Tesco delivers a tasty first-half performance: RTIH rustles up the retail technology week in numbers
Do you like numbers? Do you like retail systems news? Then this is the article for you. Including Augmodo, Swiggy, Dexory, Ameba, Asda, Zitcha, Ikea, LEGO Group, Starbucks, Dubit, Frasers Group, Mulberry, and the 2024 RTIH Innovation Awards.
£31.5 billion…Tesco’s first-half sales grew 4% to £31.5 billion, ignoring fuel and exchange rates. Retail underlying operating profit rose 10% to £1.6 billion. Full-year guidance was upgraded, expecting retail underlying operating profit of around £2.9 billion (previously at least £2.8 billion).
Aarin Chiekrie, Equity Analyst, Hargreaves Lansdown, says: “Tesco delivered a tasty first-half performance to both customers and investors alike. Easing inflationary pressures have seen annual food inflation slow from 2.3% in July to just 2% in August, the lowest reading in nearly three years.”
“On top of that, Tesco has continued to invest in keeping prices low in its value range to help fend off competition from the likes of Aldi and Lidl.”
“At the other end of the spectrum, the Finest range is helping Tesco poach customers off more premium supermarkets. Both of these actions have left Tesco on a high at the half-year mark, with the low prices meaning that it has been the cheapest full-line grocer for nearly two years, which is luring more price sensitive customers in the door. Growth is being led by more customers taking items off the shelves which is more than offsetting the lower goods price growth.”
Chiekrie adds: “The strong volume led growth has given management the confidence to upgrade full-year profit guidance. With a strong start to the year and the all important Christmas period just around the corner, this upgraded target looks well within reach.”
“There’s plenty of cash pumping around the business too, which is helping to fund share buybacks and a double digit increase in dividends. Tesco’s putting up a great fight in the battle for consumers’ hard earned cash. Its market-leading proposition and income potential shouldn’t be overlooked, and despite the run-up in share price this year, there’s opportunity for investors.”
$5.3 million…Augmodo, a real-time inventory and task tracker using wearable SmartBadges to create live 3D store maps, has raised $5.3 million in seed funding. The round was led by Lerer Hippeau, with participation from Dunnhumby Ventures, NewFare Partners and Simple Food Ventures.
Seattle-based Augmodo’s proprietary SmartBadges are powered by a Spatial AI assistant for store associates, which recommends actions and tasks to increase efficiencies, including restocking shelves, placing orders and improving compliance, saving stores time and money and improving retailer, associate, brand and shopper experiences.
“Artificial intelligence is already changing retail, and new advances in AR and spatial computing are about to completely transform the physical world of shopping as we know it,” says Ross Finman, Founder and CEO at Augmodo.
“We’re deploying our technology across the world’s most innovative retailers to provide their associates with Spatial AI assistants, empowering their workforces to drive revenue and improve shopping experiences for all parties, making store associates even more valuable to their employers.”
$13.3 billion…US asset manager Invesco has raised the value of its stake in Swiggy, ascribing an implied valuation of about $13.3 billion to the Indian food delivery and quick commerce startup that is set to go public in the near future.
In a disclosure on Tuesday, Invesco’s Developing Markets Fund said it valued the 28,844 shares it owns in Swiggy at $237.24 million as of the end of July 2024. It bought the shares in Swiggy for $190.47 million.
Invesco invested in Swiggy in early 2022, leading a $700 million round in the Bengaluru-based startup. The round valued the company at $10.7 billion.
3…There are only three weeks left to submit your entries for the 2024 RTIH Innovation Awards.
Deadline for submissions is Friday, 25th October.
The awards, sponsored by CADS, 3D Cloud, Retail Technology Show 2025, and Business France celebrate global tech innovation in a fast moving omnichannel world.
It's free to enter and you can do so across multiple categories.
Download our handy guide to entering the 2024 RTIH Innovation Awards.
