Consumer goods companies: Standard pack sizes extended but prices, profitability may still be impacted

NEW DELHI: Despite being given a 90-day extension by the Government to implement standard pack sizes, consumer goods companies say the move will impact their profitability and could lead to higher prices. According to the new norms, companies cannot sell sachets/packs of products in irregular sizes and will have to adhere to standard packs like 25, 50 and 100 gm, 1 kg packs and multiples of 1 kg.
The near-term impact of the proposal for standard-pack sizes may lead to likely higher consumer inflation as prices can move up only in multiples of Re 1, says a new report by brokerage firm Kotak Institutional Equities. "In the medium term, this could be an opportunity for challenger brands to target market share gains. However, we may just be going back to the pre-2004 period when only standard pack sizes were allowed and non-standard packs were not possible, effectively forcing companies to invest more on innovation," the report says.

The notification, issued by the Ministry of Consumer Affairs, was to come into effect from July 1.
Companies that are likely to be most impacted are Hindustan Unilever, Nestle and Britannia. The Government had allowed non-standard pack sizes in '04 to encourage lower price-point packs, which could increase affordability-led penetration growth. While makers of shampoo, skin care, oral care products benefitted, some like Nestle used it as a tool to improve its margins, because in most of its product categories like Lactogen and Nan infant foods, dairy whitener and Nescafe, it reduced grammage while maintaining price points.
"There is no such direct pack-size control anywhere in the world. While most companies' official stated position is that they would manage the transition effectively, most product categories are likely to see price hikes," the Kotak report adds.

Source : http://articles.economictimes.indiatimes.com/2012-06-09/news/32140778_1_pack-sizes-skin-care

Rich increase spending on luxury experiences

The luxury market, including things such as yachts, frocks and safaris, is set to hit $1.5 trillion this year, roughly matching the entire economic output of Spain or Australia, as the income inequality gap widens across the globe.

Luxury goods and services have proved a rare bright spot in consumer goods, as the ranks of the wealthy grow - especially in markets like China and Brazil - and seek the status symbols to go with it.

However, money is increasingly going on luxury experiences, from spas to safaris, rather than tangible products. Spending on experiences grew 50 per cent faster than on goods last year, according to Boston Consulting Group.

The management consultancy expects the overall luxury market to expand seven per cent this year, a deceleration on the past two years' 12 per cent but still comfortably ahead of projected growth in global economic output. 

“The gap in income inequality is growing, which is unfortunate, but as a result there are more and more millionaires every year,” said Jean-Marc Bellaiche, a senior partner at BCG and co-author of the latest report. Millionaires, he adds, account for an estimated 45 per cent of the market.

Some analysts have questioned how long the inexorable rise of luxury can continue as swaths of Europe are engulfed in economic and financial turmoil and the US remains fragile.

Even China, accounting for 10 per cent of the market domestically and a further 12 per cent through overseas purchases according to Altagamma, is seeing slower economic growth.

Hong Kong retail sales in April, the latest month available, were dampened in part by mainland Chinese visitors scaling back lavish purchases, according to Donna Kwok, greater China economist at HSBC.

However, Bellaiche expects the country's new rich to continue snapping up the trappings of wealth. By 2020, he estimates the number of Chinese middle-class - with annual incomes in excess of RMB60,000 ($9,400) - will almost treble to 140 million.

He also anticipates 330 Chinese cities will exceed Shanghai's average GDP per capita by then. “And Shanghai today is clearly a city of luxury like London or New York,” he said.

The survey also highlights the growing trend towards luxury experiences is swallowing an increasing amount of the luxury spend. The market is worth $770 billion, or more than half the total, and growing at a faster rate.

This is the case even in the newly rich countries, which Bellaiche says raises challenges for luxury providers. While a Rolex watch, for example, can be the same in Beijing or Zurich, expectations of service vary widely around the world.

Luxury is a bright spot for Europe too. The continent represents 70 per cent of worldwide luxury manufacturing, including gourmet food and drink, and the industry directly and indirectly employs 1.5 million people, according to Altagamma. 

 

Source : http://gulfnews.com/business/retail/rich-increase-spending-on-luxury-experiences-1.1034374

Consumers spend more on services 

AUSTRALIANS may soon spend more on services than goods - a "by-product" of our rising standard of living, says CommSec chief economist Craig James.

Changing consumer behaviour shows spending on fitness classes, hairdressers, insurance premiums and airfares may soon overtake our budgets for clothing, cars and furniture, partly due cheaper goods resulting from a strong Australian currency, he said.

"For instance Australians are spending more of their budgets on public transport and airfares than buying a car. Less is being spent at cafes and restaurants and on household goods and cars. And more is being spent on education services and health services," he said.

"The rise and rise of services is a by-product of Australia's rising standard of living. Australians don't like to admit it, but our standard of living is one of the highest in the world."

A "paucity of data" on services spending was a reason why economists had under-estimated last week's strongest economic growth figures in five years, up 1.3 per cent in the March quarter to an annualised growth rate of 4.3 per cent. South Australia's economy grew at 1.7 per cent for the quarter and 2.3 per cent for the year, in seasonally adjusted terms.
While the mining sector was a strong contributor to GDP growth, so too was the hidden increase in services spending, Mr James said.
"Most statistics are still focused on our spending of physical goods like clothing, cars, furniture and televisions. But we are close to the point where spending on services will overtake the spending on goods," Mr James said.
"Clearly this deficiency of data needs to be corrected."
Independent economic researcher the Grattan Institute released its Game-changers: Economic reform priorities for Australia report last week calling for the need to broaden the GST to cover education, health and food and capture increased services spending.
Revenue raised from the broader GST would reduce corporate and income taxes while compensating those on welfare, chief executive John Daley said in the report's analysis.

Source : http://www.adelaidenow.com.au/business/consumers-spend-more-on-services/story-e6frede3-1226390397777

Chequered fortunes

 

A large part of the deceleration in consumption is coming from discretionary spend, even Q4 results of FMCG companies reflect a showdown in demand environment.

India’s high inflation and low income have slowed down the momentum of consumer goods-related stocks since start of May. Yet, some market strategists say that as long as these domestic uncertainties do not morph into another global panic, they could serve another purpose: to remind investors that the consumer goods stocks may be the best choice among a tough set of options. 

