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Category: General

Retail News Asia is committed to providing both local and global retailers with the latest General Retail news throughout the Asian market. This on a daily base.

  • AirAsia X may convert A330neo order to larger A350 jets

    AirAsia X may convert A330neo order to larger A350 jets

    AirAsia X Bhd, the long-haul arm of the region’s biggest budget carrier, is looking at swapping an order for 66 Airbus SE A330neo widebody jets to larger A350s in a bid to boost capacity on its busiest routes.

    A review of the Kuala Lumpur-based discounter’s fleet requirements is under way and could result in a plan to trade up to the bigger widebody, Tan Sri Tony Fernandes, chief executive officer of the AirAsia

    AirAsia X will remain focused on routes within four to eight hours’ flying time and would deploy the A350s on those services just as it had aimed to do with the A330s, Fernandes said, adding that a switch wouldn’t indicate a revival of plans to serve Europe.

    For Airbus, an order would shrink the 212-plane A330neo backlog while bolstering an A350 programme that has itself suffered recent setbacks.

    “Over the last 10 years we’ve been tweaking the model,” the CEO said. “Now that we kind of know what we want to do, we’re looking at the fleet. We’re toying with the A350. If we went A350, we wouldn’t use the A330neo anymore, we’d go all A350.”

    AirAsia X currently has 10 A350-900s on order alongside the larger A330neo commitment, while its existing fleet comprised 30 currentgeneration A330s. The Boeing 787 “looks interesting as well,” Fernandes said in London.

    The move would mark an about face from previous plans. In 2015, the Malaysian operator began looking at flipping the ten A350s due for delivery from 2021 to A330neos, with the unit’s chief Benyamin Ismail saying the smaller jet was cheaper and just as economical.

    While an order rethink could be lucrative for Airbus, with the A350-900 having a sticker price of US$311.2mil versus US$290.6mil for the A330neo, the switch would come as a complication given the airline’s status as a launch customer for the plane.

    Fernandes said the first jet is due in December 2018, though the date is “slipping” after already being put back amid development issues with Rolls-Royce Holdings Plc’s Trent 7000 engine. The company will send representatives to the model’s first flight, scheduled for Oct 18 in Toulouse, he said.

    AirAsia X is also exploring the business case for adding Airbus A321neos to serve routes to India and China that might not support bigger planes, Fernandes said.

    The main AirAsia shorthaul operation already has orders for more than 400 upgraded Airbus narrowbodies, including 100 A321 variants.

    Commencing heavily discounted flights to Europe is unattractive right now, given the amount of capacity already deployed, the CEO said.

    “When we come into a market we’ve got to make sure we can really bring fares down; we don’t think we can,” he said, adding that serving the US from Japan could be a more interesting market, with an Osaka-Honolulu route doing “very well”.

    Fernandes said plans to sell AirAsia’s aircraft leasing arm Asia Aviation Capital Ltd should come to fruition before the end of this year, with the company focused on two or three bidders from around the world.

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  • AirAsia now connects Bali and Kolkata

    AirAsia now connects Bali and Kolkata

    AirAsia Indonesia inaugurated its new flight route from Bali to Kolkata in India on Oct. 4.

    The service offers four flights a day departing from I Gusti Ngurah Rai International Airport in Bali and arrives at Kolkata’s Netaji Subhas Chandra Bose.

    Upon landing, the maiden flight, which used an Airbus A320-200 airplane, was greeted with a water canon at the airport in Bali.

    According to AirAsia Group CEO for Indonesia Dendy Kurniawan, the ticket sales for this route was first made available on Aug. 17 in accordance to the 72nd anniversary celebration of Indonesia’s Independence Day.

    “We want to emphasize that this expansion is only possible due to the hard work of the Transportation Ministry. We are currently in the first category of the FAA safety rank and we really appreciate it,” said Dendy.

    Following the launch of the new service, AirAsia now offers two routes to India as it previously launched Bali – Mumbai flight in May.

    This also marks the fourth international route from AirAsia Indonesia after Bali – Narita, Bali – Mumbai and Jakarta – Macau.

    The travel time between Bali from Kolkata is 7.5 hours including a short transit in Kuala Lumpur, Malaysia.

    India has the second highest growth percentage for the number of tourists to Indonesia with 27 percent per year, right behind China with 45 percent per year.