Key 2024 dates:
Friday, 25th October: Award entry deadline
Tuesday, 29th October: 2024 shortlist revealed
30th October-6th November: Judging days
Thursday, 21st November: Winners announced at the 2024 RTIH Innovation Awards ceremony, to be held at RIBA’s 66 Portland Place HQ in Central London.
For all entry related queries, please email our Editor and Founder, Scott Thompson: scott.thompson@retailtechinnovationhub.com
10…A2Z Cust2Mate Solutions Corp. has received an order to deploy its new Cust2Mate 3.0 smart shopping carts at an additional 10 Franprix stores in Paris, France in Q4 2024. This follows on from a deployment in August.
In addition to AI technology, self-scanning, and in-cart payments for a "pick and go" experience, A2Z Cust2Mate's 3.0 smart shopping carts include several new features, such as a shopping list which is automatically updated as the shopper progresses and advanced retail media capabilities such as in-store location based advertising and customised advertising targeting both, on cart and historic shopping purchases, as well as the shopping list and other triggers.
$75 billion…US retail sales over Black Friday - Cyber Monday (BFCM) weekend may set a new record, surpassing $75 billion in sales, according to Bain & Company research. This highlights significant year-over-year growth of around 5%, outpacing Bain’s overall holiday sales growth forecast of 3% for the entire holiday season.
Using proprietary data from Pyxis, Bain’s consumer intelligence division, trends show that consumer shopping patterns remain focused around the major shopping days of the season, with Black Friday again expected to rank as the top sales day for retailers.
Cyber Monday, however, has seen its relevance fade as e-commerce growth slows and many shoppers cite the convenience of online shopping and sales days beyond the core weekend. In 2023, the day before Thanksgiving emerged as a major shopping day, likely influenced by Thanksgiving Day store closures and Bain expects that this year that trend may continue.
Retail momentum will continue to be strong throughout the weekends leading up to Christmas, with peak shopping days projected on 21st December (the Saturday before Christmas) and 23rd December (the Monday before Christmas.) These late-in-season shopping surges are expected to help give an additional push to retailers achieving strong results in overall holiday shopping this season.
“Despite our slower growth forecasts for retailers this holiday season, Black Friday and Cyber Monday weekend will likely be a bright spot, capturing its highest share of holiday spending in the last five years,” says Aaron Cheris, Partner in Bain & Company’s Retail practice.
“This has to do partly with more stores closing on Thanksgiving Day as well as how the calendar falls this year, with a later than usual Thanksgiving. Black Friday is a prime opportunity for retailers to refine their promotion strategies, ensure adequate inventory, and perfect in-store experiences. The retailers who are ready to meet consumer demand this season and prioritise this key holiday shopping window will come out ahead.”
$80 million…Dexory, a robotics and data intelligence company, has closed an $80 million Series B funding round.
This was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic and several angels from the logistics industry. As part of this investment, DTCP’s Michael Rager joins Dexory’s board of directors.
The new funding, made up of a mix of equity and growth debt, will support an expansion of the firm’s artificial intelligence (AI) powered features across the DexoryView platform, grow its global team and accelerate the deployment of its autonomous robots with customers like GXO, Maersk, and DB Schenker.
A significant focus continues to be on expanding across the US market, where Dexory is already live with customers in seven states. The Series B will also enhance development and production facilities at its UK headquarters.
Dexory has now raised $120 million over the past three years.
10% and 5%…In a bid to compete with rival platforms such as Depop and Vinted, eBay has scrapped fees for private sellers across almost all categories except the sale of vehicles.
It had already removed seller fees for fashion in April, and believes scrapping them altogether will boost reselling and customer experience at the same time.
In a similar move earlier this year, Depop removed its selling fees, which accounted for 10% of the total sale price, and instead introduced a ‘marketplace fee’ for the buyer of up to 5% of the purchase price. However, Depop sellers are still required to pay a payment processing charge.