Visible slowdown

This may seem a difficult statement to make, after May’s sales report, which showed that the every segment of automobiles suffered a sharp deceleration in sales growth, except utility vehicles (UVs). Auto sales in India moderated in May with the country’s largest car makers Maruti Suzuki, General Motors, Ford and TVS Motor posting declines in their numbers due to post-budget price hikes, high interest rates and rising fuel prices. Hyundai Motor, Tata Motors and Mahindra & Mahindra, however, witnessed a surge in sales.

Maruti Suzuki India recorded domestic sales at 89,478 units, compared with 93,519 units in the year-ago period, registering a fall of 4.32 per cent. Rival Hyundai Motor India’s domestic sales grew by 2.85 per cent to 32,010 units from 31,123 units in the same month last year. Sales of petrol cars, which historically were the largest segment in India, have been falling as the widening differential between the partially decontrolled prices of petrol and the closely regulated price of diesel continues to widen to the disadvantage of the former.

Similarly, sales of consumer durable goods such as TVs and refrigerators have also turned sluggish. Fast- moving consumer goods (FMCG) are still doing well, but, they are available only at valuations that are well above broader markets. Export growth is also slowing. Therefore, despite the falling rupee, investors cannot really look at exporters for outperformance. The premium being enjoyed by defensive stocks can be seen for cigarettes for FMCG giant, ITC, which now is witnessing the largest weightage in the widely followed NSE Nifty index.

Weak results

Experts pointed that the fourth quarter performance of FMCG sector was better against consumer discretionary sectors, which have shown early signs of slowdown. In terms of volumes, where demand FMCG remained stable, consumer durables and discretionary sectors faced headwinds, experts pointed.

Dhananjay Sinha and Kashyap Jhaveri of Emkay Global Financial Services, said, “A large part of the deceleration in consumption is coming from discretionary spend even as Q4 for financial year 2012 results from FMCG companies suggest resilience. Indicators for discretionary spending are disappointing. Credit growth for consumer durables in April 2012 was down 17 per cent (y-o-y) and data on domestic sales of car and two-wheelers, air conditioners, refrigerators and washing machines are showing contraction.”

On car sales, Dipojjal Saha, research analyst of Edelweiss Securities in a research report dated June 4, said, “Companies facing sales slowdown undertook cost rationalisation measures, results of which were visible in Q4FY12,”

Outlook

Sudip Bandopadhyay, managing director and chief executive of Destimony Securities, expects increased consumption of both consumer durables and non-durable items despite a marginal slowdown in demand. “Efficient FMCG and automobile companies catering to the mass market in semi-urban and rural India will continue to show exponential growth during the next three-five years,” said Bandopadhyay. He expects the global liquidity scenario to remain favourable, which in turn will support Indian markets.

Sunil Mishra, CEO of Karvy Private Wealth, expects healthcare and consumer goods companies to report impressive earnings growth on the back of monetary easing, global flows and a bounceback in GDP growth.

Meanwhile, Sonal Varma, chief economist at Nomura India, believes 50 basis points of additional repo rate cuts in 2012 due to continued weakness in domestic demand and moderate core inflation, with a 25 basis points cut at the policy meeting on June 18.

Stock performance

Yet, even with the slowdown, consumer stocks that broadly include FMCG, consumer durables, automobile and retail shares, have so far outperformed the broader market year-to-date. The BSE FMCG Index has jumped 16.21 per cent so far this year with shares such as Jubilant Foodworks, Godrej Consumer Products, United Spirits and United Breweries climbing 60.35 per cent, 45.38 per cent, 27.44 per cent and 26.72 per cent, respectively. ITC, Marico and Colgate-Palmolive and Nestlé rose between 15 per cent and 18 per cent at a time that the BSE Sensex gained a mere 8.43 per cent.

Auto shares such as Tata Motors and Maruti Suzuki climbed 33.8 per cent and 22.06 per cent, respectively, during the period.

“We are playing consumption theme through Maruti Suzuki and Amara Raja in auto and auto ancillary sector and ITC & GlaxoSmithKline consumer products in Consumer staples Sector,” said Ajay Bodke of Prabhudas Lilladher in the India Strategy note.

However, two-wheeler maker Hero MotoCorp added just 5.24 per cent, while Bajaj Auto declined 4.02 per cent during the period.

Among the retail shares, Pantaloon Retail is up 29.7 per cent, Shoppers Stop is up 12.65 and Trent is up 5.03 per cent, year-to-date.

Sales performance of auto majors in the present year mirrors a similar pattern since the end of 2011-12 as signs of inflation, interest rates and high cost of fuel kept customers away. In 2011-12 itself, growth in the so far rapidly-growing market for cars, trucks and buses, slowed down to just 4.72 per cent.

“In an environment marked by panic, investors will continue to fall back on consumer stocks considered as a safe haven at a time of slowing growth,” said Kaustubh Pawaskar, research analyst at Sharekhan. 

Source : http://wrd.mydigitalfc.com/companies/chequered-fortunes-678

 

 Google and GroupM Next Launch Spark Education Series

 

Today (Thursday, June 07, 2012 )we’re kicking off a partnership with GroupM Next, the innovation unit of GroupM, called Spark, a series of custom, co-programmed events focused on delivering unique education and innovation experiences for  brands – specifically, clients of GroupM media agencies. We created this initiative together to cultivate education and dialogue for verticals that are under-represented in the broader digital media space in terms of data, research and opportunity. This partnership is the first of its kind for both Google and GroupM, in that it’s a series dedicated to client-focused education and is designed to address topics that directly impact brand opportunity and performance.

The first event, Spark: CPG, is taking place this afternoon in New York with nine leading CPG companies in attendance. In addition to discussions led by Google and GroupM Next execs, Kantar, Buzzfeed and Amazon are joining us as we, collectively as marketers, share insights, research and digital opportunities brands in the consumer packaged goods category can take advantage of.

A quick rundown of discussions on the docket at Spark: CPG in the context of marketing for CPG brands includes:

»      Making the web work for CPG brands – our take on how the consumer, and world around us, has changed

»      The digital enhanced path, exploring the ever-changing connection between consumers and brands and opportunities that exist through understanding new consumer behaviors and the role of technology

»      Marketing and messaging innovation across multiple screens

»      The power of video and building brands with the power of sight, sound and motion

»      Developing ‘content gifts’ in the social world and capturing opportunities by engaging your brand’s super sharers

»      How mobile commerce can connect shoppers to the places and CPG products they love

»      Fostering fluid innovation across marketing and process to enable agencies and brands to meet the pace of change in consumer dynamics and technology

In most cases, Spark will provide brands with insights and education they wouldn’t have access to elsewhere. Additionally, through ongoing collaboration between our companies, GroupM agencies and clients, we’ll identify areas of interest and need for brands across digital media, and foster opportunities as they emerge.