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  • Tesco Asia sales slump, profit soars

    Tesco Asia sales slump, profit soars

    Tesco Asia sales plummeted in the last half year – but profit soared by nearly a quarter.

    The UK headquartered supermarket operator, which operates Tesco Lotus in Thailand and Tesco in Malaysia – said in its trading statement that Asian operating profit before exceptional items was £141 million, up 24.8 per cent at constant exchange rates and 39.6 per cent at actual rates.

    “This improvement has been driven by refocusing on our core retail offer and significantly

    reducing the level of short-term promotional coupon activity. Furthermore, we have continued to focus on reducing our cost base as part of the group’s overall cost savings program and to help offset inflationary cost increases in the region.”

    Overall Tesco Asia sales fell by 6 per cent at constant exchange rates, with like-for-like sales falling 8.3 per cent.

    “The sales performance in Asia reflects our decision to withdraw from bulk selling activities in Thailand at the start of the financial year. Before this impact, underlying like-for-like sales in the region were down circa 2 per cent, largely as the result of a reduction in the level of short-term promotional couponing activity and the deflationary impact of lowering our food prices for customers. New store openings contributed 2.3 per cent to sales growth in Asia,” the company said.

    “Strong progress”

    Tesco CEO Dave Lewis hailed “strong progress” for the group as it reported an eightfold rise in overall first-half profits to £562 million and resumed dividend payments after a three-year hiatus.

    “Our offer is more competitive and more customers are shopping at Tesco. Today’s announcement that we are resuming our dividend reflects our confidence that we can build on our strong performance to date,” he said.

    “Market conditions have been challenging with inflationary pressure being felt throughout the half, but we have worked hard with our supplier partners to minimise price increases for customers.

    “Our overall sales inflation in the half was around 1 per cent less than the rest of the market, helping us become even more competitive.”

    However some analysts were a little more cautious in their assessments, suggesting the retail will soon have to raise its prices in the UK.

    Molly Johnson-Jones, senior retail analyst with GlobalData, said Tesco UK could not afford to maintain the 1 per cent inflation gap with its rivals and simultaneously reach its ambitious 3.5 – 4 per cent margin target and £1.5 billion cost savings goal by the 2020 year.

    “Tesco’s ability to maintain its price competitiveness will be challenged by cost inflation, which will continue through to 2019, and shelf-edge inflation, which will reach a peak of 2.9 per cent in the first half of 2019. Using our price tracker, we have seen that Tesco raised its prices circa 2 per cent during the first half, and we estimate that they are, therefore, absorbing about 1 per cent of cost inflation. At the moment, this ability to absorb cost inflation comes from the volume benefits that it has gained from suppliers.

    “We predict that Tesco’s prices will begin to increase towards 2019 as volume benefits from its supplier negotiations start to dissipate.”

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  • Facebook building $1b data center

    Facebook building $1b data center

    Reports out of Richmond say that Facebook is moving in next door. The tech giant is said to be building a $1 billion data centerin eastern Henrico County, a few miles east of town.

    The first phase of Facebook’s new facility will span 970,000 square feet and add more than 100 full-time jobs to the area. As currently envisioned, follow-up phases would bring that total up to 2.5 million square feet and 240 full-time jobs.

    The data center(s) will be on a 328-acre site at Technology Boulevard and Portugee Road within the White Oak Technology Park.  That’s the complex which also happens to also house the 1.3 million square foot former Qimonda semiconductor plant that is now a giant QTS data center.

    Virginia as a whole has been a hot infrastructure market lately. The construction of the new MAREA cable system is bringing the state its own submarine cable access point at Virginia Beach, and new fiber has been put in the ground and on poles throughout the region in anticipation.

  • Cebu Pacific invests in facilities for persons with reduced mobility

    Cebu Pacific invests in facilities for persons with reduced mobility

    The Philippines’ carrier, Cebu Pacific(CEB), is set to roll-out Disabled Passenger Lifts (DPLs) in key airports in the Philippines. The DPLs which would allow Persons with Reduced Mobility (PRMs) an easier and more comfortable boarding experience on Cebu Pacific flights.

