German group Arcandor's financial struggles have led to talks with Berlin regarding a state bailout, resulting in strong criticism from both politicians and retailers. As an alternative, rival Metro is proposing a takeover of Arcandor's Karstadt department store chain. Although both solutions could undermine competition in the market, the latter may rescue the struggling retailer in the long term.
UK retailer M&S, which is celebrating its 125th year, announced that UK profits were down by 33% in the year to March 28, 2009. In order to regenerate growth and reinvigorate the brand, group finance and operations director Ian Dyson is leading a change program. Although this strategy is likely to prove Mr Dyson's credentials as a successor to Sir Stuart Rose, he faces considerable challenges.
Asda delivered an impressive 12th successive quarter of market out-performance in Q1 2009, with like-for-like sales increasing by 8.4%. While Asda's strong price proposition is attractive to the current frugal consumer, therefore boosting growth, the retailer must continue to improve its quality perception to ensure that this performance is maintained in the long term.
For the 52 weeks to March 21, 2009, Sainsbury's total sales increased to GBP20.4 billion, up 5.7% compared to 2008, and 4.5% on a like-for-like basis. Sainsbury's innovative campaigns and range architecture are catering well for the frugal consumer, while long-term plans are laying solid foundations for future growth.
Following the success of Moto's partnership with Marks & Spencer and its own recent ventures into smaller store formats, Waitrose opened the first of two stores at Welcome Break service areas on May 1, 2009. In light of the current trend for top-up shopping and heightened demand for quality convenience products, Waitrose's timely entry into the motorway service market is expected to be a success.
Metro, Germany's largest retailer, has posted its Q1 results, revealing that for the first time in years contributions from abroad have fallen. While currency exchange rate effects played a role, other factors also contributed, such as Easter falling in Q2. While there were some snippets of good news, the overall outlook for 2009 is bleak, as the downturn becomes more pronounced.
