Tesco opened an 800 sq ft pharmacy at its Harlow store in Essex – about a third smaller than its traditional pharmacies – in its last financial year and has earmarked a further 30 locations for roll-out this year.

Ashley Hicks, category director for healthcare at Tesco, said: “We wanted to get our pharmacies into more locations, so trialled it in one of our smaller superstores in Harlow and it’s worked really well.”

He added: “The smaller format has had its design squeezed and a slightly smaller range, but it still has a private consultation room.”

Hicks said Tesco recorded its “biggest ever year” for pharmacy in its full-year results, announced last week. He said the category now attracts 500,000 customers a week, prescriptions are up 10 per cent year on year and it is 9 per cent ahead in volume.

“We are very pleased with how we are progressing and customers like the convenience and services we provide,” said Hicks. “Customers can pick up their prescriptions while they are doing their food shopping, which is a clear benefit.”

At present Tesco has 270 pharmacies in the UK and Northern Ireland. Hicks also said pharmacies could be rolled out internationally in the long term. “Terry [Leahy, chief executive] asked me about international but it’s not in our short-term plan,” Hicks said. “The regulation is very different – but we will keep it on the long-term plan and not rule anything out.”

He added: “We believe our offer is as good as that of a traditional player like Boots. They offer a number of other private services but in terms of core NHS services, we also offer the same.”

Hicks said that Tesco will add new services to its pharmacy offer later this year. It launched its Health Check in January and has cut the cost of the service from £20 to £10 and will roll-out flu vaccinations to more stores this winter.

The store has opened in London’s Covent Garden, next door to a traditional Zara shop. It was previously an accessories and apparel shop and has its own entrance and fascia.

Childrenswear is a lucrative market for retailers such as Gap, H&M, Next and Marks & Spencer, and is one of the more recession-proof sectors, because parents stop spending money on themselves before their children.

The market has also opened up further following the collapse of Woolworths, which had a large share through its Ladybird brand. Problems at Adams, which fell into administration and closed 147 shops before being rescued by its former owner, have also had a bearing on the market.

Research firm Verdict estimated the clothing sector as a whole will contract by 1.4 per cent this year, but that childrenswear will only fall 0.7 per cent, to be worth £4.6bn.

A Zara spokeswoman would not comment on possible roll-out plans. The retailer has around 200 Zara Kids stores globally, mostly in Spain, and sells childrenswear in many of its larger Zara shops.

Verdict senior retail analyst Maureen Hinton said the UK launch could be a shrewd move. “Zara Kids has been fairly low key – often downstairs in stores and not displayed in windows.” She added it could pose a threat to other mid-market players. “There is the possibility of taking share from Next, M&S and Gap. It is an attractive offer,” she said.

Bernstein senior research analyst Luca Solca said there is room for Zara to build its market share. He said: “The market is still fragmented and Inditex can certainly gain share. On the back of its Zara stores there could be an opportunity to make more of kidswear.” He estimated that Zara’s childrenswear offer generated sales of between €225m and €250m (£202.2m and £224.7m) in the year to January.

India is an important market for us due to the opportunities it presents. We have plans to launch more than 32 new models here, of which six will be touch phones, while many other models will be 3G-enabled and some of these will also be entry level phones. At present, we have about three touch phones and six 3G-enabled handsets already in the market and we plan to have about 10 models each in both these segments by the year-end. We are betting big on the touch screen segment and we are targeting sales of up to six lakh units  and a 10% market share in this space alone within the next six months.

What will be your investments in India this fiscal?

We will double our investment this year and the company as a whole will spend about Rs 400 crore on advertising this year. Additionally, we will invest Rs 200 crore in R&D to study market dynamics and consumer behaviour here. We are looking at increasing our headcount in our sales vertical to enhance our presence.

How many of the products you sell here are made here? How have your sales been so far?

Currently, we manufacture mobile phones at two units located in Pune and Greater Noida and these plants have a production capacity of three million units per year. About 70% of the production is exported while the rest is for domestic consumption. We sold about 2.4 million GSM handsets in India last year and we expect a 50% increase in sales this year.

Our institutional sales account for just 10% our total mobile sales.
Currently the Indian mobile handset market is dominated by some of your competitors.

