retail & consumer deals digest - pwc
TRANSCRIPT
Retail & Consumer Deals DigestApril 2021
www.pwc.com.au
PwC
ANZ-Roy Morgan Weekly Consumer
Confidence Rating
Source: ANZ-Roy Morgan Weekly Consumer Confidence Index
COVID-19 impactChristmas
trading
Consumer confidence rises to its highest
level since October 2019
Consumer confidence rose gradually from 110.3 at the end
of February to 112.3 by the end of March, a gain of 1.8%
as the weather improved along the east coast, after heavy
rainfall and floods wreaked havoc. Compared with the
previous year, there has a been a significant increase in
consumer confidence which rose from 65.3 in March 2020.
Confidence rose sharply in Queensland, gaining 10.5% in
Brisbane and 6.7% in the rest of the state. The increase in
consumer confidence, during the last week of March, was
driven by increasing optimism around personal finances.
"Sentiment in Queensland may be tested by the
emergence of a COVID-19 cluster in Brisbane. NSW was
more subdued, with confidence down 0.3% - reflecting
perhaps the ongoing impact of the flooding and the sad
news that two lives were lost. The rise in overall
confidence to almost its long-run average is encouraging.”
– David Plank, ANZ Head of Australian Economics, 30
March 2021
Latest Australian ABS trade results
The latest Australian Bureau of Statistics (ABS) Retail
Trade figures show that Australian retail turnover fell by
0.8% in February 2021 which follows a rise by 0.5% in
January 2021 and a fall of 4.1% in December.
The following industries rose in seasonally adjusted terms
in February 2021: Household goods retailing (0.7%),
Cafes, restaurants and takeaway food services (1.1%),
clothing, footwear and personal accessory retailing (1.6%),
and Department stores (2.2%). Food retailing (-3.0%) and
other retailing (-0.4%), fell in seasonally adjusted terms
The following states and territories rose in seasonally
adjusted terms in February 2021: South Australia (0.2%),
NSW (1.2%), Queensland (1.1%), Tasmania (0.7%),
Australian Capital Territory (0.3%). Victoria (-3.0%),
Northern Territory (-2.8%) and Western Australia (-5.4%)
fell in seasonally adjusted terms.
Source: ABS data released 01 April 2021. Data refers to the
seasonally adjusted estimate increases/decreases by industry/state
Retail & Consumer Deals Digest
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Announced deals
According to Mergermarket, announced retail deal activity for FY2021TD(1) decreased in value compared to the
prior comparable period (PCP), with volumes declining significantly. 97 deals totalling AUD$15.4bn were
announced in the FY21TD period, versus 128 in the PCP, valued at AUD$28.9bn.
In the last twelve months (LTM), deal value compared to the PCP has declined significantly with deal volume
also witnessing a fall, from 162 announced deals (AUD$37.2bn)(2) to 111 (AUD$17.3bn).
Australia and New Zealand Announced Retail and Consumer deals (FY2021TD(1) and LTM vs. PCP)
Source: Mergermarket, based on announced and completed transactions as at 31 March 2021
(1) FY2021TD refers to the period 1 July 2020 to 31 March 2021, reflecting the latest available Mergermarket data. The deal value includes
the transaction for Coca-Cola European Partners acquisition of Coca-Cola Amatil in Nov 20 (~A$9bn)
(2) The deal value for PCP includes the transaction for Asahi Groups acquisition of CUB Pty Ltd from Anheuser-Busch InBev NV in July 19
(~A$16bn) and Kohlberg Kravis Roberts & Co.’s acquisition of Campbell International from Campbell Soup Company in August 19
(~A$3bn)
Selected recently completed / announced deals
● 7 April 2021 – US-based private equity firm Summit Partners has acquired the remaining 40% of Quay
Australia, an Australia-based sunglasses and accessories retailer, for an undisclosed consideration
from the group’s founders the Hammond family. Summit Partners bought 60% of Quay Australia in 2016
through its San Francisco-based Elevate Brandpartners to drive the businesses expansion globally.
