Independent retailer grows veg on Budgens roof

North London independent retailer Andrew Thornton has started growing vegetables on the roof of his Budgens store in Crouch End.
'Food from the Sky' is the brainchild of Thornton and Azul Thome of the Positive Earth Project, and makes Budgens the first supermarket in the world to grow food on its roof.

He said: "We need to grow more food in cities; with millions of square metres of suitable growing space on the roofs of London, we want to inspire others to follow suit."
As one of the key reasons for the project is to inspire and educate people on growing their own food, Thome will be running workshops on the Budgens roof garden in the near future.

This obviously raises raises the question of why confine this initiative to spare space outside the store, when it can be a way for multiples to bring the shopper even closer to the product via natural instore theatre?

Tesco re-defining the used-game market?

According to Thisismoney in the Daily Mail, Tesco is to offer customers second hand goods for the first time with shoppers able to sell their old computer games to the supermarket, which will then offer them for sale at a bargain price.


In what appears to be an attempt to attract customers from Game and HMV, Tesco will pay a good price ( i.e. better than the games competition) for pre-used games in good condition and resell at a discount to the new version price.

Given that any price above zero represents a gain for the owner of a 'redundant' game, and the games shops appear to offer little for second hand purchases, then Tesco simply has to offer £10-£20 for a game retailing new at £40, and apply a 50% markup to resell at a worthwhile discount to normal new prices. Offering much less will do more harm than good...

Applied to best-sellers only, this has to be a new business model for the games industry, and a no-brainer for Tesco.

Only issue in setting up a new renewal market-model will be copyright owners wanting to share the resale gains, as per moves in 're-selling' pre-owned books….

Asda's step towards phone-in-aisle price comparison

pic: FT

According to the Financial Times, under Asda’s scheme, with their price guarantee service, the shopper pays for products in store and then enters receipt details at home into Asda’s website to compare if anything was cheaper elsewhere. If a customer could have saved more by shopping elsewhere, the Asda site, operated by Mysupermarket.co.uk, will print out a coupon against future purchases to cover the difference, plus a penny.

According to Asda, about 15,000 people a day are now checking prices on the site, which covers about 70 per cent of Asda’s comparable products, and demand had “surpassed expectations”.

The real issue here is that Asda are beginning to undermine one of the fundamentals in Multiple retailer price perception. Consumer-shoppers traditionally relied upon a handful of KVIs to make a broad price comparison between prices charged by the multiples.

Asda have just opened up this decision process to include fact-based comparison across every SKU in the store…next step has to be phone-in-aisle price comparison.

Now although unit pricing never really took off, and shoppers are unlikely to leave a store for one lower-priced SKU, we are nowadays dealing with the 'savvy consumer' who demands demonstrable value for money.

Asda have just taken a step towards handing them the tool….

Are we now heading for replacement of 'state-of-art' grocery retailing a new, digital version of the oldest markets – where rival retailers call out their prices, offer their customers cups of tea and are always prepared when necessary to haggle?

Raising the Vending Game?

Emirates Palace hotel in Abu Dhabi, a cash machine dispenses gold (Pic: Mosab Omar/Reuters)


According to the New York Times, vending machines in Tokyo have electronic eyes that evaluate customers’ skin and wrinkles to determine age, for access to age-sensitive categories. In bathrooms at upscale Canadian bars, vending machines with flat irons enable women to defrizz their locks. In Abu Dhabi, the lobby of a luxury hotel has a vending machine that dispenses gold bars and coins at more than $1,000 an ounce.
Changing consumer preferences about shopping and the high cost of operating brick-and-mortar stores are inspiring premium brands to rethink how they sell their wares.

With vending machines costing less than an employee, a company called U*tique will begin selling high-end beauty products in machines that light up when customers approach — a better reception than shoppers see from most retail employees….

Moreover, merchandise in U*tique machines will be arranged and lighted like works of modern art in a series of dainty portals, evoking a neon honeycomb (see above)

For those of us wanting the numbers, a Zoom vending machine in Duty free retail can outsell average airport sales per sq.ft. by 10 to 1…

A pointer or a pain for classic vended categories?

Next Asda backhaul?

