combinations with red, such as red/black, red/white or red/crystal, are set to be highly popular for 2005, said Yip.
He also believed that for 2005/2006, material combinations of plastics with metals such as stainless steel, titanium and aluminium will be fashionable. Wholesale prices for eyewear featuring material mixes are likely to be at around Euros 5 (US$6).

Hong Kong's Kelfred Optical Ltd specialises in manufacturing and exporting eyewear models in an average wholesale price range of between Euros 2.9 and Euros 5 (between US$3.50 and US$6).
The company's proprietor, Kwok Kwan Fai, expects an upturn in the world economy and with it greater disposable incomes for better-styled glasses. Due to the strong Euro, eyewear turnover figures are favourable to Hong Kong manufacturers, said Kwok. Especially in large markets, such as Turkey or Spain, quantity sales for low priced models (from Euros 1.2 to Euros 2.5 or US$1.50 to US$3) are on the rise.
According to European fashion dictates, colour combinations are in demand, with acetate rather than metal frames for the coming season.

Optical neck chains are making a comeback
Optical neck chains bounced back at Silmo 2004. Formerly thought of a purely utilitarian accessory, today's neck chains are important to fashion victims, active modern women and trend-conscious men.
Daniel Swarovski Paris Crystal Eyewear launched his new collection of glasses neck chains featuring yellow or white 23 ct gold plated chains decorated with an ornate cylinder made up of tiny crystals corresponding to crystals of the company's evening eyewear - featuring light blue, crystal, topaz or amethyst.
High-end neck chains are retailing at around Euros 100 (US$120).

Locaplast/FJO is a specialist and according to proprietor Jean Paul Deveney there is rising demand for metal chains coated with coloured textures. Also in demand are gold plated chains with a jewelled look and specialist neoprene auto-block chains. Chains are retailing at an average price of between Euros 3.50 and Euros 14 (US$4.2 and US$16.8).

Said Konrad Saur from Carl Zeiss AG: there is a strong polarization of either low-price models or high quality, pricey models. Carl Zeiss deals into the concept of tailor-made lenses offering a unique selling point in order to sharpen the competitiveness of the specialist trade.

Relaxed Vision Terminals allow patients to use state-of-the-art centration technology, so that lenses are precisely fitted to the individual. The interactive machine records the shapes of the lenses, calibrates them and determines the centring values to the nearest 1/10th of a millimetre. The more relaxed vision leads to less eyestrain. The easy and fast handling of the terminal is available from Euros 7,000 (US$8,400) and up.
Write: by Silvia Fricker, Paris. November 2004
Picture: Adidas' ClimaCool

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Metro Scaling up Investment in China by 600 Million Euros
Metro, one of the world’s largest retailers from Germany, plans to scale up investment in China by 600 million euros over the coming 3 to 5 years. The investment will be devoted to open 40 metro malls in China which source and distribute local products on their own. Such announcement was made by Metro’s president Dr. Hans Joachim Korber while attending the inaugurating ceremony of Metro Training Center in Shanghai on November 1.Dr. Korber says China is a major component of Metro’s market expansion plan in Asia. The company plans to open 40 new malls in China over a course of 3 to 5 years. 2 will be opened by the end of this year. Another 10 are under planning for 2005 when China is to lift the geographical constraints on the opening of branch operations by foreign retailers and wholesalers. In so doing, Metro will be able to expand its business into cities where Metro is yet to build its presence.
Write: LuisB. November 2004
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China food retail sector set to boom in 2005
The deregulation of the China retail market is set to provide significant opportunities for international food retailers next year as restrictions that have limited foreign players to joint ventures in the major conurbations are lifted
It is now popular knowledge that China holds the potential to become the world’s largest retail market, the deregulation of the China market at the end of this year will increase opportunities for foreign retailers no end, allowing them to expand much more freely.
The saturated food retail markets of North America and Europe mean that key players such as Wal-Mart, Carrefour and Tesco will all be clamouring to increase their foothold on the China market, where a fragmented food retail sector combined with outstanding market growth are further signs that point towards significant prospects.
This week Metro announced plans to add 12 more outlets to its existing 21 warehouse cash and carry operations in the country. Carrefour has even more outlets than Metro and in turn has a slightly higher turnover than the German retailer. It is planning to open a further 21 ‘Champion’ discount stores to add to its 53 existing hypermarkets in the country.
Adding to the competition is the relatively recent arrival of British retailer Tesco. Its joint venture with Taiwanese retailer Ting Hsin has given a strong start in the market, with 30 hypermarket outlets.
Gregory views Tesco’s move as a good one, although he adds that joint ventures will not prove the way forward for the big retailers in the future.

Currently the biggest international retailers in China are Carrefour and Wal-Mart. But with Wal-Mart poised to expand aggressively in 2005, many industry experts expect that it will take the lead next year. Last year Wal-Mart and Carrefour were neck and neck with turnovers of $1.6 billion, while Metro followed closely with a $1.3 billion turnover.
But the domestic retailers should not be forgotten in this equation. Currently the leading player is Lianhea, which in 2003 had a turnover of $3.2 billion. The company was expanding rapidly during the course of this year, and, like its foreign counterparts, is set to increase rapidly in the year ahead.
Either way, with deregulation just around the corner, the race is well and truly on to carve up the biggest slices of the China food retail segment.

