Retail news round-up on June 17, 2014: Moody’s downgrades Tesco’s credit rating, John Lewis launches competition to find budding designers, Carphone to become mobile operator in Ireland and Charlie Mayfield to help appoint banking watchdog chairman
Moody’s downgrades Tesco’s credit rating to Baa2
Ratings agency Moody’s has cut again troubled retailer Tesco’s credit rating to Baa2 from Baa1- just two notches above junk status - after a 6% drop in the company’s 2013-14 trading profit and weak first quarter sales this year., the Telegraph reported. Moody’s said it would consider a further downgrade if the supermarket giant reports a substantial profits decline in the UK or abroad.
A Tesco spokesman said: “Moody’s announcement reflects the challenges for the sector as a whole, and the impact that they expect this is likely to have on our near-term performance. However, they also acknowledge we have a plan to address structural challenges in the sector and we remain market leader both overall and in online and convenience which are critical to future growth.”
John Lewis teams up with PopUp Britain to pitch ideas for PitchUp competition
John Lewis has partnered with PopUp Britain to find the cream of British product design as part of the UK high street retailer’s latest PitchUp initiative, the Telegraph reported. Budding product designers have been invited to pitch their ideas to the department store chain. The competition, now in its third year, gives retail entrepreneurs the opportunity to showcase their products to a panel of buyers at the John Lewis headquarters.
The project is run in association with PopUp Britain, which offers short-term, low-cost premises to new retail brands as part of its mission to rejuvenate Britain’s high streets. 12 start-ups across home wares, beauty, clothing and electricals will be selected to participate in the event, which is due to be held on August 1.
Carphone Warehouse to become mobile operator in Ireland
Retailer Carphone Warehouse (CPW) has finalised a mobile virtual network operator (MVNO) deal with Hutchison Whampoa to offer services using 3’s network, thereby becoming the next mobile operator in Ireland. The agreement is likely to be formally announced next week. It is understood from several industry sources that the company will operate the second MVNO to arise from Hutchison Whampoa’s €850m (£678m) takeover of O2.
Kantar report shows British shoppers spend nearly five-times more online
According to Kantar Worldpanel’s report, consumers in the UK spend almost five times more online than in-store when making grocery trip, the Financial Times reported. This makes ecommerce an opportunity than a threat for retailers, finds the report. In all the countries surveyed, online shoppers spent on average twice as much as in-store, with British shoppers spending the most – 4.8 times as much. Kantar forecasts that packaged goods ecommerce will increase 47% by 2016 when it will account for $53bn of global sales, a 5.2% rise.
Sir Charlie Mayfield to play key role in appointing bank watchdog chairman
John Lewis Partnership’s chairman Sir Charlie Mayfield is among a trio of public figures who will play a vital role in selecting the leadership of a new body charged with repairing the reputation of British banking, Sky News understands. Sky News has learnt that the boss of the retail giant has agreed in principle to join a selection panel which will appoint the inaugural chairman of the Banking Standards Review Council (BSRC), which will be formally launched later this year.