Annual Retail Conference, London - 23 September 2011

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Eversheds Annual Retail Conference presentation slides, London - 23 September 2011

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  • 1. Retail Annual ConferenceFocused on international retailAntony Gold, Eversheds LLP23 September 2011

2. From evolution 3. to revolution 4. InnovationFrom barteringDegree ofInnovation 631 055Year Dot DarkMiddle 19 19 19 20 AgesAges60 95 10 5. InnovationFrom barteringTo buying in bulk, selling in onesDegree ofInnovation631055Year Dot DarkMiddle19 19 19 20 AgesAges 60 95 10 6. InnovationFrom barteringTo buying in bulk, selling in onesTo artisan shops in marketsDegree ofInnovation631055Year Dot DarkMiddle19 19 19 20 AgesAges 60 95 10 7. InnovationGeneral merchandisers Self-serviceDegree ofInnovation 631 055Year Dot Dark Middle19 19 19 20 Ages Ages 60 95 10 8. InnovationGeneral merchandisers Specialist chainsDegree ofInnovation 631 055Year Dot Dark Middle19 19 19 20 Ages Ages 60 95 10 9. Innovatione-CommerceDegree ofInnovation631055Year Dot Dark Middle 19 19 19 20 Ages Ages60 95 10 10. Innovationm-CommerceDegree ofInnovation631055Year Dot Dark Middle 19 19 19 20 Ages Ages60 95 10 11. The last 20 years 12. The last 20 yearsKey changesKey trendsRetailer perspective Changes in space Power passing from Consolidation manufacturerto retailer to customer Supply chain From location to brand Consumer technology From limited opening hoursto openall hours 13. The present 14. Drivers for a different approach toConsumers/Citizens Social Networks14 15. Retail under threat - 115 16. Retail under threat - 216 17. Retail under threat - 317 18. Retail under threat - 418 19. Predictions for the futureA hugeA Fast supplyCross-restructuring ofretail spacegenerationchainchannel The shoppingretailingPrice al experience will beinflationSustainablechange the differentiatorproducts SustainableThe relentless operatinggrowth of theMasssupermarkets customisation modelMany fasciaRetail willLocalis brands become aSourcingm Internationalis will disappearrethoughtmoreationrecognised career choice 20. The next 20 years Widespread, seamless cross-channelretailingKey trendsPower shift Consumer technology From store location to Access to information at no customer locationcost From retailer sets prices tocustomer checks price atpoint of purchase 21. The next 20 yearsCustomers as designersKey trends Power shift Manufacturing technology From buy what I sell I dont want that oneto Ill create your design(personalisation ondemand) 22. Stores reinventedA unique customer experience To browse To play with and sample products To gather information To order To pick up what you have already ordered 23. How to succeedHyper-personalisationKey trendsPower balance Retail brand independent of Retailer insights onlocationindividual customer versus Customer analytics on aninformation consumers haveincreasingly Customer servicerich data set Highly personalisedinteraction 24. The Social Media revolution 25. Copyright 2011 25 26. On the move -Consumers require joined upplatforms, devices, andexperiences. 27. Real estate issues when expanding intoEurope and beyondGareth Ashfield, Eversheds LLP23 September 2011 28. Global Perspective on RetailPRESENTED BY:MARK BURLTONPartner, Retail ServicesCushman & Wakefield LLPSeptember 2011 29. 