Where's the "touch and feel" thing...!!

"The world is getting lazier, and a businessman knows how to take advantage of it."

Last Sunday when I was enjoying a fresh and cool morning walk, this statement dropped in my ears and stopped me. I turned around and saw two men gossiping. At this particular hour, normally I hear people talking about the politics, inflation, corruption, reality shows etc. every day. But today, the 'public-concern' seemed to be a little different than ever. I was in hurry so could not hear more of this conversation.

For some time, I forgot about the words, but the statement was still in my mind, "the world is getting lazier, and a businessman knows how to take advantage of it". The only connecting link I could find to understand the matter was "online businesses" frequently called as 'e-businesses'. I figured out that they were discussing regarding the evolution of the e-businesses in India and not to forget the word, 'critically'.

We all have always liked to go for shopping, purchase a lot of things and come back home with a tired yet happy face. But don't you think, the scenario is a little bit different now, people like to order online as many things as possible whether it's a Pizza, an air ticket, a railway ticket, a book or a t-shirt or anything else. No matter, how much time it will take to get delivered, but we do it, just because we like to sit on our benches and order for it with just one click.

Recently, I asked an online shopper, "why do you purchase online?" and he says, "It's easy and I don't have to go all the way to the market for buying it". Then I asked, "Do you shop everything online?" and he says, "What are you talking, no matter how convenient it is to shop online, most of the things I wouldn't buy, until and unless I see them in person". It made me realize one thing, "no matter how lazy we become, for us Indians, we like to 'touch and feel' whatever we are buying".

Frankly speaking, I am also a lazy guy. I like to do things with easiest possible way, yet I would not prefer to buy my clothes, shoes, cell phones, books, grocery or anything else, until and unless I try it myself. And I think, this is a typical case in India. People like to try things out, they like to "touch and feel" the product.

Probably this 'touch and feel' thing of the products has made it difficult for the online retailers to spread over their businesses. However, data is evident that people in India have started liking the e-model. Now people frequently book their train and air tickets, order Pizza, book movie shows, order novels and pay fees online. But I think, there's one thing in common, all of the things which are being ordered online, are mostly beyond the "touch and feel" specifications. For railway tickets or flight tickets, we don't really bother about how it will look and how I will look with it. For novels we don't need to check if the size is perfect or it smells nice. These things would be purchased in the same way, as they are being purchased online.

But, when it comes to Apparels, Accessories, Mobile phones, Furniture, or anything else, we really want to try them first before purchasing them. We like to see, touch and check them ourselves if it's a perfect match to our expectations. We like to try the shoes that we want to purchase whether it's of perfect size or not and whether it looks well in our feet or not. If it's a mobile, we wish to check its multiple functions/features by ourselves. All these items, where "touch and feel" is a must, we try to avoid an online purchase for any reasons.

India is a country where people like to see, touch and feel things and enjoy their true existence. And this indeed gives the e-businesses a reason to worry.

However, a wise businessman can never avoid taking calculated risks. He understands the market size and its dynamics perfectly. He knows how to change customer preferences, how to make a prospect a definite customer. And ultimately he knows how to answer his customers' queries no matter even if it is about the "touch and feel" as well. And todays' technology is trying all possible ways to help him. Recent researches with "Augmented Reality" features have opened up new amplitudes to the e-business prospects.

For us, today, it's hard to make an online purchase because we want to try things out first. But, are we sure, the scenario would remain the same after one year. Let's compare ourselves with our 'previous-years'. Our preferences are changing faster than what we realize. If we wish to know what's going to happen, well, there's just one thing we can do, "wait and watch...!!"

How to save money on your grocery bill

In these economic times, stretching your grocery dollars can sometimes be a challenge.

But a little shopping savvy and some creative thinking can help you rake in the savings when purse strings are tight.

Here are several strategies that can help:

- Buy in bulk. Remember that one of the things you're paying for when you buy a food item is the packaging. Purchasing foods from bulk bins at a natural food store can eliminate the need to pay for packaging.

For those who have excess storage shelves or an extra freezer, buying larger quantities of bulk food when it is inexpensively priced can save quite a bit.

- Go coupon crazy. In today's technological world, there are numerous ways to get your hands on those valuable discount coupons.

You can clip them from the newspaper the old-fashioned way. You can download e-coupons on your smart phone. You can register to receive coupons by mail or e-mail.

Some grocery stores even have coupon-generating machines that vend coupons. No matter how you get them, if you plan ahead and gather coupons for the foods you buy, you can save big money by using coupons.

The Annual Topline U.S. Consumer Packaged Goods Coupon Facts Report for Year-end 2011 reported that consumers saved an almost unbelievable $4.6 billion using coupons. Couponing is definitely worth it.

- Check out the shelf tags. Reading shelf tags is smart shopping because it provides the cost per ounce for the food you are buying. With that information, you can compare apples to apples and make a more educated purchase, saving money.

Take advantage of store discount cards: This is a great strategy for those who are too busy to clip coupons. These discount cards -- which look like credit cards -- offer instant savings on tons of products in the store. All you have to do is swipe your card at checkout to save.

- Consider a co-op. Join a health food co-op and enjoy the benefits of being a member ... one of which is profit-sharing.

- Purchase whole foods. It's easy to fall prey to buying that package of pre-cut celery and that canister of pre-grated Parmesan cheese, but you're paying a premium for the preparation of these foods.

If you purchase full stalks of celery and spend a little time at the kitchen counter cutting them up, you could save. Same holds true for buying a block of Parmesan, grating it by hand, and storing it in an airtight container.

For example, the difference in price between whole carrots and pre-sliced ones is about 65 percent. And you can save about $3 a pound by grating your own cheese.

- Buy produce in season. They're cheaper and more flavorful.

- Grow your own food. From growing herbs in a window box to planting a full garden, your pocketbook will thank you ... and you might just enjoy it!

- Adopt Meatless Monday. Johns Hopkins University promotes Meatless Monday as a way to cut down on the consumption of saturated fat and your carbon footprint, but it can also save about $11 a week for a family of four.

That's $132 a year savings, not to mention improved health.

