Annual Retail Conference, London - 23 September 2011


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Annual Retail Conference, London - 23 September 2011

  1. 1. Retail Annual ConferenceFocused on international retailAntony Gold, Eversheds LLP23 September 2011
  2. 2. From evolution…
  3. 3. …to revolution
  4. 4. InnovationFrom barteringDegree ofInnovation 6 3 1 0 5 5Year Dot Dark Middle 19 19 19 20 Ages Ages 60 95 10
  5. 5. InnovationFrom barteringTo buying in bulk, selling in onesDegree ofInnovation 6 3 1 0 5 5Year Dot Dark Middle 19 19 19 20 Ages Ages 60 95 10
  6. 6. InnovationFrom barteringTo buying in bulk, selling in onesTo artisan shops in marketsDegree ofInnovation 6 3 1 0 5 5Year Dot Dark Middle 19 19 19 20 Ages Ages 60 95 10
  7. 7. InnovationGeneral merchandisers – Self-serviceDegree ofInnovation 6 3 1 0 5 5Year Dot Dark Middle 19 19 19 20 Ages Ages 60 95 10
  8. 8. InnovationGeneral merchandisers – Specialist chainsDegree ofInnovation 6 3 1 0 5 5Year Dot Dark Middle 19 19 19 20 Ages Ages 60 95 10
  9. 9. Innovatione-CommerceDegree ofInnovation 6 3 1 0 5 5Year Dot Dark Middle 19 19 19 20 Ages Ages 60 95 10
  10. 10. Innovationm-CommerceDegree ofInnovation 6 3 1 0 5 5Year Dot Dark Middle 19 19 19 20 Ages Ages 60 95 10
  11. 11. The last 20 years
  12. 12. The last 20 yearsKey changesKey trends Retailer perspective• Changes in space • Power passing from• Consolidation manufacturer to retailer to customer• Supply chain • From location to brand• Consumer technology • From limited opening hours to open all hours
  13. 13. The present
  14. 14. Drivers for a different approach toConsumers/Citizens Social Networks 14
  15. 15. Retail under threat - 1 15
  16. 16. Retail under threat - 2 16
  17. 17. Retail under threat - 3 17
  18. 18. Retail under threat - 4 18
  19. 19. Predictions for the futureA huge A Fast supply Cross-restructuring ofretail space generation chain channel The shopping retailing Price al experience will be inflation Sustainable change the differentiator products Sustainable The relentless operating growth of the Mass supermarkets customisation model Many fascia Retail will Localis brands become aSourcing m Internationalis will disappearrethought more ation recognised career choice
  20. 20. The next 20 years Widespread, seamless cross-channelretailingKey trends Power shift• Consumer technology • From store location to• Access to information at no customer location cost • From retailer sets prices to customer checks price at point of purchase
  21. 21. The next 20 yearsCustomers as designersKey trends Power shift• Manufacturing technology • From „buy what I sell‟• „I don‟t want that one‟ to „I‟ll create your design‟ (personalisation on demand)
  22. 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. 23. How to succeedHyper-personalisationKey trends Power balance• Retail brand independent of • Retailer insights on location individual customer versus• Customer analytics on an information consumers have increasingly • Customer service rich data set• Highly personalised interaction
  24. 24. The Social Media revolution
  25. 25. Copyright © 2011 25
  26. 26. On the move -Consumers require joined up platforms, devices, and experiences.
  27. 27. Real estate issues when expanding intoEurope and beyondGareth Ashfield, Eversheds LLP23 September 2011
  28. 28. Global Perspective on RetailPRESENTED BY:MARK BURLTONPartner, Retail ServicesCushman & Wakefield LLPSeptember 2011
  31. 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. 32. Global Economy 32 SIZE OF THE MARKETEUROPEAN UNION U.S. CHINA JAPAN $16.2 Trillion $14.7 Trillion $5.9 Trillion $5.5 Trillion UK BRAZIL INDIA $2.3 Trillion $2.1 Trillion $1.5 Trillion Source: Cushman & Wakefield Research, International Monetary Fund
  33. 33. Global Economy 33 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, Moody’s Analytics
  34. 34. Global Economy 34 REAL GDP GROWTH 2009-2012 The tale of two markets – mature markets andY-o-Y %Change emerging markets Source: Cushman & Wakefield Research, U.S. Bureau of Economic Analysis, OECD, Moody’s Analytics
  35. 35. Global Economy 35 REAL CONSUMER SPENDING GROWTH 2010-2012Y-o-Y %Change Emerging 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, Moody’s Analytics
  36. 36. Global Economy 36 STOCK MARKETS AND RETAIL SALES 2006-2011 Stock Market Retail Sales Stock Market Retail 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 has proved to be a leading indicator of retail sales Source: Cushman & Wakefield Research
  37. 37. Global Economy 37 FISCAL DEFICITS AND DEBT Negative sovereign ratings actions have moved beyond Ireland and Greece Rating placed on negative outlook Rating downgrade(s) AA- AA+ Ireland Spain Baa1 Aa2 Baa3/ BPortugal Greece BBB+ AA- Aa3 A+ BB+ A- A3/BBB- Baa1/Belgium Japan USA BBB- Italy AA+ AA- Aa2 AAA A+ AAA B1/BB- Caa1/ AA+ CCCDec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Source: IMF, Fitch, Moody’s, Standard & Poor’s