    CEB is the first airline to invest in its own DPLs, in line with its thrust to improve passenger experience. The use of the DPL is free of charge for Cebu Pacific passengers with reduced mobility. Aside from Persons with Disabilities (PWDs), these include pregnant and elderly passengers who may have difficulty climbing stairs to board their flights.

    CEB has invested over PHP100 Million for the procurement and installation of 35 brand-new DPLs. The first DPL was installed in the Ninoy Aquino International Airport Terminal 3 in March 2017 for testing and evaluation. Since July 2017, the DPL has been used to lift PWDs, pregnant and elderly passengers on a limited number of CEB flights.

    Michael Ivan Shau, Vice President for Airport Services of Cebu Pacific said that the rest of the DPL units would be installed starting 2018. Six more units would be placed at the NAIA Terminal 3, with the rest deployed to other CEB hubs across the country, namely, Clark, Kalibo, Iloilo, Cebu and Davao; as well as high-traffic airports across the country with CEB operates flight using Airbus aircraft. Target completion is by June 2018.

    “We are looking at initiatives to improve the passenger experience for everyJuan. For our PWD passengers and those with reduced mobility, we recognize that the experience of being lifted manually can be uncomfortable. Investing in the DPLs will allow us to board and deplane passengers with reduced mobility safely, with minimal discomfort,” said Shau.

    In 2016 alone, over 43,000 passengers availed of wheelchair assistance from the check-in counter. Of this number, more than 14,000 were wheeled from the check-in counter and carried to their seats in the aircraft.

    The DPL was introduced in 1998 by international aircraft service provider Airport Maintenance Services– Ground Service Equipment to give airports a safe, comfortable and dignified way to get PRMs on and off aircraft. The DPL allows PRMs, as well as their companions or service agents to board the aircraft or deplane via the aircraft door designated by the airlines. To date, there have been at least 500 DPLs used worldwide.

    For PWDs and other PRMs who need wheelchair assistance, they simply need to tick the box indicating this requirement upon booking their flights.

    Cebu Pacific has also recently implemented discounts on base fares and value-added taxes (VAT) exemption for all domestic flights for PWDs and senior citizens across all its booking channels. CEB has also integrated the domestic terminal fees into CEB ticket costs—all aimed to provide guests with a more convenient and hassle-free flight experience.

  • Rustan’s launches Shang Marketplace concept

    Rustan’s launches Shang Marketplace concept

    Rustan’s Supercenters (RSI) is staging a three-day festival, A World of Wine, to mark the transformation of its supermarket at Shangri-La Plaza into the Shang Marketplace.

    RSI marketing assistant VP Ana Punongbayan says the revamped concept has more new offerings for customers to explore and experience as a brand shop with exclusive “non-mainstream” products.

    Different design elements give the store a whole new ambiance. “Rustan’s Supermarket is very masculine, using mainly black, while Marketplace is more feminine with softer design elements,” says Punongbayan.
    Brighter and bigger, the new store has wider aisles, the latest in showcases and refrigeration with less carbon emissions, and energy-efficient LED lighting.

    Many Marketplace amenities are based on customer feedback, including the brand shop.

    Aside from its wine selection, Shang Marketplace has a cheese section and an improved ready-to-eat unit.

    Other Rustan’s supermarkets may undergo the same transformation depending on the primary market, says Punongbayan.

    CEO Irwin Lee says shoppers will find “the world is at Marketplace” as the store carries brands and products from around the world.

    Gourmet fare

    The store’s international gourmet offerings are curated and categorised for convenience – Breakfast World, Cooking World, Fresh World, Ready-to-Eat, World of Cheese and Deli, World of Indulgence and Snacks, and daily baked items from Lartizan.

    With its expansion, the Wine and Spirits World offers rare, top-tier selections. Australian ambassador to the Philippines Amanda Gorely says Rustan’s carried about half of her country’s wine labels.

    Marketplace by Rustan’s has exclusive partnerships with British supermarket chain Waitrose and French retailer Casino, as well as exclusive brand offerings like Stash, Stonewall Kitchen and Wild Harvest. The store has also brought in a wider range of paper, personal and cleaning products from Seventh Generation, which pioneers plant-based products.

    Marketplace also has its own Supergoods line – products from local social enterprises such as Human Heart Nature – as well as organic produce from Holy Carabao, snacks from Pili & Pino, Sabanana and The Cracking Monkey, chocolates from Coco Dolce and Theo & Philo, and refreshments from Bayani Brew, Hope in a Bottle and Wellness Water.