Source : http://www.goerie.com/article/20120611/LIFESTYLES07/306119986/How-to-save-money-on-your-grocery-bill

Amazon.com's Attack on Retail

Given all the hyperbole that surrounds retail these days, you'd be forgiven for envisioning Generic Retail Co. chained up in some dingy cell at Amazon.com's (Nasdaq: AMZN  ) headquarters, contemplating the cyanide capsule tucked in its molar. In fact, Bloomberg TV recently wondered whether electronics retailer Best Buy (Nasdaq: BBY  ) had become nothing more than a showroom for Amazon. That might actually be true, but let's look past the mainstream hype and see what's really going on in retail.
Thin margins are like thin mints: best served en masse
First, let's talk about money; Amazon basically prints it all year long. Last quarter, the company bought in $13.2 billion in revenue, which is just silly. But along with all that moneymaking comes money burning. Having low, low prices and shipping deals cuts into the bottom line. Amazon has opted to sell lots and lots of stuff at a 1% net margin instead of selling a few things at 10%. That means the $13 billion it brought in turned into $130 million in actual income.
On Main Street, Best Buy is feeling the pinch, and here's the reason: branding. For lots of electronics, DVDs, and video games, the brand of the retailer is not nearly as important as the brand of the product. If you want to buy a Sony TV, the important thing is that it's made by Sony, convenient to buy, and cheap. More often than not, that means buying from Amazon.
But those same bargain hunters can't hurt lululemon athletica's (Nasdaq: LULU  ) sales. The yoga-clothing retailer pulled down a 20% net margin last quarter, and sales keep growing. The huge margin is due to brand strength that Amazon can't touch. You can get cheap pants from Amazon, but they aren't lululemon pants, so people buy directly from lululemon instead.
Mo money, mo products
The other reason Amazon is dominating the industry is its ridiculous, Freddie Mercuryish range of selection. Companies like Barnes & Noble (NYSE: BKS  ) are fighting the often-discussed "long tail" that Amazon houses. When you go into a physical store you're limited to what happens to be on the shelves at that moment. Amazon gives shoppers seemingly infinite choice, and it's hurting those other companies. Barnes & Noble took a $74 million loss last year and has had to take on new funding and friends, teaming up with venture capitalists Jana Partners and tech giant Microsoft to save the ship.
But the long tail doesn't touch companies that sell exclusive products. Look again at lululemon; it provides the only place to buy its products. There are no retail outlets to purchase lululemon clothes except for company stores and small yoga shops. Amazon can't get a part of the action because, once again, lululemon has locked it out completely.
Even kings fear assassinsAmazon's final strength is also its most interesting weakness. The reason the company has dominated the retail landscape is that it envisioned a different kind of retail before anyone else did. In classic rule-breaker fashion, Amazon turned the online sales system on its head. But now, the new online system is becoming more mainstream. Companies from Target to Best Buy now have online stores that look surprisingly like Amazon's. But the norm is always subject to disruption. Shoe retailer Zappos and other smaller retailers moved into Amazon's space, and in 2009 Amazon had the good sense to buy Zappos out.
Other companies are turning up the heat on Amazon as well. Newegg.com, an online computer and electronics retailer, filed for an IPO in 2009 before withdrawing in 2011. The company brought in $2.5 billion in revenue in 2011 and shows no signs of slowing down. That's $2.5 billion that Amazon didn't sell in 2011, and to preserve market share, Amazon will probably have to fight it off or buy it out.
The options
Given these insights, there are two ways for investors to get around Amazon's strength. The first is to just buy Amazon shares. They're never cheap, but that hasn't hurt performance so far.
As an alternative, you can spread out across retailers that fit into these categories:

1. Strong brand value that produces high margins.
2. A proprietary product.
3. A disruptor in the online market.

To summarize, Amazon will never dominate all of retail -- just a few huge, very lucrative segments. The Fool has picked out three other companies that are set to dominate the globe. These guys make the board game Risk look like a corporate strategy. Our analysts have explained how they're going to do it in a special report, which you can download for free. Grab your free copy of the report now.

AXA Gulf opens retail outlet at Nakheel Centre

MANAMA: As part of an expansion strategy aimed at increasing its geographical footprint in Bahrain and the Gulf, AXA Gulf, one of the largest and the leading non-life international insurers in the Middle East, yesterday announced the opening of its new retail shop at the Nakheel Centre, in Saar.
A stone's throw from the St Christopher's Junior School, the centre is already becoming a favourite amongst local residents.
The new retail shop is the second AXA shop in Bahrain, following the successful opening of first shop in Ramli Mall last year.
The new shop, on the first floor of the Nakheel Centre, will offer a whole host of AXA services, including policy issuance, policy renewal, documentation and information, on all personal retail products.
"Both shops support AXA's renewed commitment to be more available to our retail customers," said country manager Stephen Wagstaff.
"With the Nakheel Centre Shop now open, AXA offers three convenient locations for our customers to visit - the AXA branch in Seef, the Ramli Mall shop in A'ali and Nakheel Centre shop in Saar.
"Our customers are able to visit an AXA location seven days a week, and coupled with our new 24-hour call centre, we hope they now find our services more convenient."

Source : http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=331864

Retailers retrench as reform hopes dashed

 

