Dean Best's food industry blog - from just-food.com

M&S could face questions over long-term online food strategy

Mon, 20 May 2013 16:01:00 GMT

When Morrisons makes its first home deliveries in January, Marks and Spencer will be the only major UK food retailer not to have a full online grocery service. M&S's food arm has been ticking over nicely and much of its focus is elsewhere but the retailer could face questions over its online plans for food when it reports its annual results tomorrow.

M&S customers can order food online for delivery to stores but the retailer does not offer a full home delivery service like its major rivals, competitors that now include Morrisons after its distribution and technology deal with UK online specialist Ocado.

When he was at Morrisons, Marc Bolland, now M&S chief executive, was reluctant to take the UK's fourth-largest grocer online. Now at M&S, the Dutchman is still said to be unsure about the benefits of launching a full online grocery service, questioning the return on investment.

Tomorrow, when M&S reports to the City, a lot of attention will be on whether the retailer is seeing improvements from its clothing business. Its food division has performed well in the last 12 months (Q4 food like-for-likes were up 4%). But that does not mean industry watchers will not be wondering what M&S's plans are for online grocery - especially as there is speculation Morrisons' deal with Ocado could spell the end of the online specialist's deal with another upmarket UK grocer in Waitrose.

For its part, Waitrose said little about the Morrisons/Ocado venture, revealing only it had asked lawyers to look into the agreement to see if it breached its deal with the online specialist. The Waitrose/Ocado deal runs until 2020 but there is a break clause that allows Waitrose to walk away in 2017.

The upmarket retailer refused to comment on whether it would activate the clause but there is a feeling in the City it could quit the deal in four years time, leaving Ocado with a potentially big hole in its sales.

If Waitrose walks away, could that hole in time be filled by M&S?

Now we wait for Waitrose lawyers to issue Ocado verdict

Fri, 17 May 2013 18:02:00 GMT

Today's top story has, obviously, been news that Morrisons and Ocado have a struck a deal that will see the UK grocer at last launch into online grocery. However, industry watchers are waiting to see what Waitrose, Ocado's existing partner, does next.

Waitrose, which has a long-standing relationship with online specialist Ocado, was initially coy when just-food called the upmarket retailer in the wake of the Morrisons venture being announced this morning.

A couple of hours later, Waitrose did issue a formal statement, pretty much repeating what a spokesperson told us this morning.

That said, the statement made plain Waitrose will be calling in the lawyers to look at the Morrisons deal to see if there is a breach of the contract between it and Ocado.

"We have asked to see the detail of the deal and the operating arrangements. Meanwhile, we have instructed lawyers so that we can get a clear and unequivocal view of the contract and examine what might constitute a breach. This process will take some time so we are unlikely to comment again in the near future," Waitrose said.

Some industry watchers think Waitrose could pragmatically decide Ocado's deal with Morrisons gives the online firm more scope for investment in its technology.

Others think Ocado's agreement with Morrisons means it is now more likely Waitrose will walk away from its deal with the online specialist in 2017.

The UK grocery sector now awaits to see what Waitrose's riposte will be.

E.Leclerc in push for French retail top spot

Mon, 20 May 2013 14:20:00 GMT

French retailer E.Leclerc has added fresh impetus to its previous declaration of overtaking rival Carrefour in its domestic market by bringing its target forward a year.

The chief executive of privately owned Leclerc reportedly said a focus on low prices will enable it to overtake Carrefour in France ahead of schedule, by 2014.

According to Reuters, Michel-Edouard Leclerc told a news conference it remains focused on staying ahead in the price war heating up among French retailers. "I thought that in 2015 our chart line and that of Carrefour would cross, I think we will reach that point one year earlier," he told attendees.

Leclerc's market share is currently at 18.8% as of 24 March, according to Kantar Worldpanel data. This is against Carrefour's 20.5%.

Losing the top spot in its home market would be a blow to Carrefour, which has been fighting hard to improve its domestic performance - a market which accounts for over 40% of its sales.

The weak European markets have certainly played their part in making life tough for food retailers in the region, as shoppers' disposable incomes are squeezed by rising prices, subdued wage growth and austerity measures.

But Carrefour saw an improved performance at its core French stores in the first quarter, thanks to its recent pricing initiative.

