Retail round up the Sunday papers
Amazon plans tech assault, Sweet Mandarin sisters secure sauce deal with Sainsbury's and Selfridges, UK will embrace paying via mobile phones in 2013, Paul Smith fashions payout, High street plunges into triple dip, Bingo tycoons hit jackpot with £15m windfall, Shopping centres and retailers suffer despite late Christmas surge, Asda customers left without festive dinners, Lenders in debt battle as they plan HMV revival, Book sales overtake ebook downloads for first time in three years, IKEA to invest £1m on each UK Ikea store to help lift sales further, JD Wetherspoon to open 30 new pubs, Next figures give first guide to festive sales.
Amazon has announced major expansion plans beyond its traditional retail operations that could see it competing with Google and Apple as one of the largest technology companies in the world. A senior executive with the company has told The Sunday Telegraph that Amazon believes its cloud computing operation could end up dwarfing other parts of the business. Andy Jassy, head of the Amazon Web Services division, said the unit was growing so rapidly that it could end up catapulting Amazon past its rival Apple to become the largest technology business in the world. “At the highest levels of this company, we believe that it’s quite possible that AWS ends up being the largest business in Amazon. We believe [that] passionately,” he said.
They shot to fame thanks to Gordon Ramsay and Dragons’ Den. Now the twin sisters who run the Sweet Mandarin restaurant have secured a major deal with Sainsbury’s to sell their sauces. Helen and Lisa Tse, who run the Chinese restaurant in Manchester, secured a deal with Sainsbury’s last month to sell around 20,000 bottles of their gluten-free sauces across 500 stores over Christmas, with further, major orders already set up for next year.
Mobile phones could hit the mainstream as a method of making payments in Britain next year, the boss of Vodafone has claimed – finally helping the UK to catch up with much of the rest of the world. Britain has fallen behind the US and many developing countries such as India and Tanzania in developing mobile phone transfers as a widespread alternative to cash or credit card payments. However, Vittorio Colao, group chief executive of Vodafone, said it is finally set to kick into gear closer to home.
The fashion label founded by Sir Paul Smith has paid £3.3m in dividends after sales edged past £200m. Accounts for Paul Smith Holdings reveal that the retailer delivered a healthy shareholder payout for the year to June 2012 after a dramatic reduction 12 months earlier. The company recorded turnover of £202m, a 3% increase on 2011. Pre-tax profits dropped by 7% to £31.7m but were still significantly ahead of 2010.
High Street stores are already in a triple-dip recession after a sharp rise in the number of shops going bust at the end of the year. The survival rate for retailers that fall into administration has slumped from 66% this time last year to 50%, according to FRP Advisory, an insolvency specialist. If any more chains go into administration over the new year period and fail to emerge successfully, the store survival rate will drop below 50% for the first time.
The founders of one of Britain’s biggest online gambling companies have scooped the lion’s share of a £15m dividend. The award takes the total paid out to shareholders in Gamesys, which runs the Jackpotjoy.com bingo site, to almost £60m over the past four years. Most of that has gone to the trio who launched the London-based company: Noel Hayden, Robin Tombs and Andrew Dixon. They own more than two-thirds of the group, with the rest held by management.
Mail on Sunday
An eleventh-hour surge in Christmas shopping failed to rescue retailers from a disappointing Christmas, with total shopper numbers still lower than last year, according to data compiled for Financial Mail. Figures from retail research firm Springboard show December numbers until Christmas Eve were down 1.3 per cent on last year. The High Street fared only slightly better – with shopper numbers down 0.6 per cent in December compared with last year – suggesting the dip was worse at shopping centres and at out-of-town retail parks.
Asda bosses have been left red-faced after many customers had their Christmas ruined following the breakdown of the store’s online delivery service. A ‘systems error’ at its Morley distribution centre in West Yorkshire led to hundreds of customers suffering last-minute delays and others being told on Christmas Eve that their groceries would not be delivered in time. The crisis was particularly awkward for the chain because it affected customers in its heartland – within miles of its Leeds head office.
HMV’s lenders plan to block efforts by turnaround fund Apollo to buy the firm’s debt as they plot a revival of its fortunes. Music industry sources said Apollo Global Management had been planning to buy the retailer’s debt, which would give it control of HMV. Apollo has already acquired ten per cent of the debt and must now negotiate with about six banks. However, the lenders are understood to be reluctant to sell their loans too cheaply and are still hopeful that HMV can survive without a takeover.
Printed books made a surprise comeback this Christmas after figures revealed the strongest week of sales in three years. The autobiographies of TV star Miranda Hart and Olympic cyclist Bradley Wiggins were believed to be key factors in the surge of book-buying in the Christmas rush. Physical books have seen dwindling sales in recent years due to the increased use of e-readers and tablets, but this Christmas their fortunes were reversed. The industry saw takings of £75.4million in the week ending December 22 - up by 20 per cent on the previous week and £1.4million higher than the same period in 2011.
It’s been a truly dreadful Christmas for most retailers, with Britain tightening its belt even further and store bosses gritting their teeth for a tough 2013. But not Carole Reddish.The Swedish chain IKEA’s UK chief is extremely relaxed about the coming year and she has the numbers to back her up. In the year to August sales were up 6.3 per cent, the biggest rise for six years. Sales over the festive period have apparently continued in a similarly positive vein. Close to £20million will be invested, £1million in each of the stores, to guide customers through in a more efficient way. Reddish – who is acting country manager while Ian Duffy is on an extended leave due to illness – says such tweaks can help companies to beat stagnant markets.
JD Wetherspoon has bucked the malaise that has seen rival groups close underperforming pubs by announcing plans to open 30 new sites creating 1,200 jobs. The expansion plans will see pubs open in cities across the UK, adding to the firm’s current total of 866. Wetherspoon is to invest more than £35m in areas including Cardiff, Fort William, Selby, Whitby, New Brighton and Fraserburgh, many of which are where Wetherspoon is not yet represented.
All eyes will be on Ftse 100 high street titan Next on Thursday, as the retail bellwether offer up some of the sector's first hard news on festive sales. Retail experts said that they expect Next's internet sales to increase by as much as 15-20 per cent, which would confirm recent suggestions that shoppers are increasingly looking to buy online.
*Register now for the Retail Bulletin's Multichannel Retailing Summit, 6th February 2013. Click here for the full list of speakers and programme details.
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