Client Newswrap: Cadbury’s shares spike and retailers adapt overseas expansion plans

BRANDS
Shares in Cadbury rose this morning as speculation grew that Kraft would raise its £10bn offer for the Midlands-based confectioner. Shares went up 3.5p to 801p. According to Reuters, speculation also rose today that Nestlé could submit a bid for the firm.

Meanwhile, Nestlé has also resumed its operations in Zimbabwe after it received assurances from the Harare government concerning the safety of its staff. The Swiss confectioner suspended operations in the country last month after ministers from President Mugabe’s Zanu-PF party pressured it to take consignments of milk from a dairy controlled by the president’s wife.

Diageo has been named as the largest corporate creditor of the collapsed owner of off-licence chain Threshers, First Quench Retailing. It is reported that the drinks giant is owed more than £1.9m by the company, which entered administration in October last year. Other major creditors of the firm include Pernod Ricard and Carlsberg UK.

Unilever has consolidated its digital marketing across the globe, with the addition of digital agency Euro RSCG 4D to its roster. According to the agency, the move marks a major shift for the FMCG giant in positioning its brands in the fast-moving digital landscape.

Medical association the BMA has warned that the relaxation of rules concerning product placement on television will have a negative impact on child obesity in the UK. In a letter to the Department of Culture, Media & Sport, the body expressed “deep concern” over the move, which aims to boost revenues for commercial broadcasters, claiming it would reduce the protection of young people from “harmful marketing influences”.

RETAILERS
Sainsbury’s and Marks & Spencer are set to reveal sales figures for the all-important Christmas trading period this week, with M&S’s numbers expected on Wednesday, and Sainsbury’s the following day.

Major retailers moving to expand overseas operations are being forced to change their approach to building business in new markets due to stubborn competition from local players, The Times has reported. Global firms such as Wal-Mart, Tesco and Carrefour are increasingly seeking to expand their share with consolidation, asset swaps and deals with local partners in markets where they already have an established presence, the newspaper said.

Wal-Mart is looking to its supply chain to cut costs in 2010, and has estimated that it could make savings of between 5-15%, or £2bn-£7.4bn, by globalising its purchasing. According to the Financial Times, the move is part of the retail giant’s efforts to increase the proportion of goods that it buys direct from manufacturers.

Retailers have experienced an “excellent” start to 2010, according to figures from the Preliminary Experian FootFall UK National Index. Visitors to stores on New Year’s Day were up 9% year-on-year, despite predictions shoppers would stay at home due to VAT rising to 17.5% and severe weather warnings.

Shadow business secretary Kenneth Clarke has said that a Conservative government could raise taxes, including VAT, if elected. In an interview with the Sunday Telegraph, Clarke refused to rule out tax rises and cutbacks in public spending to help slash Britain’s defecit.

Tesco has predicted that sales of comedy and TV DVDs will outsell products in its film chart for the first time, with the success of stand-up comedians and television comedy series contributing to sales. The retailer also said sales of classic comedy boxsets, such as Fawlty Towers, had grown 800% year-on-year.

Primark is reported to be considering a 6,500sqm store at Westfield Stratford, the East London shopping centre scheduled to open in September 2011. According to The Independent, retailers including Adidas, H&M, Next and Topshop have all expressed an interest in units at the site. John Lewis, Waitrose and Marks & Spencer have already signed up as anchor tenants.

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