  39. 39. Retailing Trends 39SPENDING PATTERNS are changingfor mature and emerging marketsTECHNOLOGY is becoming a bigger partof consumer purchasingRETAILERS are changing footprints
  40. 40. Retailing Trends 40 PERCENT of CONSUMERS SELF-IDENTIFYING AS “SPEND SHIFTER” 2011 Shopping for “needs” not “wants” will dominate retailing going forward. Self-identified “spend shifters” cut across ages in mature markets 60% 0.55 0.53 50% 0.45 0.45 40% 30% 20% 10% 0% United States France Italy GermanySource: Booze & Co. 2011
  41. 41. Retailing Trends 41 WORLDWIDE LUXURY GOODS CONSUMPTION 2011 Emerging markets will continue to drive the luxury segment globally in 2011Source: Bain & Company
  42. 42. Retailing Trends 42 INTERNET AND CATALOG SALES AS A PERCENTAGE OF U.S. TOTAL SALES 1992-2010 Share of internet and catalog sales in the U.S. is accelerating similar to Moore’s LawSource: Cushman & Wakefield Research, U.S. Census Bureau
  43. 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. 44. Retailing Trends 44 GLOBAL INFORMATION / COMMUNICATION TECHNOLOGY 2000-2010 Mobile commerce (M-commerce) will play a dominant role in E-commerce Mobile cellular telephone 100 subscriptions 90 Internet users 80 Fixed telephone lines Per 100 inhabitants 70 60 Mobile broadband subscriptions 50 Fixed broadband subscriptions 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* *EstimatesSource: ITU World Telecommunication/ICT Indicators Database
  45. 45. Retailing Trends 45 SOCIAL MEDIA AND POPULATION 2011 If Facebook was a country, it would be the third largest country in the world CHINA: 1.3 billion INDIA: 1.2 billion FACEBOOK: 600 million U.S.: 310 million INDONESIA : 240 million BRAZIL: 200 millionSource: Cushman & Wakefield Research, World Bank, Facebook
  46. 46. Retailing Trends 46Retailers are changing their footprint to driveprofitability Polarisation Flight to quality Saturation in domestic markets Lessons from first Quality of advice movers
  47. 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
  49. 49. Cross Border Activity 49THE CURRENT RECOVERYhas created two tiereconomies in the matureand emerging marketsRETAILERS’ search for salesin both is accelerating crossborder activity
  50. 50. Cross Border Activity 50 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. 51. Cross Border Activity 51 GLOBAL 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. 52. Cross Border Activity 52 TOP GLOBAL SHOPPING LOCATIONS U.S. and Asia-Pacific markets dominate the list of World’s most expensive shopping streetsSource: Cushman & Wakefield Research Main Streets Across the World 2011
  53. 53. Cross Border Activity 53U.S. RETAILERS EXPANDING
  54. 54. Cross Border Activity 54EUROPEAN RETAILERS EXPANDING
  55. 55. Cross Border Activity 55ASIA PACIFIC RETAILERS EXPANDING
  56. 56. Cross Border Activity 56 TOP LOCATIONS IN THE AMERICAS 666 Fifth Avenue New YorkSource: Cushman & Wakefield Research Main Streets Across the World 2011
  57. 57. Cross Border Activity 57 TOP LOCATIONS IN EUROPE Leicester Square LondonSource: Cushman & Wakefield Research Main Streets Across the World 2011
  58. 58. Cross Border Activity 58 TOP LOCATIONS IN ASIA PACIFIC Pedder Building Central Hong KongSource: Cushman & Wakefield Research Main Streets Across the World 2011
  59. 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. 60. THANK YOU - Q&A
  61. 61. HR issues for 2011/2012Shrinkage in employment legislation?Prospects for changeAudrey Williams, Eversheds LLP23 September 2011
  62. 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 of employment tribunal claims (236,100 in 2009-10)
  63. 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. 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. 65. Resourcing the system effectivelyCharging fees• Consultation on how best to implement a fees mechanism is 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. 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. 67. HR issues for 2011/2012International and EU issues: retirement andgender proposalsAudrey Williams, Eversheds LLP23 September 2011
  68. 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. 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. 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. 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 change Belgium • Compulsory retirement not permitted; but • Notice required to dismiss is reduced to 6 months at 65
  72. 72. Doing with/without mandatory retirementDifferences of approach• Mandatory retirement permitted at/above a particular age – The Netherlands • possible to terminate employment on the basis of the employee reaching the state pension age • State pension age is currently 65 – might be increased to 66 or 67 (proposal for new legislation pending) • Termination on grounds of age for younger employees only possible if can be justified.
