RETAIL & CONSUMER DEALS DIGEST - PWC AUSTRALIA
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Retail &
Consumer
Deals Digest
April 2021
Retail & Consumer Deals Digest
Consumer confidence rises to its highest ANZ-Roy Morgan Weekly Consumer
level since October 2019 Confidence Rating
Christmas
130 COVID-19 impact
Consumer confidence rose gradually from 110.3 at the end trading
of February to 112.3 by the end of March, a gain of 1.8%
120
as the weather improved along the east coast, after heavy
rainfall and floods wreaked havoc. Compared with the
110
previous year, there has a been a significant increase in
consumer confidence which rose from 65.3 in March 2020. 100
Confidence rose sharply in Queensland, gaining 10.5% in
Brisbane and 6.7% in the rest of the state. The increase in 90
consumer confidence, during the last week of March, was
driven by increasing optimism around personal finances. 80
"Sentiment in Queensland may be tested by the 70
emergence of a COVID-19 cluster in Brisbane. NSW was
more subdued, with confidence down 0.3% - reflecting 60
perhaps the ongoing impact of the flooding and the sad Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
news that two lives were lost. The rise in overall
confidence to almost its long-run average is encouraging.” Source: ANZ-Roy Morgan Weekly Consumer Confidence Index
– 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 and Consumer Deals Digest April 2021
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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$17.3bn).
Australia and New Zealand Announced Retail and Consumer deals (FY2021TD(1) and LTM vs. PCP)
FY2021TD(1) PCP(2) LTM PCP(2)
Deal value (in A$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
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.
Source: Mergermarket, based on recently announced and completed transactions
Retail and Consumer Deals Digest April 2021
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Also recently in the news
● American technology company Pitney Bowes, ● Harris Scarfe, an Australian retailer that sells
announced the launch of its online parcel kitchenware, homewares and apparels
delivery platform, SendPro Online, in announced it would be opening its first bricks and
Australia. The platform allows small businesses mortar store in Central Sydney. The new store is
and online retailers to choose a preferred carrier, part of its massive physical expansion plan to
print shipping labels and track packages from a open 100 stores in the years ahead.
centralised service. Further it would help to cut
● The US based Lifestyle sneaker brand Cole
down on unnecessary shipping costs and meet
Haan launched in Australia through a
customers’ expectations.
partnership with fashion distributor True
● Yummy Karma, a privately held Australian Alliance, bringing its e-commerce offer to
ready-to-eat meals manufacturer, is seeking to Australia. Management considers this partnership
raise funds to assist its domestic growth plans. as key to their ability to further grow in the APAC
The company plans to raise growth capital in region.
phases, with A$1 million this year and another
● Online retailer The Nile is looking at its
A$3-5 million in 2022, to boost sales efforts and
options for a public listing after a A$2.5 million
move the company into a larger manufacturing
capital raise.
facility.
● One of the world's leading designer lifestyle
● Wine technology platform WineDepot,
brands, Tommy Hilfiger, launched a new store
announced a partnership with Ebay and
at Chatswood Chase shopping centre, bringing its
Vivino to increase its customer reach ahead
global store concept to Sydney.
of its direct-to-trade launch. Under the
partnership, Australian wineries will be able to list ● An American toy, clothing, and baby product
their products on Ebay without having to set up retailer, Babies ‘R’ Us, is relaunching online
an account or handle inventory and fulfilment. with an initial set of products and wider selection
to be available in second half of this year. The
● Discount pharmacy chain Chemist
relaunch is part of recent acquisition of Toys
Warehouse, is seeking to expand across
‘R’ Us, Babies ‘R’ Us and Hobby Warehouse
regional areas of New Zealand to grow the
by Funtastic.
business in the wake of the Covid-19 pandemic.
The retailer established 7 stores in the region ● Venetian fashion house Golden Goose
last year and plans to expand to 35 stores by launched its Australian flagship store, its third
the end of 2021. store in Australia and its second in Melbourne.
● Australian liquor retailer Dan Murphy’s ● Fonterra Co-operative Group plans to sell its
unveiled a future focused store concept, remaining stake in infant formula producer
which it plans to roll out across the entire Beingmate Co. by the end of the current fiscal
network as Woolworths group gears up for the year. The company is continuously reducing its
demerger of the Endeavour Group, expected in stake in the company, which on 31 January 2021
June this year. was sitting at 3.94% and is now 2.82%.
● Italian Chocolate manufacturer Venchi, is Source: Mergermarket, Inside Retail
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.
Retail and Consumer Deals Digest April 2021
PwC 4
Also recently in the news A Closer Look: Future Concepts in
online retailing
● Sandhurst Fine Foods, a private Australian
condiments manufacturer, could consider an Customer service
acquisition of local peers to grow in the domestic
market. The potential targets could include ● With more consumers switching away from brick
cheese, small goods, and garnish manufacturers. and mortar stores to online retailers, online
customer service will be at the top of retailers’
● The McWilliam’s Wines business is to be split priorities
into two and will be acquired by Calabria Family
Wines and by entities related to the Medich family ● New technologies will need to digitally emulate a
office, in a deal that could be valued at ~A$40 comprehensive in-person customer service
million. offering and replace the antiquated chat-bot
● Canadian activewear firm Lululemon is Expedited delivery
establishing a new store in Sydney. The store ● For some customers, the concept of next-day or
will be Lululemon’s first multi-level store in the two-day delivery still isn’t enough, even more-so if
country and is seeking to open in July. they are able to purchase the product in store in a
● Pental, an Australian owner of household matter of hours
cleaning laundry and personal care brands, is ● The future of fulfilment will be measured in hours,
currently assessing two to three businesses with some retailers already achieving this by
that could be acquired to enhance its channel partnering with last mile delivery providers in
diversification. The company could also major cities
potentially sell one of its brands to reduce its
presence in grocery channels ● Physical retail stores are being adapted to partial
‘dark stores’ and click-and-collect centres for
● South Korea’s LG Electronics announced customers to collect items same-day
plans to wind down its loss-making mobile
division after failing to find a buyer, a move Virtual ‘fit tech’ fitting
that is set to make it the first major smartphone ● Though there have been numerous upsides for
brand to completely withdraw from the market. retailers resulting from the customer shift to
Further LG plans to retain its 4G and 5G core online, one downside which has garnered much
technology patents as well as core R&D attention is the higher rate of returns suffered
personnel, and will continue to develop from online transactions
communication technologies for 6G.