Leclerc, however, has continued to make lots of noise on price and making sure it offers the lowest price across a number of areas. It also managed to book a respectable performance in 2012, despite the price intensity of its domestic market. It claimed its share of the market grew faster than its rivals last year, with sales up 7%.

Leclerc's chief executive is one of the more vocal characters in the French retail sector but his latest comment are sure to throw down the guantlet to his equally as outspoken counterpart at Carrefour, Georges Plassat.

Wal-Mart continues to play CEO card close to chest

Tue, 14 May 2013 15:38:00 GMT

US retail giant Wal-Mart has continued to remain tight-lipped over who will succeed current CEO Mike Duke when he steps down.

Two possible internal candidates have been mooted as potential successors: Bill Simon, the head of Wal-Mart's US arm and Doug McMillon, who heads up its international operations.

A spokesperson for the retailer said it would not comment on "rumour or speculation", but that is unlikely to put a stop to the talk over who could succeed Duke.

Neil Stern, a senior partner at US retail consultants MacmillanDoolittle, believes the chances of Wal-Mart hiring externally is "unlikely" given it has always appointed from within for CEO - and particularly given the company is performing "at a fairly strong level".

McMillon and Simon are frequently mentioned as potential successors and are undoubtedly front-runners, according to Stern.

"Both have considerable experience with multiple aspects of the business. Doug is still quite young but has been a rising star for quite some time. Bill has effectively turned around the US, While he doesn't have Wal-Mart experience globally, he is a seasoned global executive. It will be interesting to see which direction they go," he tells just-food.

Whichever direction Wal-Mart chooses to turn, the challenges for Duke's successor are "numerous", Stern believes.

He cites: "Continued US growth and the quest for new format growth ... international growth with particular focus in emerging markets ... the biggest challenge - how to grow e-commerce and multi-channel retail to remain relevant in the future ... and always, the pubic perception of the running the world's largest retailer."

According to a number of reports, Duke isn't expected to step down immediately, but Wal-Mart may name his successor in the coming months.

M&S looks to Friel to further boost food sales

Fri, 10 May 2013 15:14:00 GMT

UK retailer Marks & Spencer is hoping the voice of actress Anna Friel will add further momentum to its food sales in 2013 with the launch of a new campaign.

Kicking off from Monday, Friel will provide the voice for a series of TV ads focused on different food occasions - from a seaside picnic to lunch on-the-go. The first, maybe a week too late to inspire us get the picnic blankets out, focuses on a summer BBQ.

M&S is hoping the campaign will publicise the retailer as a destination for all events from BBQs and picnics to Sunday roasts.

With the strapline 'Make Today Delicious', it will act as an umbrella campaign for all M&S food marketing, covering online, print and TV.

M&S' food sales have been the star performer for the retailer. Last month the grocer booked a 4% increase in like-for-like food sales in the UK for the 13 weeks to 30 March - a performance that was "well ahead of the market".

Indeed, it has reported three years of rising food LFL sales and found itself relatively unaffected by the horsemeat saga that hit the European food industry earlier this year. This latest campaign is only likely to boost sales further.

Those wanting a sneak preview of the ad can do so by visiting the retailer's Facebook page on Sunday evening.

Sir Alex Ferguson admirer Justin King rebuffs questions over his future

Wed, 08 May 2013 17:44:00 GMT

"The only good news about the speculation swirling around me means I have had my name mentioned in the same breath as Alex Ferguson today. The great man himself." So quipped Sainsbury's chief executive Justin King as he again faced questions over when he, like the legendary Manchester United manager, could step down from his post.

On the day Sir Alex announced his retirement as United manager after almost 27 years in the job (prompting a cloud of gloom to descend over part of the just-food editorial team), King had to fend off renewed queries over his plans after nine years at the helm at Sainsbury's.

"I've been very clear about my position and that is this is a great company with fantastic future prospects. I see myself playing my part in that," King insisted.

Two weekends ago, reports claimed Sainsbury's had hired executive search firm Egon Zehnder to find a replacement for King. That weekend, King popped up on TV to insist he was "not going anywhere" but, at the press conference to discuss Sainsbury's annual results, the questions returned.

