Iceland Foods hits back at Icelandic government over trademark

This latest position in the Icelandic saga raises some issues for NAMs:

Where at: A distracting stalemate, with giving-in i.e. surrendering the trade-mark rights, or fighting the case, as the only apparent options for Iceland retail?

Where headed: The retailer is unlikely to give in. This leaves the Iceland government to initiate and incur legal costs, for as long as it takes…

Effect on you: Some resulting lack of focus within the retailer, making shorter term strategies the best option for suppliers

Action: From your experience of your category in Iceland, weigh up level of risk and tailor your initiatives accordingly…

A KamBlog insight from NamNews

Tesco toying with Argos Prices?

Shrinking Grazing-shrinkage, promoting healthy snacking, a 2-for-1 no-brainer for Tesco?

Walmart needs to cut Asda loose

An interesting article published earlier this year by Bloomberg sets out why Asda should be sold off:

Aldi & Lidl have eliminated Asda’s low price advantage, resulting in falling like-for-likes, with Asda’s sales growth trailing the other mults… (graphs in the original article really spell it out).

NamNews readers will be aware that Asda has been underperforming and thus diluting Walmart’s performance in terms of ROCE and Net Margin since its acquisition in 1999.

Normally, Walmart would have solved these problems by a combination of organic growth and acquisition of say Sainsbury’s or Morrisons, but UK planning legislation limits the building of new stores and competition legislation prevents acquisition of sizable competition.

This leaves sell-off as the only option for their UK operation.

Bloomberg estimates that Asda would be worth £8bn based on current market valuations of the other mults (i.e. @ 40% of sales).

The UK, in current competitive circumstances (Discounters, large space redundancy, seismic-shifts, ‘Brexit’ currency impact…, you name it!) would be unattractive for global players, given the probable purchase price and the need to justify the move to their respective stock markets.

This leaves private equity.

In which case, we enter a whole new ball-park, where the emphasis would shift to optimising the asset-base (stores) and financial performance (ROCE), in a 5 year time-frame leading to flotation….

This would provide a new basis for NAMs in their dealings with Asda:

• Emphasis on quantifying cost & value in all aspects of the supplier-Asda trading relationship (Margin, Credit, rotation, trade investment, NAM-advice, and deductions)
• Relating trade investment directly to Asda P&L

…and all within a 5 year window….

Trump - moving from business negotiation to political negotiation...

Trump's Art of the Deal describes his 11-step approach, which is worth comparing with an article on political negotiation in the Harvard Business Review.

One question is how negotiating in business differs from negotiating through back channels, with defiant coalition partners, in war zones, and in the shadow of severe mistrust and hostility. 
(Those NAMs that see little difference compared with their day-job might care to drop me a line on bmoore@namnews.com) 

As the President-elect attempts to apply what he knows best in terms of negotiating skills, NAMs can gain more insight into their own negotiation process as Trump’s moves – and their consequences – over the coming four (or even eight?) years, are played out in global media…

Open-minded NAMs may even pick up some political negotiating tips that can be applied in the day-job…

Trump's 11-step approach

1. Think big
2. Protect the downside and the upside will take care of itself
3. Maximize your options
4. Know your market
5. Use your leverage
6. Enhance your location
7. Get the word out
8. Fight back
9. Deliver the goods
10. Contain the costs
11. Have fun

Political negotiation (more):

• Preconditions and ultimatums are usually bad ideas
• You don’t need an amazing deal - you need an implementable deal
• They lose does not equal you win
• You have to help them save face
• You have to have the courage to tell supporters what they don’t want to hear

Over to you and yours...

Meanwhile longer term, the real issue (apart from picking up valuable insights) for NAMs has to be: Will Trump will change politics, or will politics change the President?

Medieval brainstorming: auto self-portraiture

“Good idea, but how about making it smaller, and adding some extras?

-  Abbreviated auto-scribing
-  Instant letter-transmission
-  Conversing between absent friends
-  A more precise hour-glass
-  Settlement of accounts with merchants”

Great ideas are always a little ahead of their time...

Irish cross-border shopping-traffic increase..

According to the BBC, the same well-known brand of whiskey is 27 euros on shelves in the Republic of Ireland - but in Northern Ireland it is £15 - the equivalent of 16 euros, a reduction of 40.7%...

Think about the potential distortion of trade caused by uncoordinated price-hikes in the ROI:

Where at: The real issue here is the distortion to trade caused by cross-border (ROI/NI) reaction to shelf-price differentials North and South of the border, with individual shoppers but the tip of the iceberg… i.e. think third-party bulk purchases transported across a 310 mile long – i.e. unmanageable – border with the Irish Republic. There is already a 15% currency-based price differential arising from recent falls in sterling…

Where headed: Any disproportionate supplier price increases for NI and ROI will simply add to the appeal of a shopping journey North…

Effect on you: UK brand suppliers will suffer loss in brand equity in Ireland if savvy consumers perceive there to be differences that are not transparent and defensible. Paradoxically, ROI consumption of UK brands may also increase via NI, while sales are dropping in the South…

Action: UK suppliers need to think through where their brands are currently (in ROI), where they want them to be, and plan for price increases that maintain the status quo in UK and Ireland, if possible…

Still want to push through that price increase in the South, regardless?

Aldi & Lidl as problem solvers?

Unlike the redundant-space, 80/20 issues of the mults, Aldi & Lidl see online as a way of reducing car-park congestion and queueing instore.

In an interesting twist on accepted wisdom that discounters are simply trying to imitate the mults, Simon Johnstone of Kantar Retail gives details how discounters innovate to solve the problem of 'custom-bunching' resulting from Aldi's Special Buys on Thursdays and Sundays.

Developing online focused on lifestyle helped Aldi spread the traffic...

A number of other examples are given in the article, all examples of discounter-specific creativity.

Given that much discounter growth is at the expense of brands, branded NAMs that can find ways of working proactively with Aldi & Lidl have to gain an advantage over the competition.

In other words, the combination of NAM creativity and discounters' apparent willingness to innovate in terms of - their - problem solution suggests ways forward for NAMs that are prepared to put the fire-fighting on hold and trigger a brainstorming session with Aldi or Lidl...

When even £1 is too much in a pound-shop...

An article in today’s Daily Mail gives 15 examples where well-known brands priced at £1 in a pound-shop retail at approximately 85p elsewhere (worth a look to see if you are included).

Obviously we may all be moving to a position where shelf prices are the responsibility of the retailer, and any damage to brand credibility will be at the expense of the name above the shop-door…

However, even the savvy consumer may not be expert in such subtleties of pricing/branding dynamics and will simply feel conned by the brand-owner, thereby triggering the tell-10-friends reflex…

Better perhaps to reduce the retail margin on the £1 SKU in regular – i.e. non pound-shop distribution – to a level that discourages reductions in price below a pound.

Risking a de-listing?
Question is whether you really want/need mainstream listings of your £1 SKUs?

UK Budget 2016 – how it works in household English