  73. 73. Doing with/without mandatory retirementDifferences of approach• Mandatory retirement permitted at/above a particular age – Spain • As a general rule, mandatory retirement is permitted at 65 if provided for by the applicable Collective Bargaining Agreement – Sweden • Employer can compel retirement at 67 • The employer can not make the employee retire at a younger age, except where full disability pension available
  74. 74. Doing with/without mandatory retirementDifferences of approach• Mandatory retirement legal; no minimum age – Ireland • Employee must have reached employer‟s 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. 75. Female presence on Boards in Europe 35 %age female presence on Boards* 30 25 EU average 20 is only 11% 15 10 5 0 * Boards of larger listed companies, 2009/2010
  76. 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 legislation but renewed discussion on the possibility of introducing legal quotas• France: – Companies have until: • 1 January 2014 to make their Boards 20% female • 1 January 2017 to make their Boards 40% female – It applies to listed companies and companies with an average headcount, for 3 consecutive years, of 500 permanent employees and a net turnover of at least €50,000,000
  77. 77. Female presence on BoardsThe role of legislation in speeding up progress• Spain: – Since 2007, larger quoted companies have 8 years to attain 40% females on their boards. Not mandatory until 2015 – A CGC requires an explanation where few female directors, plus how it will be corrected• Norway: – Has a quota – 40% of boards must be women – Sometimes criticised as being problematic (are women appointed on merit or to make up numbers?)
  78. 78. Female presence on BoardsThe role of legislation in speeding up progress• Belgium: – No legislation – A CGC requires attention to be paid to diversity – Current legislative proposals to force 30% quota• Italy and Austria: – Quota legislation under discussion• EU initiative: – A 2010 warning from the EU Commission: companies have a year to sort out gender board imbalances, failing which it may legislate
  79. 79. Recent government announcementsEquality ActEquality Act (EA):• Positive action in recruitment and promotion provision, public sector equality duty in force• Dual discrimination provision scrapped• Consultation on third party harassment• What about gender pay measures? – 14 September 2011 Eversheds hosted launch of Voluntary Gender Equality Reporting by Home Secretary Theresa May
  80. 80. HR issues for 2011/2012Flexibility for all – the government agendaAudrey Williams, Eversheds LLP23 September 2011
  81. 81. Shared parental leave• Consultation on Modern work placed published on 16 May 2011. The government proposes to: – Extend right to request flexible working to all (timescale for introduction to be confirmed) – Provide more flexibility for men and women to share parental leave between them – Current intention is for new parental leave measures to come into force in 2015• extend the right to request flexible working to all employees;
  82. 82. Final Remarksand Questions?
  83. 83. Consumer ProtectionConsumer Protection from Unfair TradingRegulations 2008 – an updateElizabeth Hyde Eversheds LLP23 September 2011
  84. 84. Consumer ProtectionConsumer Protection from Unfair Trading Regulations 2008 – avoiding the pitfalls• in force on 26 May 2008• harmonises law across EU• overhauls UK legislation• applies to commercial practices• general principle of fair treatment
  85. 85. Consumer ProtectionMisleading PracticesMisleading Actions (Regulation 5)Actions which mislead by:• containing false information or deceiving (or being likely to deceive) the average consumer;• where the false information or deception relates to specific information set out in the Regulations;• And where the average consumer takes (or is likely to take) a different decision as a result
  86. 86. Consumer ProtectionMisleading PracticesMisleading Actions (Regulation 5)Relevant information:• Main characteristics• existence of the product• the price or the manner in which the price is calculated• the existence of a specific price advantage
  87. 87. Main characteristics• availability• composition of product• method/date of manufacture• quantity of product• geographical origin
  88. 88. Consumer ProtectionMisleading Practices• What is „misleading omission‟Practices which:• omit or hide material information; or• provide it in an unclear/ambiguous manner; and• the average consumer takes (or is likely to take) a different decision as a result)
  89. 89. Consumer ProtectionMisleading Practices• What is the „Average Consumer‟• reasonably well informed, reasonably observant and circumspect
  90. 90. Consumer ProtectionAggressive PracticesWhat are aggressive practices?CPR prohibit practices which:• by harassment, coercion or undue influence;• significantly impair freedom of choice/action; and• cause the average consumer to take a different decision
  91. 91. Consumer ProtectionAggressive PracticesFactors suggesting an aggressive practice• timing, location, nature or persistence• threatening/abusive behaviour• exploitation of specific circumstances
  92. 92. Consumer ProtectionBanned Practices• Schedule 1• 31 specific practices deemed unfair in all the circumstances
  93. 93. Consumer ProtectionGeneral ProhibitionCommercial practice is unfair if:• it is not professionally diligent; and• it materially distorts, or is likely to materially distort the economic behaviour of the average consumer
  94. 94. Consumer ProtectionOffences• fines• time limits• individual liability• defence
  95. 95. Consumer ProtectionDue Diligence DefenceOffence due to• mistake;• information;• act/default of another;• accident; or• cause beyond controland due diligence applied
  96. 96. Consumer ProtectionAvoiding the pitfallsSystems and proceduresTraining of staffAuditsMonitoring complaints
  97. 97. Consumer ProtectionCase law update
  98. 98. Consumer ProtectionLapland New Forest Park• Snow-covered Lapland village• ‘Where dreams really do come true’• ‘it would light up those who most loved Christmas’• ‘where we have prided ourselves on attention to detail’• ‘We can assure you of an absolutely magical scene’
  99. 99. Lapland New Forest Park
  100. 100. Lapland New Forest Park
  101. 101. Lapland New Forest Park
  102. 102. Consumer ProtectionLapland New Forest Park• Victor Mears, 67 and Henry Mears, 60• £30 per ticket – 42,000 tickets sold• £1m advance ticket sales• Action taken by Dorset Trading Standards• Charges of misleading public
  103. 103. Consumer ProtectionLapland New Forest Park• 13 months imprisonment• Large number of people affected• Target was families with children in the run up to Christmas• High sums of money involved• Judge said they showed, not one „scintilla of remorse’
  104. 104. Consumer ProtectionPowys v Rebo Limited• January 2011• „Sale‟• Products never offered at higher price• Eight offences• £12,000 plus £2,625 costs
  105. 105. Consumer ProtectionThe Office of Fair Trading v Purely Creative Limited• First High Court decision• Scratch card gave the consumer the impression they had won a prize• OFT applying for an order to prevent sale• Misleading actions and omissions• Breach paragraph 31of Schedule 1
  106. 106. Consumer ProtectionThe Office of Fair Trading v Purely Creative Limited• Paragraph 31 of Schedule 1• „Creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact either –• (a) there is no prize or other equivalent benefit, or• (b) taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost’.
