Monday 25 February 2019

Private Equity Giant KKR Mulling Bid For Asda

According to The Sunday Times, the US private equity giant, whose past investments include Alliance Boots, is working with former Asda boss Tony De Nunzio on a possible approach. He is now a senior adviser to KKR and the report suggested he would become Chairman of Asda in the event of an acquisition. [more for NamNews readers]
  • From a NAMs-eye-view, the issue is the probability of new private equity-based majority ownership of Asda…
  • …meaning sale & leaseback of outlets.
  • …P&L by outlet…
  • …all adding up to finance-based buying…
  • …quite apart from an Amazon wanting to buy an inexpensive Sainsbury’s via the petty-cash box…

Friday 15 February 2019

What if: a restaurant was run like a supermarket?

Suppose a major multiple decided to apply state-of-art retail principles to the HoReCa sector, using expertise in space management, offering optimisation, efficient service-level and money management to bring something extra to the food service industry… (i.e. not simply adding on a restaurant to absorb redundant space, but actually treating every aspect of the restaurant offering as if from a supermarket and coming back from that point to a practical application)

Space management:
Calculation of sales and profits per sq. ft. means converting annual sales into table footprint like a supermarket gondola, with spaces between tables treated as aisles. In other words, the total sq.ft measure of all tables divided into annual sales would give sales per sq.ft. of ‘selling area’.

Reducing the space between tables would increase selling intensity, with customer comfort and relative privacy a trade-off against increased productivity…

The offering:
Diners would need the equivalent of ‘shopping the aisle’ via a more interactive menu. In other words, it would be apparent that flowery descriptions of menu-ingredients, albeit in franglais, would then seem inadequate, as currently conveyed. However, the temporary provision of an ipad for each guest, listing available dishes, complete with provenance, attractive illustrations pitched at levels that would manage expectations, updated ‘live’ to match kitchen availability, would help in meeting diner need. Unforeseen demand-spikes would obviously trigger emergency deliveries from just-in-time suppliers. The addition of ‘ideal world ‘ needs and other personal details would aid the addition of award points and service improvements, thus providing a basis for follow-up marketing to satisfied guests.

Service level:
The iPad would also help in minimising waiter numbers (virtual self-service?) by allowing guests to place orders directly with the kitchen, with ‘are we there yet?’ queries answered regularly via text updates…(with a suitable app designed to delete/replace expletives, as necessary...).

Meanwhile, live video coverage of the kitchen would facilitate on-going observation/monitoring of the cooking process where so required by anxious guests…Discretionary on/off soundtrack would protect sensitive guests in the event of sudden outbursts of ‘over-excitement’ by the chef/s…

The money:
In terms of pricing, the ipad would provide full details on pricing, by ingredient/unit, per chair, and full table, with a running total monitoring impulse bottles of wine and other add-ons. This ongoing build-up of the 'shopping basket’ would provide invaluable insight to restaurant management, enabling lighting and heating levels to be related to rate-of-sale and adjusted accordingly.

Tables could be priced according to popularity, size, position, degree of privacy and of course discounted via advance-booking… At the end of the meal, payment could be made in a check-out area, thereby freeing up the table so much faster for the next party.

Finally, a discrete scanner would then ensure that the number of guests attempting to take home the 'menu' as a souvenir, would be minimised...

Impossible, or food for thought?

Thursday 14 February 2019

Optimising the NAM's business lunch?

In the bygone era of the free 3-hour ‘business lunch’, in effect a high-powered 'non-business' meeting that appeared to have no fixed agenda, a new NAM tended to be thrown in unprepared, with no training on the basics…

Some precautionary pointers may help

In one of my first business lunches, my Dutch MD rescued me from the confusion of the French menu by suggesting I might like Tournedos Rossini, which until that moment I had taken to be part of the restaurant’s musical accompaniment… The resulting combination of rare filet mignon with warm foie gras on a bed of wet toast proved very satisfactory and apart from raising the bar on expenses, from that moment I have found an assured request for ‘Tornado Rossini’ was always a safe bet when confronted with a ‘foreign language’ menu.

