Sony, Panasonic & Sharp are “junk status”

Global ratings agency Fitch has downgraded electricals giants Sony, Panasonic and Sharp to “speculative grade with negative outlook” (effectively, junk status).This means that while it believes they can service debts for now, they could default on them at some stage.

The BBC reported that Fitch’s downgrade of Panasonic was due to its “weakened competitiveness in its core businesses, particularly in TVs and panels, as well as weak cash generation from operations”. Panasonic reported in October that it was on course for another £6.3bn net loss for the year to March 2013. Sony also posted its seventh consecutive quarterly net loss in the three months to September 2012. Sharp’s rating was cut after its shares hit their lowest value in three decades.

Fitch’s head of Asian corporate research Matt Jamieson told the Financial Times that providing bosses focused on cash-generating areas, such as Panasonic’s domestic appliances and Sony’s camera division, and made steps to cut back unprofitable business such as TVs for Sony and personal computers for Panasonic, there may not be further downgrades.

Linsar call on CIH for consumer day

TV manufacturer Linsar has called on CIH to consider adding a consumer day to Euronics’s trade-only show which is next being held on 14th-15th April 2013 at the NEC. Linsar director Barry Kick has suggested the cost would be minimal, that it would enhance Euronics’s public image and capitalise on the TV campaign for the Euronics brand. It would also fit in very well with the launch of CIH’s consumer magazine “At Home with Euronics”.

Amdea push for appliance replacement

White goods trade association Amdea is urging the Government to encourage consumers to replace their old appliances and use energy-saving features. Apparently, replacing an old fridge-freezer with a modern appliance can have the same benefits as installing double-glazing as it would use 50% of the power. Douglas Herbison, chief executive of Amdea, said: “By working together with the Government, we can have a greater impact on energy use in the home. Including major appliances in the Green Deal or a similar scheme has the potential to be an all-round winner. As well as the savings on household bills, and greenhouse gas emissions, this could encourage millions of consumers to upgrade their kitchens – providing considerable work for skilled tradesmen and for young people just starting out on their careers.”

Amdea has just completed a pilot study with the University of Surrey, examining how appliances are used in the home. Their report, the Efficient Household Appliances Study, is downloadable on: http://www.amdea.org.uk/our-purpose/campaigns/new-publications/

Push for energy labelling

John Lewis and the Department for Energy and Climate Change (DECC) will introduce a product-labelling trial in 2013 that shows the lifetime running costs of household appliances – starting with washing machines, washer dryers and tumble dryers. Norwegian trials have shown that when consumers see product running costs as well as initial cost they are more likely to buy energy efficient models. It is estimated that the more efficient models could cost up to £900 less over a lifetime.

A UK Government spokesman said: “Although there are existing European labelling requirements on energy use, these are reported in kWh per year, rather than in estimated monetary terms for the life of the product… Indeed, consumers in many purchasing situations focus on the initial cost as opposed to the lifetime running costs. Better information would mean better consumer decisions.”

The move is part of a package of measures announced by the Government that could cut energy use by 11% by 2020. Around £40m will be given to five End Use Energy Demand Centres to research how to change consumer and business behaviour. Greg Barker, the Energy and Climate Change Minister, said the savings in energy efficiency could save the UK 196TWh in 2020, equivalent to output from 22 power stations.

Sharp bail-out by Intel and Qualcomm?

Sharp is in discussions with Intel and chip-maker Qualcomm Inc. The US technology firms could jointly invest ¥30 billion (£233 million) in the firm. Sharp’s shares jumped by 11% on the news but brokers believe this uplift will be short-lived because of the company’s $13.8 billion (£8.7bn) debt and intense competition from rivals such as Samsung and LG. Sharp has already received substantial loans from two Japanese banks, which are expected to keep it afloat until March 2014.

Co-op offers free time slot delivery

The Co-operative Group has launched a free 60 minute time slot delivery service for customers shopping for electrical products. This is the result of a survey they conducted of over 3,000 online shoppers – over 90% of whom said no delivery slot was their “main online annoyance” and half objected to paying for home delivery.

Deputy group chief executive Martyn Wates commented: “Most consumers do not have the luxury to be in whenever the on-line retailer dictates and so end up paying unnecessary extra charges for the convenience of a defined day of delivery.”

Impact of Comet Administration

Both John Lewis and Dixons have reported benefits from Comet going into administration. John Lewis saw a 17.9% increase in total sales in the seven days to 3rd November, based on the same period last year – with electricals up a massive 28.9%. The newly launched iPad Mini tablet was the best seller, and vision products also did very well. In its turn, Dixons shares rose almost 20% to 24.7p between 31st October and 8th November.

In other news, Dixons Retail has offered job opportunities to Comet staff facing redundancy. It is looking to recruit 3,000 temporary members of staff, including 2,000 in stores, in the run-up to Christmas, and has invited Comet staff to apply.

Booths for Better Service in push on headphones

Cromwell customer, Booth for Better Service, which is the largest independent in the north of Scotland, has opened a “headphone store” inside its Inverurie superstore to push top-end products such as Skullcandy, Dr Dre, and Ferrari. If you “like” them on their Facebook page you can get 10% off any headphone: http://www.facebook.com/pages/Booth-for-Better-Service/201390799875139

Mobile Christmas

A new study from IMRG and Capgemini predicts that around £4.6bn will be spent online in the UK in the first two weeks of December. Of that, around £920m is expected to go through mobile devices. The percentage of all online sales being made via a mobile device will rise to 20% by the end of December (from 8.2% in Q1 of this year). Consumers are increasingly sitting in front of their TVs and browsing online stores on their smartphones and tablets. EBay has announced that it expects 30% of all purchases made on its site this Christmas will be via mobile devices, making mobile-enabled e-commerce sites a must have, not a nice to have.

A report from retail analysts Verdict and SAS UK, “How Britain Will Shop For Christmas”, also suggests that online sales will be strongest amongst retailers able to offer click and collect and m-commmerce options, with websites optimised for both smartphones and tablet computers.

October retail sales slow online and offline

The British Retail Consortium has admitted that slowing online and offline retail sales are a reminder of “difficult economic realities”.

Online sales grew by just 7.3% in October – the second lowest in four years (this August saw growth of just 4.8%). Stephen Robertson, director general of the BRC, said: “That’s partly about disposable incomes being squeezed and people holding off making major purchases but also it’s inevitable growth will slow as online retailing matures and becomes established practice with a bigger proportion of shoppers… There is good news. Click and collect services are continuing to grow well. But retailers will be hoping that autumnal weather and thoughts of Christmas will start to translate into much stronger online spending soon”.

Across retail, footwear was the fastest growing category, followed by food, clothing, furniture and flooring and house textiles and health and beauty. But other non-food sales fell, while the home accessories category was also down.