(Reuters) - India's largest supermarket operator, Future Group, is having a clearance sale: its financial service business and flagship clothing brand are gone, and more deals are in the pipeline.
Six months after the government backtracked on plans to allow foreign retail giants such as Wal-Mart Stores (WMT.N) and Carrefour to form joint ventures, cash-starved domestic chains are selling assets, shutting stores, and scaling back expansion plans.
It seems improbable that retailers could be in such trouble in India. They have the world's second-largest population, increasingly affluent consumers, and limited competition.
But things are tough for supermarkets, a relatively new business sector in India, with every major chain losing money. The economy has lost momentum, compounding problems of high food inflation and low retail prices, and expensive real estate.
Foreign partners would bring experience, expertise and funds, but many in the industry do not expect a decision on foreign investment in supermarkets before elections in 2014.
"These companies have realised there is no point standing still and bleeding more, waiting for the government to act," said Debashish Mukherjee, partner and vice-president with consultancy AT Kearney.
Graphic on retail market, click link.reuters.com/byz54s
ALTERNATIVE FUNDING
With foreign investment ruled out, many supermarkets, which account for 70 percent of organised retail in India, are looking to private equity investors or hitting up their billionaire owners for more capital as they continue to bleed.
"Foreign private equity firms are in talks with smaller businesses which are less capital intensive. So this option is ruled out for the big boys," said an investment banker who did not wish to be identified.
Last November, after years of delay, the prospect of a foreign partner appeared tantalisingly close for the domestic chains. India said foreign supermarket operators would be able to own up to 51 percent of a joint venture.
Industry euphoria proved short-lived. Under pressure from ruling coalition allies, the government backtracked in an embarrassing reversal that has come to symbolise the inability of Prime Minister Manmohan Singh's administration to enact reforms.
Indian traders and middlemen vehemently oppose allowing foreign chains into a $450 billion retail industry where 90 percent of sales are made by informal "kirana" stores, which are generally family run.
Proponents argue the infrastructure and investment that can be brought by the likes of Wal-Mart would go far to ease crippling food inflation and a high rate of food spoilage.
"We are going cautious with our expansion plans," said Mark Ashman, chief executive of Hypercity, the hypermarket arm of Shoppers Stop (SHOP.NS), which, like many of its rivals, hopes to join forces with an overseas retailer once the rules change.
"If foreign direct investment was allowed, the appetite for expansion for us would certainly be higher," he said.
A SMALLER FUTURE
Future Group, controlled by Kishore Biyani, known as the father of Indian retail, recently sold control of its financial services arm Future Capital (FCHL.NS) to private equity firm Warburg Pincus.
Future (PART.NS), which sells groceries under the Big Bazaar and Food Bazaar brands, announced the deal days after it sold a controlling stake in its flagship clothing brand Pantaloon. The two deals will wipe about $1 billion in debt from its books.
"Our intention is to exit from non-core businesses and focus on core retail business," a company spokesman said, adding Future Group aims to be debt-free by the end of the fiscal year in March 2013.
"Two recent deals are not the last ones from us."
Future is now in talks to sell a stake in its food processing and manufacturing business to Japan's Lawson Inc, Japan's No.2 convenience store chain, a source with direct knowledge said, adding a deal would be finalised soon.
Lawson spokesman Shin Ichikawa said the company was in talks with several potential partners about entering India, but declined to name them and said nothing had been decided.
Future Group also plans to exit its insurance joint venture with Italy's Generali, although a possible deal is further off, said the source with direct knowledge who declined to be identified.
SCALING DOWN
As well as selling assets, Future Group, which operates more than 1,300 grocery stores covering 16.5 million square feet (1.5 million square metres) across its different formats, is also scaling down growth plans.
The source said the group will only open 2 million square feet of retail space this fiscal year, instead of a previously announced 2.5 million square feet (230,000 square metres).
Future is not alone. Aditya Birla Retail has shut 50 of its More supermarkets and is closing loss-making outlets in Mumbai, Delhi and Pune to focus on hypermarkets, a company source said.
The company, part of the Birla conglomerate, has also sought another 3 billion to 4 billion rupees from controlling shareholder Kumar Mangalam Birla, the source said.
Even mighty Reliance Industries (RELI.NS), the conglomerate controlled by Mukesh Ambani, India's richest man, has been unable to make money in retail after six years in the business and 1,300 stores.
Still, it has no plans for a foreign partner and is pushing ahead with expansion of its supermarket chains.
"Food and grocery retailers have been suffering in most of the major markets," said Devangshu Dutta, consultant with Third Eyesight.
"Many believed India to be insulated, but that's not the case."
(Additonal reporting by James Topham in Tokyo; Editing by Tony Munroe and John Mair)

Source : http://in.reuters.com/article/2012/06/11/india-future-group-retail-fdi-idINDEE85A02D20120611

Key facts on India's retail sector

(Reuters) - Supermarket chains are looking for funding in a tough business environment, with foreign partners closed off for now after last year's indefinite suspension of a move to open the $450 billion retail market to giants such as Wal-Mart Stores Inc(WMT.N).
The government had hoped the major reform would boost investment in Asia's third biggest economy, but it quickly backtracked when it came up against fierce opposition from across the political spectrum and from traders' unions.
Following are some facts on India's retail sector:
* The retail sector in the nation of 1.2 billion people is estimated to have annual sales of $450 billion, with nearly 90 percent of the market controlled by tiny family-run shops.
* Organised retail, or large chains, makes up about 10 percent of the market, but is expanding at 20 percent a year. This is driven by the emergence of shopping centres and malls, and a middle class of close to 300 million people that is growing at nearly 2 percent a year.
* India also allows 100 percent FDI in cash-and-carry, or wholesale, ventures. Restrictions on foreign investment in front-end retail exist because of opposition from millions of small shopkeepers who are valuable vote banks during elections.
* India has recently allowed 100 percent FDI in single-brand retail subject to certain sourcing restrictions but no ownership in multi-brand retail.
LOCAL COMPANIES
* Pantaloon Retail, India's largest listed retailer and part of the Future Group, runs apparel and electronics stores under its lifestyle brands Central, E-Zone, Hometown. Future also operates the Big Bazaar hypermarket chain and supermarket brand Food Bazaar.
The group has over 1,300 stores across formats, and occupies a total retail space of 16.5 million square feet in India.
Future has for long been linked to France's Carrefour(CARR.PA) for a partnership in hypermarkets. It is recently sold controlling stake in its flagship clothing brand Pantaloon to bring down its high debt.
* Second-ranked Reliance Retail is part of Reliance Industries(RELI.NS), India's largest listed group headed by Mukesh Ambani, India's richest man. Reliance Retail operates 1,300 stores across neighbourhood stores, supermarkets, hypermarkets and lifestyle stores.
It has said it doesn't plan to partner with any global retailer.
* Shoppers Stop (SHOP.NS), part of the K Raheja Group which operates in real estate, has about 265 stores across brands and formats including 12 Hypercity hypermarkets.
It operates 4.58 million square feet of retail space and its loss-making Hypercity is open to partnerships with foreign groups.
* Trent, part of the sprawling Tata Group, operates 106 stores across formats and runs the Westside range of apparel stores, and hypermarkets under Star Bazaar. It signed a franchisee agreement with Tesco Plc under which Star Bazaar shops use the British firm's supply chains and infrastructure.
* Aditya Birla Retail is the unlisted retail arm of India's telecoms-to-cement conglomerate Aditya Birla Group, headed by Kumar Mangalam Birla, ra nked the seventh-richest Indian by Forbes in March 2012.
The company operates around 500 supermarket and hypermarket stores under the More brand. It has said it will evaluate partnerships with global firms.
MAJOR FOREIGN COMPANIES
* Wal-Mart Stores Inc (WMT.N) has a cash-and-carry operation with Indian partner Bharti Enterprises, the parent of leading mobile provider Bharti Airtel, and will add 12-15 new cash-and-carry stores this year to its 17 existing stores.
* Tesco, Britain's largest retailer, has a tie-up with Trent's Star Bazaar hypermarket chain. Tesco is also looking to enter the wholesale market through the tie-up.
* Germany's Metro AG operates 11 wholesale stores in India. The company plans to open 5 cash-and-carry stores every year.
* Carrefour has 2 cash-and-carry stores in India. The world's No. 2 retailer has been seeking a local partner to enter the hyper or supermarket sectors.
(Reporting by Nandita Bose in MUMBAI; Editing by John Mair)