Unfortunately, I have been less successful with my choice of a standard starter in Pate Maison, finding it tasted different in every restaurant…

For these reasons, I found it useful to conduct a dry run on a new venue in preparation for really important lunches. It obviously raises the cost, but pays off in terms of ability to focus on the hidden agenda in real time…

Following the menu-choice lead of the main guest can aid the bonding, but can also have its pitfalls…

I still blush in recollection of an introductory meal with a newly promoted buyer where I pre-warned the team to follow his lead regardless..

This appeared to work well with his choice of starters, a generous portion of fresh Dublin Bay prawns, dutifully followed by the rest of us. However, when he proceeded to eat them complete with shells, I sensed some loss of my personal franchise as the team crunched their way through their portions… Looking back, I now realise that he was one of the best leg-pullers I have ever met… beware the hidden agenda

When it comes to wine, it pays to keep it simple and stick with what you know. To this day, nothing beats the embarrassment I experienced having sent back a bottle of ‘corked’ Hirondelle, without realising it was one of the first plastic-capped wines in the UK…

Excessive alcohol consumption can also have its downside in terms stage-management of the occasion. A long-standing MD pal with a hard-earned reputation for being able to hold his drink tended to give himself away by leaning forward towards the end of a lunch and whispering ‘ I would like to give you some infidential confirmation..’ This was always a signal for his NAM to announce some emergency ‘at the office’ that only his MD could handle…

In other words, high quality and moderation, with a silent-mobile primed to divert when all else fails…

All other egg-sucking precautions can probably be handled very adequately by well-intentioned grandchildren….

Wednesday 13 February 2019

Amazon Secures First Sites For UK Launch Of ‘Go’ Format

According to property sources quoted by The Grocer, the online giant has now secured sites of around 5,000 sq. ft. in “key” locations across central London. Whilst the stores are said to be in high-footfall areas, they are not the “obvious highest rent prime pitches.” [more]
  • Patently a serious move in the UK’s most densely populated area…
  • …and better for NAMs to be on board, than not…
  • …with direct access to evidence of progress…
  • …rather than having to rely upon second-hand feedback.
  • i.e. a no brainer.

Friday 12 October 2018

Ground down by the price of your £2.50 Patisserie Valerie and other high street cappuccinos?


Issues both financial, and now legal at at Patisserie Valerie (see Finance Chief arrested) highlight the value of examining one of the fundamentals of on-premise provision of food and drink...

Given that the humble £2.50 cappuccino has fallen out of favour, coffee connoisseurs apparently demand more than a standard caffeine fix to help them through the day, at a price!

The Daily Mail has listed sources like The Connaught in Mayfair (£7.50 for any cup of coffee) and Claridge’s (up to £20 for a filter coffee for two people), apart from the ultimate deep-pocket source like The Wellesley hotel in Knightsbridge serving Wild Kopi Luwak coffee, at £45 a cup.

In other words, connoisseurs trying DIY @ 9p/cup vs Wild Kopi Luwak coffee, at £45 a cup, can appreciate the threat to food service... 

But the real issue has to be the contrast between High Street coffee at £2.50 a cup compared with home filtered at 9p a cup.

In other words, far from seeing up market varieties as a threat, consumers adopting a DIY approach might be more dangerous…

In fact, with street coffee priced at upwards of £2.50 a cup, I have reverted to grinding and filtering best quality French coffee beans, purchased from Waitrose at £2.60 per 227g bag. Each bag yields 5 x 6 cups, effectively costing me 9p a cup. If I could buy wholesale, the price would be no more than £2/bag...

OK, the ambience is worth something, but 30x 'domestic rates'...?

In fact, when you think about it, apart from the bill, most people's memory of a great restaurant meal is coloured by the final course, a cup of coffee. Yet, even at these mark-ups, some restaurants risk diner alienation by skimping on the coffee, thereby triggering the manual 'tell a friend' mechanism' whereby, if you please a customer, they tell one friend, disappoint them and they tell ten. Add social networking muscle, and the reach is infinitesimal.....

