NASA-funded study envisages a permanent Moon base within 20 years

According to Science Alert, a new economic assessment into the feasibilities of an ‘Evolvable Lunar Architecture’ base suggests that humans would be able to return to the Moon for approximately 90 percent less cost than previous estimates, which ran up to US$100 billion.

The new low-cost strategy would be possible due to leveraging partnerships with the private sector, and predicts that the US could lead an ‘International Lunar Authority’ comprising both public and corporate interests.

Time to begin to factor a re-born Tesco into your trade strategies, while others await a possible turnaround?

'Moe Greene' February 29, 1936 - July 18, 2015 R.I.P.

Supermarket price wars fall-out: Food companies across the UK 'on brink'

A report by Begbies Traynor in NamNews says the number of food and drink manufacturers in ‘significant’ financial distress has risen by 54% in the past 12 months to 1,622, 89% of which are small or medium-sized suppliers and farmers dealing with the major supermarkets.

Given that branded goods suppliers need Net Margins of 5-10% to fund brand equity building, and - depending on category - stock rotation of 5-20 times per annum to meet availability KPIs, ROCE performances of 15 -25% to ensure an adequate reward for risk - and thus some local autonomy - it is fairly easy to assess the scale of the fall-out in your categories...  

The key issue for suppliers is their own performance vs other companies in their categories.

In other words, check your company's UK figures at Companies House, for 2007 and the latest available - usually 2014 for most companies - allowing for issues re Corporation Tax (i.e. your company tax domicile arrangements can colour the reported performance at local level) but in general the figures will be usable for most companies in your category, especially in food.

Action: 

• Check your own figures, 2007 & 2014
• Check three competitors on the same basis
• Assess relative strengths and weaknesses i.e. the relative damage done to date, the ability to continue funding price-cuts and especially the competitors' ability to compete in your category
• ...keeping in mind that the buyer is equally capable of investing a £1 per set of results, from the same source...

This category-focus will provide a reality-check reflecting latest available data, a basis for optimising consumer strategies and especially a means of identifying and quantifying your walk-away points with the trade.

Unless of course you prefer to believe the politicians and fly blind?

Co-op convenience cashback for the weekend?

                                                                                                                             pic: Marisa Cashill
Midlands Co-operative Food shop, Duckmanton, this morning 0400hrs,
Police checking if they went north or south!

Amazon's Birthday Sales - 398 items/second, 34.4m for the day, every little helps...

Good job Walmart were holding them back!

'Caveat emptor' has morphed into 'caveat venditor' - why ‘seller beware’ is the new mantra for savvy consumers..

Today’s news that the Competition and Markets Authority (CMA) plans to take action after its investigation into misleading supermarket promotions should not be news, except in that it signals a significant shift in responsibility from buying to selling…

In other words, for many years sellers have relied upon the ‘letter’ of the law in terms of leaving the responsibility for checking match with consumer need to the purchaser, rather than the ‘spirit’ of the law whereby a savvy consumer expects to receive what it says on the tin, at least…

•   The real issue is why retailers need to learn about consumer trust the hard way?
•   To say nothing of the basic Tell-a-friend formula in junior selling school:
            -  Exceed Consumers’ expectations and they will tell a friend..
            -  Short-change them and they will tell 10 friends…

In other words, in a world of savvy consumers, caveat emptor has truly morphed into caveat venditor…courtesy of the new Peoples' Champion - the government!

Asda Move Closer to Walmart - the two-pat approach to ‘Save Money, Live Better’

Further to NamNews' report on Asda's Overhauling Of Its Brand To Bring It More In Line With Walmart, NAMs might benefit from a deeper dig into where Walmart are headed in coping with Aldi/Lidl, and online competition like Amazon Fresh.

In fact, Walmart Food EVP Steve Bratspies' recent presentation to the Bentonville Bella Vista Chamber’s WalStreet (sic) supplier group gives considerable insight re Walmart's food plans, and by inference, a view of where Asda is headed.

Five building blocks that will remain
Bratspies outlined five customer promises that are foundational to Walmart’s strategy in the midst of these shifts.

• EDLP – Price is still “the decider,” even as the bar is being raised across other customer criteria.
• Quality you can trust – Customers are smart enough to expect one-dollar quality on a one-dollar item but won’t tolerate one-dollar quality on a five-dollar item. Quality is defined by the item being purchased.
• Everything you need – Despite its forays into small formats, Walmart is still very much in the supercentre business and is invested in facilitating a one-stop-shopping experience for its customers.
• Happy to help – Of Walmart’s three sub-promises (a fast, clean, and friendly shopping experience), friendliness makes the biggest difference at the end of the day.
• Shop your way – Customers must be able to access Walmart online from any device and from multiple locations.

Walmart's Growth Game Plan
1. Win in fresh
2. Re-energize the centre of the store
3. Expand physical-to-digital integration
4. Win on the fundamentals

Above all, Bratspies encouraged global suppliers to bring great ideas from other markets, empowering Walmart-facing teams to make decisions and “come sell us stuff”, pointing out that that their buyers are there to buy.

In other words, make a point and back it up with the numbers...we are listening like never before...

Hat-tip to Carol Spieckerman via Pete Louree and Spencer Booz

Tesco £40 minimum delivery spend, an each-way bet on basket-size?

Their new £4 surcharge on orders below £40, in line with Asda and Sainsbury’s, means that Tesco are crossing fingers that a sufficient number of core £25-users will either pay the surcharge or raise their order-quantities to £40+…

In practice, they are taking the basket-size route to fulfillment-cost amortisation vs. the blanket-distribution approach of Amazon i.e. delivery density – try tracking your next Amazon parcel and be impressed by the number of local deliveries your driver makes en route to your door.

The Tesco numbers look like this:

Order size £25
Tesco gross margin say 25%, i.e.       £6.25
Delivery charge, say £4                      £4.00
Delivery surcharge - £4                       £4.00    
Approx. cost of order fulfillment say £20.00

An improvement, but Tesco still loses say £5.75 per order

Order size £40
Tesco gross margin say 25%, i.e.  £10.00
Delivery charge, say £4                 £4.00
Delivery surcharge - £4                   £0.00    
Approx. cost of order fulfillment say £20.00                                          

Tesco loses £6 per order (i.e. needs incremental sales of £24 to cover the loss)

In fact, apart from increasing the base delivery charge, Tesco’s only route to break-even is via its gross margin i.e. say 25% of goods sold. This means they would need to increase the minimum basket-size size to £64, to break even on a delivery.

If Aldi enter the home-delivery race, my bet would be on them taking the localised delivery-density route, if Amazon don’t beat them all to it….