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A.T. Kearney: U.S. tops in e-commerce opportunity

BY Marianne Wilson

NEW YORK — The United States is the top market for e-commerce, followed by China and the United Kingdom, according to A.T. Kearney’s 2015 Global Retail E-Commerce Index. Although e-commerce remains less than 10% of total retail sales in the United Sates, it has seen consistent growth, and rose by 15% in 2014.
 
The Index ranks the top 30 countries for e-commerce based on nine variables, including select macroeconomic factors as well as those that examine consumer adoption of technology, shopping behaviors, infrastructure, and retail-specific activities. It is designed to help retailers devise successful global online retail strategies and identify market investment opportunities while understanding the tradeoffs and barriers to success.
 
Globally, online sales increased more than 20% in 2014 to almost $840 billion, as online retailers continued expanding to new geographies and physical retailers entered new markets through e-commerce. One of the biggest expressions of the boom, according to the report, was in the stock markets, which gave e-commerce companies skyrocketing valuations, highlighted by Alibaba’s record-setting $25 billion initial public offering in September, which valued the China-based company at about $170 billion.
 
In other report findings:
 
• The Asia Pacific e-commerce market continues to grow — soon it will be the world’s largest region in terms of online sales — but many Asian countries declined in this year’s Index, with China, the previous leader, losing its top billing to the United States. Although China’s e-commerce market continues to expand, its rate of growth has slowed down. And a large part of its future growth will be driven by tier 3 and tier 4 cities, where there are questions about infrastructure investment, logistics support (a key to retail e-commerce growth), and consumer spending.
 
• In Europe, the United Kingdom (3rd), Germany (5th), and France (6th) all move up one spot in the Index, while Belgium (a 15-spot rise to 9th place), Denmark (up 13 spots to 15th) and Spain (entering the rankings in 18th) have posted impressive progress.
 
• In Latin America, while Mexico jumps into the rankings at 17th place, Brazil and Argentina fall steeply in the Index, due to their slowing macroeconomics. Fundamental infrastructure challenges – logistics and transportation in Brazil, government regulations in Argentina – may hinder e-commerce growth in the future.
 
• The report identifies four overarching themes that color this year’s Index findings as they relate to business strategy, customers, and channels: Internationalization; the rise of e-commerce IPOs; the continuously connected consumer; and the need for omnichannel strategies.
 
The top 10 countries in the Index were:
 
1. United States
2. China
3. United Kingdom
4. Japan
5. Germany
6. France
7. South Korea
8. Russia
9. Belgium
10. Australia
 
Click here to read the full 2015 Global Retail E-Commerce Report.
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99 Cents Only opens nine new California stores

BY Dan Berthiaume

CITY OF COMMERCE, Calif. — 99 Cents Only Stores is opening nine new stores in California between April 9 and April 11. The stores will be located in the communities of San Luis Obispo, Ontario, Sonora, Santee, Escondido, Tustin, San Bernardino, Cypress and South El Monte.
 
99 Cents Only currently operates 384 stores located in California, Texas, Arizona & Nevada.
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Report: Kroger rebranding some Harris Teeter stores

BY Gina Acosta

 

CINCINNATI — Kroger is moving ahead with its strategic plan for 2015 by closing and rebranding some of its Harris Teeter stores in Tennessee, according to the Nashville Tennessean.
 
The four Harris Teeter stores owned and operated by the Kroger Co. in the Nashville, Tenn., area will be closing on or before June 15, the newspaper reports. Three of the stores will re-open, but under the Kroger banner. This is the first time the Kroger Co. has switched banners on a Harris Teeter store.
 
Earlier this year the Kroger Co. closed another Harris Teeter store in Nashville. Kroger has about 45 stores in the Nashville area.
 
Last month the Kroger Co. Chairman and CEO Rodney McMullen declared 2014 an “outstanding year” for Kroger. Kroger’s identical store sales increased 6%, excluding fuel, in the fourth quarter ended Jan. 31, while total sales including the benefit of acquired Harris Teeter stores increased 12.9% to $25.2 billion. Net income increased 27.5% to $518 million, or $1.04 a share, compared to $406 million, or 81 cents a share the prior year. Earnings per share exceeded analysts’ consensus estimate by 14 cents.
 
"2014 was an outstanding year by all measures. Kroger captured more share of the massive food market, delivered on our commitments and invested to grow our business,” McMullen said. “While improved fuel margins contributed to our results in the second half of the year, our core operating performance without fuel shows that our associates are improving our relationship with customers in ways that grow loyalty and generate strong shareholder returns.”
 
The Kroger Co. operates 2,625 grocery retail stores in 34 states under nearly two dozen banners.
 
Read more by clicking here.

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