Tuesday 22 March 2022

Asda Set To Introduce New Budget Range And Continue Simplification Drive

Asda is launching a major price repositioning that will involve the rollout of a new budget range and further SKU simplification.

According to trade magazine The Grocer, the new own-label offering will be called ‘Just Essentials by Asda’. It will cover around 300 products including items such as beans, bread, crisps, and biscuits as well as non-food lines such as washing-up liquid and laundry powder.

Asda said the move was aimed at appealing to price-sensitive customers facing a cost-of-living crisis as inflation soars, although it stressed that it would also emphasise the quality of the new range.

Analysts have suggested that Asda has lost some of its price competitiveness under the ownership of the Issa brothers and TDR Capital. The business recently faced criticism from anti-poverty campaigner Jack Monroe for raising the price of essentials and the lack of coverage of its existing Smart Price and Farm Stores value ranges.

However, The Grocer noted that the speed of the planned roll-out has caused concern among own-label suppliers, some of whom have questioned whether it is possible to launch such a major proposition in a short space of time.

The new range is expected to replace Asda’s Smart Price offering, with the supermarket saying ‘Just Essentials’ will be a “bold, upbeat and positive brand”.

Asda had planned to start rolling it out from May but said: “We want to do it faster because it’s really important for our customers that we are with them all the way.”

The Grocer report also said that a recent presentation to suppliers by the supermarket revealed plans for a wider range reset which will see further SKU cuts on top of those carried out during the pandemic. The retailer said the simplification process would ensure there were no more than three iterations of the same product.

Asda also wants to simplify its promotions strategy, with no product promoted more than three times in any 12-month period.

The report added that the Issa brothers were also planning an overhaul of Asda’s stores and the rollout of its Rewards loyalty scheme that has been undergoing trials in 16 supermarkets.

NamNews Implications:
  • Aimed at those facing an inevitable cost-of-living crisis as inflation soars, without compromising quality.
  •  i.e. If this “bold, upbeat and positive brand” hits these notes…
  • …it has to find a market.
  • Rolling it out faster than the planned May launch could cause logistical problems…
  • …therein an opportunity for rivals?
#AsdaPace #CostOfLiving

Friday 18 March 2022

Head Of JLP Says UK Is Facing Double-Digit Inflation

The Chairman of the John Lewis Partnership (JLP) has joined the growing number of business executives and politicians warning that the UK is heading towards double-digit inflation as the war in Ukraine adds to cost pressures already being felt across numerous industries.

UK inflation is already at a 30-year high of 5.5% and is expected to rise to almost 8% next month as energy bills soar.

Speaking on the BBC’s Radio 4 Today programme, Sharon White said: “Everything you can see in terms of energy prices from the impact of the Ukraine war suggests that we might well end up with double-digit inflation. My big worry is that it ends out being more enduring than anyone expects. So I think inflation is the big macroeconomic washout.”


NamNews Implications:
  • ‘UK is heading towards double-digit inflation…’
  • And this from an ex-government economist (Sharon White).
  • NB. Keep in mind that ‘double-digit’ starts at 10%…
  • Meanwhile, bankers are suggesting that, as high inflation will be temporary, workers will be tolerant on the impact on their living standards…
  • In your dreams…
  • And BTW, for those that feel that weakened Unions are in no position to negotiate…
  • …we could find that inflation already in the pipeline could breed effective resistance on the shop floor.
  • ...especially if inflation hits 10%!!
#'HyperInflation' #pipeline #bankers #energy

Monday 14 March 2022

Fertiliser Crisis Could Lead To Food Shortages And More Price Rises

Farmers in the UK are facing the prospect of fertiliser rationing because of the war in Ukraine, which could lead to shortages of some foods in supermarkets and further inflationary pressure.

Russia is the world’s biggest exporter of fertiliser that is essential for growing crops and grass for cattle. Last week the EU imposed sanctions on three large producers, Eurochem, PhosAgro and Uralchem.

According to The Times newspaper, some fertiliser merchants have temporarily closed their order books because of a lack of supply while others are rationing the amount that farmers can buy. The UK imports around 60% of its fertiliser.

NamNews Implications:
  • Understatement of 2022?
  • The cost of fertiliser has also quadrupled in the past year from about £250 a tonne to nearer to £1,000 due to rising gas prices.
  • (and that before the Ukraine crisis…)
  • Moreover, the squeeze on fertiliser supplies is expected to limit the scope for substitution of lost Ukraine wheat production by other countries.
  • Time to try some what-ifs based on 10% and 15% inflation…
#HyperInflation #ShortSupply


Friday 11 March 2022

JLP 'never knowingly underinflated' Raises Inflation Concerns

After hailing the success of its recovery programme yesterday, the head of the John Lewis Partnership added to warnings from across the retail and manufacturing sectors that Russia’s invasion of Ukraine will lead to a further jump in inflation.

Chairman Sharon White said that the conflict meant inflation would be “more persistent” and at a higher rate than previously expected.

She highlighted that the group was facing “significant persistent pressures” on costs, adding: “As far as we can, we’re trying to absorb the cost pressures … not all of these pressures are absorbable.”

Both the group’s Waitrose and John Lewis chains have been forced to increase prices on certain items in recent weeks, with prices at the supermarket chain rising by between 3% to 4% compared with 2% last year.

White said: “We’re expecting inflation to be more permanent, more persistent, and certainly at a higher level than when we were all gathered for half-year results [in September].

