Tuesday, 21 May 2019

Sainsbury’s Links Up With Euro Garages Again

According to The Grocer, Sainsbury’s recently began supplying its own brand sandwiches and salads, as well as ‘food for tonight’ items like ready meals, to a “small number” of Euro Garages sites. [more]
  • Every little helps...
  • ...and if a presence in a few Euro garages prove worthwhile...
  • …then a full roll-out is inevitable...
  • ...along with other possible routes to consumer.
  • Time for suppliers in these and allied categories to capitalise on Sainsbury’s willingness to experiment…

Tuesday, 23 April 2019

Sainsbury’s And WH Smith End Food-To-Go Trial

Nine months after the trial began, a report by The Grocer revealed at the end of last week that Sainsbury’s-branded products were no longer stocked in the trial stores. In some cases, the supermarket’s food-to-go lines had been replaced by the Greencore’s ‘Munch’ range. [More]
  • A good quality in retail is the ability to fail fast.
  • Trying different initiatives also helps…
  • …with the added benefit for retailers that footfall determines success/failure, ‘instantly’…
  • NAMs that take this all on board, and propose initiatives accordingly…
  • ...cannot go far wrong.

Thursday, 18 April 2019

Asda Offers ‘Free Alcohol’ To Welsh Shoppers

A sign in the Asda supermarket in Cwmbran was meant to guide shoppers to ‘alcohol-free’ beer. However, it had been wrongly translated in Welsh to ‘alcohol am ddim’, which means ‘free alcohol’. The correct Welsh translation for alcohol-free is ‘di-alcohol’. [more]
  • Well, so much for my Easter weekend in Cwmbran…
  • BTW, our Gaelic word Crack was changed to Craic in 1990 – a need to differentiate good, clean fun from a dangerous new form of cocaine – and led to this spelling gaining popularity among those in search of compulsive but less addictive recreation…
  • NAM insight: Best stick to plain English for promotional purposes, methinks!

Monday, 25 March 2019

GCA Finds The Co-op Breached GSCOP

The GCA has found the supermarket group had breached the Groceries Supply Code of Practice (GSCOP) on two counts. The retailer failed to provide reasonable notice to suppliers of decisions to de-list products and varied supply agreements unilaterally and without reasonable notice in the way it applied two specific charges. The Co-op Group has been ordered to introduce “major changes to its governance, systems and processes” [more]
  • Problem identified, analysed and corrected…
  • …with the promise of post-correction monitoring…
  • …making it easier for suppliers to partner with the Co-op.
  • A valued and important route to consumer…
  • (coupled with a willingness by supplier-partners to report any future breach…
  • …for the benefit of all stakeholders)

Thursday, 14 March 2019

Latest Podcast from Hospitality Mavericks: Retail, Hospitality & Delivering Value to Savvy Consumers with Brian Moore

Michael Tingsager and Brian share key trade insights re Amazon, the Discounters, Shrinkflation/brand equity preservation, as they affect the past, present and future states of retail and hospitality. With many crossovers to be found between the two sectors, Brian provides in-depth advice for businesses looking to succeed in a world of corporate giants and savvy consumers.

Hospitality Mavericks is a growing community of past and present business owners, franchisees, senior managers and experienced professionals with a love and passion for the hospitality industry - find out more here

Monday, 11 March 2019

M&S Deal Could Cost Ocado A Large Chunk Of Customers

A survey of 250 Ocado customers carried out by analysts at HSBC found that 22% would no longer shop with Ocado if it did not sell Waitrose products, while 17% stated they would not use it if the Waitrose products were replaced by M&S lines.

David McCarthy, head of consumer retail research at HSBC, described the findings as “worrying” for the new Ocado and M&S joint venture. “A meaningful proportion of customers said that their loyalty is to Waitrose and that M&S is not an adequate replacement,” he wrote in a research note. [more for NamNews readers]
  • Its called brand loyalty, folks…
  • …whether it be supplier or retailer.
  • Hopefully Ocado will have factored this into the equation in advance…
  • …and can live profitably with the difference.
  • Watch this space…

Sunday, 10 March 2019

Fair-Share Trade Relationships: How to optimise via equal compromise...

