In an effort to improve the shopping experience, Carlsberg worked with custom car experts Yiannimize to create a motorized trolley complete with an electric engine, a beer cooling system and satellite navigation. No more warm crates of beer, getting lost in the supermarket and struggling with wonky shopping trolley wheels.
Saturday 30 January 2016
If Carlsberg did shopping trolleys... (Asda Clapham Junction)
In an effort to improve the shopping experience, Carlsberg worked with custom car experts Yiannimize to create a motorized trolley complete with an electric engine, a beer cooling system and satellite navigation. No more warm crates of beer, getting lost in the supermarket and struggling with wonky shopping trolley wheels.
Tuesday 26 January 2016
GCA-Tesco Investigation, What Now?
The GCA Investigation report establishes a basis for suppliers wishing to bench-mark and re-set their relationships with Tesco and other retailers.
Nothing beats a detailed reading of the report in order to identify key aspects to a supplier’s actual trading relationship with Tesco, but application has to be top-of-mind….
In practice, suppliers need to revisit all aspects of their trading relationship and establish working limits, i.e. walkaway points, in each case.
Essentially, the report provide two key areas for immediate application, Credit periods and Deductions.
Credit Periods
Tesco currently pays suppliers in 44 days on average, and the GCA report (7.3) refers to a Competition Commission Report published in 2000 that noted ....retailers delaying payments to suppliers beyond contractual payment periods or by more than 30 days from the date of invoices may adversely affect the competitiveness of some suppliers.
In practice, for daily delivered SKUs, it could be said that seven days is even more appropriate, but every little helps…
However, strictly speaking, GSCOP specifies that breaches occur when a retailer deviates from a negotiated agreement on terms i.e. the onus is on suppliers to reach agreement on a 30-day credit period if they wish reduce their exposure and operate on that basis.
Deductions:
The report also focuses on unilateral deductions and gives sufficient examples for suppliers to use as a basis for internal adjustment of their systems. Essentially, this means assessing their supplier-retailer relationships re
- Unilateral deductions made in relation to historic claims (Post-audit recovery)
- Unilateral deductions for short deliveries and service level charges
- Unilateral deductions made for other items or unknown items
Given that it can be easier to document each aspect of the trading relationship in advance of execution, if only to avoid having to recover two year old documents under the pressure of a two week buyer deadline, suppliers need to establish ways of minimising post-audit claims, agree and document delivery and service level conditions and anticipate possible deductions for any other breaches.
The pending SFO report - due this week - will add numbers to the above, as well as fleshing out Trade investment definitions and measures.
On balance, the GCA and SFO reports can provide a basis for suppliers to revert to basics with Tesco, treating the company as a new major customer. This means re-assessing Tesco’s relative competitive appeal vs other customers from a consumer-shopper point of view (think media fall-out from both reports), the retailer’s development life-cycle in a radically changed market, and the characteristics that qualify them as an Invest, Maintain or Divest customer, all tailored to your brand consumer...
Finally, for your category, an objective re-assessment of your relative competitive appeal vs Tesco’s new appetites arising from both GCA and SFO investigations will help you determine the strength of your negotiation position in re-setting and optimising the opportunity window partially opened this morning by the GCA Report...
Nothing beats a detailed reading of the report in order to identify key aspects to a supplier’s actual trading relationship with Tesco, but application has to be top-of-mind….
In practice, suppliers need to revisit all aspects of their trading relationship and establish working limits, i.e. walkaway points, in each case.
Essentially, the report provide two key areas for immediate application, Credit periods and Deductions.
Credit Periods
Tesco currently pays suppliers in 44 days on average, and the GCA report (7.3) refers to a Competition Commission Report published in 2000 that noted ....retailers delaying payments to suppliers beyond contractual payment periods or by more than 30 days from the date of invoices may adversely affect the competitiveness of some suppliers.
In practice, for daily delivered SKUs, it could be said that seven days is even more appropriate, but every little helps…
However, strictly speaking, GSCOP specifies that breaches occur when a retailer deviates from a negotiated agreement on terms i.e. the onus is on suppliers to reach agreement on a 30-day credit period if they wish reduce their exposure and operate on that basis.
Deductions:
The report also focuses on unilateral deductions and gives sufficient examples for suppliers to use as a basis for internal adjustment of their systems. Essentially, this means assessing their supplier-retailer relationships re
- Unilateral deductions made in relation to historic claims (Post-audit recovery)
- Unilateral deductions for short deliveries and service level charges
- Unilateral deductions made for other items or unknown items
Given that it can be easier to document each aspect of the trading relationship in advance of execution, if only to avoid having to recover two year old documents under the pressure of a two week buyer deadline, suppliers need to establish ways of minimising post-audit claims, agree and document delivery and service level conditions and anticipate possible deductions for any other breaches.
The pending SFO report - due this week - will add numbers to the above, as well as fleshing out Trade investment definitions and measures.
On balance, the GCA and SFO reports can provide a basis for suppliers to revert to basics with Tesco, treating the company as a new major customer. This means re-assessing Tesco’s relative competitive appeal vs other customers from a consumer-shopper point of view (think media fall-out from both reports), the retailer’s development life-cycle in a radically changed market, and the characteristics that qualify them as an Invest, Maintain or Divest customer, all tailored to your brand consumer...
Finally, for your category, an objective re-assessment of your relative competitive appeal vs Tesco’s new appetites arising from both GCA and SFO investigations will help you determine the strength of your negotiation position in re-setting and optimising the opportunity window partially opened this morning by the GCA Report...
Monday 25 January 2016
SFO Tesco investigation set to conclude this week
According to CityAM, quoting Cantor Fitzgerald’s Mike Dennis, the investigation could be wrapped up this week. Any fine/redress will obviously impact Tesco’s cash position in terms of repayment and re-financing bonds, adding to pressures on the company.
Longer term we believe that the government will legislate re the accounting for trade investment, and probably move to retro-payment based on auditable results.
This means a move for suppliers to building in KPIs and compliance for every trade initiative, an inevitable and long overdue progression to fair-share dealing....
This development coupled with Tesco’s loss of market share, and unlikelihood of a return to old market dominance, means that suppliers are in a stronger position re negotiation of compliance.
A once-only opportunity for NAMs that are prepared to go all the way…
Longer term we believe that the government will legislate re the accounting for trade investment, and probably move to retro-payment based on auditable results.
This means a move for suppliers to building in KPIs and compliance for every trade initiative, an inevitable and long overdue progression to fair-share dealing....
This development coupled with Tesco’s loss of market share, and unlikelihood of a return to old market dominance, means that suppliers are in a stronger position re negotiation of compliance.
A once-only opportunity for NAMs that are prepared to go all the way…
Saturday 23 January 2016
Thursday 21 January 2016
Counting on Tesco brand values to drive improved performance
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
Wednesday 20 January 2016
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:
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
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…
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…
Tuesday 19 January 2016
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:
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…
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