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Retail

Retail Sales, Partnerships & M&A

The U.S. Commerce Department released its first estimate for Q4 GPD, which increased at an annualized rate of 2.6%—and consumer spending, which was up by 3.8% and saw its fastest growth rate in over a year.

A successful holiday season, however, means that retailers are also having trouble restocking shelves. A report from the Wall Street Journal suggests that businesses are facing increasing costs to truck their goods across the country, with expenses expected to remain high over the next couple of years, thanks to a national shortage of drivers and vehicles.

Now more than ever, retailers and manufacturers will need to be able to more efficiently and quickly track their inventory as well as consumer demand. This is expecially true considering that it will become more and more difficult to offload these types of increased costs on to consumers. Demand and spending has been increasing at a faster rate than income growth; consumers are saving less and are spending more for essentials like housing and medical care. While the tax cut should slow down the inevidible, its boost to American’s paychecks is only temporary.

The biggest retail disruptors are more willing to sacrifice a faster growth trajectory to achieve the customer experience shoppers expect—with better results than non-disruptors, according to the new 2018 Retail Disruptors Survey for JDA Software Inc. by Retail Systems Research. In addition to focusing on products, delivery, and customer experience, the survey found disruptors have a different attitude toward technology, using it to improve the customer experience: 25% offer seamless shopping experiences across all channels vs. just 13% of non-disruptors. Seventy-one percent believe cross-channel fulfillment will drive foot traffic into stores in addition to interactive technology (62%) and loyalty programs (60%).

A consumer-focused survey from PointSource reveals that shoppers are more engaged when AI or chat bots are deployed tactically on online sites; 49% are willing to shop more frequently, 34% will spend more money, and 38% will share their experiences with friends and family. The boost comes when AI is used for simple interactions like checking if products are in stock, pricing information, or product discounts. When it comes to more complicated, high-stake and in-store retail interactions, however, consumers preferred the human touch.

European investment fund JAB Holding is now the controlling stakeholder in a combined company with Dr Pepper Snapple Group. The combined company, Keurig Dr Pepper, is expected to bring in $11 billion in annual revenues under the leadership of CEO Bob Gamgort. Keurig will own 87% of the company and Dr Pepper Snapple shareholders 13%. Mondelez, JAB’s partner in Keurig, will hold a 13–14% stake in the combined company.

Bacardi Ltd. buys Patrón Spirits Intl. in a deal worth $5.1 billion; the liquor company has held 30% stake in the tequila maker for the last decade. The deal makes Bacardi the second-biggest such company in the U.S. after Diageo.

Jakks Pacific receives non-binding proposal of interest from Hong Kong Meisheng Cultural Co., a subsidiary of the California toymaker’s Chinese distribution partner Meisheng Cultural and Creative Corp., to acquire a 51% stake in the company. If the transaction is completed, Meisheng’s stake in Jakks would increase to 51%.

Toys ‘R’ Us receives the go-ahead from bankruptcy court to close 182 stores nationwide with “negative sales trends,” out of a total of 900. The toy retailer expects to convert a number of existing locations into co-branded Toys ‘R’ Us and Babies ‘R’ Us stores. Closings will take place beginning in early February, with the majority of locations closing in mid-April. Up in Canada, all 83 locations are expected to remain open.

Walmart is joining hands with Rakuten; the two global powerhouses will form a joint venture to sell online groceries in Japan as well as ebooks and audiobooks in the U.S. Walmart’s local Japanese retail brand, Seiyu GK, will collaborate with Rakuten to expand its online grocery delivery services and delivery area. Stateside, Rakuten’s Canadian Kobo unit will work with Walmart to make its ebooks, audio books, and e-reader available for the first time online and in-store.

Supermarket giant Kroger is considering buying up both Boxed.com and Overstock.com, according to The New York Post. Boxed.com has also attracted the eye of Bed, Bath & Beyond for a potential aquisition.

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