  107. 107. Consumer ProtectionThe Office of Fair Trading v Purely Creative LimitedCourt said..• The requirement to pay for a nominal rate call to collect prize was not misleading• minimal cost e.g. postage stamp or nominal rate call or money that did not reach the promoters pocket• promoter must not receive payment to off-set the cost of the prize
  108. 108. Consumer ProtectionThe Office of Fair Trading v Purely Creative Limited• Average Consumer• reasonably well informed, reasonably observant and circumspect• ‘consumers who take good care of themselves should be protected, rather than ignorant, careless or hasty consumers’• Court ruled that whether the Average Consumer would read all the terms and conditions will depend on the circumstances
  109. 109. Consumer ProtectionOfgem InvestigationsDoorstop Selling• Concern of mis-selling• Pressure• Many companies suspending doorstop sales
  110. 110. Consumer ProtectionDealing with the Regulators•Trading Standards powers to obtain documents•Offence of obstruction•Privilege•Time limits for prosecutions
  111. 111. Final Remarksand Questions?
  112. 112. Competition law and land agreementsThe new regimeAdam Collinson, Eversheds LLP23 September 2011
  113. 113. Outline• The new regime in a nutshell• A more detailed look at the key prohibition• Risks (and opportunities)• Where will the prohibition bite?• Assessing whether a land agreement is likely to be caught• Quick case studies• Questions
  114. 114. The new regime in a nutshell• Restrictions in agreements relating to land are now subject to normal UK competition rules on restrictive agreements• The rules catch not just new agreements but pre- existing ones as well• Restrictions in these agreements could be void and unenforceable where they constrain competition on a market (and there may be other consequences besides)• In turn that may lead to changes in the nature of the trading environments enjoyed by retail outlets
  115. 115. Background• Chapter I Competition Act 1998 (which prohibits restrictive agreements) was originally rendered inapplicable to many types of land agreement by the Land Agreements Exclusion Order (LAEO)• The 2006/8 Competition Commission investigation into grocery retailing led to a review of the exclusion• The LAEO was repealed with effect from 6 April 2011• The OFT issued guidelines in March 2011 summarising how competition law can apply to land agreements in the UK – agreements/land-agreements-guideline.pdf
  116. 116. Chapter I Competition Act 1998CHAPTER I PROHIBITS:• Agreements between “undertakings”• Which have as their object or effect• The appreciable restriction of competition• On a relevant market• And have no redeeming features which would justify their exemption
  117. 117. Consequences of infringement• Infringement carries the risk of (among other things) – Investigation and fines (no fine may be imposed in respect of the period prior to 6 April 2011) – Disqualification of directors – Actions for damages from those who suffer loss as a result of the agreement• But in most cases – Unenforceability will be the primary risk (or opportunity)
  118. 118. Where will it bite?• Unlikely to bite – Normal property clauses (service charge, alterations, repairs, hours of use, etc) – Restricted user clauses (unless the landlord is also active in the tenant‟s trading market)• Might bite – Exclusivity arrangements, restricted user clauses (where the landlord is also active in the relevant market), freehold restrictive covenants• Certain to bite – Price fixing provisions
  119. 119. Assessing land agreements (1)• Relevant markets in which competition takes place – Product / service scope – Geographic scope• Rationale for restriction• Appreciability of restriction / foreclosure effect – Market structure / market shares – Duration of restriction – Availability of other suitable premises nearby from which to undertake the relevant activity (special characteristics required / planning restrictions) ?
