Vintage Me-too, or Brexit-prep?

Counting on Tesco brand values to drive improved performance

                                                                                                                       Chart: CityAM                                                                                                              
The YouGov Index score shows a brand’s overall health and is a combination of several metrics – namely its Impression, Quality, Value, Satisfaction and Reputation measures.

The chart speaks for itself and echoes Tesco’s sales results from Jan 2014 to Jan 2016, through a low point in December 2014 and a continuing upward trend into 2016…making the point that at base, it’s the brand that counts, more than a little…

A Tesco on the way back now has to nurture its delicate relationships with shoppers – and suppliers – and regulators – to avoid even a little unhelpful misstep….

HT to Andy Parker for pointer

Trade Investment Accountability and how Governments will legislate…

Following the Tesco Accounting scandal, a lack of consensus among the UK's major food retailers is detracting from efforts by the Financial Reporting Council (FRC) to improve the way that companies report complex supplier arrangements and will prolong the uneven disclosure of supplier income, according to a new report by Moody’s Investors Service - more here

NAM Implications:

• The combination of inconsistency and scale of payments involved means that governments will eventually legislate to optimise taxable income
• It is probable that such legislation will be conservative (small ‘c’), retrospective, i.e. paid after-the-event and based on measurable results,  the only certainty...
• In other words, all trade investment will specify KPIs, build in compliance, and payments will be withheld until auditable results are available

NAMs and their customers had best prepare for the inevitable…

The ultimate T-cut: Asda plans to axe free tea and toast perk for staff

Reports in The Standard that Asda will stop providing breakfast perks, which also include coffee and vending machines, insisting it must make “tough decisions”,  means that the company could fall foul of the Law of Unintended Consequences.....

Although possibly a minor scratch for the owners, this could be major gash for the recipients, and their unions…

Think also of the massive signal being sent to the market – ‘I knew their Christmas was bad, but…’

It remains to be seen how this T-cut application will affect the staff-shopper interface, but the issue for NAMs has to be how this 'financial viability' parameter will impact their next session with the buyer… 

Amazon Rumoured To Be Eyeing Tie-Up With Ocado

City rumours reported in The Daily Mail yesterday suggested that Amazon is preparing to make an approach for Ocado as part of its plans to launch a full grocery delivery service in the UK.

NAM Implications:

• For Amazon this means leap-frogging years of food-delivery expertise in the UK’s most concentrated M25 market
• For Ocado, a takeover by Amazon provides a means of capitalising on their investment to date in leading-edge fulfilment and a degree of food-delivery experience that far outranks* Amazon Fresh, besides providing an additional revenue stream via third party retail usage of their facilities
• For the mults, already tempted to outsource fulfilment to a 'manageable' Ocado, joining with the biggest elephant in the room might be too tight a squeeze…
• ...and no mention of money, because the potential gains are so obvious for Amazon…

*See Paul Clarke Ocado presentation 

HomeBunnings - an Au shake-up of the UK DIY sector?

News of Bunnings £340m takeover of Homebase means inevitable change to DIY retailing.
Wesfarmers need to justify an overseas investment, Bunnings need to make an impact, and the competition need to make counteracting moves.

What is certain is all DIY retailers are now in the market for innovative instore - and car-park - theatre* initiatives.

A must-take opportunity for all suppliers to be first from the trap, while others sit and wait...

* Bunnings is known for its “sausage sizzles” outside stores where local sports or community groups are allowed to set up stalls and sell food to customers, UK weather permitting....

A 'Bowie-comment' on the global stockmarket rout

Ground Control to Major Tim
Ground Control to Major Tim
Take your Man up pills and put tin helmet on

Ground Control to Major Tim
Commencing meltdown, algos on
Check deflation and may Goldman Sachs be with you

This is Ground Control to Major Tim
You’ve really made bad trades
And the papers want to know whose shirts you’ll wear
Now it’s time to leave the free-fall if you dare

This is Major Tim to Ground Control
The markets are through the floor
And the £’s floating in a most peculiar way
And the stats look very different today

For here
Am I with a tin hat on
Just got out of bed
All the markets are bright red
And there’s no easing from the Fed

Now I’ve lost one hundred thousand pounds
I’m feeling very sick
But I think my broker knows which way to go
Tell my bank I owe it very much you know

Ground Control to Major Tim
Your stop-loss is dead,
You’re really on a limb
Can you hear me, Major Tim?
Can you hear me, Major Tim?
Can you hear me, Major Tim?
Can you….