Incidentally, for those NAMs that prefer tea, how about one tailored to cope with the pressures of the NAM day-job...  (Thanks Gerry)

A NAM insight from NamNews

Tuesday 9 October 2018

Lidl Launches Pop-Up Gin Bar


Visitors to the bar will be offered samples of Lidl’s Hortus Gin range. Guests will begin their experience in the Pink Gin Liqueur Lounge, where Hortus Gin Liqueurs including Raspberry, Rhubarb & Ginger and Rose & Pomegranate will be offered. (more)
  • Please remember to pinch yourself as a reminder…
  • …that this is one of those ‘down market, common and ‘foreign’ discounters…
  • …that could never succeed in the sophisticated UK retail environment…

Tuesday 4 September 2018

New Branding Unveiled For Waitrose And John Lewis

The John Lewis Partnership has today relaunched its two retail brands as ‘Waitrose & Partners’ and ‘John Lewis & Partners’ with a new visual identity and their first ever joint marketing campaign. [details]
  • Profit-sharing is still a large part of the partnership package for staff….
  • …so any reduction in profits can negatively impact the aisle…
  • Also scope for other retailers to replicate the staff part of the model by introducing a profit-share element…
  • A little more business-fixing yet to be done, methinks…

Thursday 26 April 2018

Toys 'R' Us sets up $156m fund for trade claims - too little too late...!


The 'vendor reserve fund' will be carved out of a broader budget meant to cover some expenses as the retailer winds down its business in the largest-ever U.S. retail liquidation, Toys ‘R’ Us lawyer Joshua Sussberg said at a hearing at U.S. Bankruptcy Court in Richmond, Virginia.

However, the amount fails to cover total trade claims worth roughly $760m, lawyers who represent trade vendors said at the hearing.

Many vendors believed that payment for shipments after the Sept. 18 Chapter 11 filing would be covered by a $3.1bn bankruptcy loan, but that loan gives priority to lenders and other expenses such as legal fees, lawyers said on Tuesday. [more]
  • This highlights the fact that when a customer goes bust, suppliers come last for payment in a list that includes government agencies/tax, secured lenders, and staff...
  • For this reason, it is vital that NAMs & KAMs constantly monitor their financial exposure to all customers, given that they are in fact unsecured lenders at zero interest rate...
  • Apart from watching for signals from the market that credit insurers are refusing to offer cover (i.e. too late!), a supplier should divide their annual sales to the customer by their (the supplier's) net margin before tax, and multiply by 100.
  • This gives the incremental sales required by the supplier in order to replace the profit lost via a customer going bust...

Thursday 22 March 2018

FedEx launches a Returns Technology service for ecommerce


Given the fact that Amazon set a gold standard in making returns as easy as 1-Click ordering and factored in the costs from the beginning, traditional and online retailers that stumbled into online without appreciating the cost implications are now suffering the consequences.

Moreover, Amazon customers have become accustomed to 'ordering three dresses, choosing 'the 'best fit' and returning two, 'as easy as 1-Click ordering'.

In fact, other online retailers now face “Returns Tsunami” As Try-Before-You-Buy Trend Intensifies...(more)

As a result, this week has seen the launch of FedEx Returns Technology. It’s new service billed as a comprehensive solution for returns management which aims to give high-volume merchants and ecommerce retailers the ability to quickly and easily improve their customer experience by helping them take returns (more).

It is now clear that returns have rapidly evolved into a critical factor, second only to cost, in satisfying today’s e-commerce customers.

This FedEx initiative may help....

Wednesday 28 February 2018

Breaking News: Booker Shareholders Approve Tesco Deal

                                                                                           
83% of Booker’s investors are reported to have voted in favour of the transaction despite recent calls by shareholder advisory groups to reject Tesco’s cash-and-shares offer [more]
  • With 83% of Booker’s investors in favour of the transaction, despite recent calls by shareholder advisory groups for an improved Tesco cash-and-shares offer...
  • …this has to mean that shareholders believe that there is a greater long term value in the deal…
  • It also indicates that most Tesco-Booker initiatives will be supported...
  • Only issue will be what happens if the company cannot improve its bottom line in the process...