  120. 120. Assessing land agreements (2)• Enforcement priorities in relation to land agreements mean OFT will focus on – agreements between competitors – agreements where there is market power (a market share above 30%)• OFT will assume that market share is less than 30% (and market power doesn‟t exist) wherever there are four or more independent retail fascias (including the beneficiary of any restriction) operating on a market• But this doesn‟t preclude aggrieved companies pursuing matters independently
  121. 121. Assessing land agreements (3)• NB the position can change over time so agreements can slip in and out of infringement (need to monitor?)• If a restriction of competition is not appreciable there is no infringement• If it is appreciable the agreement may still merit exemption if – The agreement produces efficiencies – There is no less restrictive way of attaining those efficiencies – A fair share of the benefits flowing from the agreement will accrue to consumers – The agreement does not eliminate competition
  122. 122. Quick Case Studies
  123. 123. Case Study One• You are legal counsel for a successful department store• The business lets some space to concessions of branded products which compete with certain products the department store sells• The current draft of the lease contains a clause requiring the concessionaire – only to offer reduced prices when the department store is having a sale (and at those times not to sell at prices more than 5% lower than the prices of equivalent products in the department store) – at all other times to sell at full price
  124. 124. Case Study Two• You are legal counsel at a leading operator of wine bars which has an existing bar in the Greek Street area of Leeds city centre (a very popular eating and drinking area)• Other operators are keen to get a position in this area• The business wants to sell the wine bar and impose a restrictive covenant against future use as a wine bar
  125. 125. Case Study Three• You are legal counsel at a chain of electrical stores• The business is keen to gain entry to a relatively new but very successful out-of-town retail park• The landlord has refused you a lease to the soon to be vacant unit claiming the terms of another lease prevent him letting to another electrical store
  126. 126. Underlying concepts to remember• Agreements containing price fixing restrictions will always be unlawful and problematic• As regards other agreements – Restrictions of competition not restrictions of activity are what is important – To assess these restrictions focus on • Relevant markets in which competition takes place (product / service and geographic) • Structure of those markets (market shares and number and identity of other competitors) • Rationale for / justification of restriction • Market power / extent of foreclosure
  127. 127. Any questions?
  128. 128. Final Remarksand Questions?
  129. 129. Dealing with the social media explosionThe HR dimensionJames Bull, Eversheds LLP23 September 2011
  130. 130. Issues involving the use of social media inrecruitment• Advertising vacancies - websites - using smart phones to attract interest from target audiences• Reducing bureaucracy and saving costs• Potential to exclude social groups• Discrimination
  131. 131. Issues involving the use of social mediaduring the life of the employment relationship• Performance management – productivity - excessive personal use of internet or emails via work computers or smart phones, including use of Facebook and Twitter• Conduct - derogatory comments about the employer or customers & bringing the company into disrepute (Taylor v Somerfield and Preece v JD Wetherspoons)
  132. 132. Issues involving the use of social mediaduring the life of the employment relationship• Conduct - bullying and harassment of fellow colleagues - discriminatory remarks (Gosden v Lifeline Project Limited)
  133. 133. Risks of IT misuse and abuse by employees• Damage to reputation - derogatory statements - bringing the business into disrepute• Security - breach of the Data Protection Act - disclosure of confidential information• Tribunal claims - discrimination - third party harassment
  134. 134. Employees duties to the employer in terms ofconfidential information• Implied duties - to act honestly towards the employer - to disclose to the employer all information relevant to its business - not to make secret profits from the employer‟s business - to respect the confidentiality of the employer‟s business information - not to compete with the employer‟s business
  135. 135. Employees duties to the employer in terms ofconfidential information• Express duties - contractual clauses• Whistle blowing
  136. 136. The need for clear internal policies on theuse of social media forums• Preserving good business relationships and promoting a positive business image• Having a clear policy - restricting the use of employer‟s IT resources - restricting the use of smart phones during work - restricting employee use of confidential information - prohibiting bullying, harassment and discrimination
  137. 137. The need for clear internal policies on theuse of social media forums• Having a clear policy - prohibiting negative comments about the employer, its customers, suppliers and employees - making clear to employees that social media messages may reflect on their employment• Training - awareness and understanding of the policy• Disciplinary procedures
  138. 138. Final Remarksand Questions?
  139. 139. Dealing with the social mediaexplosionReputational Risk & Advertising IssuesAndrew Terry, Eversheds LLP23 September 2011
  140. 140. What do we mean by social media?• A “conversation” v “one-way traffic”• Wide ranging: – Social and business networking sites • e.g. Facebook, LinkedIn, MySpace, Bebo – Blogs: a “web log” • e.g. Twitter, Blogspot, Square Space – Digital media sharing • e.g. YouTube, Flickr, Slideshare – Wiki• BUT much overlap and rapidly changing• AND your own website
  141. 141. Areas of corporate risk• Another means of corporate communication BUT lack of control, brevity and casual use increase reputational risk: – defamatory comments – misleading advertising – disclosure of private information – employee misconduct• Manage by: – adopting appropriate internal policies – reviewing regularly – devoting adequate resources – complementing established marketing
  142. 142. Third party comments• Monitor third party sites for damaging comments and IP infringement• Monitor sites/content under your control (even though you may lose “intermediaries” defence)• Identify and communicate with disaffected customers• Internal response team• Legal intervention – Defamation law – Notice-and-take-down procedures – Privacy rights
  143. 143. Defamation• Wide protection – any statements which make readers think worse of a person or organisation• Publication• Balance of power in Claimant‟s hands• Defences available (justification, fair comment, qualified privilege)• Aim – vindication (damages, apology, retraction, costs)• Clear potential for vicarious liability
  144. 144. Notice-and-take-down procedures• Defamation actions: author, editor, publisher – Identifying the author – Likelihood of relief against bloggers etc – Position in meantime• Role of ISPs and other “intermediaries” – E-Commerce Regs 2002 (Reg.17-19) - defence for mere conduit, caching or hosting if no actual knowledge – s. (1) Defamation Act - if not an author, publisher etc and no reason to believe defamatory – May lose protection if have editorial control• Put on notice (including for IPR infringers)
  145. 145. Privacy rights• Right to respect for private and family life, home, health and correspondence – Article 8 ECHR (1) Is it private information? (2) Is there a reasonable expectation of privacy? (3) Is there a genuine public interest?• “Private Information” – emotional relationships / family / friends – job performance – business information• Injunctions v “Super Injunctions”
  146. 146. ASA : online remit extension“Advertisements and other marketingcommunications by or from companies,organisations or sole traders on their ownwebsites, or in other non-paid-for space onlineunder their control, that are directly connectedwith the supply or transfer of goods, services,opportunities and gifts”• Primary intent is to sell something though not necessarily immediately• Has it appeared in the same or very similar form in third party space?• New sanctions – enhanced name and shame, removal of adverts
  147. 147. ASA : user generated content• UGC is content created by private individuals – outside remit• But UGC falls within remit if adopted and incorporated within own marketing communications• Customer reviews – inside or outside remit?• Content excluded from remit extension: – press releases and other public relations material – editorial content – natural listings – heritage advertising
  148. 148. Content of social media policies• who writes the copy?• tone of company “voice”?• what is the posting process from inception to publication?• how often do you update or post?• who monitors and how often?• policing in moderation (abuse v negative comments)• correcting mistakes quickly• ensure enforcement is uniform
  149. 149. Final Remarksand Questions?