For here
Am I with a tin hat on
Just got out of bed
All the markets are bright red
And there’s no easing from the Fed….

Source: Stephenroi - comment on The Slog https://hat4uk.wordpress.com/ 15-01-2016

Guest Blog: Releasing cash is always faster than generating sales

5 levers to release cash....
By Ian Yates, Director at Barcanet

Looking for cash...want to avoid the travel ban, release funds for innovation, identify more efficient operating models?

Historically, companies have managed costs through a series of (mainly) uncoordinated technologies and processes, supported by tactical initiatives when budgets needed to be squeezed.

Today, with competitors constantly innovating and new entrants changing the game, businesses need to take a more enduring approach to cost optimisation and find new operating models and/or efficiencies to release the cash needed to fund their own innovation and growth.

Working with hundreds of businesses around the world, I have found the following five levers consistently optimise spend across any business operating cost;

1. Visibility
Whether you run a multi-national organisation with disparate systems, and de-centralised supply-base or a sole-supply contract with complex commercial or operational terms, getting visibility of spend, usage and performance drives better decision making.

The visibility lever will;

• Centralise usage and costs data
• Bring transparency to complex categories and contracts
• Provide governance for your business policies

Giving the right insight, to the right people, at the right time allows for simple data-driven decision making.

2. Compliance
Errors in invoices or missed discounts accounts for up to 3% of the cost of goods/services bought in some categories. Some estimates put ‘procurement fraud’ at as much as 1% of a businesses turnover.

The compliance lever includes factors such as;

• AP and contact commercial terms compliance
• Governance over days-to-pay and early-payment discounts
• Identification of shadow/rogue spend

Finance and ERP systems deliver an element of this compliance, but a lot of value is lost throughout the process. Pre-payment audit routines and insightful reporting retains cash in the business and provides the mechanism to drive change.

3. Consumption
Be that non-production, “We were paying $5m per annum on mobile phone services for people who had already left the business – some of them years ago!” or production, “We used 0.5% more in one factory than another, with almost identical outputs, doesn’t seem a lot but the cost was millions per year”.

The consumption lever brings insight to make simple, data-driven decisions;

• Benchmarking internal usage and cost profiles
• Optimising assets
• Making users accountable

Generating the realisation of cost brings behavioural and cultural change. Users are in the best position to reduce costs and bring faster innovation to business operating models.

4. Price
Over two-thirds of CPO’s see cost reduction as a priority, and yet 84% are not satisfied with the levels of insight they receive. Businesses need to recruit well and have a strategy for these procurement professionals to align with. However arming them with good, consistent data allows the team to negotiate and manage suppliers from a position of knowledge.

The price lever comes from;

• A suite of reports of spend and usage from all silo’s in the business
• Insight to business and new product strategy
• Supplier performance and risk management insight

Procurement working as a business partner rather than simply a cost reduction specialist, better defines the business objectives for the supply base, increasing agility, optimising costs and reducing supply-chain risks.

5. Process
Simplification and standardisation are two of the key words I hear repeated at almost every customer. But where do you focus resource where it really matters?

The process lever provides the business and the change agents with insight to identify these areas and data on where best practice is being achieved;

• Benchmarking cost, usage, margin and ROI
• Identifying why rogue/shadow spend happens – what is the benefit
• Identifying impacts across silos

You will find some components of these levers are simple to implement, others require a more structured approach to sustain the benefits over the longer term. However, these benefits can be significant and worth the investment - sustainable reductions of 20-50% of operating expenses.

More details here

For further information, contact Ian Yates, Director at Barcanet
Email: ian.yates@barcanet.com or Tel. +44 7868-745705