King and Sainsbury's chairman David Tyler refused to confirm whether headhunters had been appointed.

"We haven't confirmed headhunters have appointed as we never comment on rumours or speculation," King said.

Tyler echoed King's stance. "Let me just reaffirm what Justin said: we never comment on market rumours on this matter."

He added: "We have a cracking management team here and my job as chairman is to look after that and develop it for the future and that's what we're doing right now." Tyler then referred to the going-on at United and added: "The only rumour I will scotch is that it is not true that I had a call from Old Trafford to see if Justin might be available."

Asked how much longer Tyler would like to see King stay at Sainsbury's, he said: "I think he is doing a cracking job and he'd have to persuade me hard if he wanted to leave at any stage."

In some ways, the speculation over King's future at Sainsbury's, which returns every few months, is something of a sideshow - at least in the near term - while the UK's third-largest grocer continues to churn out solid results.

That said, shareholders will be keen to hear King's comments each time he - perhaps annoyingly for him - is asked about his plans.

The Sainsbury's boss this afternoon insisted he was "committed" to the retailer and labelled the rumours as "speculation".

Some mischievous industry watchers may draw parallels between King's comments and Sir Alex's programme notes before the Chelsea game on Sunday in which he said he had "no plans to walk away".

But it seems, for now, the Sainsbury's boss and United fan will remain in his post. For how long? Diageo CEO Paul Walsh, who will step down in July, has been CEO at the drinks group for 13 years. There could be a bit of time in King's tenure yet.

Delhaize shares climb as CEO steps down

Wed, 08 May 2013 14:13:00 GMT

Surprisingly, Delhaize saw its share price climb this morning (8 May) on news that its CEO Pierre-Olivier Beckers is to retire at the end of the year.

Of course the share rise could have been down to the fact the Belgian retailer also booked a return to profit in the first quarter, but the news of a CEO departure is usually enough to send share prices plummeting. Investors do not like the unknown.

Speculation will no doubt now be about who will replace Beckers. And they will be big boots to fill. The chief executive has been at the helm for 15 years and seen Delhaize through a challenging few years and implemented a thorough revamp of its US Food Lion stores in a bid to halt falling sales. Any new CEO will need to see this through as well as offering a fresh perspective on the retailer's future, both at home and in its US market where it generates 64% of sales.

Delhaize said it is looking both internally and externally for candidates and expects to have a new chief executive in place by the end of the year. So, watch this space.

Iceland Foods claims "encouraging" start to online return

Tue, 07 May 2013 15:02:00 GMT

We reported a fortnight ago Iceland Foods was to start trialling an online service in weeks - and, over the weekend, the UK retailer announced its return to the channel.

Iceland, which launched online in 1999 but shelved the service six years later as it fought to turn itself around, said "a small number" of stores had kicked off the trial.

The retailer said the stores - in London, the South West, the North West and the Nort East - had seen "very encouraging initial results".

Iceland already offers a home delivery option for in-store orders over GBP25 and the retailer said the full online service would build upon a scheme that caters for 180,000 transactions a week.

Chairman and chief executive Malcolm Walker said: "Iceland was the first UK food retailer to launch a nationwide online shopping service as long ago as 1999, but maintaining it was not a priority when I was faced with the challenge of turning around a near bankrupt company on my return to the business in 2005. Now the time is right to re-launch the service, building on our well-established and smoothly running home delivery infrastructure with an easy-to-use website that sets new standards for customer friendliness."

John Mackie, director of delivered sales at Iceland, added the retailer was "delighted" with the start of the trial.

"This is exceeding our expectations for the number and size of orders we have received, and for the proportion of new customers to Iceland that the service is attracting," he said.

Nestle's Maggi the food brand bought most often, says Kantar Worldpanel

Thu, 02 May 2013 15:59:00 GMT

Nestle's Maggi is the food brand purchased most regularly around the world, according to a new survey from industry analysts Kantar Worldpanel.

The number-crunchers at the firm have developed data that they claim show the "brand footprint" of the world's largest FMCG brands.

The list, published today (2 May), gives a brand's "consumer reach points", which Kantar Worldpanel says measures for the first time how many households around the world are buying a brand (its penetration) and how often (the number of times shoppers acquire the brand).