Source : http://in.reuters.com/article/2012/06/11/india-retail-factbox-idINDEE85A02K20120611

J.Crew And Lane Crawford Announce Retail Collaboration Bringing J.Crew To Asia

NEW YORK, June 10, 2012 /PRNewswire via COMTEX/ -- J.Crew, the iconic American retailer and Lane Crawford, Asia's leading designer specialty store, are excited to announce a strategic partnership, providing customers in Asia with special access to the J.Crew women's and men's collections through Lane Crawford's retail and online stores.

Beginning in October 2012, a curated selection of the J.Crew Autumn/Winter 2012 women's ready-to-wear and shoes, men's apparel and accessory collections will be available at select Lane Crawford stores, allowing customers throughout Hong Kong and China to shop J.Crew in a retail environment outside North America for the first time. This project is the first-ever collaboration for J.Crew with Lane Crawford. The partnership will debut at the Lane Crawford ifc mall in Hong Kong and the Seasons Place store in Beijing, as well as on lanecrawford.com, providing a new and exclusive positioning for both brands across Greater China.

Millard Drexler, J.Crew's chairman and CEO says, "We always want to work with the 'best of the best,' and Lane Crawford was at the top of our fantasy list. When it comes to editing and presenting collections with a creative and elevated point of view, no one does it better. We are beyond excited to partner with Lane Crawford to help introduce J.Crew to Asia."

Andrew Keith, Lane Crawford's president adds, "We are thrilled to be collaborating with J.Crew on this first-ever, unique multi-channel project. J.Crew is renowned in the US for bringing together an exceptional level of quality and distinctive styling, paired together with Lane Crawford's exclusive edit, we are very excited to offer this unique experience to the Hong Kong and China markets."

About J.CrewSince 1983, J.Crew has established itself as a retail pioneer with its catalog, which has become an official style guide for many, and the introduction of innovative and successful retail concepts both on and offline. J.Crew has gained international attention through its dedication to quality, timeless design and world-class customer service. From its partnerships with the finest European mills and fabric houses to its renowned Italian cashmere and impeccably tailored Ludlow suiting, the company has built a loyal following all over the world. The next phase in the company's expansion plans will include opening specialty stores in select markets in Europe and Asia over the next several years. J.Crew Group, Inc. is an internationally recognized multichannel retailer of women's, men's and children's apparel, shoes and accessories. As of June 7, 2012, the company operates 277 retail stores: including 227 J.Crew stores, 8 crewcuts stores and 3 J.Crew stores in Canada, 39 Madewell stores, the J. Crew catalog business and jcrew.com as well as 96 Factory outlet stores. For more information, see www.jcrew.com .

About Lane Crawford Lane Crawford is Asia's leading specialty store, offering the largest assortment of international designer brands across Womenswear, Lingerie, Menswear, Shoes & Accessories, Jewellery, Cosmetics and Home & Lifestyle. It is part of the Lane Crawford Joyce Group, Asia's premier international fashion, beauty and lifestyle brand group, including multi-brand retailer Joyce, designer shoes and accessories specialist The Pedder Group, and management and distribution arm, Imaginex. The Lane Crawford Joyce Group operates more than 550 points of sales across Greater China and South East Asia.

SOURCE J.Crew; Lane Crawfor

Retailers unveil NSW budget wish list

 

Australia's peak retail body says it wants major cuts to NSW payroll tax in the state budget.
In a move to boost the sector, the Australian Retailers Association (ARA) has outlined seven points they hope NSW treasurer Michael Baird will address in Tuesday's budget.
Among the wish-list is a call for a 'minimum 25 per cent in reduction in red tape', which they say could mainly be achieved through cuts to the payroll tax.
'Retailers in NSW pay some of the highest payroll taxes in the country, which hampers their ability to compete on a national scale,' ARA Executive Director Russell Zimmerman said in a statement on Monday.
The association has also called for improved transport links for the supply of goods and investment in workplace training through VET funding.
The ARA said it also did not want to see any extra taxes or charges on households.
'NSW retailers also need to see some relief from low consumer sentiment through initiatives which stimulate household spending rather than squeeze budgets any further,' Mr Zimmerman said.
While accepting for the government to return to surplus, the association said this should not come at the expense of business investment or further pressure on household budgets.

Source : http://www.skynews.com.au/politics/article.aspx?id=759824&vId=

Expedia to open retail outlets in India

In a first, online travel company Expedia is planning to open retail outlets for the Indian market. This is a strategy it has not adopted anywhere else worldwide.
However, it is not the first online travel company to have offline presence in India. MakeMyTrip has 54 stores across India. Yatra.com has 23 outlets, including one in Kathmandu, which it refers to as ‘Yatra holiday lounges’.

In a contrast scenario, traditional travel companies like Cox & Kings and Thomas Cook are looking at online as an important tool for growth and remaining relevant. A senior travel industry expert said, “Companies have to go for a hybrid model and have a healthy mix of both online and offline if they want to compete and get a wider market share.”

