Tuesday 12/11/19

1. In MACRO NEWS, the UK manages to grow, avoiding recession
2. In RETAIL NEWS, Alibaba’s Singles’ Day is a huge success, Amazon opens its first supermarket in LA, UK retailers call for a rates review, Burger King teams up with Unilever for a meat-free Whopper and Greggs continues to satisfy
3. In INDIVIDUAL COMPANY NEWS, Google collects medical records and Walgreens Boots gets a buyout proposal
4. In OTHER NEWS, I bring you one woman’s efforts to train her dog to talk…

So the UK economy manages to grow, but only by a bit…

UK avoids recession but it’s no cause for celebration, say critics (The Guardian, Phillip Inman and Mark Sweney) cites the latest data from the Office for National Statistics which shows on the one hand that the British economy staved off a recession in the third quarter after expanding by 0.3% but, conversely, the annual growth rate was the slowest for a decade. Performance from the all-important services sector was the main reason that things stayed positive. * SO WHAT? * Funnily enough, Labour’s John

McDonnell and the Liberal Democrat’s Ed Davey criticised the growth rate, but TBH what do you expect when no-one knows what’s going on with Brexit?!? Don’t get me wrong, these aren’t figures to boast about on their own merits but it’s not like the rest of Europe is firing on all cylinders – or even most of the rest of the world, for that matter. I am actually pretty amazed that these figures are still in positive territory despite everything. It does make you wonder how strong they would be if we didn’t have the Brexit cloud hanging over us! Anyway, Tories boosted by return to growth despite pace slowing over Brexit (Daily Telegraph, Russell Lynch) gives a positive spin on the figures for the government as they will no doubt be used to bolster BoJo’s credentials come voting time.

Alibaba’s Singles’ Day knocks it out of the park yet again, Amazon opens a supermarket in LA, UK retailers call for lower rates, Burger King teams up with Unilever for a meatless Whopper and Greggs rakes in the profits…

Swift returns for Alibaba as Singles’ Day takes 68 seconds to clock up $1bn sales (Daily Telegraph, Hasan Chouwdhury) highlights how incredibly successful this completely self-manufactured annual retail event is as it took a mere 68 seconds to generate $1bn in sales, within an hour that ratcheted up to $12bn and then by the end of the day they’d clocked up $38bn – in one day! This year’s performance easily smashed last year’s total of $30.8bn in sales. This annual shopping day was totally fabricated by chief exec Daniel Zhang as a day where single people treat themselves and has been a roaring success since it was first held on November 11th 2009. In addition to this, Alibaba aims to deliver with $16bn courier venture (Financial Times, Ryan McMorrow) shows that Alibaba is making strides towards its goal of being able to deliver anywhere in China within 24 hours and anywhere in the world within three days as it increased its stake in its Cainiao logistics venture from 51% to 63% at the end of last week. * SO WHAT? * Zhang is a genius for thinking this up – and it seems that things are only going to get better as more people come online each year as the numbers of middle class continue to swell. Other tech innovations like “smile to pay” where the system links facial recognition technology to customers’ financial data makes payments almost instantaneous. Brands and video bloggers are lapping it up as online shopping newbies are a captive audience seeking guidance of what choices to make in product categories like cosmetics. According to Duncan Clark, chairman of investment company BDA China, some of these live-streaming sessions can attract around 33m people per session! However, some observers point out that these incredible growth rates can’t last forever and that Alibaba still has the US-China trade war to contend with as well as a $15bn secondary listing in Hong Kong to sort out against a backdrop of pro-democracy protests. On a separate note, I really think that UK retailers need to come up with some kind of retail event that will engage the shoppers. I mentioned this recently saying that they could learn from the Americans and/or Japanese as well as the Chinese.

In Amazon opens its first ‘bricks’ supermarket in Los Angeles (Daily Telegraph, James Titcomb) we see that the e-tailing giant announced plans to open its own grocery stores next year and has started hiring for an outlet in Los Angeles. It will be distinct from Whole Foods (the top end chain it bought two years ago), the cashierless Amazon Go and its “four star” stores (where it sells goods that were rated four stars or more) and is expected to have Amazon’s branding. The job listing says that this supermarket will be “Amazon’s first grocery store”. * SO WHAT? * It’s interesting to see just how many formats Amazon is experimenting with currently – and I wonder whether one day we could get a potential hybrid of all of them with best-in-class delivery capabilities. Just imagine – you could saunter into a cashierless supermarket that has groceries and highly-rated non-food products and either take your shopping out yourself or get it delivered to your address within an hour

(this is just my speculation BTW!). This may well cut out the need for major parking facilities which would mean that a smaller footprint would be needed per store which would open up many more possibilities for new sites. Fascinating, don’t you think?