Kantar Worldpanel analysed data from 32 markets and the numbers led to Coca-Cola (a little unsurprisingly) coming out on top. The analysts said Coke had a penetration of almost 44% of households and was bought by homes 15 times a year on average. The scores combined meant it was chosen (and had achieved consumer reach points) 5.3bn times.

The top five places were made up by drinks (Nescafe and Pepsi) and personal care brands (Colgate toothpaste and Lifebuoy soap). Incidentally, Colgate was second but had the highest penetration score, meaning its reach is wider than that of Coke.

Maggi was sixth on the list, chosen 1.58bn times a year. Unilever's Knorr was the next highest food brand at eight, with households purchasing the brand 1.29bn times a year. PepsiCo's Lay's brand was in at nine. Some 1.14bn households put that brand in their baskets a year.

Kantar Worldpanel CEO Josep Montserrat said: "Now brands demand more in-depth analysis of their current basket reach compared to their competitors and opportunities for growth around the world. Consumer Reach Points reveals which brands are already achieving global success and provides insight that will help other FMCG brands with international ambitions to set global targets more accurately and improve their global business growth."

In the coming days, we will run a full-length interview with Kantar Worldpanel in which it explains why it developed the data, what the survey can offer FMCG companies and why certain brands scored highly.

Mondelez faces fresh UK union criticism over Cadbury

Wed, 01 May 2013 18:17:00 GMT

The takeover of Cadbury was one of the most debated deals of recent times, particularly in the UK, where the then Kraft Foods faced union and political criticism. Now the confectioner's current owner, Mondelez International, is in the spotlight.

The Unite union today (1 May) accused the company of "human rights abuses" in north Africa. It said Mondelez had been linked to the "sacking" of five union officials in Egypt, and the dismissal of a worker who spoke out after getting injured in one of its plants in the country. Unite also claimed Mondelez has "locked out legitimate trade unions" at sites in Egypt and Tunisia.

"This is a company that has repeatedly demonstrated that it has little respect or concern for its workforce and their employment rights," Unite national officer Jennie Formby claimed. "Unite warned Kraft that their future behaviour towards workers would be under close scrutiny following the hostile Kraft-Cadbury takeover in 2010. As soon as they took over the company, hundreds of jobs were lost. Yet Kraft is still allowed to continue this bad management in dealing with its workforce today."

She added: "Our members take this unjust attack on its fellow brothers and sisters in Egypt very seriously and they will not stand by when their rights or any workers' rights are under attack. It is totally unacceptable and must stop. We'll fight-back together until we end these unjust attacks on workers in Egypt and to defend workers' rights."

Mondelez could not be reached for immediate comment. Tomorrow, Unite and the International Union of Food Workers will host a reception in Birmingham, not far from Cadbury's flagship Bournville site to "highlight their concerns" with Mondelez. Two of the supposedly sacked union workers from Egypt will be present.

We'll chase Mondelez for comment again tomorrow.

Waitrose sets sights on Europe with Eurostar deal

Tue, 30 Apr 2013 15:07:00 GMT

UK upmarket retailer Waitrose has its sights set on Europe with the signing of a Eurostar deal.

The agreement, which will see the grocer supply food and drink to all standard class buffet cars across Eurostar's fleet, marks Waitrose's first major move into on-board food.

It will also be the supermarket's first significant move into Northern Europe as it looks to expand its business-to-business and export activities.

And it marks yet another expansion abroad for the retail chain, which grew its export business 20% over the past year.

Waitrose already supplies food to 45 countries including Singapore, Thailand, New Zealand and India. It also operates five branches in the Channel Islands, and has nine shops in the Middle East in partnership with Fine Fare Food Market. In the year to the end of January it grew its export business by around 20%.

It will therefore come as no surprise the retailer has expansion on its mind. In 2013 it has already begun supplying to new countries including Gibraltar, Trinidad, Ibiza, the Bahamas, the Philippines and the Turks and Caicos Islands.

This latest deal will give Waitrose access to Eurostar's 10m passengers a year who travel between destinations including Paris, London, Brussels and Calais.

It is a further sign the retailer is growing, despite operating in a highly promotional and competitive UK grocery market. In Kantar Worldpanel's latest figures, Waitrose's latest market share hit a record 4.9%.

