Disappointing Results for Discounters whilst Tesco and Morrisons Continue their Recovery

Latest News of Christmas trading raise the following implications for NAMs:

Where at: The combination of intense price-warfare and consumer expectation ‘that 2017 will be more expensive’ gave a boost to most Christmas sales, while suppliers and retailers absorbed pent-up cost-price increases

Where headed: Q1 will reflect real world conditions in terms of price increases i.e. a re-set in relative performance where historical performance counts less..

Effect on you: Opportunities for pro-active NAMs while competitors await trends and perhaps an expectation of a return to normal

Action: Why not assume that you are re-launching everything in Q1 and re-assess your relative competitive appeal on that basis?

2017: When more is required, NamNews can help...

M&S Agrees To Grocery Price Rises Following Supplier Threats

Marks & Spencer has reportedly accepted wholesale price rises of up to 15% on some of its grocery lines after suppliers threatened to withdraw their products.

Where at: Clearly at the limits of supplier & retailer cost absorption, with ‘public’ announcements best left to the post-agreement stage

Where headed: Some face-saving rationalisation, knowing that scale savings rarely transfer directly into significant reductions in cost of production

Effect on you: opportunity for NAMs in other customers to watch from the ringside, and learn from premature moves

Action: Stick to defensible price increases based on latest analysis of competitor and customer financials…

2017: A year of political tweaking?

2017: a year for multi-tasking?

When Almost Right is not enough...

Is Amazon the answer?

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