NAMs that manage to achieve fair share realationships with buyers can keep it so by focusing on the following 'rules':

Keeping the Deal in Place…
An ongoing Trade partnership requires that both parties respect the basic deal. In other words, over time they have reached a balance of risk and reward that satisfies the needs of each party. All further moves will take place on a reciprocal basis whereby a demand by one will be matched by a gain of equivalent value by the trade partner. Otherwise, the relationship becomes so one-sided that the partnership breaks down and each side loses. Systematic use of financial measures can help in optimising trade partnerships and provide a more reliable balance of risk and reward.

Corporate Customer Portfolio Role
Essentially, the process starts with establishing the customer’s role within the corporate customer portfolio, in terms of current and target Sales and Profit, lifecycle profile, and investment classification (invest, maintain or divest). The main focus can then be on achieving target sales and profit, only referring back to corporate performance when target sales and profit performance s deviate from that target.

‘Deal on the Table’ a constant benchmark
Here the customer and supplier are placed in market context, reflecting relative power in the relationship.
  • Customer’s share of the supplier’s business (£ sales, %)
  • Supplier’s share of the customer’s business (£ sales, %)
  • Customer’s share of the category in total market: their appeal to the supplier’s competition and importance to the supplier
  • Supplier’s share of Customer’s version of the category
  • Size of deal for supplier (£, %) in this case current and annual target sales and profit (Gross and Net), reflecting scale and risk of loss of the business within supplier’s customer portfolio
  • Size of deal for Customer (£, %) current annual and target sales and gross profit, reflecting Customer’s level of dependency on supplier
Current Terms and Conditions in the relationship
The supplier, operating on the premise that everything can be reduced to a financial cost and value, calculates the cost of each element of the relationship and the incremental sales it represents for each party. This includes credit period, settlement discount, stock levels, promotional support and all other parts of the supplier’s total offer package. The same terms and conditions should be translated into customer’s sales equivalents, using the customer’s published net margin as a multiplier. This will help to establish and demonstrate the value of the supplier to the customer. 

Maintaining the ‘status quo’
This total offer package represents the basic working relationship in terms of relative risk and reward between the two parties. If both parties seriously value and want to maintain the relationship, then any additional request or change in the deal by one party, will require a reciprocal move of equivalent value in order to maintain the equity of the business relationship, in other words, the ‘status quo’.

In practice this means that however the circumstances of either party may change, any such change and the resulting demands should be costed, valued and the results factored into the total offer package in order to ensure that parities have been maintained, and the supplier will continue to invest in the relationship.

Specifically, the implications of any new, ‘incremental’ or arbitrary demand or breach in compliance should be explored fully in terms of its impact upon the rest of the deal, and agreement reached on appropriate adjustments to the total offer package. Any reluctance to explore such options on the part of the buyer should be treated as an attempt to achieve an incremental gain at the expense of the supplier, and resisted.

Finally, it is obvious that this level of trade relationship relies heavily upon mutual trust and willing compliance. It is a deal between two organisations equal in respect for one another, if not in scale, and by definition has to operate on a multilevel and multifunctional basis, capable of surviving regular buyer-churn and fundamental changes in the market.

Otherwise, we are all in more trouble than we realise….

Feedback: ‘everything in a supplier-retailer relationship can be reduced to a financial cost and value’ We welcome any feedback quoting exceptions and will try to illustrate way and means of calculating cost and value. Please contact me with your exceptions and comments via Linkedin, or at bmoore@namnews.com

Friday, 8 March 2019

Booker And Tesco Ramping Up Benefits Of Merger

Speaking at an event this week, hosted by trade magazine The Grocer, Booker’s Chief Executive Charles Wilson revealed that significant benefits would be rolled out in three phases during 2019.

Phase one began last month with retail and catering customers being offered lower prices and better margins. The second phase is due to launch in the spring and will involve improving the quality of produce by switching to Tesco suppliers and specifications. A last phase in autumn will see the roll out of various Tesco services. [more for NamNews readers]
  • All depends on how these offers and terms compare to those available from other wholesalers…
  • …and if greater, inevitable switching of allegiance will follow.
  • Meanwhile, NAMs need to reassess their wholesale customer classification in terms of Invest, Maintain or Divest…
  • Watch this space.