● Retailers have been strategising ways to curtail
● Luxury German fashion house and suit-maker this trend by adopting new virtual technologies
Hugo Boss partnered with the iconic which can recommend personalised products
American brand Russell Athletic to produce a based on a customer’s measurements
capsule collection for both men and women.
● Middleware ‘fit matching’ platforms are emerging
Source: Mergermarket, Inside Retail
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
Retail and Consumer Deals Digest April 2021
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PwC Source: CapitalIQ, as at 13 April 2021 Retail and Consumer Deals Digest April 2021 PwC 6
PwC Source: CapitalIQ, as at 13 April 2021 Retail and Consumer Deals Digest April 2021 PwC 7
PwC Source: CapitalIQ, as at 13 April 2021 Retail and Consumer Deals Digest April 2021 PwC 8
Retail sector trends Attend our next Virtual Event
As reported by the ABS, the seasonally adjusted PwC’s Retail & Consumer Series
Australian retail turnover for February 2021 trends are as Environmental, Social & Governance (ESG)
follows: impact and opportunities
● 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
Wednesday, 28 April 2021
estimate for Household goods retailing rose 0.7% in
February 2021. By industry subgroup, the seasonally 8:30am - 9:30am (AEST)
adjusted estimate rose for Furniture, floor coverings,
houseware and textile goods retailing (1.8%), Electrical Live webcast
and electronic goods retailing (2.4%) and fell for
Hardware, building and garden supplies retailing (- To register: angela.j.martin@pwc.com
1.8%).
● Clothing, footwear and personal accessory Sustainability is a growing topic of importance that
retailing: The seasonally adjusted estimate for can no longer be managed in a silo. Climate and
Clothing, footwear and personal accessory retailing sustainability opportunities and risks are
rose 1.6% in February 2021. By industry subgroup, the increasingly being embedded into organisations’
seasonally adjusted estimate rose for Clothing retailing core strategy, reflected in purposes and missions,
(1.0%), and rose for Footwear and other personal managed across operations and supply chains, and
considered crucial to engagement with stakeholders
accessory retailing (2.8%).
across the market landscape.
● Department stores: The seasonally adjusted estimate We are delighted to be joined by PwC Australia’s
for Department stores rose 2.2% in February 2021. Environmental, Social, Governance (ESG)
● Cafes, restaurants and take-away food services: leader and COO, Liza Maimone for our upcoming
PwC Retail & Consumer Series virtual session. Liza
The seasonally adjusted estimate for Cafes,
will frame up the discussion by sharing her insights
restaurants and takeaway food services rose 1.1% in on the impact and opportunities of ESG from
February 2021. By industry subgroup, the seasonally purpose, reporting and metrics to opportunities for
adjusted estimate rose for Cafes, restaurants and growth, differentiation and ease of access to
catering services (2.5%) and fell for Takeaway food finance.
services (-0.7%).
Join us for a facilitated discussion with Liza and our
● Other retailing: The seasonally adjusted estimate for guest panel of industry leaders as we explore the
Other retailing fell 0.4% in February 2021. By industry future of ESG and take a closer look at key drivers,
subgroup, the seasonally adjusted estimate rose for emerging trends and market insights relevant for
Australia’s retail and consumer organisations.
Pharmaceutical, cosmetic and toiletry goods retailing
(1.7%) and fell for Newspaper and book retailing (- For any enquiries or to register your attendance,
1.1%), Other retailing n.e.c. (-1.7%) and Other please contact Angela Martin at
recreational goods retailing (-1.9%). angela.j.martin@pwc.com
Source: ABS data released 01 April 2021. Data refers to the seasonally
adjusted estimates by industry
Retail and Consumer Deals Digest April 2021
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newsletter, please contact one of our Deals Retail and Consumer specialists:
Donna Watt Julia Richards
National R&C Lead Deals Strategy / Financial Sponsors
Partner, Melbourne Director, Sydney
Tel: +61 421 141 350 Tel: +61 421 486 418
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Glen Hadlow Mick Calder
Deals Driver Operational Turnaround
Partner, Sydney Partner, Melbourne
Tel: +61 418 202 046 Tel: +61 449 953 825
Email: glen.hadlow@pwc.com Email: mick.calder@pwc.com
Elizabeth Fritts Daniel Walley
M&A Restructuring
Managing Director, Sydney Partner, Sydney
Tel: +61 415 037 666 Tel: +61 432 322 988
Email: elizabeth.fritts@pwc.com Email: daniel.walley@pwc.com
Chelsie Harris Adam Colley
Private Clients Restructuring
Partner, Melbourne Partner, Sydney
Tel: +61 477 281 345 Tel: +61 427 957 205
Email: chelsie.harris@pwc.com Email: adam.colley@pwc.com
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