Sainsbury's insists King staying... again

Mon, 29 Apr 2013 13:57:00 GMT

Sainsbury's has again insisted chief executive Justin King has no imminent plans to exit the UK supermarket group.

The weekend papers were once more buzzing with speculation that King could be preparing to depart the UK's third-largest retailer.

Over the past month, reports have had him making an array of career moves, from the seemingly left-field suggestion that he could be replacing 82-year-old Bernie Ecclestone as the chief executive of Formula One (an option that seems to be largely based on the fact his son is a Formula Three driver) to the more predictable suggestion that he could take the helm at Marks and Spencer, a retailer that has disappointed the market as it grapples with various issues at its clothing business.

According to the latest set of reports, Sainsbury's has started long-term succession planning by instructing the executive search firm Egon Zehnder to find a replacement for King. Potential candidates have been cited as Sainsbury's commercial director Mike Coupe - believed to be the leading internal contender - Coles MD Ian McLeod, outgoing WH Smith boss Kate Swann, as well as various Tesco directors - including UK MD Chris Bush.

But the chief executive has quickly moved to cool speculation that he will be checking out of Sainsbury's any time soon. In a television interview yesterday (28 April), King said: "I am not planning on going anywhere. I see myself staying at Sainsbury's."

While Sainsbury's and its chief executive evidently plan to remain tight-lipped over the possibility that King could be preparing to abdicate, it seems likely the rumour mill will continue to turn. Speculation will be given added impetus as King approaches his tenth anniversary of taking the helm at the retailer in 2014.

Orkla initiates compulsory acquisition of Rieber shares

Fri, 26 Apr 2013 16:04:00 GMT

Orkla Brands has made a mandatory offer for all the shares of Rieber & Søn that it does not already own.

The offer price is NOK67.45 per share, which is the same price per share as paid to the Rieber family for its majority 90% stake, Orkla said.

When Orkla announced the deal last August, the company said the takeover was "a significant step" to becoming a "pure-play branded consumer goods company".

Orkla has been selling off non-consumer assets in recent years but still has interests in sectors including aluminium, financial investments and hydro power in order to focus on its food interests. Funds from these disposals will either be fuelled to fund M&A and drive growth or returned to shareholders, management has indicated.

Danone's Oikos tops US NPD poll - and here's the top ten

Wed, 24 Apr 2013 16:21:00 GMT

Underling the buoyancy of the Greek yoghurt sector in the US, Danone's Oikos brand has topped a poll of the best-selling new products in the US - and here we list the top ten.

The French food giant saw sales of its Dannon Oikos line reach US$283.8m last year as demand for Greek yoghurt in the US continued to grow, IRI's New Product Pacesetters survey said.

IRI measures the best-selling launches each year. The poll looks at sales of products in their first year at grocery, drug, mass market retailers, dollar and club stores, plus, for the first time, Wal-Mart outlets.

The top ten new products are listed below. In at two, Starbucks' K-Cups coffee reinforced the popularity of single-serve coffee at home. Dean Foods' TruMoo chocolate milk was fourth; flavoured milk is a segment keenly eyed by dairy companies, particularly in mature markets, as they look for areas of growth.

At eight was General Mills' Nature Valley protein bars, which has tapped into demand for on-the-go snacks while also offering a health benefit.

ConAgra Foods' Orville Redenbacher popcorn brand also featured on the list and looked to offer even more convenience from a snack - by providing consumers with a bowl they could then throw away, without using their own.

Not sure it would make this correspondent rush to the popcorn shelf but, hey, some do want ultimate convenience.

Click to enlarge

Booker gets green light for Makro buy

Fri, 19 Apr 2013 15:40:00 GMT

The UK Competition Commission has unconditionally cleared the acquisition of Metro's UK business, Makro, by cash and carry operator Booker Group.??

Loss-making wholesaler Makro was sold by its German parent to Booker for GBP139.7m.

Booker has said that the deal will strengthen its presence across the country and the company expects to bring the business into the black as it integrates Makro into its store network.

In its final report, published today (19 April), the Competition Commission concluded that the merged company would continue to face sufficient competition from other wholesalers. ??