  • AirAsia Philippines will seek US$250mil IPO

    AirAsia Philippines will seek US$250mil IPO

    The Philippines unit of AirAsia Bhd is seeking to raise up to US$250 million via an initial public offering (IPO) in mid-2018 to fund its expansion programme, its chief executive said on Tuesday.

    Asia’s biggest low-cost airline, which has nine units in the region, is beefing up its fleet in the Philippines amid an expected long-term boom in budget air travel. AirAsia first raised the prospect of listing its Philippines unit in 2015, planning at that point to take the airline public as early as 2017.

    “We are working on the IPO, hopefully in the middle part of next year,” Philippines AirAsia CEO Dexter Comendador told Reuters.

    Philippines AirAsia had initially aimed to raise US$200mil but raised its target to fund purchases of more aircraft and to expand its route network, Comendador said.

    The airline, which started Philippine operations in 2012, hired BDO Capital and Investment Corp as its underwriter.

    Its fleet will reach 70 aircraft in the next 10 to 15 years from the current 17, Comendador said. AirAsia is one of the largest customers of the Airbus A320-family of jets.

    The airline has a 10% share of the air travel market in the Philippines, one of the world’s fastest growing economies. The local market is dominated by Cebu Pacific, followed by flag carrier Philippine Airlines, both owned by local tycoons.

    AirAsia has also said it is considering a potential IPO of its Indonesian arm.

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  • AirAsia to install broadband on more than 120 planes

    AirAsia to install broadband on more than 120 planes

    The Malaysian conglomerate has signed a contract to hook up much of its vast fleet with high-speed broadband. It announced the move last week as the ink dried on a contract with Inmarsat, a British satellite telecommunication company.

    From the first half of next year, the airline will set up its inaugural connected plane with GX Aviation, Inmarsat’s in-flight broadband tech.

    The contract covers all existing and future Airbus 320 and A330 across the AirAsia Group as a whole, including its long-haul operator AirAsia X. There is also a possibility for the agreement to cover planes joining the fleet in the future, such as the Airbus 350.

    Inmarsat Aviation President Philip Balaam said, “AirAsia Group is one of the aviation industry’s leading innovators and we are delighted that GX Aviation will play a key role in their future service offering. The fact that we have signed this contract within months of announcing a Memorandum of Understanding is testament to AirAsia’s confidence in GX Aviation and builds on its successful track record as a leading customer of our SwiftBroadband service.

    “The scale of this contract, covering more than 120 existing aircraft and one of the industry’s largest order books for additional aircraft, showcases our status as a global market leader in advanced in-flight broadband. Inmarsat has the fastest growing service uptake in our market, with, following this agreement, more than 1,300 aircraft, expected under signed contracts, both installed and under backlog, for our next generation GX Aviation and European Aviation Network (EAN) solutions.”

    AirAsia Group Chief Executive Officer Tony Fernandes said, “GX Aviation will form the backbone of AirAsia’s digital cabin offering. By delivering inflight connectivity that’s indistinguishable from what you get on-ground, our guests will be able to stay connected in ways that matter to them, whether it’s streaming movies or music, checking social media, messaging friends or catching up with work emails. Coupled with our ROKKI entertainment and e-commerce platform featuring free movies, music, articles and games as well as shopping, AirAsia guests will soon be able to enjoy one of the richest digital inflight experiences in Asia, while also enhancing our knowledge of our guests with very rich data.”

    This contract supports Inmarsat’s strategy of providing airlines with tailored scalable capacity by designing, owning and operating a global network of High-Throughput Satellites (HTS).

    AirAsia Group will connect to the GX network using new JetWave terminals produced by Honeywell Aerospace. The terminals are designed, according to Inmarsat, for ease of installation and maintenance to assure the lowest downtime for any cabin connectivity solution in the market, allowing installation with minimal labour and using standard tools available in maintenance hangars.

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  • Tesco whistleblower reveals accounts gap

    Tesco whistleblower reveals accounts gap

    A senior accountant at Tesco has described mounting pressures on managers as the food business under-performed against targets in 2014, telling a London court that his attempts to have the targets revised down fell on deaf ears.

