Retail news round-up on May 6, 2014: Morrisons apologises for ad stunt, Amazon and Twitter ink tie-up, Tesco launches pound zones and more.
Morrisons forced to apologise for Angel of the North advertising stunt
Supermarket Morrisons has apologised after its decision to beam an advert onto the Angel of the North statue sparked outrage.
The under pressure supermarket tried to kick start a new price cutting move over the weekend by projecting an image of a baguette onto the artwork, which was created by Antony Gormley.
The spokesman said: “We’re sorry if you thought we got carried away by shining a baguette on the Angel of the North and apologise unreservedly to those to whom we have caused offence.
“We were trying something different which was meant to put a smile on peoples faces but clearly it wasn’t to everybody’s tastes. We’re so proud of our northern roots and the last thing we want to do is offend anybody.”
Meanwhile, Morrisons has also faced criticism after it axed funding for social activities for hundredsof elderly ex-staff.
House of Fraser eyes Russian expansion with four franchise stores
House of Fraser is planning to expand into Russia with new store openings. This overseas growth follows the retailer’s recent acquisition by Chinese tycoon Sanpower.
Sanpower chairman Yuan Yafei said he would open four franchise stores in Russia and two in Abu Dhabi over the next two to three years, as well as a flagship ‘Oriental Fraser’ store in Nanjing next year. Yuan told the Financial Times that he planned to inject money into its UK operations to renovate its stores but intended to leave its management team in place.
Amazon and Twitter ink shopping tie-up
Online retailer Amazon has partnered with Twitter to allow consumers to tweet items they like into their shopping baskets, The Financial Times reported. The feature is aimed at turning Twitter into a new shopping window for Amazon. Through the tie-up, consumers on Twitter who see a tweet with an Amazon product link will be able to drop it into their Amazon.com basket by replying with the hashtag #amazoncart in the US and #amazonbasket in the UK. Although Twitter will not make any money from Amazon sales directly, the group hopes that it will encourage retailers and other companies to spend more money on advertising through the site.
Tesco launches offensive against pound shops with in-store pound zones
Tesco is launching a massive counter-offensive against Poundland and single price point retailers by introducing heavily-promoted ‘pound zones’ within its stores. So far the zones have been launched in more than 60 Tesco stores, and it plans to increase this figure to nearly 300 over the next few weeks, according to The Daily Mail. A range of products will be sold for as little as 50p, including items such as health products, kitchen tissues, washing-up liquid, pet food and detergents. The retailer will launch new point-of-sale marketing materials including header boards, hanging banners and other signs to encourage people to visit the new areas of the shops.
Mothercare calls in PwC to renegotiate banking covenants
Baby and child retailer Mothercare has called in PwC to help persuade its lenders HSBC and Barclays to relax the terms of its banking covenants. The Daily Telegraph understands the covenants are being renegotiated to give the company flexibility to invest in new store launches planned for next year. After This is the second time Mothercare has sought relief from its banks in the past year. Barclays and HSBC agreed a £90m refinancing last September.
Co-op farms may be sold to Chinese buyer
The Co-operative Group is under fresh attack for betraying its ethical roots after a letter extinguished hopes that any of its farms could be sold to community projects, The Guardian reported. The group is expecting bids by the end of May for all 15 of its farms, but has reiterated that it will only sell to a single buyer. Co-op members and green campaigners say that leaves the way open for a Chinese buyer to snap up the farms, reflecting the growing attractiveness of British rural land to foreign investors.
The group’s stake in its troubled bank was cut to 30% after its £1.5bn financial rescue last year, but the Sunday Telegraph said the group was planning to sell some of its entitlements in the rights issue, in a deal that would leave it with a stake of just over 20%.