● 26 March 2021 – Alcoholic beverage distributor Good Beer, announced its acquisition of The Union
Hotel, an Australian based restaurant operator, from Mr Patrick Gallagher and Mrs Angela Gallagher, for a
consideration of A$20 million. The Union Hotel is considered a North Sydney landmark and operates
gaming machines, three bars, a restaurant, function rooms and a large office ideal for trade conversion.
● 16 March 2021 – Accolade Wines announced its acquisition of Veritas Winery, the Australia-based
winery producing Rolf Binder Wines, for an estimated consideration of A$20 million. The transaction is
in line with Accolade Wines’ growth strategy and will allow it to expand its Barossa and South Australian
wine region portfolio. As part of its strategy, the company is targeting more acquisitions in the premium
end of the sector.
● 10 March 2021 – One of Australia's largest glasshouse producers of fresh fruit and vegetables,
Flavorite, announced the merger of its business with the Murphy family businesses in Victoria.
Management believe the merger will further strengthen its offering to customers and deliver great products to
market through innovation and quality for consumers. Flavorite also has plans already underway to construct
a further 16.5 hectares of glasshouse across its Tatura and Warragul sites in Victoria.
● 9 March 2021 – American snacks giant Mondelez International announced its acquisition of
Australian cracker business Gourmet Food Holdings, from Sydney based private equity firm CPE
Capital for ~A$400 million. The company is expected to use the Gourmet Food brands to expand into
premium entertaining products. Gourmet Foods’ co-founder and CEO Todd Wilson will remain with the
business as an advisor, while its COO Oliver Flint has been promoted to MD.
● 02 March 2021 – Odyssey Private Equity announced its acquisition of a significant stake alongside
the founders of leading Australasian online cycle brand “MTB Direct”. The company seeks to use the
proceeds to grow and build on its customer offering.
FY2021TD(1) PCP(2) LTM PCP(2)
Deal value (in A$m) # of deals Deal value # of deals Deal value # of deals Deal value # of deals Deal value
$0 to $5M 0 0 0 0 0 0 0 0
$6 to $10M 3 26 10 94 4 36 13 122
$11 to $20M 20 330 21 338 20 330 26 408
$21 to $30M 7 181 12 315 7 181 14 366
$31 to $50M 16 648 10 420 19 771 15 619
$51 to $100M 6 434 18 1,197 9 619 20 1,357
$101 to $300M 8 1,345 5 787 8 1,345 7 1,236
$301 to $500M 3 1,203 4 1,653 3 1,203 5 2,013
>$500M 5 11,204 7 24,092 7 12,810 10 31,035
Subtotal 68 15,371 87 28,896 77 17,295 110 37,156
Undisclosed 29 n/a 41 n/a 34 n/a 52 n/a
Total Announced 97 15,371 128 28,896 111 17,295 162 37,156
Total Completed 59 2,952 110 26,387 68 3,726 144 34,647
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Retail and Consumer Deals Digest
Source: Mergermarket, based on recently announced and completed transactions
April 2021
PwC
Also recently in the news
● American technology company Pitney Bowes,
announced the launch of its online parcel
delivery platform, SendPro Online, in
Australia. The platform allows small businesses
and online retailers to choose a preferred carrier,
print shipping labels and track packages from a
centralised service. Further it would help to cut
down on unnecessary shipping costs and meet
customers’ expectations.
● Yummy Karma, a privately held Australian
ready-to-eat meals manufacturer, is seeking to
raise funds to assist its domestic growth plans.
The company plans to raise growth capital in
phases, with A$1 million this year and another
A$3-5 million in 2022, to boost sales efforts and
move the company into a larger manufacturing
facility.
● Wine technology platform WineDepot,
announced a partnership with Ebay and
Vivino to increase its customer reach ahead
of its direct-to-trade launch. Under the
partnership, Australian wineries will be able to list
their products on Ebay without having to set up
an account or handle inventory and fulfilment.