The deregulation of the market means that food retailers are no longer obliged to enter the market through a joint venture. This is likely to spell the end of such arrangements for the biggest international players. On top of that, the potential for these players has also been increased because geographical restrictions on where new retail outlets can be set up have also been lifted. This means that retailers are now likely to expand outside of the three main urban conurbations of Beijing, Shanghai and Guandong into smaller tier one and two urban areas and cities.
Write: LuisB. November 2004

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November Consumer Outlook: Spending Should Continue Easing From Lofty Levels
Retail Forward's Index of Future Spending indicates that consumer spending should continue to moderate in November from the strong surge posted in the first half of the year. The Index eased to 97.9 this month from a 100.7 reading in October, likely depressed by pre-election jitters.
"The downshift appears to have been exaggerated by the harsh election environment. With the voting over, the negative impact of the election on consumers' moods should dissipate, paving the way for a solid holiday shopping season," said Steve Spiwak, an economist with Retail Forward.

The Index now stands near its levels during the 2003 holiday, which points to retail sales growth this year that is similar to the healthy shopping pace turned in last holiday but weaker than the blow-out growth during the first half of 2004.
In fact, ShopperScapeTM results show there is still plenty of time for consumers to regain cheerier holiday spirits. Nearly half of consumers haven't started shopping for holiday gifts yet, and those who have still have most of their holiday budgets left to spend.
This month's survey also indicates that Wal-Mart continues to expand its share of the food market beyond its core Down Market customers, which bodes well for the world's largest retailer during the holidays.

Markets Moderate Up and Down
The indices for both the Up and Down Markets slipped in November, pulling the overall Index and the near-term outlook for spending lower. However, the index for the large Middle Market segment, which accounts for nearly half of consumer spending, remained nearly stable with a slight increase.
- The index for Up Market households (incomes greater than $75,000) slid to 94.2 this month from 100.5 in October, suggesting the recent strong pace of spending in this segment should weaken in November. A falloff in home buying and weaker assessments of job security compared with high levels in the prior month dampened the outlook, offsetting greater optimism about the performance of investments.
- Down Market households (incomes less than $22,500) saw their index moderate to 101.8 in November from 105.7 in October. Higher debt burdens compared with the prior month fed that falloff even as views of job security and income growth bounced higher. Debt burdens were boosted by an increase in home buying in this segment.
- The index for Middle Market households (incomes between $22,500 and $75,000) improved slightly to 99.9 in November from 99.2 the month before. The improvement was driven by the cash flow and wealth effects of better job security and investment performance, which should feed an up-tick in spending. A weaker pace of home buying tempered the outlook for this segment.
Hostile Election Making Holiday Outlook Less Cheery?
The latest ShopperScapeTM indicates that shoppers are exhibiting more caution about holiday spending as the season draws nearer. Compared with October survey results, more consumers this month said they plan to reduce their holiday spending versus last holiday. This was true across all income segments.

However, the election cycle was reaching a fever pitch just as the latest survey of consumers was fielded. It's likely that the hostile tone of the election and the uncertainty surrounding the outcome contributed to the heightened pessimism on the part of consumers this month in an otherwise favorable spending environment. Consequently, the end of the elections should spark some renewed consumer optimism before the holidays.
- A higher proportion of all shoppers in November (31%) said they plan to spend less on holiday gifts compared with last holiday, up five percentage points from October. The proportion that plans to spend more held nearly steady (Figure 2).
- Down Market shoppers especially showed increased pessimism. Thirty-eight percent said they plan to spend less this holiday compared with 32% last month.

Holidays Still Revving Up
Although some shoppers may not currently be planning to increase their holiday gift spending, stay tuned. Only about half of consumers have begun their holiday shopping, and those who have started still have most of their holiday budgets left to spend. So there's still hope that good news on the political and/or economic fronts could spur them to open their wallets wider as the holidays approach.
- Among all shoppers, 47% said they have not yet started shopping for the holidays (Figure 3). Down Market shoppers were most likely to have said they have not yet started.

- Those who have commenced holiday shopping have spent about 29% of their holiday budgets so far (Figure 4). Down Market households have spent the highest proportion of their budgets, while Up Market households have spent the lowest.

Many Holiday Shoppers Still Cost-Conscious
Holiday gift purchase plans show that consumers remain in a practical state of mind this year, with some exceptions regarding shopping for their kids. Affordable gifts will take priority over unique gifts this holiday season as many consumers, particularly those in the Down Market, remain price sensitive.
- ShopperScape results show that gift cards will get even hotter this year compared with 2003 (Figure 5). Twenty-six percent of all consumers say they plan to spend more of their holiday budgets on gift cards and gift certificates than they did last year.
- Other popular categories for the upcoming holiday season include clothing, electronics (especially among Up Market households), and toys and games. Conversely, it appears that sporting goods sales will do well to match last year's holiday levels.
- Over half of all consumers are more concerned about finding the lowest price for holiday gifts this year. Even in the Up Market-the least price-sensitive group-50% place importance on low cost while only 32% give priority to finding unique gifts as key buying criteria for holiday gifts.

Wal-Mart Makes Gains in Up Market Groceries
ShopperScape™ results indicate that one-fifth of all groceries are now purchased at Wal-Mart or Wal-Mart Supercenter (Figure 6). This market share alone is enough to worry other grocery retailers, and they're probably not even surprised that Wal-Mart is gaining ground among the Down Market. But the recent two percentage point increase in share among Up Market households is downright scary to some. We don't think that the currently stable share among the Middle Market, at 21%, will be much consolation, either.

Source: Retail Forward, Inc. November 2004
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