$7.1 million…Ameba, an AI driven platform helping companies manage and unlock growth from their complex supply chains, has announced a $7.1 million seed round led by Hedosophia. European early-stage investor Visionaries Club reinvested, having led Ameba’s pre-seed round, and Anamcara also participated.
Ameba’s team of supply chain, AI, quant and deep-tech specialists is led by founders Cedrik Hoffmann, former Supply Chain Director and Co-founder at e-commerce firm VALOREO, and Craig Massie, a former Palantir engineer who built the S&P 500 firm’s data privacy tool.
The firm’s platform uses AI on top of existing software to give brands real-time, bespoke insights into their global supply chains. It automates the extraction of data in multiple languages from sprawling sources – emails, WhatsApps, PDFs, Excel and more – and brings it into a single “source of truth” platform.
With insights into the source and status of every product on a chain, brands can predict disruptions; react to bottlenecks; and get enhanced visibility into their sustainability efforts.
1,000…Asda is extending its partnership with Too Good To Go, a surplus food marketplace.
Too Good To Go offers any surplus, but still edible, food to app users in the form of ‘Surprise Bags’ for them to purchase from local retailers.
The digital platform will now be available to use across nearly 1,000 sites, including Asda supermarket and Asda Express stores, as well as foodservice sites located in Asda stores such as LEON, Greggs, Sbarro and Subway.
Customers will be able to purchase surplus stock at a fraction of its original price via the Too Good To Go app. As part of a Surprise Bag, a variety of food items will be available, including chilled items, ready meals, food to go, prepared fruit or salads, bakery products, or produce with use-by dates such as dairy, meat, fish or poultry.
Surprise Bags from Asda Supermarkets will be available for £3.30 and will include minimum £9 worth of goods. Bags from Asda Express, LEON, Greggs, Sbarro and Subway will also be available. The bags will vary in price depending on the contents, but could include breakfast items, lunch, and dinner food, and also a cakes and pastries bag.
The roll-out follows a trial across a number of Asda’s supermarkets, convenience stores and foodservice sites. Since forming the original partnership with Too Good To Go in 2021 through the former EG Group convenience sites, over 2,000,000 kilograms of perfectly good food has been saved from going to waste.
36%…New Daemon research reveals that cyber security issues continue to plague Brits, particularly whilst shopping online.
The company surveyed 2,000 people for this. In the last six months alone, 36% have fallen victim to phishing scams, with other common issues including non-delivery of items once purchased (33%), credit card fraud (30%), counterfeit goods (28%) and identity theft (17%).
These challenges vary by demographic. While 25% of GenZ have faced identity theft, only 9% of Millennials and Baby Boomers have experienced the same. Meanwhile, 57% of Baby Boomers have been targeted by phishing scams, compared to 36% of Millennials and 31% of GenZ.
When asked if the fraud/scam/theft experienced caused them to trust the online retailer less, 42% reported having significantly less confidence in the retailer. When asked what would restore trust, 45% of consumers called out quick and accessible customer support for security concerns.
Other trust builders include displaying security certifications and badges from trusted third-party providers (30%) and using AI to detect fraud (24%), which consumers said make them feel more confident when shopping online.
A$15 million…Retail media platform Zitcha has secured A$15 million (US$10 million) Series A funding, led by US investment firm VMG Partners, to accelerate growth in the North American market.
Australian venture capital business OIF Ventures, which raised Zitcha’s seed funding round in 2022, has also invested in the Series A round which will go towards its plans to open new offices in the US, hire sales and customer success teams.
Zitcha currently works with retailers across seven countries including Coles Group (Australia), The Warehouse Group (New Zealand) Peavey Mart (Canada) Leroy Merlin (South Africa) and is used by brands including Unilever, Fisher & Paykel and Microsoft, Lego and Sennheiser.
Earlier this year, it entered into a partnership with Axonet to leverage first party convenience store data and retail media touchpoints across tens of thousands of North American convenience stores (C-store).
