Monday, 8 November 2021

Supermarket Buyers Using Delay Tactics To Thwart Supplier Cost Price Increases

According to a report by trade publication The Grocer, retailers are asking suppliers for increasingly complex cost breakdowns for individual ingredients, packaging, storage, transportation, as well as manufacturing and labour overheads and profit margins to justify any price increases.

The report highlighted that signoff processes are also lengthening and often requires a level of detail only an ‘open book’ supplier would be expected to share.

NamNews Implications:
  • Because of the relative size and importance of a major customer…
  • …NAMs may not take the risk of ‘getting mad’.
  • But for sure these buyer tactics will encourage NAMs to ‘get even’.
  • And in unprecedented market conditions…
  • …there are many ways of getting even.
  • (better still, suppliers, why not focus on optimising your good customer relationships?)

Friday, 5 November 2021

Tesco Slips Down Price Ranking

Despite moves to improve its competitiveness, particularly against the discounters, a price ranking has found Tesco to be one of the most expensive supermarkets in the country.

The analysis by consumer watchdog Which? compared the prices for a basket of 23 everyday items throughout October, both own label and branded.

With a total of £28.64, Britain’s largest grocery retailer came in sixth place – third from the bottom and only ahead of Ocado (£29.95) and Waitrose (£33.81).

Aldi remained the cheapest overall, at £24.24, just ahead of Lidl on £24.97. Asda was third and the cheapest big four supermarket, with the basket costing £25.94. It was followed by Sainsbury’s (£27.71) and Morrisons (£28.31).

Which? also carried out a more extensive survey covering 77 items. This included more branded items, and so Aldi and Lidl were excluded.

Tesco also had a poor showing in this analysis, coming second from bottom as shown below:

NamNews Implications:
  • Given upcoming pressures on consumer disposable income…
  • Aldi’s 15% price advantage over Tesco has to make a difference.
  • And even on a branded-only basis, Asda has an 8.6% advantage over Tesco.
  • Add a large dose of inflation…
  • …and budget for an escalation of retail price war?
  • (Tesco is not going sit on the sidelines while Aldi capitalises on this price advantage in the coming inflationary Winter...)

Wednesday, 3 November 2021

M&S To Roll Out Opticians Service

Marks & Spencer is rolling its Opticians service to 55 stores over the next 18 months.

The decision follows an initial trial in five stores, during which the service is said to have received a strong customer satisfaction rating

NamNews Implications:
  • Golden rule in retail:
  • ’try it and if it works…’
  • i.e. anticipate a quick roll-out to 55 stores for M&S.
  • (with other mults unlikely to remain on the sidelines)
  • And McKesson sell-offs revitalised under new asset management.
#Opticians #retail

Monday, 1 November 2021

Study Shows Supermarket Shoppers Switched Brands During Pandemic

Only 38% of consumers in the UK remained loyal to their usual brands in supermarkets during the pandemic.

The research by artificial intelligence specialist found that consumers who switched were more likely to have traded down on grocery brands during the period than those who traded up from own-label to brands. 20% said they traded down from brands to own-label during the pandemic, compared to just 14% who traded up.

NamNews Implications:
  • Curious that a move to private label is still regarded as a ‘trading down’ move.
  • See Gen 4 of our paper ‘Four Generations of Private Label’
  • That said, ‘Saving money was the main motivation for those switching to own label (55%)’…
  • …and branded suppliers need to factor that in.
  • The key is reassessing relative competitive appeal within your post-Lockdown categories…
  • …whilst ensuring you include private label (all Generations) as ‘available competitors’.

Saturday, 30 October 2021

Disappointing Quarter Amazon; Facing Soaring Costs

 Amazon reported a big fall in profits yesterday and highlighted that it was facing billions of dollars in extra costs to manage supply chain and labour shortage challenges over the key festive period.

After benefitting from the surge in online shopping during the pandemic, Amazon’s third-quarter results disappointed Wall Street. Net income fell by 50% to $3.16bn on total revenues up only 15% to $110.8bn – the company’s slowest rate of growth since 2015.

NamNews Implications:

  • Fortunately for Amazon, they have not even started to use accumulated muscle…
  • Meanwhile, to maintain its consumer-centric reputation they will have to absorb costs:
    • labour rates
    • supply chain bumps
  • But there are limits, even for Amazon.
  • i.e. suppliers will feel the pain before consumers…
#AmazonSlows #ProfitSqueeze

Tuesday, 26 October 2021

Coca-Cola Trialling New Refillable Concept

Coca‑Cola Europacific Partners (CCEP) has started trialling a new refillable, on-the-go soft drinks solution.

The pilot is taking place in Stockholm, Sweden, at a PBX convenience store in collaboration with GLACIAL beverage containers.

The concept allows consumers to buy or bring their own drinks containers to fill, choosing from more than 60 flavours, including the Coca-Cola, Fanta, Sprite, FuzeTea and Smartwater brands.

NamNews Implications:
  • In effect, moving dispensers from behind the bar to the front…
  • i.e. from on to off-trade…
  • ‘Simple’ and neat…
  • “Now why didn’t I think of that…?”

Friday, 22 October 2021

Iceland Giving Away Free Food

Iceland Foods has rolled out a new scheme called ‘Free on Last Day of Life’ as part of its efforts to reduce food waste. The initiative will see online shoppers offered free products when the last day of shelf life has been reached and no other stock is available.

Traditionally, food items delivered by Iceland has a minimum shelf life of at least two days. However, products close to expiry will now be given away to prevent them being wasted.

NamNews Implications:
  • ‘…we to have find an innovative way to combat (food waste)…’ - says it all, for most retailers.
  • But what makes Iceland different is the imaginative way they package the idea…
  • Their ‘Free on Last Day of Life scheme’ not only helps reduce food waste but also supports our customers.
  • (in a way that also grabs headlines….)
  • Watch this space…

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