How are you looking at improving your brand visibility here?

LG is rapidly gaining market share in the GSM market, despite being a late entrant. We are already the fifth-largest player in the segment. I believe our distribution line was poor earlier, but now we are reworking our strategy here. Based on the analysis of our marketing team, we are deploying 1,000 additional shop sales executives and we will be launching about 1,000 additional shop-inshop formats in rural and tier II cities. On the organised retail front, the overall channel coverage is at 42%.

India is an important market for us due to the opportunities it presents. We have plans to launch more than 32 new models here… We are betting big on the touch screen segment
MOON B SHIN

MANAGING DIRECTOR, LG

Earlier this week, Wal-Mart, the world’s largest retailer, said that it planned to improve its second quarter sales by offering shoppers irresistible bargains. For the last quarter, Wal-Mart reported flat earnings of $.77 and said it expected to deliver a range of $.83 to $.88 in the current period. Same-store sales for this quarter are expected to be between flat and up 3%. Wal-Mart may have an uphill fight to post strong second quarter earnings. Recent employment numbers and shrinking access to credit will hurt retail sales, although Wal-Mart probably has its share of people who pay cash.

According to Reuters, “Treasurer Charles Holley said Wal-Mart has planned a number of merchandising initiatives to appeal to cash-strapped shoppers, including its dollar program.” The theory behind the promotion is sound. Most stores could not bring in a lot of revenue selling items at $1 a piece, nor could most restaurants, but Wal-Mart and McDonald’s have such significant scale and customer bases that getting an even slight increase in discretionary spending from tens of millions of people could make the difference between a mediocre quarter and a good one.

Wal-Mart and McDonald’s are often criticized for selling “cheap” food and merchandise and treating their employees poorly by paying them very modest sums. There may be some truth in both charges but that true comes with another side to it. Many people who eat at McDonald’s and shop at Wal-Mart are from the lower economic classes. McDonald’s and Wal-Mart do not exploit that by selling these people junk. George Soros may not want to wear shoes from Wal-Mart and eat McDonald’s hamburgers but that does not mean that both establishments have not helped feed and clothe people who might otherwise struggle.

Workers at McDonald’s and Wal-Mart are not paid well. Waiting on people in a big-box retail outfit or cooking and serving fast food will never pay well. The jobs don’t require any special skills and so they do not come with a premium wage. Wal-Mart does employ 2 million people, which is a lot of individuals to keep on a payroll during a recession. McDonald’s has 400,000. Neither place has announced significant layoffs and neither is likely to. (Read: “The Burger That Conquered the Country.”)

Charging people a dollar for a meal or for some modest item off a retail shelf may seem like a gimmick to pick up a penny a share for the next quarter. It is a good deal more than that. When a dollar is all that someone can spend, that person doesn’t care if his purchase increases the company’s earnings.

But Indian consumers won’t be able to partake of Wal-Mart’s everyday low prices. India’s restrictive commercial laws prohibit most foreign companies from setting up shop to compete with domestic retailers. So Wal-Mart’s debut outlet, which will open in the city of Amritsar in northern India later this month, is a wholesale-only operation that will sell mainly to vegetable vendors, hospitals, hotels, restaurants and other companies. The Amritsar outlet won’t even carry the familiar Wal-Mart brand. To deflect the attention of politicians and activists who oppose the entry of foreign multi-brand retailers, the Little Rock, Ark., company has named its Indian outlets BestPrice Modern Wholesale.

Despite the stealth approach, industry experts expect Wal-Mart, known for squeezing efficiencies out of suppliers and supply chains, to have an impact on India’s $375 billion retail market, which is dominated by mom-and-pop businesses and outmoded distribution networks. “We can learn the science of retailing, how to build scale and efficiencies,” says Kishore Biyani, chairman of Pantaloon Retail, India’s largest homegrown retailer with 114 hypermarkets.

The world’s largest retailer isn’t new to India. For the past decade, the country has been an important Wal-Mart supplier of textiles, apparel, home products and jewelry. But in anticipation of its India launch, Wal-Mart for the last three years has been developing a network of suppliers to stock its stores with fresh produce and staples like lentils, wheat and rice — all with an appreciation for variations in local cultures and tastes. “India is not a homogenous market, so ours is not a cookie-cutter approach from the U.S.,” says Raj Jain, president of Wal-Mart India.

