Kmart continues to drive prices down

By Shivaun Hales

Kmart managing director Guy Russo has lashed out at fellow retailers for failing to offer consumers the best possible price.

Russo believes Kmart’s lowest prices every day pricing strategy is more effective than the way many retailers “mark up” products in order to offer discounts and promotions.

In an interview with The Australian Financial Review, Russo said this pricing strategy has led to Australian consumers paying too much.

“I’ve only been in this space a few years but maybe the retail model a lot of retailers are working with is outdated,” said Russo.

“The word ‘sale’ has been destroyed – they’re not sales, they’re retailers trying to drive customers in every week to one particular area,” he said.

According to Russo, the best offer is to deliver the best price possible 365 days a year.

Since Russo joined Kmart in 2008, the discount retailer has focused heavily on consistent low prices, with overall prices falling by 30 to 50% in the last three years.

Kmart’s product range which includes kitchen, personal care and fabric care appliances, has been culled from 120,000 to 50,000, with a focus on private label products sourced directly from Asia.

Kmart said the volume of products sold has risen from 75 million to 100 million a year.

Kmart cuts prices with direct sourcing

Operating on a direct sourcing model along side global discount retailers such as Walmart has allowed Kmart to reduce the purchase cost of some goods by 50%, passing on the direct savings to consumers.

Following the introduction of the every day low prices strategy in 2009, Kmart has seen nine consecutive quarters of growth in both numbers and units sold

Kmart’s gross margins have risen, its cost of doing business has fallen and earnings before interest and tax to sales margins have rose from 3.3% in 2009 to a ­forecast 5.9% this year.

Three years into Kmart’s turnaround strategy, Russo said the retailer will continue to work on accurately estimating volumes, and exploring further scope to further reduce prices on low-priced items.

“The new model Kmart will always have prices as keen as we can make them,” he said.

Kambrook heats up with latest small appliances

By Anhar Khanbhai

Kambrook’s comprehensive range of winter heating appliances ensures that staying warm this winter is affordable and safe.

The appliance maker has announced a range of both electric heaters and electric blankets to suit all budgets and needs.

To stay warm in bed this winter, Kambrook’s new, easy to use Snugasabug Fitted King Electric Blanket is suitable for standard king-sized beds. The King Fitted features three personal heat settings and an extra foot warmth feature for added comfort.

With dual detachable controllers and made from quality, machine washable materials and fabrics, the Fitted King is family-friendly and easy to clean.

The Fitted King incorporates built-in safety overheat protection and comes with a three year warranty.

Kambrook’s new Dual Heater combines convection and radiant heating systems to serve as a multi-purpose heater.

The Dual Heater emits convection heat from the top to warm the air in the room and radiant heat from the front panel for instant warmth and features four heat settings and variable thermostat control

It also has a safety tip-over cutout switch and ThermoGuard overheat protection.

Great for personal heating and smaller rooms, the Upright Fan Heater heats up quickly and uses a fan to circulate warm air around the room.

It features two personal heat settings, a fan only setting and variable thermostat for extra control.

The Upright Fan Heater includes a safety tip-over cutout switch and ThermoGuard overheat protection as standard.

GLOBAL: Portable fridge wins Edison award

By Anhar Khanbhai

ChotuKool, portable cooling solution from Indian multinational Godrej & Boyce was awarded the gold seal for best new product in the lifestyle and social impact category at the renowned 2012 Edison Awards.

ChotuKool was born out of collaboration between Godrej & Boyce and Boston-based strategic innovation consulting firm Innosight.

The team applied innovative thinking and processes to address the problem of food spoilage in rural India, determining this market needed an affordable, mobile solution to keep food cool for one or two days.

Conventional refrigerators are not widely available or practical in these communities, so ChotuKool offers a much-needed alternative.

Running on battery power, weighing only 7.8 kg and costing less than $70, ChotuKool has made it possible for leftovers to be stored for consumption the next day in areas of the world where saving food is essential.

ChotuKool serves the base of India’s economic pyramid, where 80% of the households don’t own major appliances and one-third of all food is forfeited due to spoilage.

“It is extremely gratifying to see ChotuKool recognised alongside such outstanding competition,” said Innosight emerging markets and new products vice president, Hari Nair.

“ChotuKool, the Whirlpool ACE and Rural Shores are testament to the fact that innovation isn’t just good for business, it’s good for society.”

The early success of ChotuKool led to Godrej being named India’s most innovative company of the year by Business Standard magazine in a ceremony conducted by the nation’s Prime Minister.

GLOBAL: Appliance sales in rural China declining

By Anhar Khanbhai

New data released by the Ministry of Commerce in China has shown 23.34 million home appliances were sold in rural areas in China, down 16.4% year-on-year, in the first four months of the year.

Those goods had a total value of US$9.8 billlion, a number down by 6.7% year-on-year, the ministry reported.

The sale of home appliances in rural areas showed marked acceleration in April, when 5.35 million of the products were sold, up 135.1% year-on-year.

