Aldi Scrapping Online Delivery Service To Focus On Stores And Value

 

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Aldi is axing its home delivery service for its non-food ‘Specialbuys’, as well as wine and spirits, to focus on opening new stores and keeping prices low.

The move will leave click & collect of groceries, which Aldi launched in 2020 across over 200 stores, as its only online operation when the other services come to an end this year.

The discounter launched home delivery of wines and spirits in 2015, which grew to offer shoppers many of its non-food Specialbuys exclusively online.

An Aldi spokesperson commented: “We keep our prices low by being the most efficient retailer in Britain, and we have therefore taken the decision to stop selling wine and spirits online for home delivery from later this month.

“We will also stop selling our Specialbuys online for home delivery later this year.”
Aldi currently has over 950 stores in the UK and hopes to reach 1,000 during 2023.

NamNews Implications

• For me, this IGD stand-out slide of 2022, says it all about home delivery.
• Aldi are obviously applying the same logic…
• (also worth keeping in mind that even Amazon could only break even on online retail, at best)
• Aldi dropping online delivery is a monumental step for retail...

Aldi Beats Lidl To Be Crowned Cheapest Supermarket Of 2022

Analysis by consumer watchdog Which? shows Aldi has narrowly beaten its main rival Lidl to be named the cheapest UK supermarket over the last 12 months.

Throughout 2022, Which? tracked hundreds of thousands of grocery prices across the eight major supermarkets (Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury’s, Tesco, Waitrose) to find out how much each shop was charging for everyday items such as bread, milk and eggs.

Overall, Aldi was the cheapest supermarket for seven consecutive months from June to December, while Lidl was the cheapest from January to May.

The results for the final month of the year in December showed a basket of 48 groceries on average was £81.63 at Aldi, just beating Lidl, where the basket was £83.24. Meanwhile, Waitrose was more than £30 pricier than Aldi, at £112.62 and was consistently the most expensive supermarket across the 12 months.

Alongside the price comparison of a basket of groceries at all eight supermarkets, Which? also compared a larger trolley packed with a greater selection of branded items that are not always available at the discounters – meaning they aren’t included in this bigger comparison.

Asda was the cheapest of the traditional supermarkets in December – as it has been every month for the last three years. Based on a larger trolley of 149 products, Asda’s total came in at £355.62, followed by Sainsbury’s (£368.97), Tesco (£375.97), Morrisons (£377.81) and Ocado (£386.68). At Waitrose, the total came to £406.95, £51.33 more than Asda.

Which? is currently campaigning for all supermarkets to do more to help customers during the cost of living crisis and has recently published a 10-point plan of steps across three key areas to help ensure affordable food is available to everyone who needs it.

“With food and drink prices putting huge pressure on household budgets, it’s no surprise to see many people turning to discounters like Aldi and Lidl when our research shows they could save up to £31 on a typical shop,” said Reena Sewraz, Which? Retail Editor.

“Which? believes all supermarkets have the ability to make a real difference to hard-hit households by ensuring everyone has easy access to basic, affordable food lines at a store near them, particularly in areas where people are most in need.”

NamNews Implications

• While experts closer to grocery might split hairs re the methodology...
• ...in the mind of the shopper, their perception of something like a 27% price difference between Aldi and Waitrose...
• …has to make a shopping difference.
• And will be reflected in grocery market shares.
• Suppliers had better tune into shopper perception
•  (Even in Aldi...)
• Or suffer the consequences?

#BasketPrices #Cheapest

Inflation Drives Record Christmas In Grocery Sector; Aldi Remains Fastest Growing Supermarket

Latest Kantar data shows take-home grocery sales rose 9.4% to a record £12.8bn in 4 weeks to 25 December, via inflation vs volume. Over 12 weeks, up 7.6%, with discounters continuing to outperform the mults. Whilst value sales were up £1.1bn in December vs Christmas 2021, volumes down 1%.

“This story played out across the traditional Christmas categories,” said Fraser McKevitt, head of retail and consumer insight at Kantar. “For example, value sales of mince pies soared by 19%, but volume purchases barely increased at all.”

Annual grocery price inflation 14.4% in December, down from 14.6% in November: “This is the second month in a row that grocery price inflation has fallen, raising hopes that the worst has now passed".

High inflation impacting how and what people buy.