● Discount pharmacy chain Chemist
Warehouse, is seeking to expand across
regional areas of New Zealand to grow the
business in the wake of the Covid-19 pandemic.
The retailer established 7 stores in the region
last year and plans to expand to 35 stores by
the end of 2021.
● Australian liquor retailer Dan Murphy’s
unveiled a future focused store concept,
which it plans to roll out across the entire
network as Woolworths group gears up for the
demerger of the Endeavour Group, expected in
June this year.
● Italian Chocolate manufacturer Venchi, is
seeking to establish stores in Australia, as
part of its APAC expansion. The brand is
continuing to grow its presence across the globe
and has made major strides in Asia, opening 7
stores last year, with plans to further expand its
network in the region in 2021.
● Australian natural skin care company, Skin
Elements, announced an equity funding
facility with the US-based investment group,
LDA Capital. The company has entered into a
put agreement with LDA Capital under which LDA
Capital would provide the company with up to
A$20 million in committed equity capital over
the next 36 months, against the shares to be
issued by Skin Elements.
● Harris Scarfe, an Australian retailer that sells
kitchenware, homewares and apparels
announced it would be opening its first bricks and
mortar store in Central Sydney. The new store is
part of its massive physical expansion plan to
open 100 stores in the years ahead.
● The US based Lifestyle sneaker brand Cole
Haan launched in Australia through a
partnership with fashion distributor True
Alliance, bringing its e-commerce offer to
Australia. Management considers this partnership
as key to their ability to further grow in the APAC
region.
● Online retailer The Nile is looking at its
options for a public listing after a A$2.5 million
capital raise.
● One of the world's leading designer lifestyle
brands, Tommy Hilfiger, launched a new store
at Chatswood Chase shopping centre, bringing its
global store concept to Sydney.
● An American toy, clothing, and baby product
retailer, Babies ‘R’ Us, is relaunching online
with an initial set of products and wider selection
to be available in second half of this year. The
relaunch is part of recent acquisition of Toys
‘R’ Us, Babies ‘R’ Us and Hobby Warehouse
by Funtastic.
● Venetian fashion house Golden Goose
launched its Australian flagship store, its third
store in Australia and its second in Melbourne.
● Fonterra Co-operative Group plans to sell its
remaining stake in infant formula producer
Beingmate Co. by the end of the current fiscal
year. The company is continuously reducing its
stake in the company, which on 31 January 2021
was sitting at 3.94% and is now 2.82%.
Source: Mergermarket, Inside Retail
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Retail and Consumer Deals Digest April 2021
PwC
Also recently in the news
● Sandhurst Fine Foods, a private Australian
condiments manufacturer, could consider an
acquisition of local peers to grow in the domestic
market. The potential targets could include
cheese, small goods, and garnish manufacturers.
● The McWilliam’s Wines business is to be split
into two and will be acquired by Calabria Family
Wines and by entities related to the Medich family
office, in a deal that could be valued at ~A$40
million.
● Canadian activewear firm Lululemon is
establishing a new store in Sydney. The store
will be Lululemon’s first multi-level store in the
country and is seeking to open in July.
● Pental, an Australian owner of household
cleaning laundry and personal care brands, is
currently assessing two to three businesses
that could be acquired to enhance its channel
diversification. The company could also
potentially sell one of its brands to reduce its
presence in grocery channels
● South Korea’s LG Electronics announced
plans to wind down its loss-making mobile
division after failing to find a buyer, a move
that is set to make it the first major smartphone
brand to completely withdraw from the market.
Further LG plans to retain its 4G and 5G core
technology patents as well as core R&D
personnel, and will continue to develop
communication technologies for 6G.
● Luxury German fashion house and suit-maker
Hugo Boss partnered with the iconic
American brand Russell Athletic to produce a
capsule collection for both men and women.