Ocado is the latest major retailer to join the firm’s platform, becoming the first to leverage its latest iteration including new business planning tools.
This identified which bricks and mortar stores UK consumers viewed as being the most ‘fun’. Eight out of the companies listed in the top ten have reported positive financial growth in their last (2023) audited accounts.
Seven out of the top ten reported a turnover growth greater than 5%.
Saturn CEO, Chris Welsh, says: “The findings underline how vital it is for retailers to imbue a sense of fun in their bricks and mortar stores.”
“The more fun and inspiring retailers can make their stores and extend the time their customers want to spend in-store, the more profitable they’re likely to be. Ikea for example has reported nearly a 12% growth in sales and was ranked as the most fun store in the UK by our survey.”
£83 million…Frasers Group, which already owns a 37% stake in Mulberry, is making a ‘possible offer’ for the whole of the company. The move comes after the brand announced an emergency £10.75m placing of shares to bolster its finances last week. The offer is worth 130p per share, valuing Mulberry at £83 million.
Susannah Streeter, Head of Money and Markets, Hargreaves Lansdown, says: “Mike Ashley’s frustration with Mulberry is plain to see. The offer to buy the beleaguered handbag maker, comes after it unexpectedly announced a plan to raise emergency funds, which also took Frasers Group by surprise.”
“Keeping it quiet indicates that the board didn’t want to give Frasers the early option of owning an even bigger chunk of the company. However, investors may also be losing patience, given that Mulberry’s shares have fallen by 52% over the past year.”
“Frasers Group has already been taking steps to move upmarket, given that its upped stakes in Hugo Boss and its portfolio also includes Savile Row tailor Gieves and Hawkes. Owning Mulberry outright would bolster that plan and would offer a deeper well of finance to help turn the brand’s fortunes around.”
“It’s been super tough for Mulberry as, like Burberry, it’s more reliant on aspirational shoppers than the powerhouse names in LVMH rails. Mulberry’s core customers aren’t as insulated as the super-rich from the pressures whipped up in an era of high interest rates and an uncertain economic climate.”
“China remains the engine of growth for the luxury sector and those brands not winning the eye of approval from the super-wealthy shoppers in Shanghai, Beijing or Chengdu seem to be faltering. Mulberry is positioned in the middle of the luxury market and has struggled to attach the exclusivity tag.”
“There have been hopes that the change at the top, with the new CEO Andrea Baldo, formerly of Danish fashion brand Ganni, coming in would help give the company new direction.”
“But as he’s unpacked his bags and tried to set out a new chapter for the company, it’s clear the current financial situation is untenable without more funding. Mulberry, with its proud Somerset heritage, may be highly reluctant to be scooped into Fraser’s high street wardrobe, but it would at least keep the brand alive.’’
4…Dubit has opened Starbucks’ first four virtual stores in some of the most popular Roblox role playing games.
“Come visit and enjoy a virtual coffee in our virtual third place. There are 35,000 UGC items up for grabs, and even more real-world prizes courtesy of Starbucks from free customisations to free coffees,” says Matthew Warneford, CEO at Dubit, which has created Gamer Rewards, pitched as the first loyalty programme for Roblox that lets players earn in-game rewards and redeem them off-platform, and also Gamer Retail to power immersive in-game retail experiences for brands.
Warneford adds: “I’m hugely excited. This year we’ve seen meaningful real-world outcomes from Roblox. Last month, we drove 15,000 people into real-world stores here in the UK.”
“Earlier this year, we delivered a 22% increase in sales velocity for one of America’s most popular lunchtime snacks. Roblox drives real-world results, and will for Starbucks too.”
“The campaign is geo-locked to APAC regions. Thanks Starbucks! And a big thank you to our amazing game partners: Seaboard City, Bilberry City, New Smith, and Theme Park HeideLand.”
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