Client Newswrap: poor retail results and Apple’s green laptop

Retailers

It was a tough week for the retail sector after a series of disappointing results statements.

Electrical retailer DSG International, which owns Currys and PC World, revealed a 7% fall in sales blaming cash-conscious shoppers for holding on to their old TVs and stereos rather than splashing out on a new ones.

It was a similar story at the parent company of Argos and Homebase, Home Retail Group, while felt the effects of the housing slump and bad weather reporting a pre-tax loss of £437m for the six months to 30 August.

Meanwhile, growth in online shopping spend appears to have slowed, according to the latest IMRG Capgemini e-Retail Sales Index. It said that year-on-year growth in online shopping in September 2008 reached 14%, a dramatic dip from last year’s figure of 73%.

Bucking the trend, however, was Debenhams, whose full-year figures showed online sales up by more than 60% to £42m. The retailer put the increase down to better site-to-store integration so that customers are able to return unwanted items bought over the web.

Elsewhere, Office of Fair Trading this week announced that the Co-operative Group must dispose of 126 stores if is it complete its purchase of Somerfield. It found that the merger would not affect competition nationally but at a local level.

Brand owners

Apple remained as on-message as ever with its new Macbook, which it claims to be its greenest ever. The fact that it uses one quarter the power of a single light bulb when it’s running grabbed the headlines – but we were more interested to learn that it uses 41% less packaging and more recycled materials than previous versions.

Another American giant, PepsiCo, announced that it has started a $700m marketing overall including adding a smile theme to its logo.

The poor run of results announcements continued as pharmaceutical giant GlaxoSmithKline reported a 20% fall in third quarter profit to £1.1bn, blaming a fall in sales of its diabetes, epilepsy and heart medications.

Procter & Gamble revealed that it is to take on retailers with the launch of the Essentials.com, a website that sells its brands directly to customers.

Lastly, Premier Foods denied claims made in The Financial Times that it is to sell key brands including Mr Kipling Cakes, Branston Pickle and Quorn to clear debt it has built up since acquiring bread firm Hovis.

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