    Amit Soni was giving evidence at the trial of three former senior Tesco executives who are accused of fraud and false accounting in the run-up to a statement by the retail giant in September 2014 that had over-stated its profit forecast by 250 million pounds ($A422 million).

    Christopher Bush, who was managing director of Tesco UK, Carl Rogberg, who was UK finance director, and John Scouler, who was UK food commercial director, have all pleaded not guilty.

    Soni, who is described as a whistleblower by the prosecution, told Southwark Crown Court that his team had produced a series of reports as the financial year 2014/15 unfolded showing a growing gap between actual performance and what the leadership team had budgeted for.

    The projected gap had widened to 240 million pounds by August, he said.

    Accounting teams had been instructed to “pull forward” future income from suppliers by booking it in advance, a practice which one of his reports noted would not pass muster with auditors. The effect was to mask the growing accounting gap in the short-term, but his view was that it would cause problems further down the line.

    Soni told the court that one of his senior colleagues had told him during a private conversation that this had been going on for too long and he “did not want to go to jail for this”. That colleague is due to give evidence later in the trial.

    Soni said Tesco was under intense pressure at the time from competing retailers, especially discounters, and morale was low. He described “constant reviews and innumerable discussions on how Tesco had to do better”.

    Soni said an announcement by the company in July that chief executive Phil Clarke would be replaced by Dave Lewis had given him hope that the situation might improve.

    Soni is due to continue giving evidence for several days.

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  • Thai AirAsia adds two new destinations in India

    Thai AirAsia adds two new destinations in India

    Thai AirAsia commenced two new routes from Bangkok Don Mueang (DMK) to India. Flights from the Thai airport to Tiruchirappalli (TRZ) commenced on 28 September, followed by the inaugural service to Jaipur (JAI) on 29 September. Both routes will be served four times weekly by Thai AirAsia A320s. There is no competition on either route. The airline now serves six destinations in India from Don Mueang, accounting for 32 weekly flights.

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  • Hong Kong retail sales rise ‘moderate’ in August

    Hong Kong retail sales rise ‘moderate’ in August

    Hong Kong retail sales continued their steady but sure recovery in August, rising 2.7 per cent year-on-year.

    The Census and Statistics Department (C&SD) estimates retail sales totalled

    HK$34.8 billion. After taking into account the revised estimate of 4 per cent for July, retail sales rose 0.3 per cent during the first eight months of this year, compared to last year. That takes the year-to-date figure out of the red after a shaky first two months of the year.

    A government spokesman described August’s growth as “moderate” and said the rise was mainly supported by “the prevailing sanguine consumer sentiment amid a full-employment situation”.

    “The near-term outlook for retail sales should remain positive given the favourable job and income conditions and stabilisation of inbound tourism. However, the various external uncertainties remain causes for concern.”

    Categories to perform well (in order of the category’s impact on the total figure) were jewellery, watches and clocks, up by 7.3 per cent, supermarket sales (up 2.3 per cent),  department store sales (up 5.2 per cent), medicines and cosmetics (up 2.3 per cent), electrical goods and cameras (up 1.4 per cent), books and stationery (up 1.8 per cent), and furniture and homewares (up 3.5 per cent).

    Apparel sales fell 0.6 per cent, food and liquor sales by 3.9 per cent, footwear and accessories by 5.2 per cent, Chinese drugs and herbs by 3.2 per cent and optical shop sales by 0.1 per cent.

    After netting out the impact of inflation and other price changes year-on-year, Hong Kong retail sales rose 3.2 per cent in August.

  • Fitch takes on new executives in APAC

    Fitch takes on new executives in APAC

    Retail and brand consultancy Fitch has changed its leadership structure in the Asia Pacific region with two appointments and a promotion.

    Based in Shanghai, Nikki Lin has been promoted to managing director of Fitch China. She joined Fitch as GM from Interbrand early last year.

    Returning to the company, Simon Bell has been appointed MD for Fitch Singapore. He has more than 20 years’ experience working in Singapore, India and Australia in strategy, management and regional roles. He was previously Fitch India strategy director from 2009 to 2011.

    Fitch Hong Kong has appointed Janice Siu as business director. More recently an independent consultant, she was previously MD at brand and communications agency Brash. She will report to Hong Kong MD Cally Williams.