Following yesterday's Netto snap at £778m, how about Asda adding Home Retail Group to their new market-share basket?
- Netto adds £0.8bn sales to Asda
- Home Retail would add £5.9bn sales (of which Argos = £4.3bn, a nice addition to the Asda catalogue)
- At a market capitalisation of £2bn, Home Retail would be a snip
- This would bring Asda sales from £18.6bn to £25.5bn vs. Tesco UK sales £42bn
- Presuming Tesco is now sitting on its hands...
- Resourcewise, Walmart market capitalisation = £130bn = 4x Tesco £33bn mkt cap.

Meanwhile, economywise, Homebase matching green livery means minimal expenditure on outlet paint-conversion...

Have a restful long weekend, from the Namnews Team!

Asda takeover of Netto - surprised?

With latest accounts ('09) at Companies House showing Netto's
- ROCE at 2.1%
- Net Margin at 0.8%
- Stockturn at 16.8 times per annum
today's announcement was a 'no brainer' (although paying 100 times earnings shows extent of Asda's appetite...)

As you know, to maintain its independence these ratios needed to have been:
- ROCE at 10.5-15%
- Net Margin at 2.5%, minimum
- Stockturn at 20 times per annum, minimum

Key issue for suppliers has to be the possibility of any pricing and/or terms disharmonies in their dealings with Asda vs. Netto.
Action: A narrow window possibly exists to correct such differences before the authorities allow the deal to go through…

Meanwhile, where does this leave WalmAsda, Dansk, medium-term….? (A signal for your continental colleagues?)

Incidentally, why not let us help your team anticipate the inevitable, via our inhouse bespoke finance workshops? - More on KamTraining

The Retailer's Perspective on GSCOP

Some key questions for the weekend?

• How much will retailers lose via the 'banned conditions'?
• Can you expect them to simply absorb the losses? (Would you?)
• How can they recover the losses from suppliers?
• Do you really believe that nothing is happening, because nothing appears to be happening?

See above for the answers and insights
Have a retailer weekend, from the Namnews Team!

Buying a shop, the original public-private battle for Harrods

Photograph: Stefan Rousseau/PA

With all the drama of a 'who-done-it', the saga of Lonrho (Tiny Rowland) and Mohamed Al Fayeds' fight for control of Harrods, involved government intervention, a DTI enquiry, a threatened injunction, two libel actions, and two rulings by the Monopolies and Mergers Commission: 'it was against the public interest for Lonrho to own Harrods since it also owned Brentford Nylons and might therefore discriminate against other suppliers of bed linen'

The story goes back to 1981, when the Monopolies and Mergers Commission made two rulings affecting Lonrho, the international conglomerate led by Tiny Rowland: one approved the company's purchase of the Observer; the other prevented it bidding for House of Fraser, owner of Harrods, which Rowland had been pursuing since 1977.
[For more details on 'warehousing' the Harrods shares, the implementation of one of the City's greatest 'stings' and subsequent use of several firms of accountants and solicitors, private detectives and freelance journalists in an investigative operation, said to cost many millions of pounds, together with illicit bugging devices and some of the money going in bribes to officials to unearth incriminating documents in Egypt, Haiti, Dubai, Brunei, France and Switzerland, see the original article]

The Department of Trade and Industry then launched an official Inquiry, but declined to publish the result. Rowland obtained a copy and The Observer produced a special midweek free edition of the newspaper to circumvent an anticipated injunction, expected later that day…

Insight: ..makes todays local tussles by the multiples with the planning authorities seem mild by comparison…

A GSCOP-thought for the weekend?

Given that the designated retailers have little to gain and lots to lose from the spirit of GSCOP, it is unlikely that they are currently preparing to merely observe the letter of the new Code of Practice.

For instance:
Losses from Banned conditions:

• No delay in Payments (they currently pay in 45 days approx., scope for negotiating extension, 90 days ring a bell?)
• No requirement to predominantly fund a promotion ( move from fully-funded to 50%?)
• No obligation to contribute to marketing costs (your current payments reduced to zero?)
• No Payments for shrinkage (say average shrinkage = 2% of retail sales?)
• No Payments for wastage (say 5% of sales, conservatively?)
• No Payments as a condition of being a Supplier (your current payments for listing, etc = zero?)
• Compensation for forecasting errors (think refund of incremental margin from normal sale of promo-stocks)

Potential recovery from:

• Extending credit (by negotiated agreement?)
• Trade funding (currently up to 20% of purchases, scope for more?)
• Deductions off invoice (say 3 -10% of invoiced sales, scope for more?)