In a brief statement Booker Group welcomed the announcement.

US consumer study brings cheer to private label, concern for brands

Thu, 18 Apr 2013 14:40:00 GMT

US shoppers, historically some of the most brand-hungry on the planet, have become more accepting of own label during the downturn - and a survey suggests store brands will remain a key part of the basket even when the economy improves.

Deloitte's annual American Pantry Study, released this week, underlines how US consumers have adapted to the recession. Shoppers have become more frugal and smarter about what they buy since the onset of the financial crisis and Deloitte's survey showed such behaviour continues.

However, it is some of the more forward-looking data in the survey that will cheer the country's private-label manufacturers and cause furrowed brows at brand owners.

Deloitte said 94% of respondents claimed that even if the economy improves, they will remain cautious and keep their spending at the current level. And, notably, only 27% of shoppers say they will buy more national brands instead of private label when the economy improves. That figure is down on the 35% recorded in the last two of these surveys.

More shoppers are buying own-label lines in categories they hadn't before. Fewer consumers feel they are "sacrificing" when buying private label. And more consumers feel they have found store brands that are "just as good" as national brands.

"Prudent consumers and improving perceptions about store brands are squeezing national brands' position. The gap between the few must-have brands on shoppers' lists and others on the shelf may be widening, making it more important for brands to differentiate through innovation, quality and performance," Pat Conroy, vice chairman and consumer products leader at Deloitte, said. "Consumer product companies may also consolidate low and mid-level performers and shift investment to the category leaders."

The study, which surveyed over 4,000 consumers, obviously gives support to the strides ConAgra Foods - which owns brands including Hunt's ketchup and Banquet ready meals - has made in own label in recent years, including the acquisition of US private-label group Ralcorp Holdings.

However, it will cause concern for brand-owners in categories where the prevalence of own label is highest. Think cereal or soup. And therefore think Kellogg, General Mills and Campbell Soup Co.

Pershing investment adds to PepsiCo/Mondelez rumour mill

Tue, 16 Apr 2013 15:25:00 GMT

Speculation is once again mounting about a potential marriage between Mondelez International and PepsiCo.

Following the reports last month that activist investor Nelson Peltz had gone on a US$2bn spending spree, building up stakes in Mondelez and PepsiCo, it seems someone else has been shopping too.

According to dealReporter, Bill Ackman's hedge fund Pershing Square has made an investment in Mondelez, fuelling further speculation over a potential merger between the two behemoths.

Rumours have swirled that Peltz has built up his stakes in Mondelez and PepsiCo with a view to pushing for a merger of the companies into a snack food Goliath.

In the wake of the Peltz reports, PepsiCo said it saw "no need" for major deals. It insisted it was seeing "strong progress" in its "strategy to deliver long-term growth and create shareholder value".

However, the reported move by Ackman will only serve to reignite the speculation.

This isn't the first time Ackman's hedge fund has had exposure to a Kraft entity. Pershing owned Kraft Foods shares before the company split but sold the entire stake in the former company in the second quarter of 2012.

As of 31 December, Pershing Square reports owning 5,978,214 shares. While, this could be considered only a small position (worth around $179m, according to hedge fund watcher Market Folly) compared to the rest of its portfolio, it could be significant given it is a new disclosure.

A tie-up between the snack businesses of PepsiCo and Mondelez could have strategic logic if you take into consideration that both see sales growth weighted to emerging markets and their product offerings are complimentary. Moreover, a merger between the two would perhaps serve to calm investor jitters about Mondelez's reliance on the developing world.

More may become clear on which firm might be pushing the board when next month's round of 13-F equity holding filings are published.

Sainsbury's athletics sponsorship continues

Mon, 15 Apr 2013 15:29:00 GMT

Sainsbury's move to sponsor the 2012 Paralympic Games looked to be one of the more astute recent pieces of marketing - and the UK retailer is set to continue its association with athletics.

The company today (15 April) announced it would sponsor the Sainsbury's Summer Series - three events in June and July that include a meet at the Olympic Park to mark the anniversary of last year's Games.

"As the first ever sole-sponsor of the Paralympics, Sainsbury's saw first-hand the power of sport to bring people and communities together," chief executive Justin King said. "We said at the time that we saw our involvement as much more than a one-off sponsorship – we wanted to be part of the movement, and to play our part in ensuring a lasting legacy building on the momentum created last summer."