  150. 150. Using Social Media as a PromotionalToolMary Kelly, Eversheds LLP23 September 2011
  151. 151. Social media trends across markets
  152. 152. Social media: a few facts Half of the 29 million 500,000,000 Facebook subscribers in the UK check their page at The number of global least once a day users Facebook reports they have registered - PWCOne out of every five Social media minutes online is advertising spend will spent on social increase 400% by the media related sites year 2014 - Nielsen - Forrester It took Facebook 3 Facebook valued years to reach at $50 billion worldwide audience of 50 million - and another - PWC four years to reach over half a billion
  153. 153. Retail marketplace pressures and theuse of social mediaSocial media opportunities
  154. 154. Some examples of retailers‟ use ofsocial media
  155. 155. Some examples of retailers‟ use ofsocial media (Continued)
  156. 156. What do consumers want from digitalmarketers?…Create value for consumers… keep it exciting …one of the main reasons customers site for „friending‟ a corporate Facebook page is to get access to special offers and sales discounts. - E&Y Reaching Consumers Globally May 2011
  157. 157. Running promotions on social media……Terms and conditions
  158. 158. Running promotions on social media……Regulations and Codes of Conduct still apply• Gambling Act 2005 (different regime in Northern Ireland)• Consumer Protection from Unfair Trading Regulations 2008• UK Code of non-broadcast Advertising, Sales Promotions and Direct Marketing (“CAP Code”)… however, regulations are not harmonised throughout the EU
  159. 159. Social media platform terms andconditions……What you need to be aware of Facebook You Tube Twitter Promotions Guidelines• Release and disclaimer of • Must provide • Possible to use Facebook liability participant ability to „Retweet‟ as a• Methods of entry using a read rules of entry condition of entry Facebook platform before they enter a • Must provide a link to• Facebook cannot be used as competition/ promotion terms and a means to notify winners of promotion conditions a promotion • Entry to a promotion• Promotion cannot use must be free/no Facebook functionality, eg money requirement „Like‟ button as a voting • Promotions must mechanism indemnify YouTube in• Third party advertisements respect of any prohibited contests/promotions run on YouTube• Must not incorporate any functionality that identifies which users visit a page/ promotion
  160. 160. Social media promotionsCase study: Timberland Trail of Heroes
  161. 161. Social media promotions (Continued)Timberland Trail of Heroes - Features• Part of Timberland‟s 2011 “Nature Needs Heroes” marketing strategy - its biggest environmentally focused marketing campaign• Geocache contest run through Facebook and website• Collaboration between Timberland, ad agency and Groundspeak - a Geocaching community website• Run in 6 European cities at the same time (London, Milan, Paris, Madrid, Berlin and Brussels)• Consumers register themselves as members of the geocaching community and log individual caches
  162. 162. Social media promotions (Continued)Timberland Trail of Heroes - Lessons• Ensure the mechanics of the promotion are clearly described and comply with all relevant social media platform terms and conditions• Where time and location are key to the promotion ensure it is consistent in each time zone• Be clear as to what data is to be provided by a participant, how it is to be used and that appropriate consents are provided• If complex, test it out on a smaller restricted number of users. Timberland trialled the promotion with the blogging communities• Get country specific legal review
  163. 163. Social media promotions (Continued)Examples• Fashion retailer Facebook quiz wanted to share results instantaneously on Facebook page. Site already built by agency. Led to wasted costs.
  164. 164. Social media promotions (Continued)Conclusion• Understand and participate in the development of your social media and promotional strategy• Engage with your marketing and social media colleagues early in respect of the mechanics and terms of promotions• Ask lots of questions as to how promotions will operate - regulations still apply to social media in the same way as more „traditional‟ promotions• Your contribution may save time, money and reputation - and enhance the use of social media as a promotional tool
  165. 165. Final Remarksand Questions?