Kantar: consumers buying supermarkets’ O/L with sales up 13.3%, vs 4.7% increase in branded lines.

McKevitt said: “The British supermarket sector is more competitive than ever and the grocers are keen to retain customers by offering their own festive alternatives, emphasising premium own-label.

Sales grew 10.2% to hit a £700m first time. Tesco’s Finest remains largest premium own-label, with Aldi and Lidl the biggest contributors to the premium own label sector’s overall growth in 2022.”

December, the mults' busiest month since the start of the pandemic - shop visits up 5.2% YOY.

Online grocery value sales up 4% YOY. Online’s total share vs Christmas 2021, down 0.6 percentage points to 11.6%.

Tesco, Sainsbury’s, Asda and Morrisons grabbed two-thirds of all spending.

Asda up 6.4%, Sainsbury’s and Tesco up 6.2% and 6.0% respectively, Morrisons down 2.9%

Aldi was the fastest-growing up 27.0%, market share up from 7.7% in 2021 to 9.1%. Lidl’s up 23.9%, market share up 0.9 percentage points to 7.2%.

Iceland’s sales grew by 10.2%, frozen poultry rising by 15% and frozen prepared foods by 18%. This pushed Iceland’s market share to 2.5%. Sales at Waitrose continued to weaken, down 0.7%, with its market share slipping from 5.1% to 4.7%.

NamNews Implications

• ‘volumes were actually down by 1% year-on-year’ says it all for realists.
• Added to which, many consumers were having a last hurrah... …before knuckling down to the realities of January’s demands on their purses.
• Meanwhile “…value sales of mince pies soared by 19%, but volume purchases barely increased at all.”
• i.e. the impact of inflation needs drumming into those in the business too easily mislead by top-line figures.
• The moves to own-label and the discounters are again confirmed.
• (with Aldi & Lidl continuing to grow share at the expense of the mults and Waitrose)
• And will not easily be reversed...
• In other words, it is hopefully obvious that suppliers planning to stay outside the discounter channel...
• ...are at risk.

#MarketShares #OwnLabel #Discounters

Trailer misrepresents Movie, an unprecedented case for compensation?

On Friday 23-12-2022, The Times reported that Universal Studios is embroiled in a legal action that could cost it millions because they included Ana de Armas in the trailer for Yesterday, Danny Boyle’s 2019 movie about a struggling musician that discovers that no one but him has heard of the Beatles, and exploits that fact to become a superstar.

However, much to the disappointment of at least two fans, the Cuban-Spanish actress's scenes ended up on the cutting room floor.

Conor Woulfe and Peter Michael Rosza accused Universal of deceptive marketing after they paid $3.99 to rent the film, demanding $5m damages for themselves and others affected.

Unfortunately for Universal, a US Federal judge found it infringed Californian advertising law if a significant number of reasonable viewers could be misled. The case will now proceed to Clark action certification.

By refusing to dismiss the case, the judge ensured that Woulfe and Rosza were not saddled with Universal’s legal fees.

If the parties cannot settle, Universal may decide that this precedent is bad enough for them that they will invest a million dollars to fight it all the way to the end to try to get this precedent overturned.

NamNews Implications:

• It looks like the court has decided that a movie trailer is a trade description...
• ...and represents a condition of purchase.
• By suing for $5m on a $3.99 purchase...
• ...the case will get wide coverage.
• Given that many viewers rely on a combination of write-ups and trailers for their choice of a streamed movie purchase/rental...
• (and are invariably disappointed?)
• ...it follows that this ruling opens up a whole new way for expressing that disappointment...
• ...and being compensated for the gap between promise and delivery.
• Watch this place...

#Promise #Delivery #Unprecedented

Happy Christmas

 

Morrisons Suffers Credit Rating Downgrade

Morrisons has had its credit rating downgraded due to the £6bn worth of debt it is now saddled with from the takeover by CD&R and shrinking profits amid poor sales performance.

Credit rating agency Fitch highlighted that the struggling grocer has been pushing up prices faster than its rivals, causing it to lose market share. It also noted that soaring debt interest costs will lead to a £200m drain on Morrisons’ profits over the next three years. 

Fitch downgraded the Morrisons’ debt rating from a ‘speculative’ BB level, to a ‘highly speculative’ B+, suggesting a ‘material’ risk of it defaulting.

