Russian Discounter Opens First UK Store With Prices Cheaper Than Aldi

The interior of the store in Preston is minimalist with painted breeze-block walls and no branding (see video). Journalists visiting the site described it as a “drab” retail space that makes a branch of Aldi look almost glamorous.

To keep costs down, goods are sold from pallets with limited in-store services and only a handful of staff. The product range is focused on longer life ambient and frozen items, alongside household items. Everyday staples like milk, eggs and bread aren’t available, and there is no fresh fruit or veg.
There is an area with a selection of limited deals on non-food products, similar to the middle aisle in Aldi and Lidl stores.

Suppliers must deliver direct to stores and are expected to offer stock on a sale or return basis. MERE’s Chief Procurement OfficerPavels Antonovs, said: “We are a hard discounter. When we see that a manufacturer or a distributor has an offer that fits our business criteria, we will have it in store.”

NamNews Implications:

• A gauntlet thrown down!
• There has to be an Aldi/Lidl reaction…
• The real issue is how the nearby mults will react.
• Getting listings should be straightforward for suppliers.
• (although direct store delivery, SOR may cause some to pause…)
• But a MERE startup in the UK cannot be ignored… 

#HardDiscounter #Discounter

Grocery Sales Fall, Inflation Returns, And Tesco, Sainsbury’s, And Discounters Gain Market Share

The latest take-home grocery figures from Kantar show sales fell by 4.0% year-on-year during the 12 weeks to 8 August as consumers continued to return to pre-pandemic shopping habits, making smaller but more frequent trips to the stores. However, in the last month, sales declined more slowly by 0.5% and the data shows that Covid is still having an impact on people’s spending as grocery sales remain 9.9% higher in the latest 12 weeks than in 2019.

NamNews Implications:

• A solid base of online loyals has emerged…
• ‘Ocado has retained 1.8% of total grocery sales, the same as last year, and sales are up by 44.4% compared with 2019, the fastest two-year growth in the market.’
• Says it all for Ocado.
• Meanwhile, with 11% of Amazon grocery in own-label…
• …they have plenty of O/L headspace vs mkt average 50%.
• ‘Aldi now holds 8.2% of the market and Lidl 6.1%’ illustrates the continuing discounter threat…

#GroceryMarketShares #PostLockdownRecovery #DiscounterThreat

Amazon To Add New Own-Label Food Range To Online Offering

The own-label food range developed for Amazon’s new grocery store format that launched in the UK earlier this year is set to be offered to its online customers.

The two ranges made their debut in March in the new ‘just walk out’ Amazon Fresh stores. Said to be sourced from UK suppliers, the ‘By Amazon’ label focused on everyday items such as milk and bread, whilst the ‘Our Selection’ offer covered more premium lines. They are sold alongside branded products and items that come from Morrisons and Booths.

NamNews Implications:

• The ultimate test of a retailer’s pulling power (and ego) is the extent to which they can monetise their retail brand via own-label.
• Key is the Generation they choose to position the offering (See our 1-page treatment of Four generations of own label)
• i.e. like Tesco Finest, deliberately positioned as Gen 4: better than national brand but the same price.
• Then branded suppliers have a real (and threatening) competitor…

#PrivateLabel #Amazon

Lockdown, what Lockdown? Some wishful thinking from the NamNews Team!

#Lockdown #Hospitality #PoliticalDilusion

Two Wrongs won't make it a Right Question, from the NamNews Team!

 (Best focus on how to rebuild a business from Lockdown?) 

#LockdownDamage #BackToBasics #RelativeCompetitiveAppeal

Asda’s CEO Steps Down Earlier Than Expected

Trevor Strain, Morrisons’ Chief Operating Officer, Steve Murrells, the boss of the Co-op, Jason Tarry, CEO of Tesco UK & Ireland, Stuart Machin, head of Food at M&S, Ronny Gottschlich, a former boss of Lidl, and Anthony Hemmerdinger, Asda’s COO, have been named by industry watchers as potential candidates to take over from Burnley.

NamNews Implications:

• With six potential candidates, NAMs will need further clarity…
• …in order to muse re impact of a replacement on Asda policy.
• Meanwhile, anticipate more influence from the owners…

#Succession #AsdaFuture

The Hut Group Makes Another Acquisition

E-commerce giant The Hut Group (THG) has continued its acquisition spree by buying online retailer Cult Beauty for £275m.

Launched in 2008, London-headquartered Cult Beauty sells around 300 brands across skincare, haircare and cosmetics, including Charlotte Tilbury, Drunk Elephant, and Huda Beauty.

NamNews Implications:

• In the infinite space of online…
• …this is a no-brainer addition to THG will add scale benefits inc cost efficiencies, minimum.
• And at growth rates of 38% and 41%…
• …you have to have a good reason for not being on board.

#

OnlineCosmetics #beauty #skincare

Doritos Unveils Latest On-Pack Promotion

PepsiCo’s Doritos brand is launching a new on-pack promotion that offers shoppers the chance to win a grand prize of £20,000. There is also an additional opportunity for consumers to win £200 every day.