  166. 166. Google AdWordsThe current state of playKaisa Mattila, Eversheds LLP23 September 2011
  167. 167. Google AdWordsIntroduction• Continuing “hot topic” among retailers• Evolving area of law – several recent decisions• AdWords = allows traders and businesses to purchase keywords to trigger the display of a „sponsored link‟ advertisement whenever an internet user searches for the selected keyword.• Controversy: registered trade marks freely available for any advertiser to purchase as keywords
  168. 168. • Distinguish NATURAL results from ADWORDS
  169. 169. Google AdWordsWhat is their significance…• … for online advertisers? – Capture Internet traffic interested in similar products / services – Communicate sales of branded products• … for trade mark owners? – Diversion of trade = lost sales – Customer confusion & counterfeits – Loss of prominence & higher advertising costs• … for Google? – Huge revenue source – 97% of US$28bn in 2010
  170. 170. Google AdWordsThe trade mark law angle• Brand owners: use of trade marks as AdWords amounts to trade mark infringement both by the advertiser and by Google – Use of identical sign (usually) – In the course of trade – In relation to goods/service which are usually identical to those protected by TM registration – Also possible dilution & free riding on reputation of well- known brand• Distinguish between TRIGGER ONLY use and AD TEXT use
  171. 171. • TRIGGER ONLY USE vs. AD TEXT USE
  172. 172. Google AdWordsThe current state of play• ‘Use’ – Google is not “using” TMs by offering them for sale as advertising keywords or by displaying the advertisements = no infringement – Advertisers, however, do “use” the TMs in the course of trade in relation to products / services when selecting them as AdWords so capable of infringing.• Infringement by advertisers – Only if damages the „core function‟ of the trade mark as a guarantee of trade origin (in other words, is liable to lead to confusion)• Cases: Louis Vuitton Malletier SA v Google France; re-affirmed in Die BergSpechte Outdoor Reisen v Gunter Guni & ors (both March 2010)
  173. 173. Google AdWordsThe current state of play• Potential damage “if the advertisement does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originated from the trade mark owner or an undertaking economically connected to it” – “Normally informed?” / “Reasonably attentive?” – “Only with difficulty”?• A question of fact to be determined by national courts on a case-by-case basis• Little guidance from the European Court
  174. 174. Google AdWordsThe current state of play• Potential liability for Google if not exempt under E- Commerce Directive as Information Service Provider! – Would need to be acting as a mere information storage/transfer service with no active role, knowledge or control over the content of the information stored/transmitted on behalf of the end user • Extent of Google’s involvement a matter for national courts on a case by case basis – Could be held liable for AdWord use by an advertiser if a brand owner brings unlawful content /activities to Google‟s attention and it fails to act expeditiously to remove that content – Note: depends on the activity itself being unlawful!
  175. 175. Google AdWordsLikely developments• Interflora v Marks & Spencer – Opinion of the Advocate- General of the European Court: – M&S infringed the Interflora trade mark by purchasing INTERFLORA as an AdWord (Internet users might believe M&S was part of Interflora‟s sales and delivery network given Interflora‟s unusual business model) despite the word not appearing in the ad text – AdWord use is also capable of: • diluting the reputation of trade marks to become generic terms; and • taking unfair advantage of their reputation provided that the TM appears in the actual ad text.
  176. 176. Google AdWordsThe way forward• Advertisers: unclear scope of what could amount to infringement – increased caution, particularly with ad text use• Warning sounded to Google re: ISP liabilitySteps to take: – “Test searches” – Report unlawful/confusing use to Google – Report any counterfeiters to Google – Write to advertiser? – Exercise caution when using AdWords yourself!
  177. 177. Google AdWordsGoogle’s current AdWords policy• Does not prevent the selection of TMs as keywords in the EU/EFTA• Will only investigate ad text in response to brand owners‟ complaints and will only carry out a “limited investigation” into whether the keyword combined with the ad text is confusing as to the origin of the goods being advertised• If satisfied that there is potential confusion, will take down the advert Parallels to decided cases: focus on confusion Possible impact of forthcoming Interflora decision?
  178. 178. Google AdWordsAny questions?Thank You!Kaisa MattilaSolicitor, Intellectual Property
  179. 179. Final Remarksand Questions?
  180. 180. IT Procurement & RetailBruce Cairns & Mike Gladwin, Eversheds LLP23 September 2011
  181. 181. 10 Key Contracting PointsNo. 1 - What are the deliverables?•specifications•tender documents and requirements specifications•change control
  182. 182. 10 Key Contracting PointsNo. 2 - What rights do you get?•software licences•group usage•contractors•types of licence
  183. 183. 10 Key Contracting PointsNo. 3 - When will you get it?•project plans•milestones•liquidated damages•walk away rights
  184. 184. 10 Key Contracting PointsNo. 4 - How much will it cost? •link payment to milestones and acceptance •fixed charge? •avoid time and materials •avoid cost elements “to be agreed” •rate card •avoid uncapped increases
  185. 185. 10 Key Contracting PointsNo. 5 - Acceptance tests•agreeing test criteria•customer participation•end to end and modular•integration with customer systems
  186. 186. 10 Key Contracting PointsNo. 6 - What if it goes wrong?•damages•termination•liquidated damages•service credits•liability caps
  187. 187. 10 Key Contracting PointsNo. 7 - Customer Group issues•what is the current group?•dealing with changes to the group•assignment•outsourcing service providers
  188. 188. 10 Key Contracting PointsNo. 8 - Data protection•your risk as data controller•contractual obligations on data processor•outside EEA?•liability caps for breaches
  189. 189. 10 Key Contracting PointsNo. 9 -Service descriptions & service levels•support and maintenance•clear descriptions•clear service levels•bronze or platinum?