Expedia’s plans for offline retail outlets may have been triggered by restrictions in the Indian market, including poor broadband penetration and problems related to online payment. While noting Expedia had become a familiar name in the online travel space, Vikram Malhi, the company’s country head, confirmed plans to set up offline retail stores.
According to experts, for online players, ticketing is big business in terms of volumes but not in margins, which come from selling holidays. While customers can easily go online to book a return ticket for packages, many still prefer to have a face-to-face interaction with the travel agent. “We are actively focused on growing the offline business and carefully select serious investors with a passion for the travel industry to partner in retail franchise operations,” said Keyur Joshi, chief operating officer (COO) at MakeMyTrip.com.
For personalised and high value transactions, online travel companies are partnering entrepreneurs at the regional level, largely in tier-I and tier-II cities. “The grass is always greener on the other side. We like their (online) volumes. They like our margins,” said Rakshit Desai, executive director, Thomas Cook India. The company, with presence across 70 cities and 153 owned locations in India, now wants to create its online market in ways that add value to transaction, he said.
While the traditional travel companies have a strong offline presence, the challenge for them is to find the right content for the online platform. “Ours is not a ticketing business. We feel the web is vital for growth and needs to be pushed with right products,” said Karan Anand, COO, Cox & Kings.
With their expertise in packages already in place, these companies want to direct the traveller to make high value purchases with more convenience. “We can have options like order online and pay offline, as customers are often not comfortable using credit cards online,” Desai said.
According to a recently published paper by Thomas Cook India on convergence of travel and technology, 59 per cent of the surveyed respondents visited three or more sites to make a travel purchase and still 51 per cent of people stated they were not able to get enough information online to make an informed decision. “The products are evolving in the online space and consumer demand for information is fast outpacing the developments. Future corporate policy on IT and use of gadgets and connectivity will be driven by employee demand to stay connected and render services,” the paper said

What Does Retail Entail?

 Appearances are deceptive... we must have heard this age-old adage several times in our life, but does this concept apply to our contemporary age? In fact, it very well does, since appearances make a world of difference in today's day and age and can give an instant facelift to anyone's career. This is what retail merchandising entails.

Retail merchandising is a process used in order to conduct retail sales. Once you choose to become a retail merchandiser or venture into this unconventional career, you have to first establish a close contact with your manufacturer, who is responsible for providing goods and services. This type of retail buying involves determining what products will be carried in the retail establishment, negotiating the unit price that will be charged by the manufacturer and arranging for the delivery of those goods. In short, a merchandiser is responsible for sourcing the products for the brand, presenting the same to a consumer in a certain manner at a retail store, so that s/he is forced to become a brand loyalist.

Imagine you are out on a shopping spree. You are completely bowled over by the presentation and availability of the products there. You enter the store, buy a couple of things and spend big bucks. So, who had the last laugh here? But, of course, the merchandiser, who did everything possible to attract you to step into the store. This profession is extremely challenging and requires immense creativity . Interestingly, the merchandiser is the captain of the ship. "I started off with a very small store. Initially, it was maddening, because the management can overload you with work and honestly, it is your analytical skills that come handy here," says Rakhi Singhal, a retail merchandiser. In a way, the merchandiser represents the company at a retail store. Right from deciding on the design to the positioning of products, the merchandiser dons the director's hat. The merchandiser needs to constantly upgrade his skills and do a lot of market research to ensure that the product sells at any cost. "In India, a merchandiser has the creative freedom to do up the store as per his/her tastes. International brands follow a different pattern. One is given a stepby-step instruction guide and it is mandatory to abide by it," says Karthik Verma, a merchandiser.

There are mainly two skills that are required to become successful in this career: organisational and analytical. It is essential for an aspirant to have an eye for observation and present products in an organised manner so as to instantly catch the eye of the customer.This not only appeals the consumer, but also aids the merchandiser to develop such basic qualities. Meanwhile, an analytic bent of mind aids in this field, since one has to deal with large numericals as well as make practical decisions at the drop of a hat. One has to be sensible to make wise moves in this profession.

The courses for Retail Management can be undertaken by a student after completion of his Senior Secondary, which basically includes various diploma programmes, whereas for MBA and Post Graduate Diploma, candidate needs to be a graduate in any stream. Common entrance exams for MBA are CAT, MAT, XAT, which conduct a written test followed by group discussion and interview. 

 Source : http://timesofindia.indiatimes.com/home/education/news/What-does-retail-entail/articleshow/14010130.cms

 

 

 

Future Group's Kishore Biyani not to sell stake in Big Bazaar and Food Bazaar chains

 

Retail magnate Kishore Biyani says he is not in talks with anybody to sell stake in Big Bazaar and Food Bazaar chains because his Future Group has sorted out its debt crisis after three back-to-back deals in the past one month.

"We are not in discussions with anybody. I don't want to divest my core retail business now. I want to run it," Biyani told ET. "Our debt levels are very comfortable and divestment, if any, will only be in non-core assets," the Future Group chief said.

In recent weeks, the retail industry has been abuzz with speculation that the Future Group was in talks with India's richest man Mukesh Ambani to sell stake in its flagship Big Bazaar hypermarket network, which contributes almost 65% of revenues of Pantaloon Retail (India) Ltd, the listed entity of Future Group.

Reliance Industries operates a nationwide network of retail chains under Reliance Retail and Ambani sees this segment as one of the engines of future growth for the conglomerate.

A Reliance Industries spokesman denied any negotiations with Biyani. "We deny that Reliance Industries has ever been in talks with Future Group or Mr Kishore Biyani for any stake sale," he said.

A person aware of developments in Future Group, however, said Reliance Retail and Future Group had explored the possibility of a partnership about three months ago. But the talks did not proceed because the AV Birla Group moved faster and agreed to buy Pantaloons department chain, helping Future Group improve its precarious financial situation.

"At that time the priority was to bring money into the company and the Pantaloons deal addressed that issue," the person said.

The Future Group, which has been in an aggressive expansion mode, ran into a crisis with consolidated debt of Rs 7,800 crore that weighed on its profitability. Pantaloon Retail has been spending more than Rs 100 crore in interest over each of the past three quarters. This started to pinch as consumer spending slowed. That was when Biyani started looking to sell assets to pare debt.

Last month, the Future Group sold a majority stake in Pantaloons department chain to AV Birla Group's Aditya Birla Nuvo for Rs 1,600 crore that included Rs 800 crore of debt transfer.

No Hurry to Sell Core Business

Then, last week, the Future Group announced sale of its 53.67% stake in Future Capital Holdings to US-based private equity firm Warburg Pincus for Rs 4,250 crore, which included Rs 450 crore of cash payout and Rs 3,800 crore of debt transfer. Pantaloon Retail also raised Rs 200 crore through a preferential share allotment last week.
  

"In the past one month, Biyani has managed to reduce his debt by Rs 6,000 crore. Now, he is in no hurry to sell any of his core businesses," the person close to Future Group said. A senior official of a rival retailer, however, said Biyani will ultimately get a partner for his value chain. "The only question is if he will tie up with an Indian company or wait for foreign direct investment to be allowed in the sector so he can find an international partner," the person said.

Meanwhile, Biyani plans to sell more non-core assets in a bid to make the Bombay Stock Exchange-listed Pantaloon Retail debt-free by March 2013.

