Goodman Fielder losses. Australia’s largest baker, accounts for more than 33% of packaged bread sold in Australia, almost 50% of packaged bread sold in New Zealand, facing the second consecutive bottom line loss in 2012, as written down value in AU and NZ by almost $400 million in two years. Aiming to cut costs by $100 million by 2015. Helgas, Lawsons and Buttercup brands are losing market share to $1 Woolworths and Coles private-label bread and premium priced loaves by artisan bakers such as Sonoma and Bourke St Bakery. Company has cut prices, and is culling varieties and closing plants to reduce costs. Major rival is George Weston Foods (Tip Top and Burgen bread). Analysts say break makers need to raise prices to lift margins. Woolworths CEO: We are constantly reviewing trading terms with suppliers... it only works if there’s something in it for the retailer and something in it for the manufacturer, but ultimately it’s the customer that drives the decisions we make” [CR: See story below. Not sure how it works with private labels competing for profit share, then saying something needs to be in it for both parties. Only way customer will decide is if they refuse to shop if item is not stocked, which is unlikely when private labels diversify into broader choice ranges.]
Woolworth sales up. Woolworths is Australia’s largest retail, shares reached a 12-month high. Company set a strategic plan in November aimed at restoring “aspirational” earnings growth to 10% over the next few years. Group sales for three months ending June 24 rose by 5.1%, full year sales up 4.7% to $56.7 billion. Australian food and liquor same store sales up 1.3%, total sales up 3.8% to $8.55 billion. Woolworths opened nine new supermarket and liquor stores and refurbished 11 others in the quarter. This despite the 4.3% food price deflation. With the new stores, sales per square metre fell from $16,424 to $16,194, suggesting weaker productivity. Big W same store sales up 1.6% in June quarter following seven consecutive quarters of flat or weaker sales, growth attributed to government May and June handouts. Dick Smith same store sales up 15.4% in AU, 9.9% in NZ due to reduced prices in preparation for divestment, sale expected to be complete next month. [CR: I would be surprised if productivity did not decrease during expansion. Not sure on the ration a to what to expect in that industry, but how long does a store take to be operating at optimum? Or any change initiative for that matter?]
Samsung sues Apple, says Apples two iPhone 4 models and the iPad 2 infringe on 3G patents. [CR: Because it worked so well last time.]
Online spending expected to double to $27 billion by 2016. Food has been the biggest boost, up from 17% in 2011 to 23% current. (Frost & Sullivan and PwC survey). Over 50% of 1000 respondents driven online by lower prices, 26% made using mobile devices, 62% purchased electronics. Spending last year was $13.6 billion, expected to hit $13.6 billion this year. [CR: Exciting to see the innovation in how to engage online, unfortunate it is driven by the commercial mandate, will be good to see benefits to social good that come out of the activity.]
NAB mobile stats: Over 33% of internet banking log-in are from mobile devices. Use of digital channels has increased by about 270% over the past 12 months. Strategy: NAB will try to exploit any technology edge to boost cross-sell, particularly of wealth management products, and leverage competitive advantage in its wide ranging third-party distribution networks. [CR: I am seeing “33% through mobile” as a current benchmark.]
Westpac launches iPad and says bank branches will halve in size over next few years. iPad app allows transfer of funds, make payments by drag and drop, check balances. Plans Facebook payments by the end of the year. Customers who were active users of mobile services stayed with the bank longer and were more likely to buy other products (Harry Wendt, GM of online and mobile). App has been downloaded 14,000 times in past two weeks. Developed iPad first due to “proliferation of devices and screen resolutions” on Android.” Says apps more secure than web browser since the concept is new and had not attracted attention of organised crime gangs. Over 1.4 million customers use Westpac’s mobile banking services (over 33% of online transactions). It took two and a half years to reach 1 million mobile customers, then six months to reach the next million. Westpac recorded 42.4 million logins to its website in year to May 2012, an increase of 17% from previous year. Of these, 12.6 million were on mobile devices, up 195% from last year. Customers made 41.2 million online payments worth $251 billion, mobile accounted for $580 million. Value of transactions going through branches has decreased an average of 5% per year for past 5 years.
AU and NZ online travel industry to grow by 11% in 2012 to $US13.5 billion. Linely Planet and trip Advisor are successful because they sell inspiration. Almost 75% of Facebook users boast about trips, 20% say they have booked trips after seeing friend’s posts. Wotif.com booked $595.6 million through the site during six months ending December 2011, posted a net profit of $28.8 million, up 14%, revenue up 4% at $74 million. Webjet booked $369 million during first half of financial year, up 29.5% from previous corresponding period. Net profits up 17% to $5.9 million, revenue up 37% to $28.2 million. Sydney-based Hotels Combined deals aggregator, 24 languages, 120 different currencies, rooms in 220 countries, founded in 2005, has 200 staff, 95% of revenue from overseas, generated bookings worth $478 million for year ending June 2012, double previous year, visitors up from 79 million to 132 million.
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