They had a value of 14.32 billion yuan, up 141.9% from the same period a year ago.

Looked at by category, colour TVs and refrigerators were the best-selling appliances.

More than 10 billion yuan of the products were sold by the end of April, accounting for 56% of the value of all home appliances sold in the countryside.

The ministry said the government’s stimulus policies helped to boost sales in April.

To spur China’s domestic consumption, the government introduced a series of policies meant to encourage the purchase of home appliances.

One important step toward that end has been subsidizing purchases of such products in rural areas.

From the start of the subsidies in 2009 to April, China had subsidized the sale of 241 million home appliance units valued at 567.49 billion yuan, according to ministry data.

The subsidy program will come to an end in January. Without the policy in place, sales of household appliances are certain to slow down, industry insiders say.

ACCC takes vacuum cleaner distributor to court

By Anhar Khanbhai

A door-to-door sales company is being prosecuted for allegedly pressuring elderly women into buying high-priced vacuum cleaners.

The ACCC has taken Lux Distributors Pty Ltd to the Federal Court on “unconscionable conduct” in selling vacuum cleaners to widows in their 80s and 90s.

In a statement of claim filed in the Federal Court in Melbourne, the ACCC alleges that between 2009 and 2011, a Lux sales rep called five elderly consumers under the premise of a “free vacuum cleaner maintenance check.”

One salesman allegedly sold a $2280 vacuum cleaner on the spot to a 91-year-old Brisbane woman with “impaired mental capacity” who could have bought an equivalent vacuum cleaner in a shop for half the price.

This breached section 51AB of the Trade Practices Act 1974 and section 21 of Australian Consumer Law.

Lux distributes domestic vacuum cleaners in Australia and primarily markets through in-house demonstrations.

The consumer watchdog is seeking injunctions and the payment of pecuniary penalties and costs from Lux, as well as the implementation of a trade practices compliance program.

The matter has been filed in the Federal Court’s Fast Track List and due to be heard in Melbourne on 6 July 2012 at 10:00am.

Philips appoints new MD for ANZ

By Shivaun Hales

Philips Electronics has revealed the appointment of Alan McCarthy as Philips Electronics ANZ managing director and Philips Healthcare ANZ general manager.

McCarthy succeeds Harry van Dyk who left Philips last year to pursue interests outside of the company.

In the dual position, McCarthy will be involved in accelerating growth across the ASEAN and Pacific region and will be responsible for a team of more than 450 staff across its Consumer Lifestyle, Lighting and Healthcare businesses.

“In Alan, we have a leader with a unique combination of broad business and healthcare expertise to fuel growth of the Philips businesses in ANZ,” said Philips ASEAN and Pacific chief executive officer Harjit Gill.

“Alan has a track record of achieving strong growth and has an in-depth understanding of the marketplace from a customer perspective. I am confident he will be instrumental in further cementing relationships with our key stakeholders across the private and public sectors, and unlocking the full potential of Philips in ANZ,” added Gill.

McCarthy joins Philips with more than 20 years experience in general and finance management, related mainly to medical capital equipment and the devices industry.

In his most recent role, McCarthy worked for CareFusion as the Asia Pacific sales and marketing- critical care technologies vice president.

Prior to this he was Cardinal Health Australia general manager where he led the integration of multiple acquisitions.

“I look forward to building on the strong foundation, brand equity and partnerships we have in Australia and New Zealand and further improve our performance,” said McCarthy.

“A key focus will be working collaboratively with our partners and stakeholders to ensure that Philips’ unique capabilities in Lighting, Healthcare and Consumer Lifestyle are optimised, creating the best possible future for people in Australia and New Zealand,” he said.

In his new role, McCartney will work alongside Philips Consumer Lifestyle director Chris Kerr and will report to Philips Healthcare Asia Pacific senior vice-president and commercial leader Wayne Spittle and Harjit Gill.

MasterChef ratings slip on opening night

By Shivaun Hales

Sunbeam appliances returned to the small screen as MasterChef season four opened to an audience of 1.36 million metro viewers nationally on Sunday evening.

Sunbeam is the small appliance sponsor of MasterChef 2012 with its TVCs airing during the highly competitive Sunday night prime time and the appliances used as a part of the cooking challenges. Despite the high number of viewers, ratings were 7% lower than last year’s debut episode which attracted 1.51 million viewers.

According to ratings figures from OzTam, Channel Nine’s The Block took the top spot on Sunday night with 1.47 million viewers. MasterChef held the number one program in the 18-49 year old demographic, a valuable segment for advertising revenue.

The Ten Network was hoping to attract around 1.5 million viewers on opening night, with ratings typically growing throughout the series.

Ten’s chief executive, James Warburton warned investors while delivering half-yearly results that the network could no longer rely solely upon the show for its ratings. ‘

‘We have to diversify. It’s no longer good enough to be a one-bet, one-punch MasterChef network,” he told shareholders.

Media analysts are speculating that MasterChef ratings may not match last year’s figures, which were down 15% on the previous season.