    Fitch global CEO David Blair says the company has had a strong presence in Asia for a long time.

    “With the acquisition of the Hong Kong studio last year, we are now one of the biggest brand and design consultancies in Asia.”

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  • Countdown bans the bag

    Countdown bans the bag

    Supermarket giant Countdown will remove single-use plastic bags from its stores and e-commerce operations by the end of 2018.

    The move – which means 350 million shopping bags will be taken out of the system – has been welcomed by industry associations.

    In its press announcement today, Countdown’s managing director Dave Chambers said 83 percent of its customers support the plan.

    “We are now calling on the new government to step in and regulate to completely stamp out single use plastic bags,” he said.

    “Regulatory action gives the best outcome for our oceans and sea life, and will mean a universal approach that is fair for all retailers.”

    Retail NZ says it’s great news that Countdown is moving to phase out plastic bags and congratulates all retailers that have taken steps to reduce the number of plastic bags being issued.

    “There is increasing customer demand for action by retailers on plastic bags, and we have also seen New World recently launch bagvote.co.nz to ask its customers whether or not it should introduce a charge on bags” said Greg Harford, Retail NZ’s general manager for public affairs.

    “A number of other retailers have also taken action, and we think this will increase over time.

    “Ultimately, retailers will be led by their customers.  Customers have traditionally expected a bag when they go shopping, but there seems to have been a change in public opinion, and retailers are responding to that.”

    Harford added that many businesses in the retail sector are attempting to reduce their environmental impacts and government leadership through regulation is still required to “ensure that there is a clear, consistent and universal approach” across the sector.

    “Industry action should not be seen as an excuse by government to dodge its responsibilities, however,” he said. “Ultimately, it’s important that any solution regarding plastic bags is universal, and applies to all retailers.”

    Countdown’s bag ban was also praised by Greenpeace, who said the move “makes them leader of the pack on plastic reduction”.

    “They’ve realised how strongly the New Zealand public sees these bags as pure environmental craziness,” said Greenpeace campaigner Elena Di Palma. “Better than that, they’ve done something about it.”

    “We’d like to see Foodstuffs and New World, who are considering a 5 or 10 cent charge on bags, to match Countdown’s boldness and eliminate this marine menace”

    Auckland mayor Phil Goff said if other businesses made efforts to reduce plastic bag use and the government introduces a levy on plastic bags, “that around 500 to 600 million plastic bags” a year could be cut out in Auckland alone.

    “Charging or banning plastic bags cannot be introduced through a council bylaw and I will continue to work with MPs to promote a change through a local bill in parliament,” he said.

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  • South Pacific and Asia flights from $99 on AirAsia

    South Pacific and Asia flights from $99 on AirAsia

    It’s almost the end of the year and to get you through the last of 2017, AirAsia has a flight sale that’ll take you across its entire network from October 2017 to March 2018 for as little as $99.

    This super low fare is on journeys from Darwin to Bali and is one-way only. Fly return though and you won’t have to pay the cost of two one-way fares when you book through Flight Centre. Instead, you’ll pay a fraction of the cost as we found return flights down to $129. This is on journeys from 12-15 November, though these aren’t the only dates you can travel to revel in this fare.

    It’s not the only destination you can take off to in this sale either. Other cities you can discover include Kuala Lumpur from $119 (departing Perth), Auckland from $139 (departing Gold Coast) and Phuket from $183 (departing Perth).

    Flights depart from Melbourne, Sydney, Perth and Gold Coast with most including a stopover in Kuala Lumpur.

    While this sale is on travel between 2 October 2017 and 31 March 2018, blackout dates still apply during the peak Christmas season.

    As AirAsia is a budget carrier, your ticket to fly doesn’t include checked luggage or in-flight meals and entertainment. However, you can add these on for a fee during the booking process.

    This AirAsia Year-End sale ends 15 October 2017 or until seats sell out.

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  • Puregold Price Club enters Western Visayas

    Puregold Price Club enters Western Visayas

    Puregold Price Club has bought five supermarkets in Roxas City, its first move into the Western Visayas.

    This takes the group’s nationwide store network to 313. The cost of the acquisitions has not been disclosed.

    Puregold has been expanding outside Luzon with construction of its second store in Leyte expected to finish next month.

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