Thursday 21 October 2021

Unilever Warns Of More Price Rises To Counter Increasing Costs

Alongside its third-quarter results today, Unilever became the latest consumer goods manufacturer to warn that more price rises were on the cards as it battles spiralling input cost inflation.

Over the three months to 30 September, the group’s underlying sales rose a slightly better-than-expected 2.5% to €13.5bn. This was driven by an average price increase of 4.1% across its product range which counteracted a 1.5% fall in volumes.

NamNews Implications:
  • P&G, Colgate-Palmolive, General Mills, Kimberly-Clark, NestlĂ©, PepsiCo and now Unilever…
  • Price rises are coming.
  • The only issue is whether average increases of 4.1% for Unilever…
  • …are anything like enough?
  • i.e. can we anticipate even steeper hikes to come?
  • Meanwhile, rivals in Unilever’s categories might benefit from a line by line comparison with Unilever brands and geographies…?
#PriceInflation #SupplyChainInflation

Tuesday 19 October 2021

EG Group Pulls Out Of £750m Deal To Buy Asda’s Petrol Stations

After agreeing to buy Asda, Mohsin and Zuber Issa, the founders of EG, and their private equity backers TDR Capital, announced plans in February to finance the acquisition in part by selling the supermarket’s petrol stations to their own forecourts business for £750m.

Asda will retain the petrol forecourts business and the associated revenue and profits. However, the £750m expected from the deal will now come from £500m of debt and £250m of its own cash.

NamNews Implications:
  • £500m extra debt means sweating Asda more…
  • Apart from pressures on costs of goods and shelf price increases.
  • Fingers crossed re the £1bn sale of Asda distribution assets.
#PrivateEquity #Asda #RetailDebt

Wednesday 13 October 2021

Grocery Sales Down, Prices Up; Tesco Outperforms Market

Take-home grocery sales fell by 1.2% over the 12 weeks to 3 October, partly because the reduced availability of petrol led to shoppers limiting the number of trips they made to supermarkets.

Despite the dip, the data from Kantar shows sales remain 8.1% higher than they were before the pandemic and every retailer recorded better sales compared with the same period in 2019.

NamNews Implications:
  • Key for suppliers to compare their sales with anticipatory Christmas shopping by cautious shoppers.
  • Despite relatively little share movement, worth comparing the detail re your business…
  • NB. the discounters are still an issue for Big Retail, despite counteracting moves by the mults…

Wednesday 6 October 2021

Tesco Posts Impressive Results After Defying Supply Chain Disruption, But Challenges Ahead

Tesco raised its full-year profit forecast today after reduced costs related to the pandemic and its strong supply chain helped it deliver better-than-expected first-half results.

Tesco saw its like-for-like sales in the UK climb 1.2% over the 26 weeks to 28 August. This followed a 0.5% rise in the first quarter, accelerating to 2% in the second as comparatives softened due to the easing of Covid restrictions in the summer last year.

NamNews Implications:
  • ‘UK’s biggest player was able to leverage its supplier relationships and distribution capability to maintain good levels of product availability…
  • …events such as Euro 2020 and staycations helped.’
  • The key for suppliers is to compare their Tesco performance by format, geography and category.
  • Rest assured that Tesco’s ‘bumps in the road’ will be less than those of rivals.
  • After all, every little helps… (to ward off PE predators…)
#PrivateEquity #SupplyShortages #Christmas

Friday 1 October 2021

HFSS Restrictions Offer Opportunities In Convenience Channel

Despite millions of pounds being at risk from the upcoming HFSS restrictions, new analysis highlights some opportunities for retailers and brands in the convenience channel.

The UK Government will introduce new rules for high fat, sugar and salt (HFSS) products in October 2022. They will restrict the advertising of HFSS brands, volume promotions, and the display of HFSS products in-store.

NamNews Implications:
  • Stores smaller than 2,000 sq. ft. are an obvious opportunity for some suppliers.
  • However, many of whom cannot afford to drill down to that level of coverage, post-Lockdown.
  • Making it key to enhance supplier-wholesaler relationships…
  • Fast…
  • Meanwhile, for stores above 2,000 sq. ft., see the detail of the IRI analysis…


Wednesday 29 September 2021

Future Of Morrisons To Be Decided By Auction This Weekend

The UK’s takeover regulator has ruled that the four-month-long fight for Morrisons will be decided by an auction between two private equity groups on Saturday. (details)

NamNews Implications:

Monday 27 September 2021

Suppliers Seeking Support To Push Through Price Increases In Coming Weeks

Higher supply chain costs are expected to drive up prices in supermarkets by at least 5% in the coming weeks, with more increases to follow.

NamNews Implications:
  • Time to take a 5% increase for granted...?
  • Perhaps some what-ifs re 10% increases in your category might be of benefit?
  • More importantly, it is essential to place these inevitable increases within a realistic context of:
    • Shell-shocked consumers emerging from the trauma of 18 month lockdown
    • To face the uncertainties of job security
    • Increased taxation vs lower public services
    • A super-savvy consumer better able to calculate ingredient cost in foods
    • More determined to demand demonstrable value for money
    • At the very least, this will result in a reduction in demand for products that do not have a clear competitive edge over alternatives available
  • Welcome to the new norm of consumer demand...

#Inflation #PriceIncreases #ConsumerDemand

Sunday 26 September 2021

The Just-in-Time to Just-in-Case transition, a retro step?

Just-in-Time = little/no buffer stock, lower cost. 
Just-in-Case = buffer stock = higher cost = inflation...