29AGENDA GLOBAL ECONOMY RETAILING TRENDS CROSS BORDER ACTIVITY CONCLUSION 30. GLOBAL ECONOMY 31. Global Economy 31GLOBAL ECONOMY is in the earlystages of recoveryCONSUMERS are feeling moreconfident with their own balancesheet and are starting to spend again 32. Global Economy32SIZE OF THE MARKETEUROPEAN UNION U.S. CHINA JAPAN$16.2 Trillion $14.7 Trillion $5.9 Trillion $5.5 Trillion UK BRAZILINDIA $2.3 Trillion$2.1 Trillion$1.5 Trillion Source: Cushman & Wakefield Research, International Monetary Fund 33. Global Economy33 SIZE OF MARKETPrivate ConsumptionBillions, $US Dollars The U.S. is still the largest retail market in the worldSource: Cushman & Wakefield Research, U.S. Bureau of Economic Analysis, OECD, Moodys Analytics 34. Global Economy 34 REAL GDP GROWTH 2009-2012The tale of two markets mature markets andY-o-Y %Change emerging markets Source: Cushman & Wakefield Research, U.S. Bureau of Economic Analysis, OECD, Moodys Analytics 35. Global Economy 35 REAL CONSUMER SPENDING GROWTH 2010-2012Y-o-Y %ChangeEmerging Markets are leading the growth in global consumer spending with an appetite for luxury and recognizable Western brandsSource: Cushman & Wakefield Research, U.S. Bureau of Economic Analysis, OECD, Moodys Analytics 36. Global Economy 36 STOCK MARKETS AND RETAIL SALES 2006-2011 Stock Market Retail SalesStock MarketRetail Sales (Y-o-Y %Change)(Y-o-Y %Change) (Y-o-Y %Change) (Y-o-Y %Change)Stock Market Retail Sales(Y-o-Y %Change)(Y-o-Y %Change)The stock market hasproved to be a leadingindicator of retail salesSource: Cushman & Wakefield Research 37. Global Economy37FISCAL DEFICITS AND DEBT Negative sovereign ratings actions have moved beyond Ireland and GreeceRating placed on negative outlookRating downgrade(s) AA-AA+ Ireland Spain Baa1Aa2Baa3/ BPortugalGreeceBBB+AA-Aa3 A+BB+A- A3/BBB- Baa1/Belgium JapanUSA BBB- Italy AA+ AA-Aa2AAAA+AAA B1/BB-Caa1/ AA+ CCCDec 2010 Jan 2011Feb 2011 Mar 2011 Apr 2011May 2011 Jun 2011 Jul 2011 Aug 2011Source: IMF, Fitch, Moodys, Standard & Poors 38. RETAILING TRENDS 39. Retailing Trends 39SPENDING PATTERNS are changingfor mature and emerging marketsTECHNOLOGY is becoming a bigger partof consumer purchasingRETAILERS are changing footprints 40. Retailing Trends 40 PERCENT of CONSUMERS SELF-IDENTIFYING AS SPEND SHIFTER 2011Shopping for needs not wants will dominate retailing going forward.Self-identified spend shifters cut across ages in mature markets60% 0.550.5350% 0.45 0.4540%30%20%10% 0% United States FranceItalyGermanySource: Booze & Co. 2011 41. Retailing Trends 41 WORLDWIDE LUXURY GOODS CONSUMPTION 2011 Emerging markets will continue to drive the luxury segment globally in 2011Source: Bain & Company 42. Retailing Trends 42 INTERNET AND CATALOG SALES AS A PERCENTAGE OF U.S. TOTAL SALES 1992-2010Share of internet and catalogsales in the U.S. is acceleratingsimilar to Moores LawSource: Cushman & Wakefield Research, U.S. Census Bureau 43. Retailing Trends 43 GROWTH OF E-COMMERCE 2004-2013 E-commerce is growing faster$963B outside of the U.S.$821B$681B$572B$482B$429B$352B$273B$211B$160BSource: Cushman & Wakefield Research, JP Morgan 44. Retailing Trends 44 GLOBAL INFORMATION / COMMUNICATION TECHNOLOGY 2000-2010Mobile commerce(M-commerce)will play a dominantrole in E-commerce Mobile cellular telephone100subscriptions90 Internet users80 Fixed telephone linesPer 100 inhabitants7060 Mobile broadband subscriptions50 Fixed broadband subscriptions4030201002000 2001 2002 20032004 2005 2006 2007 2008 2009 2010**EstimatesSource: ITU World Telecommunication/ICT Indicators Database 45. Retailing Trends45SOCIAL MEDIA AND POPULATION 2011 If Facebook was a country, it would be the third largest country in the worldCHINA: 1.3 billionINDIA: 1.2 billionFACEBOOK: 600 millionU.S.: 310 millionINDONESIA : 240 millionBRAZIL: 200 millionSource: Cushman & Wakefield Research, World Bank, Facebook 46. Retailing Trends 46Retailers are changing their footprint to driveprofitabilityPolarisationFlight to quality Saturation in domestic marketsLessons from first Quality of advicemovers 47. Retailing Trends 47 CONCLUSIONECONOMY is recovering