Tesco continues to outpace rivals (Kantar)

However, behind the headlines:

Where at: Great to see Tesco on the way back, but digging beneath the surface, growth is in premium private label, echoing similar trends in other mults. Add the rapid growth of Aldi and Lidl, at the expense of brands, and a more worrying trend becomes more obvious…

Where headed: In other words, unless branded suppliers find ways into private label and into the discounters via ‘safe’ SKUs

Effect on you: Brands are under threat, or at the very least, the brand premium is being reduced

Action: Time for branded suppliers to decide whether keeping the factory going, or maintaining diminishing brand equity is more important

£2 = 1/2p, a Boots inflation-signal for 2017?

The new reality of print media at street level

                                                                                                                                  pic: Nei Valente
In 1950 there were more than 1,500 newsstands across New York City.

Today's numbers are closer to 300 units, with newspapers and magazines playing a secondary role to snacks…

See 30 pics here

Amazon Zaps the Checkout

In another first, Amazon Go have developed a new, more convenient way of shopping.

Users with the Amazon Go app on their phones simply check into a store equipped for the system, put their phones away, shop to their hearts' content, then leave when they're finished. No waiting to pay.

As each item is picked up and held (or stored in a bag) by the shopper, the price is automatically added to the shopper's Amazon account and is deducted from the user's bank account when he or she leaves the store. The store gets the same info plus a copy of the item's SKU number for inventory management and accounting purposes.

Whilst this will cut cost and no doubt increase their sales, the real impact of this lateral leap by Amazon Go will be felt at supermarket checkouts…

In other words, whilst traditional stores have laboured for years at speeding up the process, encouraging self-scanning, and in effect making the same hole deeper as in traditional thinking, Amazon have eliminated the process in a move that will of necessity be copied by the multiples, or for speed, will be leased from Amazon…

Iceland Foods hits back at Icelandic government over trademark

This latest position in the Icelandic saga raises some issues for NAMs:

Where at: A distracting stalemate, with giving-in i.e. surrendering the trade-mark rights, or fighting the case, as the only apparent options for Iceland retail?

Where headed: The retailer is unlikely to give in. This leaves the Iceland government to initiate and incur legal costs, for as long as it takes…

Effect on you: Some resulting lack of focus within the retailer, making shorter term strategies the best option for suppliers

Action: From your experience of your category in Iceland, weigh up level of risk and tailor your initiatives accordingly…

A KamBlog insight from NamNews

Tesco toying with Argos Prices?

Shrinking Grazing-shrinkage, promoting healthy snacking, a 2-for-1 no-brainer for Tesco?

Walmart needs to cut Asda loose

An interesting article published earlier this year by Bloomberg sets out why Asda should be sold off:

Aldi & Lidl have eliminated Asda’s low price advantage, resulting in falling like-for-likes, with Asda’s sales growth trailing the other mults… (graphs in the original article really spell it out).

NamNews readers will be aware that Asda has been underperforming and thus diluting Walmart’s performance in terms of ROCE and Net Margin since its acquisition in 1999.

Normally, Walmart would have solved these problems by a combination of organic growth and acquisition of say Sainsbury’s or Morrisons, but UK planning legislation limits the building of new stores and competition legislation prevents acquisition of sizable competition.

This leaves sell-off as the only option for their UK operation.

Bloomberg estimates that Asda would be worth £8bn based on current market valuations of the other mults (i.e. @ 40% of sales).

The UK, in current competitive circumstances (Discounters, large space redundancy, seismic-shifts, ‘Brexit’ currency impact…, you name it!) would be unattractive for global players, given the probable purchase price and the need to justify the move to their respective stock markets.

This leaves private equity.

In which case, we enter a whole new ball-park, where the emphasis would shift to optimising the asset-base (stores) and financial performance (ROCE), in a 5 year time-frame leading to flotation….

This would provide a new basis for NAMs in their dealings with Asda:

• Emphasis on quantifying cost & value in all aspects of the supplier-Asda trading relationship (Margin, Credit, rotation, trade investment, NAM-advice, and deductions)
• Relating trade investment directly to Asda P&L

…and all within a 5 year window….

Trump - moving from business negotiation to political negotiation...

Trump's Art of the Deal describes his 11-step approach, which is worth comparing with an article on political negotiation in the Harvard Business Review.

One question is how negotiating in business differs from negotiating through back channels, with defiant coalition partners, in war zones, and in the shadow of severe mistrust and hostility. 
(Those NAMs that see little difference compared with their day-job might care to drop me a line on bmoore@namnews.com) 

As the President-elect attempts to apply what he knows best in terms of negotiating skills, NAMs can gain more insight into their own negotiation process as Trump’s moves – and their consequences – over the coming four (or even eight?) years, are played out in global media…

Open-minded NAMs may even pick up some political negotiating tips that can be applied in the day-job…

Trump's 11-step approach

1. Think big
2. Protect the downside and the upside will take care of itself
3. Maximize your options
4. Know your market
5. Use your leverage
6. Enhance your location
7. Get the word out
8. Fight back
9. Deliver the goods
10. Contain the costs
11. Have fun

Political negotiation (more):

• Preconditions and ultimatums are usually bad ideas
• You don’t need an amazing deal - you need an implementable deal
• They lose does not equal you win
• You have to help them save face
• You have to have the courage to tell supporters what they don’t want to hear

Over to you and yours...

Meanwhile longer term, the real issue (apart from picking up valuable insights) for NAMs has to be: Will Trump will change politics, or will politics change the President?

Medieval brainstorming: auto self-portraiture

“Good idea, but how about making it smaller, and adding some extras?

-  Abbreviated auto-scribing
-  Instant letter-transmission
-  Conversing between absent friends
-  A more precise hour-glass
-  Settlement of accounts with merchants”

Great ideas are always a little ahead of their time...