The designated retailers have to be working on ways of recovering losses from banned conditions, and also maintaining the status quo by signing suppliers up to a retailer-driven supply-agreement, written in whose favour…?

Are you missing a trick by simply awaiting the outcome?

Have a fair-share weekend, from the Namnews Team!

Who owns whom in UK retail, & so what?

According to Bloomberg, the Qatari's £1.5 billion-pound ($2.2 billion) purchase of Harrods may herald more investment in the industry as foreign buyers take advantage of a consumer-spending revival, a falling pound, and the rolling Euro-dice on the continent.
Qatari's 26% stake in Sainsburys will probably result in 100% acquisition (costing them approx £5bn), Liberty has been approached by Bluegem Capital Partners, Harvey Nichols is controlled by Hong Kong entrepreneur Dickson Poon, while Selfridges is owned by Canadian billionaire Galen Weston, and Asda is probably up for sale.
Add to these changes recent CEO moves in retail management coupled with Asda's planned extension of its Living format by 150 stores, the new entrant Best Buy's intention to open 150 stores, and the monumental change taking place in UK retail becomes obvious…(?)
At the very least, this degree of change in 'ownership' and influence at corporate and local level has to result in fundamental change in the competitive-mix.
Ultimately, the relative appeal of the different players in the eyes of distracted but increasingly savvy consumers needs to be reassessed and their marketing-mix readjusted, at least .
In other words, the relative appeal of each retailer's 8Ps (Products & Assortment, Pricing, Promotional activities, Place i.e. store location, Personnel, Physical distribution & handling, Presentation of stores & products, & Productivity) need to be realigned to avoid being found to be dangerously out of sync with the realities of the new UK hung-environment…

It hopefully goes without saying that, for suppliers, 'business as usual' is not an option...

A non-election quote that re-sets our priorities:

"These are the highlights"
Chris Martin, Coldplay frontman, after his wife Gwyneth Paltrow asked when the action would start as they watched cricket on TV
Mail on Sunday

Aldi's answer to all our old problems…

News that Aldi's Lacura Multi-Intensive Serum Anti-Ageing, at £3.49 a pop, beat 2,000 rival products in a blind test, raises fundamental issues. A key question is why use a 'blind-test' to prove a result based on appearance? Also, timing may be more than a lucky coincidence, given the way in which the elections have hung around, putting ages on us all…
But, as always, the extra-low price takes centre-stage, given the depth and duration of cuts necessary to restore the wrinkle-free appearance of UK finances….

Have a smooth weekend, from the Namnews Team!

The essential shopping environment?

……….At first glance the composition appears unintentional and the construction shoddy. But further investigation reveals a clear delineation between indoor/outdoor space with a design focus on protection through the use of barrier. Planes are shifted off the orthogonal to accommodate function; as a side effect it relieves inhabitants from a harsh Euclidian geometry…..

Andrew Sullivan Blog

All re-initial changes in UK retail?

Given that AH has almost clocked-up one year in Alliance Boots, with MB checking-out the rails at M&S, DP bringing global thoughts to Morrisons, AB now risen above Asda, leaving JK in taken-over financial mode at JS, and TL optimising the profit-mix at Tesco, a change of fiscal-government should make the UK a place where financially-focused key account management really makes a difference…if not a pre-requisite…
Keep counting on Namnews..

Sainsbury's rolls out self-checkouts

News that Sainsbury's are extending the use of self-scanning (cost transfer, HR reduction) raises the question of when it will be worth bar-coding the shopper (easily-assimilated, non-excreted RFID tags), in the interest of optimising resulting shopper-insight, enhancing loyalty card output, and even monitoring the shopper's state of health to prolong lifetime value of favoured customers?

Have a nanny-weekend, from the Namnews Team!