NamNews Implications:
  • '…invasion of Ukraine will lead to a FURTHER jump in inflation’
  • The key word is ‘further’ …
  • …in that most of the current inflation predictions (everywhere) are based on pre-Ukraine trends.
  • i.e. ‘prices at the supermarket chain rising by between 3% to 4%’ are ‘historical, pre-Ukraine.
  • We are now in uncharted territory, again (following Covid Lockdowns…)
  • Given the risk that JLP will be 'never-knowingly-underinflated' suppliers need to take the initiative.
  • Waitrose suppliers need more precision re inflation…
  • …and should explore ‘what-ifs ‘ starting at 10%…
  • …before opening discussions with the customer.
  • In other words, the supplier has to take the lead this time…
#UkraineInflation #NormalInflation #NAM-Initiative

Sunday 6 March 2022

Grocery Price Inflation Accelerates; Discounters Gaining Share

Latest industry data confirms that prices in the grocery sector are continuing to rise, with further upward pressure likely to come from the conflict in Ukraine. With the market still contracting from last year’s pandemic-driven highs, Aldi and Lidl were the only physical retailers seeing growth and gaining share on the main multiples, apart from Tesco.

Take-home grocery figures from Kantar show that overall supermarket sales fell by 3.7% during the 12 weeks to 20 February in comparison with last year when the winter lockdown meant people were eating more meals and snacks at home.

However, sales remain 8.4% higher than the same period before the pandemic in 2020.

NamNews Implications:
  • With the global Covid fears/uncertainties now replaced by Ukraine worries, consumers are spending cautiously...
  • ...despite increasing their work-driven on-the-go consumption.
  • Time for suppliers to justify why they are not optimising their potential business with the discounters?
  • Especially given that Tesco and Ocado are the only other retailers growing at the expense of the rest…

#OnTheGoConsumption #FearUncertainty #Inflation

Wednesday 2 March 2022

Sainsbury’s Closing Cafes As It Overhauls Eat-In And Takeaway Food Offer

Sainsbury’s is set to close 200 of its in-store cafes and some of its hot food counters as part of an overhaul that will see it roll out its new Restaurant Hub food hall format.

The retailer stated that it wants to transform its eat-in, takeaway and home delivery food and drink offer to give customers a better experience. Sainsbury’s has been trialling The Restaurant Hub concept at its Selly Oak store in Birmingham in conjunction with the Boparan Restaurant Group (BRG). It features a range of restaurant brands, including Caffè Carluccio’s, Gourmet Burger Kitchen, Ed’s Diner, and Slim Chickens.

The two companies are planning to open 30 more The Restaurant Hubs in the next year, with the intention to accelerate the roll-out if the format proves popular.

Sainsbury’s will also open another 30 Starbucks coffee shops in its supermarkets in the next twelve months, bringing the total number to 60. Working with BRG and Starbucks, Sainsbury’s plans to overhaul its offer in 250 supermarkets over the next three years

NamNews Implications:
  • Lockdown and Takeaways says it all…
  • But one of many fundamental shake-outs arising.
  • Benefits for those businesses that can recognise the change, and act decisively…
  • How about you?
[Just one of 12 news items in today's NamNews bulletin]

#LockdownDamage #HospitalityChange

Monday 28 February 2022

Tesco’s Price Matching Scheme Now Following Aldi’s Price Rises

Amid soaring food prices, Tesco’s ‘Aldi Price Match’ scheme has gone into reverse.

The scheme had originally been conceived as a way of Tesco improving its competitiveness by cutting prices on everyday products to match Aldi to halt shoppers switching to the discounters.

According to trade publication The Grocer, Tesco is now raising the price of matching lines to keep up with increases at Aldi.

The report noted that Tesco’s determination not to let the pressure off the discounter despite cost inflation, meant Aldi was raising prices on some price-matched lines ahead of an identical increase by the supermarket giant. This has meant that Aldi was briefly more expensive than Tesco on some lines involved in the scheme.

NamNews Implications:
  • All depends on shopper perception.
  • The real bargain-hunters will capitalise on some of the Tesco price-lagging…
  • But in general, most shoppers will simply ‘see’ the Aldi Price Match initiative in action…

Wednesday 23 February 2022

GSK Unveils New Name For Consumer Healthcare Spin-Off

GlaxoSmithKline (GSK) has revealed that its Consumer Healthcare business will be called Haleon following its planned spinoff and stock market listing this summer.

The name, pronounced “Hay-Lee-On”, was inspired by the merging of the words ‘Hale’, which is an old English word that means ‘in good health’ and Leon, which is associated with the word ‘strength’.

The demerger of the Consumer Healthcare business is planned to take place by mid-2022, creating a standalone entity with sales of around £10bn from brands such as Sensodyne, Voltaren, Panadol and Centrum.


Once separated from GSK’s pharmaceuticals and vaccines operations, the new company will be led by the unit’s current Chief Executive Brian McNamara and recently appointed Chairman Designate Sir Dave Lewis, the former boss of Tesco. Haleon will be headquartered at a new campus in Weybridge, which is expected to open at the end of 2024 and will include an R&D centre and a shopper science lab.

NamNews Implications:
  • Combination of new name and ‘separate’ existence, ‘independent’ of group…
  • …means more focus on consumer optimisation.
  • Time for rivals to reassess relative competitive appeal…