Best bits: Retailers gather in Berlin to talk shop
A new week and another morning of up-and-down trading in the shares of Europe's leading companies.
The FTSE Eurofirst 300 index, which measures the shares of Europe's largest companies by market capitalisation, first fell and then rose this morning as markets debated whether the continent's governments would finally get to grips with the crisis in the Eurozone. The FTSE 100 index of the leading UK shares dropped below 5,000 when the London stock exchange opened but, at the time of writing, is up over 0.5%.
The uncertain economic outlook, fed by the fears over Greece's public finances and pessimism over the growth prospects of markets like the US and the UK, is a key theme of this week's World Retail Congress in Berlin. Retailers across all sectors, including Carrefour, Spar International, Marks and Spencer and The Co-operative Group, will head to the German capital will discuss how to meet the challenge of declining consumer confidence, which, some in the sector say, is at its lowest for decades.
Research issued this morning by the organisers of the World Retail Congress talked of a "great divide" between retailers based in western Europe, North America and Australia and those in regions like Asia, the Middle East and South America where business confidence is higher. However, it isn't all doom and gloom for retailers in the West. Retailers in western Europe, for example, believe the online channel will be a key driver of growth. Multichannel operations, the emerging markets and in-store technology will be some of the issues discussed in Berlin, as well as how to adapt to the tough trading conditions. just-food is in attendance and will bring you the latest news and views from the event.
Today also marked the start of Tesco's new promotional strategy in the UK. Dubbed by Tesco as its "Big Price Drop", the programme sees the retailer try to halt the erosion in its market share in the UK, where the likes of Aldi and Lidl are again gaining ground.
Tesco announced the move last week after days of speculation, with concern that the UK's largest retailer would make savage cuts hitting its rivals' shares (including Ocado, which had already seen its stock tumble after its own trading update).
However, despite Tesco saying the Big Price Drop equated to GBP500m of price cuts, the retailer's new strategy was more measured than expected and industry watchers believe the move is unlikely to lead to a full-blown price war. Tesco's rivals brushed off its claims - Asda said it was still cheaper and Sainsbury's called the new strategy "classic smoke and mirrors" - and suppliers are likely to be relieved that the Big Price Drop is not as aggressive as was speculated. That said, Tesco's new strategy will cause waves among its rivals and its suppliers, who are facing still-volatile commodity costs and consumers desperately searching for value.
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