Reform business rates, say retailers (The Times, Hurley) highlights calls from the British Retail Consortium (BRC), which is the body that represents UK retailers, for political parties to reform business rates (the tax on commercial property) and the apprenticeship levy (money put aside by businesses for training staff) as a matter of urgency. The body said that business rates were leading to faster store closures and job losses and that current guidelines on what the apprenticeship levy can be spent on are too restrictive. * SO WHAT? * The BRC is only doing its job in bringing these concerns to light. Retailers have been banging on about this for ages so the industry body is just re-emphasising this. Mind you, with every retail failure, you would have thought the voices will get louder and the chances of them being listened to and acted on will increase. In the meantime, retailers need to look at themselves and make sure their offering is the best it can be – not EVERYONE is losing out!

Burger King and Unilever launch meat-free ‘Rebel Whopper’ (Financial Times, Leila Abboud) heralds a very interesting move by Burger King as it has chosen Unilever – not Impossible Foods or Beyond Meat – to supply it with plant-based burgers in Europe. The new “Rebel Whopper”, which is soya protein based, will go on sale today in 25 countries (it’ll roll out in the UK next year). * SO WHAT? * This is particularly interesting given that Burger King uses Impossible Foods in the US (for its “Impossible Whopper”). It said that it looked at alternative suppliers in Europe but I wonder whether the fact that Impossible Foods is still in the process of getting authorisation in Europe forced them to switch. Unilever is a bit of a latecomer to the meatless party but it bought The Vegetarian Butcher almost a year ago to boost its capability in this area. The “Rebel Whopper” will use The Vegetarian Butcher branding on the product’s packaging and promotional materials and the chief exec of the latter, Hugo Verkuil, said that having Unilever as a parent has accelerated its development and production capability to be able to cope well with rising demand. The competition is hotting up for Impossible Foods and Beyond Meat – and I wonder whether they will be the food equivalent of Tesla as others, like Tyson Foods, Unilever and Nestle will be the equivalent of VW and the rest! Mind you, at least the meatless companies actually make money (Beyond Meat already does anyway and Impossible Foods surely isn’t far away on that front!) 😜 The “upstarts” are going to have to boost their game in order to make sure they can at least match the big players in terms of production capability otherwise they could get crushed IMO.

Then Greggs facing hit from swine fever but profits are on a roll again (Daily Telegraph, Hannah Uttley) shows that the high street purveyor of crowd-pleaser pastries and sandwiches raised its profit forecasts for the fourth time this year, sending investors into a buying frenzy that powered the stock price up by almost 17%. Fun fact: Greggs now has about 2,000 stores around the UK – more than McDonald’s and Starbucks! * SO WHAT? * A great performance by the company, but naysayers are warning that Greggs could yet suffer a bump in the road as heightened pork prices on the back of the African swine fever outbreak are likely to affect ingredients prices. Still, in the meantime, Greggs continues to be on a roll.

Google collects medical data and Walgreens Boots gets a buyout proposal…

Google’s ‘Project Nightingale’ gathers personal health data on millions of Americans (Wall Street Journal, Rob Copeland) highlights what I think is a potentially worrying fact about Google as it has been quietly working on an initiative dubbed ‘Project Nightingale’ as part of an effort to gain entry into the healthcare industry. Amazon and Apple are also trying to muscle into the market but this project, which signed up Ascension (a Catholic chain of 2,600 hospitals and other related facilities) in secret last year, is on a huge scale as it includes lab results, doctor diagnoses etc. as well as patient names and dates of birth! This has been done without the knowledge of patients or doctors and at least 150 Google employees have access to the data on tends of millions of patients in 21 states! Apparently, the swapping of this information is legit under federal law – but surely this is highly questionable on moral grounds! Google, for it part, says that it is using the data to develop new software that will help “improving outcomes, reducing costs and saving lives”. * SO WHAT? * I think this

sounds highly dodgy – especially when Google has already been accused of falling short of protecting user data privacy. Would YOU want Google to have YOUR data to hand? On the other hand (or wrist, in this case), if this just carries on the company’s recent purchase of Fitbit just got that much more interesting as it will have access to HUGE amounts of personal data both historically and live-time.

Following on from what I was saying the other day about the potential Walgreens Boots buyout, Shares rise as Boots linked to biggest private equity transaction (The Guardian, Dominic Rushe) we see that global drugstore chain Walgreens Boots Alliance appears to be on the verge of a buyout offer from private equity group KKR. * SO WHAT? * If the deal went ahead, it would be the world’s biggest ever private equity transaction. Walgreens Boots Alliance, which owns Boots in the UK and a whole load of pharmaceutical manufacturing and distribution companies, has operations in 25 countries around the world and over 415,000 employees. This is not a certainty as yet, but I would have thought that if it does go private a lot of those 415,000 employees should get concerned as I suspect a lot of cuts will be made given the slowing momentum the company has been experiencing in recent years. Going private tends to make drastic changes a bit easier because you don’t have shareholders to answer to.

And finally, in other news…

I thought I’d leave you today with How One Woman Taught Her Dog to Talk (Inside Edition, https://tinyurl.com/runt4ra). The video is pretty amazing!