  190. 190. 10 Key Contracting PointsNo. 10 - Unravelling the deal•exit planning•software licences post termination•ongoing support•replacement services•has the supplier got you by the throat?
  191. 191. Final Remarksand Questions?
  192. 192. Annual Retail Conference DataProtection Update – Issues for 2011/12Cookies – Have you got the right recipe?Elaine Fletcher, Eversheds LLP23 September 2011
  193. 193. What‟s New?• Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011• Storing information on user‟s terminal and accessing it• Mainly but not just „cookies‟• Information does not have to be „personal‟ or „identifiable‟• Still have to comply even if anonymous, aggregated or statistical• Additional to Data Protection Act 1998
  194. 194. What has changed?• Clear and comprehensive information on purpose of cookies• Pre 26 March 2011 – providing opportunity to refuse them (known as „opt out‟)• From 26 March 2011 – giving prior consent to use them (known as „opt-in‟)
  195. 195. What does this mean?• You have to obtain the user‟s „freely given and specific indication of agreement‟• Explanations of use of cookies to be clearer, more specific, and more granulated• Browser settings probably not adequate yet – requires level of explanation and selection beyond current standards• Repeat consent not required once consent obtained on first website visit, BUT• New consent for each change of cookie use
  196. 196. How is consent obtained?• Pop up boxes• Acceptance of suitable terms and conditions• Check out the ICO‟s wording at The ICO would like to use cookies to store information on your computer, to improve our website. One of the cookies we use is essential for parts of the site to operate and has already been set. You may delete and block all cookies from this site, but parts of the site will not work. To find out more about the cookies we use and how to delete them, see our privacy notice. [ ] I accept cookies from this site. [Continue]
  197. 197. What practical steps are needed?• Engage with e-commerce teams and identify: – Each and every cookie used – is it deleted when browser closed? – What each one does – what information is collected, is it identifiably linked? – Why it is used – site essential cookies vs improved experience/ enhanced service – Whether the business still needs uses/ needs it• Review and revise website privacy policies and incorporate consent mechanisms• Check ICO website for emerging guidance
  198. 198. Reasons to comply• ICO‟s usual enforcement powers• Civil Monetary Penalties now extend to cookie requirements (up to £500k)• ICO increasingly asking to audit businesses• Customer confidence• ICO won‟t enforce for 12 months IF actively trying to comply
  199. 199. Final Remarksand Questions?
  200. 200. The International Management ofDisputesIssues for RetailersRichard Little, Eversheds LLP23 September 2011
  201. 201. Retail: implications of internationalexpansion• Opportunities abroad in expanding businesses• Managing business in multiple jurisdictions• Impact of relevant local laws on effective operations – from start to finish
  202. 202. Key considerations• Contractual protections when establishing operations overseas• Preparation for and termination of contracts• Strategy and tactics in international dispute resolution
  203. 203. Laying the Groundwork…..• Structuring the operation – balancing control, capital and risk - own branch? - franchise? - concession? - agent/distributor?• Research relevant jurisdiction – need for approvals/licences
  204. 204. Contractual ProtectionsAnticipating potential risk• Ensuring your contract works for you: - Retaining control over operations - Ownership of stock and premises - Termination provisions - Choice of governing law and dispute resolution clauses• Effective drafting reduces risk of costly disputes
  205. 205. Jurisdiction• May impact upon choice of structure - mandatory provisions in certain jurisdictions• Consider jurisdiction clause in contract• Specify applicable law
  206. 206. Principles of Contractual Interpretation• UK position - Court gives a document its ordinary meaning unless there is a clear mistake on its face. Admissible background evidence limited to factual matrix.• Contrast other jurisdictions – importance of retaining paper trail of any discussions.• Ensure tight drafting – use a second pair of eyes for a “sense check”
  207. 207. Preparing for termination• Early preparation is key - find out what is happening on the ground• Issues to consider: - stock - premises - local licences - employees• Practical implications
  208. 208. Terminating contracts• Importance of clear contractual terms• Managing an effective exit: - Know your contract - Awareness of “on the ground” performance• Consider relevant applicable law• Compile any necessary evidence
  209. 209. Terminating Contracts• Is pre-action correspondence appropriate?• Is injunctive relief available?• Mandatory application of local jurisdiction?• Consider local law position on disclosure, privilege, confidentiality etc
  210. 210. Strategy and tactics in internationaldispute resolution• Retain appropriate local team• Project management of disputes - particular logistical difficulties of working cross-border• Appropriate use of technology
  211. 211. © EVERSHEDS LLP 2011. Eversheds LLP is a limited liability partnership.