He plans to raise Rs 1,650 crore by October by offloading shares in his insurance and stationery joint ventures, the consumer electronics chain and home furnishing network. This would include raising Rs 1,000 crore by divesting stake in Future Generali insurance. This will help prune Pantaloon Retail's standalone debt, which stood at about Rs 5,500 crore at the end of March.

The group also plans to shed 40% stake in the electronics retailing business eZone when it merges it with Noida-based InTarvo Technologies, which specialises in providing technical support to large corporations and retailers. InTarvo could not be contacted for comment despite repeated attempts.

Biyani also plans to sell a minority stake in home furnishing and do-it-yourself chain Home Town network for about Rs 300 crore in the next two months.

He said his group's May deal to cede controlling stake in Pantaloons chain to AV Birla Group was a one-off transaction. The company will only sell minority stakes in any future deals in its core retailing business and will maintain majority stake in such ventures, he said.

Biyani added that he doesn't want to touch Future Value Retail, which operates Big Bazaar and Food Bazaar, as the group's debt situation can be controlled.

The only way he wants to touch Big Bazaar is by undertaking some tweaking in the profitable 150-strong chain by introducing improved services and consumer-centric approaches, underscoring with a new tagline 'Aapki Sewa Mein' (or, 'At Your Service'). Big Bazaar is changing its tagline months after it adopted 'New India's New Bazaar'. 

 

India, China will power travel retail trade: Anirban Chowdhury, Nuance India

 

Anirban Chowdhury, Country Head, Nuance India

The retail revolution in the country may have hit policy roadblocks, but travel retail is one segment that has bucked the trend. In the last half-decade, travel retail business in the country has grown at 25-30% per annum.

The commissioning of many new airports and rise in the operation of low-cost airlines are key factors that have contributed to the growth of the travel retail, says Anirban Chowdhury, country head of Nuance India.

The sector is likely to see a similar growth in the current year too, says Chowdhury. Zurich-based Nuance, a leading player in the travel retail industry operating 370 outlets across 58 airports in 19 countries, has formed a joint venture with Shoppers Stop to operate the duty-free shop at Bangalore International Airport. He sees the Indian travel retail sector posting an exponential growth in the coming years.

Chowdhury, who has over a decade of experience in consumer business, retail marketing and retail operations, is of the view that India and China will power growth of world travel retail trade in the near future.

The growth of travel retail in the country is closely linked to the commissioning of new international airports by the private sector. The efforts to increase non-aeronautical revenues by airports in the private sector to 50% or more of the total revenue have contributed substantially to its growth.

However, compared to private sector airports, revenue from travel retail is 25-30% of the total revenue in airports in the government sector.

"There has also been a huge increase in the number of inbound and outbound travellers through major airports in the country. The introduction of low-cost airlines to new destinations has added to air traffic, in turn, benefiting the travel retail sector," he says.

The world travel retail industry is estimated at around $40 billion. Not only is the turnover expected to double in the next decade but bulk of this growth is likely to come from the Asian region.

In India, Delhi and Mumbai are at the forefront of travel retail business, followed by Bangalore and Kochi. In fact, Cochin International Airport was among the first in the country to focus on non-aeronautical revenue by promoting travel retail business. Today, Cochin duty-free's turnover is close to 100 crore.

"Earlier, Indians spent money mainly at overseas airports. However, now they prefer spending it at Indian airports as overseas purchase invariably leads to excess baggage and breakage. Another reason for higher spend at the domestic duty-free shops could be that the new privatised airports offer better passenger facilities and larger retail space.

The range of products that these shops offer is at par with leading airports around the world. There are instances of duty-free shops in India offering products at lower prices than the overseas ones. Cigarette is one such product that is cheaper in Indian duty-free shops compared to other airports like London," he says.

Traditionally, product groups that have dominated the travel retail segment are liquor, tobacco, cosmetics and confectionaries.

The pattern holds good for the Indian industry too, except for the fact that cosmetics have not shown growth similar to the growth of other product groups. The lower share of women travellers was the reason for the poor performance in this product category till now.

However, Chowdhury says the trend is changing as the share of women travellers is gradually on the rise. Apart from traditional items, the Indian travel retail sector has started promoting new product categories such as electronics.

The Bangalore airport duty-free shop has, for example, started promoting LCD TVs in a big way by offering local warrantee and free installation facilities. The new offer came after those manning the duty-free shop at Bangalore International Airport noticed passengers bringing TVs from Singapore or Bangkok.

Nuance joint venture has now tied up with Sony to introduce the product at Bangalore duty-free at prices that are comparable with overseas prices.

Chowdhury says the potential for Indian travel retail business is huge now, with new terminals coming up in Chennai and Mumbai. Facilities are also being upgraded at the Kolkata airport.

The new international passenger terminal at Kochi is expected to be ready by 2014. Goa and Kozhikode airports too offer immense scope for growth.

Traditionally, the revenue between arrival and departure is in the ratio of 80:20 in India. However, in the case of new airports such as the one at Bangalore, revenue between arrivals and departures is more balanced, with the ratio moving closer to 50:50.

Business would boom further if some policy issues are addressed. For instance, "products made in India cannot be sold at arrival duty-free counters. Sales to foreign passport-holders would increase if these counters are allowed to stock Indian goods," he says. 

Source : http://economictimes.indiatimes.com/opinion/comments-analysis/india-china-will-power-travel-retail-trade-anirban-chowdhury-nuance-india/articleshow/14011512.cms?curpg=1 

'Bulk retail' block closer

 

Mon, 11 Jun 2012

News: Dunedin

The redevelopment of a Dunedin central business site sidelined in 2009 may soon become a reality. Harvest Court Mall owner Carl Angus put plans for a new "bulk retail" building on the central George St site on hold in 2009.

Yesterday, Mr Angus said the concept of redeveloping the rear of the site, which backs on to Great King St, was being considered, but he would not comment further as it was a bit "premature".

He directed the Otago Daily Times to Silver Fern Farms, which is a tenant of the site after selling it in 2008.
Silver Fern Farms chief executive Keith Cooper said he was aware ideas were being discussed but it was very early days.

Dunedin City Council resource consents manager Alan Worthington confirmed there was a resource consent for the development of the rear of the site, including removing an old brick building and putting up a new four-level building.

In Saturday's Otago Daily Times, Arrow International called for registrations of interest from building contractors and subcontractors for the construction of a building over four levels and a refurbishment of an existing structure floor plate in the central business district.

Reference : http://www.odt.co.nz/news/dunedin/212741/bulk-retail-block-closer