King listed Sainsbury's initiatives - including its Active Kids programme, which for the last nine years has looked to "engage local communities in the positive benefits of physical activity". Last year, the retailer launched an Active Kids for All scheme for disable children.

The list underlines Sainsbury's commitment to promoting sport and exercise. However, its sponsorship of the 2012 Paralympics - which saw it become the first-ever sponsor to focus squarely on the event - also, according to industry watchers, benefited the business.

After Sainsbury's announced its half-year results back in November, numbers that included the period of the Paralympics, Neil Saunders, MD at retail analysts Conlumino, said the sponsorship appeared to have provided a "nice boost" to sales. He added: "Sainsbury's deserves credit for having the foresight to sponsor the Paralympics and to turn it into a successful commercial opportunity from both a financial and brand-enhancing standpoint."

Only those at Sainsbury's HQ will know the exact effect the sponsorship had on sales - but, as well as underlining the retailer's support for athletics, the deal announced today suggests King and his team realise the business benefit such agreements bring to the grocer.

"Immodest" CEO proclaims Magnit's Russian leadership

Fri, 12 Apr 2013 14:18:00 GMT

The CEO of Magnit is afraid to be seen to be blowing the Russian retail group's own trumpet, but what the heck, he will anyway.

He apparently has every reason to be pleased. Magnit, he claimed today in a stock exchange announcement, is now number one in sales in Russia's food retail sector.

The inevitable, then, has happened. Magnit, owned by Russian billionaire Sergey Galitskiy, overtook sales at its rival X5 for the first time since the company opened its first stores 15 years ago.

Magnit had been touted for some time by analysts to overtake its closest rival at some point this year.

Over the last few years, X5 has struggled to defend its market share. Its results today revealed an 8.1% increase in first-quarter net sales and less buoyant like-for-like sales.

In contrast, Magnit reported a sales rise of more than 30% earlier this week, with like-for-like sales growth of 4.8%.

Commenting on the news this morning (12 April), Galitskiy said: "I'm afraid to be found immodest, but for the first time over the last 15 years after opening of the first store we have become the leader in the food retail sector by sales."

Magnit investor relations director Timothy Post had hinted to just-food earlier this week on the release of its results that such an announcement was imminent.

He said: "X5 had always had the largest revenue but that's now flipped, it's just not public yet."

And so the focus for Magnit now will be to continue doing what it does best, expand. The Russian retail colossus already has plans to open almost 10,000 new stores by 2017.

Watch the just-food space for a more detailed analysis on Magnit's position in the Russian food retail sector next week.

Further speculation over Burton's Biscuit Co. bidders

Thu, 11 Apr 2013 17:09:00 GMT

A potential deal likely to make a regular appearance on our pages for some time to come is the possible sale of Burton's Biscuit Co.

It emerged last month the owners of the Jammie Dodgers and Maryland Cookies maker have launched a strategic review of the UK biscuit firm. In a process that could end in a sale of the UK biscuit firm, Apollo Management and CIBC have hired Credit Suisse to help them look at their options for the business, which they have owned since 2009.

One industry insider suggested this process showed the PE owners are essentially testing the water to see exactly how much interest there is in acquiring the business. So, earlier this week, we took a speculative look at the different companies that might throw their name in the hat in our Deal or No Deal column.

But it seems we may have missed a trick. According Stefan Kirk of M&A advisors Glenboden, South Korea's Lotte Confectionery could prove a dark horse should the race to acquire Burton's get off the blocks. Coming from one of SE Asia's best performing economies, Lotte is a power player in the Asian confectionery sector. And, Kirk says, the firm could well be looking to expand in Europe.

"Since their maverick entry into the European market with the acquisition of the Wedel branded confectionery business in Poland a couple of years ago, many in the industry are waiting in anticipation of further acquisitions by Lotte in Europe, who are also in branded biscuits in their home market," Kirk says.

So, could Lotte emerge as the eventual new owner of the iconic UK biscuit business? Well, you'll just have to watch this space. In the meantime, for a more detailed analysis of the companies who could be attracted to Burton's, click here.