Friday, 30 December 2016
Friday, 23 December 2016
Tuesday, 13 December 2016
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
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
Monday, 12 December 2016
Tuesday, 6 December 2016
The new reality of print media at street level
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
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…
Monday, 5 December 2016
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
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
Sunday, 4 December 2016
Thursday, 24 November 2016
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:
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
Saturday, 12 November 2016
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
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?
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
- Think big
- Protect the downside and the upside will take care of itself
- Maximize your options
- Know your market
- Use your leverage
- Enhance your location
- Get the word out
- Fight back
- Deliver the goods
- Contain the costs
- Have fun
- 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
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?
Saturday, 5 November 2016
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...
Wednesday, 26 October 2016
Irish cross-border shopping-traffic increase..
According to the BBC, the same well-known brand of whiskey is 27 euros on shelves in the Republic of Ireland - but in Northern Ireland it is £15 - the equivalent of 16 euros, a reduction of 40.7%...
Think about the potential distortion of trade caused by uncoordinated price-hikes in the ROI:
Where at: The real issue here is the distortion to trade caused by cross-border (ROI/NI) reaction to shelf-price differentials North and South of the border, with individual shoppers but the tip of the iceberg… i.e. think third-party bulk purchases transported across a 310 mile long – i.e. unmanageable – border with the Irish Republic. There is already a 15% currency-based price differential arising from recent falls in sterling…
Where headed: Any disproportionate supplier price increases for NI and ROI will simply add to the appeal of a shopping journey North…
Effect on you: UK brand suppliers will suffer loss in brand equity in Ireland if savvy consumers perceive there to be differences that are not transparent and defensible. Paradoxically, ROI consumption of UK brands may also increase via NI, while sales are dropping in the South…
Action: UK suppliers need to think through where their brands are currently (in ROI), where they want them to be, and plan for price increases that maintain the status quo in UK and Ireland, if possible…
Still want to push through that price increase in the South, regardless?
Think about the potential distortion of trade caused by uncoordinated price-hikes in the ROI:
Where at: The real issue here is the distortion to trade caused by cross-border (ROI/NI) reaction to shelf-price differentials North and South of the border, with individual shoppers but the tip of the iceberg… i.e. think third-party bulk purchases transported across a 310 mile long – i.e. unmanageable – border with the Irish Republic. There is already a 15% currency-based price differential arising from recent falls in sterling…
Where headed: Any disproportionate supplier price increases for NI and ROI will simply add to the appeal of a shopping journey North…
Effect on you: UK brand suppliers will suffer loss in brand equity in Ireland if savvy consumers perceive there to be differences that are not transparent and defensible. Paradoxically, ROI consumption of UK brands may also increase via NI, while sales are dropping in the South…
Action: UK suppliers need to think through where their brands are currently (in ROI), where they want them to be, and plan for price increases that maintain the status quo in UK and Ireland, if possible…
Still want to push through that price increase in the South, regardless?
Tuesday, 25 October 2016
Aldi & Lidl as problem solvers?
Unlike the redundant-space, 80/20 issues of the mults, Aldi & Lidl see online as a way of reducing car-park congestion and queueing instore.
In an interesting twist on accepted wisdom that discounters are simply trying to imitate the mults, Simon Johnstone of Kantar Retail gives details how discounters innovate to solve the problem of 'custom-bunching' resulting from Aldi's Special Buys on Thursdays and Sundays.
Developing online focused on lifestyle helped Aldi spread the traffic...
A number of other examples are given in the article, all examples of discounter-specific creativity.
Given that much discounter growth is at the expense of brands, branded NAMs that can find ways of working proactively with Aldi & Lidl have to gain an advantage over the competition.
In other words, the combination of NAM creativity and discounters' apparent willingness to innovate in terms of - their - problem solution suggests ways forward for NAMs that are prepared to put the fire-fighting on hold and trigger a brainstorming session with Aldi or Lidl...
In an interesting twist on accepted wisdom that discounters are simply trying to imitate the mults, Simon Johnstone of Kantar Retail gives details how discounters innovate to solve the problem of 'custom-bunching' resulting from Aldi's Special Buys on Thursdays and Sundays.
Developing online focused on lifestyle helped Aldi spread the traffic...
A number of other examples are given in the article, all examples of discounter-specific creativity.
Given that much discounter growth is at the expense of brands, branded NAMs that can find ways of working proactively with Aldi & Lidl have to gain an advantage over the competition.
In other words, the combination of NAM creativity and discounters' apparent willingness to innovate in terms of - their - problem solution suggests ways forward for NAMs that are prepared to put the fire-fighting on hold and trigger a brainstorming session with Aldi or Lidl...
Thursday, 20 October 2016
When even £1 is too much in a pound-shop...
An article in today’s Daily Mail gives 15 examples where well-known brands priced at £1 in a pound-shop retail at approximately 85p elsewhere (worth a look to see if you are included).
Obviously we may all be moving to a position where shelf prices are the responsibility of the retailer, and any damage to brand credibility will be at the expense of the name above the shop-door…
However, even the savvy consumer may not be expert in such subtleties of pricing/branding dynamics and will simply feel conned by the brand-owner, thereby triggering the tell-10-friends reflex…
Better perhaps to reduce the retail margin on the £1 SKU in regular – i.e. non pound-shop distribution – to a level that discourages reductions in price below a pound.
Risking a de-listing?
Question is whether you really want/need mainstream listings of your £1 SKUs?
Obviously we may all be moving to a position where shelf prices are the responsibility of the retailer, and any damage to brand credibility will be at the expense of the name above the shop-door…
However, even the savvy consumer may not be expert in such subtleties of pricing/branding dynamics and will simply feel conned by the brand-owner, thereby triggering the tell-10-friends reflex…
Better perhaps to reduce the retail margin on the £1 SKU in regular – i.e. non pound-shop distribution – to a level that discourages reductions in price below a pound.
Risking a de-listing?
Question is whether you really want/need mainstream listings of your £1 SKUs?
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