Although it is restricted to wholesale operations in its wholly owned stores, Wal-Mart has a small retail presence in India through a fledgling joint venture with New Delhi-based Bharti Enterprises. The U.S. company provides back-end support for Bharti’s chain of 25 Easy Day grocery stores that opened last year.

Although other foreign hypermarket chains are entering the country — British retail group Tesco has a joint venture with India’s giant Tata conglomerate, while France’s Carrefour is said to be in talks with Reliance — Jain says Wal-Mart is in no hurry to unfurl the Wal-Mart flag nationally. “The easiest thing is to roll out stores, but the most difficult is to sustain and feed them,” he says.

Indeed, Indian mass-merchandisers over the last several years expanded frenetically, trying to get a jump on foreign chains should Indian politicians eventually decide to open up the market to direct competition from overseas. Reliance Industries built 940 stores across the country in 18 months. Aditya Birla group has opened 548 stores since 2007. Today, with India’s economy slowing and with losses piling up, the domestic retailers have shut some outlets and laid off employees, partly because of difficulties in keeping large chains supplied with goods. “When you start opening stores and then work backwards, even we get scared,” says Mahadeo Pawar, a vegetable grower from Karjat, 31 miles (50 kms) north of Mumbai.

Caution in India may be a watchword considering the global recession and Wal-Mart’s blemished track record overseas. In 2006, the company pulled out of Germany and South Korea in the face of stiff competition and poor sales. Still, Wal-Mart has been weathering the economic crisis better than most. The company on May 14 announced it earned $3.02 billion in the three months ended April 30, about equal to the profit it made in the same period in 2008. Revenue fell 0.6% to $93.47 billion from $94.04 billion a year earlier. Highlighting the growing importance of markets such as India, nearly one-fourth of Wal-Mart’s sales for the quarter — 22.7% — came from its international division.

Nandos, Hey Potato, KFC and Nineteen Ten Mexican Kitchen have signed up to be part of the new development, which will comprise 16 food outlets and three restaurants with open plan kitchens and grills.

Neil Huntington, development director for Westfield, said: “We are delighted to announce the project and these signings. Interest in the scheme has been solid and we expect to announce more names very soon.

“The success of the dining offers at Westfield Derby and Westfield London show the potential to evolve the traditional ‘food court’ model. At Merry Hill we plan to attract a fascinating mix of contemporary and traditional operators, combining tastes from around the world to make sure there is something for everyone.”

The restaurants will face a new centre entrance and car park – which will be themed with street-side dining and landscaping.

Nandos, Hey Potato, KFC and Nineteen Ten Mexican Kitchen have signed up to be part of the new development, which will comprise 16 food outlets and three restaurants with open plan kitchens and grills.

Neil Huntington, development director for Westfield, said: “We are delighted to announce the project and these signings. Interest in the scheme has been solid and we expect to announce more names very soon.

“The success of the dining offers at Westfield Derby and Westfield London show the potential to evolve the traditional ‘food court’ model. At Merry Hill we plan to attract a fascinating mix of contemporary and traditional operators, combining tastes from around the world to make sure there is something for everyone.”

The restaurants will face a new centre entrance and car park – which will be themed with street-side dining and landscaping.

Chinese apparel group Baoxiniao has announced plans to open about 100 new specialty stores in 2009.

The company announced the plan during its 2008 annual general meeting and it was revealed that Baoxiniao will invest CNY107.94 million to build its chain marketing network in 2009. Under the company’s principle of prudence in opening new stores, it will limit the growth rate of its business suit specialty stores to about 7%. For fashion brand specialty stores, after the closure of poorly-performing stores, the total number of new stores will be around 100.

Zhou Xinzhong, the chairman of Baoxiniao Group, told local media that in 2009, its headquarters will start to build a modern distribution center and the company will select sites nationwide to open its specialty stores. It will develop at least as many sites in 2009 as it did in 2008.

Founded in 1996, Baoxiniao Group is a group that combines industrial management and capital management, and is involved in designing, producing and selling up market garments and acting as agent for international brands. The company currently operates apparel brands such as Saint Angelo, S. Angelo, and Bono.