Source: Mergermarket, Inside Retail
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Retail and Consumer Deals Digest
A Closer Look: Future Concepts in
online retailing
Customer service
● With more consumers switching away from brick
and mortar stores to online retailers, online
customer service will be at the top of retailers’
priorities
● New technologies will need to digitally emulate a
comprehensive in-person customer service
offering and replace the antiquated chat-bot
Expedited delivery
● For some customers, the concept of next-day or
two-day delivery still isn’t enough, even more-so if
they are able to purchase the product in store in a
matter of hours
● The future of fulfilment will be measured in hours,
with some retailers already achieving this by
partnering with last mile delivery providers in
major cities
● Physical retail stores are being adapted to partial
‘dark stores’ and click-and-collect centres for
customers to collect items same-day
Virtual ‘fit tech’ fitting
● Though there have been numerous upsides for
retailers resulting from the customer shift to
online, one downside which has garnered much
attention is the higher rate of returns suffered
from online transactions
● Retailers have been strategising ways to curtail
this trend by adopting new virtual technologies
which can recommend personalised products
based on a customer’s measurements
● Middleware ‘fit matching’ platforms are emerging
and paving the way for a new age in fitting
technology, using 3-D body scanning equipment
to provide a future where clothes don’t need to be
tried on in store
Online store experience
● There’s been a rising trend in ‘experiential’
physical stores for some time now, but it remains
to be seen whether this can be effectively
executed for the online shopping experience
● Using virtual reality technology, online shopping
could create its own ‘experiential’ store concept
and bridge the gap for the online store to feel like
a physical one
● Customer experience (CX) is a key driver for
competitive advantage in online retailing and the
need to invest in front-end web design will
continue to play a vital role in gaining traction with
customers as the online channel becomes the
focal touchpoint for customer interaction with
brands and products
Source: Fit:Match – The Future of Online Shopping, PwC
Analysis
April 2021
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April 2021Retail and Consumer Deals Digest
Source: CapitalIQ, as at 13 April 2021
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Retail and Consumer Deals Digest April 2021
Source: CapitalIQ, as at 13 April 2021
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Retail and Consumer Deals Digest
Source: CapitalIQ, as at 13 April 2021
April 2021
PwC
Retail sector trends
As reported by the ABS, the seasonally adjusted
Australian retail turnover for February 2021 trends are as
follows:
● Food retailing: The seasonally adjusted estimate for
Food retailing fell 3.0% in February 2021. By industry
subgroup, the seasonally adjusted estimate fell for
Supermarkets and grocery stores (-2.6%), Liquor
retailing (-5.6%), and for Other specialised food
retailing (-2.9%).
● Household goods retailing: The seasonally adjusted
estimate for Household goods retailing rose 0.7% in
February 2021. By industry subgroup, the seasonally
adjusted estimate rose for Furniture, floor coverings,
houseware and textile goods retailing (1.8%), Electrical
and electronic goods retailing (2.4%) and fell for
Hardware, building and garden supplies retailing (-
1.8%).
● Clothing, footwear and personal accessory
retailing: The seasonally adjusted estimate for
Clothing, footwear and personal accessory retailing
rose 1.6% in February 2021. By industry subgroup, the
seasonally adjusted estimate rose for Clothing retailing
(1.0%), and rose for Footwear and other personal
accessory retailing (2.8%).
● Department stores: The seasonally adjusted estimate
for Department stores rose 2.2% in February 2021.
● Cafes, restaurants and take-away food services:
The seasonally adjusted estimate for Cafes,
restaurants and takeaway food services rose 1.1% in
February 2021. By industry subgroup, the seasonally
adjusted estimate rose for Cafes, restaurants and
catering services (2.5%) and fell for Takeaway food
services (-0.7%).
● Other retailing: The seasonally adjusted estimate for
Other retailing fell 0.4% in February 2021. By industry
subgroup, the seasonally adjusted estimate rose for
Pharmaceutical, cosmetic and toiletry goods retailing
(1.7%) and fell for Newspaper and book retailing (-
1.1%), Other retailing n.e.c. (-1.7%) and Other
recreational goods retailing (-1.9%).
Source: ABS data released 01 April 2021. Data refers to the seasonally
adjusted estimates by industry
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Retail and Consumer Deals Digest April 2021
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