and consumerspending is on the riseSPENDING PATTERNShave changedTECHNOLOGY will continue toaffect the way people makebuying decisions and purchasesRETAIL REAL ESTATE formats andlocations will continue to evolve 48. CROSS BORDER ACTIVITY 49. Cross Border Activity 49THE CURRENT RECOVERYhas created two tiereconomies in the matureand emerging marketsRETAILERS search for salesin both is accelerating crossborder activity 50. Cross Border Activity50 RENTAL RATE GROWTH, GLOBAL SHOPPING LOCATIONS, JUNE 2010 JUNE 2011 Growth driven by fierce competition for the most high-profile locations and aggressive expansions on behalf of retailersSource: Cushman & Wakefield Research Main Streets Across the World 2011 51. Cross Border Activity51GLOBAL RENTAL RATE GROWTH OVER FIVE YEARS Global retail markets have rebounded, despite the fragile economic recovery in many countriesSource: Cushman & Wakefield Research Main Streets Across the World 2011 52. Cross Border Activity52TOP GLOBAL SHOPPING LOCATIONSU.S. and Asia-Pacific markets dominate the listof Worlds most expensive shopping streetsSource: Cushman & Wakefield Research Main Streets Across the World 2011 53. Cross Border Activity53U.S. RETAILERS EXPANDING 54. Cross Border Activity54EUROPEAN RETAILERS EXPANDING 55. Cross Border Activity55ASIA PACIFIC RETAILERS EXPANDING 56. Cross Border Activity 56TOP LOCATIONS IN THE AMERICAS666 Fifth AvenueNew YorkSource: Cushman & Wakefield Research Main Streets Across the World 2011 57. Cross Border Activity57 TOP LOCATIONS IN EUROPELeicester SquareLondonSource: Cushman & Wakefield Research Main Streets Across the World 2011 58. Cross Border Activity 58TOP LOCATIONS IN ASIA PACIFICPedder BuildingCentral Hong KongSource: Cushman & Wakefield Research Main Streets Across the World 2011 59. Conclusion 59ECONOMY is recovering and consumerspending is on the riseSPENDING PATTERNS have changedTECHNOLOGY will continue to change theway people make buying decisions andpurchasesRETAIL REAL ESTATE formats andlocations will continue to evolveRETAIL REVIVAL is shaping newcross border strategies 60. cushmanwakefield.com THANK YOU - Q&A 61. HR issues for 2011/2012Shrinkage in employment legislation?Prospects for changeAudrey Williams, Eversheds LLP23 September 2011 62. Modernising UK Law The review aims to: ensure businesses feel more confident about hiring people; support and encourage parties to resolve disputes earlier; Address concerns that weak (and vexatious) cases are plaguing the system; ensure employment tribunal cases move more swiftly to conclusion Prompted by huge (56%) increase in the number ofemployment tribunal claims (236,100 in 2009-10) 63. Resolving disputes in the workplaceSummary of proposals Early conciliation: Shortened version of ET1 to go direct to ACAS rather than ET within statutory time limit; Reduction of 12,000 ET claims per year estimated; Statutory period of one month for ACAS conciliation; The provision of information including a statement of loss as required information Formalising offers to settle tribunal to be able to increase or decrease the amount of any award where parties have unreasonably rejected an offer of settlement; 64. Modernising our tribunalsTackling weaker cases Strike outs: To be made at any hearing (not just PHRs) or without hearing; and Deposit orders: Similarly to be made at any hearing or without hearing; Doubling maximum level of the order to 1,000; and Costs: No intention to move to general costs recovery policy; BUT Current cap on costs awards to be doubled to 20,000; and 65. Resourcing the system effectivelyCharging fees Consultation on how best to implement a fees mechanismis due in Spring 2012Businesses taking on staff and meeting obligations Extending the