Business Advice

Wesfarmers rating downgraded as Amazon looms … Skype wants to be like Snapchat … Choice weighs in on food packaging

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Kmart

Source: AAP Image/Paul Miller

By Dominic Powell and Emma Koehn.

Investment analysts at Morgan Stanley have reduced the share price target of retail giant Wesfarmers by 12%, claiming the retailer’s department store businesses Kmart and Target are “particularly vulnerable” reports Business Insider.

Morgan Stanley now rates Wesfarmers as underweight, down from equal-weight, and the rating downgrade comes ahead of the imminent arrival of online retailer Amazon at the end of 2017, with analyst Morgan Kierath telling the Herald Sun Australian specialty stores were less exposed to competition from Amazon.

“The Australian department stores look far more exposed than leading specialty retailers. Australia is overbuilt with department stores, versus other developed markets,” Kierath said.

The total losses Morgan Stanley predicts Wesfarmers will incur amount to $400 million in earnings before interest and taxes by 2026, while Amazon is predicted to generate $12 billion in sales by the same year.

Skype proves everyone just wants to be Snapchat

Microsoft has announced the “next generation” of its video communications platform Skype, with a new interface experts observe has borrowed heavily from Snapchat and Whatsapp.
Techcrunch reports the new setup feels much like other social media apps on the market, focusing on quick text chat functions and a tool similar to Snapchat stories that lets users capture video and image highlights over a period of time to send to contacts.
There are also plenty of new potential distractions on offer when it comes to work video calls, given users can now personalise the appearance of their apps and play games together during video hookups.

Choice weighs in on food measurements

Consumer rights advocacy group CHOICE has said it’s “vital” for food products to continue to show their weight on the front of the packet as the government debates whether to give businesses flexibility around where the measurement can be displayed, reports news.com.au.

The Department of Industry is currently fielding submissions around a review of the National Trade Measurement Regulations to potentially remove “prescriptive regulations that control the size, orientation and position of the measurement mark”.

However CHOICE head of media Tom Godfrey told news.com.au he believes current regulations should be left as-is.

“The erratic changes in weight across similar-looking packs can confuse consumers and show why it’s vital the pack weight stays on the front of a product,” he said.

“Our research shows hiding the quantity information on the back of pack is likely to short change 74 percent of people who consider it important.”

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