Nespresso hits US airwaves for the first time

By Anhar Khanbhai

Nespresso has announced the launch of its first-ever television advertising campaign to U.S. audiences.

The creative concept, “The best cafe. Yours.” will be supported across digital media channels and through in-store materials.

The launch of its first U.S. television advertising campaign signals the growth and popularity that Nespresso has experienced among American consumers since entering the U.S. market over ten years ago, with an increased demand for high-quality portioned coffee at home.

“What has continued to set Nespresso apart for the past 25 years is its ability to offer a genuine coffee experience that combines perfection, pleasure, simplicity and aesthetics – and the new U.S. television campaign captures just that,” Frederic Levy, President, Nespresso North America said.

“Anyone can create the perfect cup of coffee with Nespresso, anywhere, any time, just like a skilled barista.”

Nespresso’s first U.S. television ad is a 30-second spot that begins with the illusion that the viewer is looking inside a European cafe.

The camera pans to Nespresso’s Lattissima+ machine and then to an elegant female hand that chooses a sparkling gold Volluto Grand Cru capsule.

She inserts the Grand Cru into the machine, and then with a single press of a button, creates a rich and foamy Cappuccino. The scene goes on to reveal that she is not in a cafe, but at home, and closes with the tagline, “The best cafe. Yours.”

“The goal of the television ad is to showcase the sophistication that Nespresso evokes among consumers,” Franz Niedermair, Vice President of Marketing, Nespresso North America said.

“Nespresso gives you moments of luxury and pleasure through a refined coffee experience, in the comfort of your home, with a simple touch of a button at anytime – even if you have just stepped out of the shower.”

The television ad will be supported by digital media, along with the launch of Nespresso’s redesigned U.S. website, and through in-store materials.

Yonanas heads Down Under

By Anhar Khanbhai

It’s one of the most healthiest and versatile fruits the world over and it is also a multi-million dollar industry in Australia, but the number 1 consumer complaint about bananas is when they start getting brown.

This age-old problem is even the world’s largest banana producer, Dole Food over in the US, is faced with each day with bananas turning from ripe and firm to mottled and soft in just three to five days.

One traditional solution to this, of course, is to make banana bread.

Dole however is now helping to give customers another choice in the US, freeze the bananas, stick them in an appliance called “Yonanas” (perhaps with some other frozen fruit mixed in) and create a creamy dessert that carries no guilt; without sugar or dairy or anything else added – a healthy treat.

Yonanas has taken the world by storm since it was launched in the US last May where Dole purchased a 30% stake in Healthy Foods, which produces the Yonanas machine, for an undisclosed sum.

Now, the compact, easy to clean appliance that makes a dessert using just frozen fruit is set to be an overnight success here in Australia.

Consumers can use nearly any frozen fruit including strawberry and bananas, mango and pineapple or even choc mint not just limiting the appliance to bananas making it a versatile must-have kitchen appliance.

Once consumers own a Yonanas maker, however, they will actually seek out bananas that are already quite ripe or even spotted.

This in turn will mean grocers would be more inclined to display older bananas as “Yonanas-ready”.

Yonanas was recently voted one of the top 10 most innovative products at Fruit Logistica in Berlin, the biggest food show in the world.

It’s also a sure fire way to get kids to eat their recommended daily fruit intake.

“Our machine is the gun, and bananas are the bullets,” Winston Breeden, the chief executive of Healthy Foods told Forbes.

Breeden added that his company, which expects to sell more than 1 million Yonanas devices worldwide this year through big chains such as Target and Amazon is on path to become profitable sometime next month, just a year after launching.

Yonanas is stocked in Australia at Target, Harvey Norman, Harris Scarfe, Kambo’s and Myer.

For more info or to order online visit the Yonanas Australia website on www.yonanas.com.au.

GLOBAL: Sandra Lee line debuts at Sears and Kmart

By Zeba Fatima

Sandra Lee is launching an exclusive collection of home products, dubbed Sandra by Sandra Lee, at Sears and Kmart stores in the US. The collection, currently available in stores, includes cookware, utensils, gadgets, bakeware, small kitchen appliances, tabletop items and storage solutions.

“The launch of the Sandra by Sandra Lee Collection underscores our commitment to quality and value,” said Sears footwear and home senior VP and president, Nick Grayston.

“Both Sandra’s down-to-earth style and sense of practicality shine through in this innovative collection, which is aspirational, affordable and attainable.”

Sears Holdings entered into The Sandra by Sandra Lee license agreement through a deal with its agent, the Iconix Brand Group, Inc.

The collection retails at prices ranging from $2.99 to $79.99 at Kmart and from $4.99 to $139.99 at Sears.

“Launching my collection of home products with Sears and Kmart is a wonderful opportunity to continue helping over-extended homemakers and busy professionals live their lives beautifully and simply,” Sandra Lee said.

“What is equally exciting is that the ‘Sandra by Sandra Lee’ collection will be offered at down-to-earth prices while maintaining the fun, fashionable flair my brand is known for,” Lee added.