qualification period for unfair dismissal: From one to two years (3,700 - 4,700 fewer claims) Financial penalties: For employers found to have breached rights; Between 100 and 5,000 to be based on the total amount of the award made by the ET 66. Agency Worker Regulations 2011 Gold Plated ? Amendments ? Reduce reliance Closer monitoring of usage and record keeping Commercial renegotiation Clearer pay and job structures 67. HR issues for 2011/2012International and EU issues: retirement andgender proposalsAudrey Williams, Eversheds LLP23 September 2011 68. Doing with/without mandatory retirementDifferences of approach Jordan and Saudi Arabia Employer retirement age: 60 for men; 55 for women but employment may continue if both parties consent. United Arab Emirates Retirement driven by work visa approval. Historic position is 60 years. Recent amendments mean visa renewals will be provided in usual way until age of 65. May be possible to get approval to work longer e.g. up to 70 where there is a skills shortage. 69. Doing with/without mandatory retirementDifferences of approach France Compulsory retirement permitted from age 70 Termination is not automatic, ie employer has to give notice of the retirement Employees aged 65-69 can be offered retirement but cannot be forced to retire against their wishes 70. Doing with/without mandatory retirementDifferences of approach Germany Employees who reach state pension age retire automatically as long as this is provided for in a contract of employment or collective agreement State pension age = 65 Will gradually rise to 67 by 2029, beginning in 2012 No need to justify the retirement Ending of employment is automatic so no need to run any process 71. Doing with/without mandatory retirementDifferences of approach Great Britain From 6 April 2011, limited scope for retirement ; default of 65 repealed have to justify. Northern Ireland: Same as GB at present Not yet clear whether/when will changeBelgium Compulsory retirement not permitted; but Notice required to dismiss is reduced to 6 months at65 72. Doing with/without mandatory retirementDifferences of approach Mandatory retirement permitted at/above a particularage The Netherlands possible to terminate employment on the basis of theemployee reaching the state pension age State pension age is currently 65 might be increased to 66 or 67 (proposal for newlegislation pending) Termination on grounds of age for younger employeesonly possible if can be justified. 73. Doing with/without mandatory retirementDifferences of approach Mandatory retirement permitted at/above a particularage Spain As a general rule, mandatory retirement is permittedat 65 if provided for by the applicable CollectiveBargaining Agreement Sweden Employer can compel retirement at 67 The employer can not make the employee retire at ayounger age, except where full disability pensionavailable 74. Doing with/without mandatory retirementDifferences of approach Mandatory retirement legal; no minimum age Ireland Employee must have reached employers normal retirement age for the job South Africa Employer may dismiss if employee has reached the normal or agreed retirement age Standard practice for employment contracts to contain a provision prescribing the retirement age. 75. Female presence on Boards in Europe 35 %age female presence on Boards* 30 25 EU average 20is only 11% 15 1050* Boards of larger listed companies, 2009/2010 76. Female presence on BoardsThe role of legislation in speeding up progress UK: No legislation, pressure through Lord Davies report setting a 25% target for female Board presence by 2015 for FTSE 100, public target setting by the FTSE 350, greater gender disclosure and transparency Germany: No national legislatio...