NamNews Implications:

• A versatile brand…
• …combined with creative consumer engagement…
• …and potential financial reward.
• A no-brainer…

#ConsumerEngagement #Promotions

PepsiCo Selling Juice Brands To Private Equity Firm

PepsiCo has entered into an agreement with PAI Partners (PAI) to sell a 61% majority stake at $3.3bn in its Tropicana, Naked and other select juice brands across North America, and an irrevocable option for certain juice businesses in Europe.

NamNews Implications:

• Rivals should anticipate two changes resulting from this move…
• A different focus on the selling of the juice brands to release potential
• A more intensive focus on PepsiCo’s current portfolio of diverse offerings
• Including growing their portfolio of healthier snacks, zero-calorie beverages, and products like SodaStream.
• Watch these places…

‘Perfect Storm’ Gripping Food Sector With Shortages Now Inevitable, Says 2 Sisters Founder

The founder of one of Britain’s biggest food producers has claimed that supermarket shelves in the UK will be bare and panic buying will intensify unless critical issues currently threatening food supplies are solved promptly.

NamNews Implications:

• ‘Perfect storm’ of causes will have a ‘perfect storm’ of effects:
• Labour shortages = increased labour costs
• Ingredients shortages = increased costs
• Energy demands = increased costs
• Bureaucracy increases = increased costs
• Stockpiling increases = increased costs
• Do you really think all will be contained within official ‘inflationary adjustments.
• i.e. Budget for more than a 5% shelf-price increase, at least...   
• Your category, your call…

#Inflation #LabourShortage #IngredientsInflation #BrexitInflation #StockPiling

Supermarkets Benefit From Weather, Sport, And Staycations But Headwinds On The Horizon

Over the four weeks ending 17 July, total till sales edged down only 1.3% versus the same bumper period in 2020 when demand was being boosted by the effects of the pandemic. This was an improvement on the 2.4% fall in June and 2.7% decline in May when hospitality venues first reopened.

NamNews Implications:

• As always, the key is to compare your sales by sector and category.
• Meanwhile, in terms of potential headwinds (increased hospitality diluting retail, emergence of the super-savvy consumer reining spend)
• It may be worth factoring in a hefty dose of inflation…

#Inflation

The JTF Mega Discount Warehouse Chain Collapses After Lockdown Impact

Trade magazine The Grocer reported that the variety discounter has now closed all of its 12 outlets located on retail parks in the Midlands and north of England. The business employed around 500 staff.

The warehouse and online business sold a wide range of products including food & drink, health & beauty, garden, and DIY products. Customers had to sign up to JFT’s free membership scheme to shop in the stores.

NamNews Implications:

• Sometimes you have advance warning, sometimes not…
• But bankruptcies happen slowly and then very fast.
• Therefore crucial that NAMs monitor the latest annual reports…
• …for early signs of trouble.
• And complete ‘If a customer goes bust’ exercises, regularly.
• What incremental sales are required to generate the sales owed by the customer from Net Profits?
• i.e. Divide the current amount owed to you by the customer by your net margin, and multiply by 100...

#Bankruptcy #SalesImpact

First Fall In Online Grocery Sales; Tesco, Sainsbury’s And Discounters Make Market Share Gains

Latest data from Kantar shows demand for take-home groceries has continued to ease from last year’s records highs, with sales down 5.1% year-on-year during the 12 weeks to 11 July as more normal trading conditions returned and less shopping was done online. However, sales are still elevated compared with pre-pandemic times and shoppers spent £3bn more on groceries than they did during the same period in 2019.

NamNews Implications:

• For many consumers, 17 months was a sufficient period for online grocery to become a habit…
• …providing retailers maintain fulfilment fees, and preserve availability levels ‘on virtual shelf’.
• As always, the two-year comparisons reveal the most…
• …and meanwhile, those pesky discounters.

#KantarShares #OnlineGroceryShares

PepsiCo Planning Price Increases

PepsiCo, along with Coca-Cola, Nestlé, P&G, and Kimberly-Clark, have issued similar warnings in recent months due to a host of factors, including disruptions in global supply chains and rising demand that has pushed up raw-material prices.

The move to raise prices will also be used to offset higher advertising and marketing costs, which rose 30% in the period as the company looked to take advantage of a reopening of the US economy.

NamNews Implications:

• Despite government reassurances, anyone in supply and retail knowns that significant costs increases have been building within supply chains.
• These cannot be absorbed and so will result in shelf price increases...
• ...and strong brands will be able to sustain demand.
• In terms of sizes of price increases, this will depend on moves by significant players in each category.
• We would anticipate double-figure rather than single figure % increases...

#priceIncreases #PoundInPocketInflation

Secret Visa Talks Taking Place To End Lorry Driver Shortage Crisis

A shortfall of up to 100,000 lorry drivers in the UK has partly been caused by an exodus of EU workers in the wake of Brexit and the pandemic. Covid-19 restrictions have also impacted the training and tests of new drivers, whilst costs are rising due to changes to taxation rules for self-employed drivers.

One person with knowledge of the discussions told the newspaper: “Everyone involved is sworn to secrecy as the Home Office is taking a very hard line. The Home Office has the final decision on this and the DfT knows it has a very tough sell, so need the very best evidence.”

NamNews Implications:

• Very practical advice from the government: ‘invest in local driving talent’
• (in retrospect?)
• Post chaos: ‘we were only following procedure’

#SupplyChain #LorryDriverShortage