It is the latest blow for the retailer since it fell into the hands of CD&R last year and adds to growing concerns about the role of private equity firms, which rely on vast amounts of debt to fund takeovers.

In September, Morrisons reported a halving of third-quarter profits as it lost sales to the discounters and faced “unprecedented inflationary pressures” in its food manufacturing operations. The grocer’s like-for-like sales also fell 3.1% as more competitively priced chains tempted cash-strapped shoppers to their stores.

Chief Executive David Potts has come under pressure to revive the ailing chain, with industry experts branding the takeover by private equity “at best a distraction, and at worst a bit of a disaster”.
Morrisons was overtaken in market share terms by Aldi earlier this year, with Lidl stating last month that it had the “momentum” to leapfrog the traditional Big Four supermarket.

Despite the downgrade, Fitch said Morrisons’ sales decline would reverse in the coming year. It noted that the group’s performance would be boosted by the acquisition of McColl’s, which was cleared by competition regulators at the end of October.

NamNews Implications:

• Key is where Morrisons goes from here.
• Sale & leaseback of essential assets would be the obvious route for a PE-owned company, as interest rates rise...
• Anticipate sale of all outlets, leaseback of profitable outlets...
• ...as a way back to more profitable sales!
• Meanwhile, ensure your fair share of sales & investment, going forward…

#PrivateEquity #SaleAndLeaseback #InterestRates

Waitrose Pledges More Support For Egg Suppliers

Following recent reports of shortages and the rationing of eggs in supermarkets, Waitrose has pledged a further £2.6m to go directly to UK egg suppliers.

The shortages have partly been blamed on a major outbreak of Avian flu. However, farmers argue that this is not the main problem, but a scapegoat, allowing the supermarket chains to distract customers from their refusal to pay egg farmers a sustainable price.

The egg industry has faced surging feed and energy costs, making production unviable for many farmers.

Waitrose noted that retailer’s farmers had “suffered through 18 months of extreme market volatility”. The retailer claims it constantly monitors the market and farming input costs, and has been increasing the price paid for eggs over the last 18 months

James Bailey, Executive Director at Waitrose, commented: “Without our farmers, we can’t function as a business. We’ve cultivated long standing relationships with ours, and paying them fairly and offering our customers free range British eggs are commitments that we simply won’t sacrifice, even when the going gets tough.

“We continue to have a good supply of 100% British free range eggs, which is testament to these strong relationships and our unwavering commitment to our farmers. As other retailers are seeing shortages, we have seen a slight rise in demand but we’re working hard to ensure we have the quality, high-welfare products on our shelves that our customers expect from Waitrose.”

Related item:
Why eggs are being rationed

NamNews Implications:

• Waitrose has pledged a further £2.6m to go directly to UK egg suppliers.
• A pointer for all…
• This is all about sharing inflationary profit increases.
• Else the hens/owners will reduce production.
• A no-brainer issue of knife-edge economics…

#EggShortages #AvianFlu #ChickenShortages #FairShare

SPAR Planning To Extend Own Label Range

SPAR has revealed that it plans to develop its own-label range across more frozen, ambient and non-food items next year to cater to cash-strapped consumers during the cost of living crisis.

Speaking to trade publication The Grocer, the symbol group’s Managing Director Louise Hoste noted that shoppers were actively seeking own-label lines in categories that were traditionally brand-led.

SPAR’s own-label range currently comprises around 1,000 lines across chilled, fresh and BWS, as well as frozen, ambient and non-food. It plans to create another 90 new lines during 2023 across the frozen, ambient and non-food categories.

Hoste is quoted by The Grocer as saying: “Own label share is growing faster than brands in categories such as health and beauty, and we are well-placed to meet this growing need. Frozen is a category which serves many customers’ needs at a keen price point, whilst also enabling customers to manage their food waste and being able to have meal solutions ready to go straight from the freezer.

“Inevitably, considering the cost of living crisis, the SPAR brand team are reviewing all categories to ensure customers have suitable options for their budgets, whether that is customers that are still looking to treat themselves with premium, or customers looking for value products.”

NamNews Implications:

• It could be said that most grocery retailers are pursuing this option...
• ...overtly or not.
• Meaning brands need to increase their appeal vs, own label equivalent.
• In a manner that fits most routes to market...
• It used to be called tailor-making, folks!

#PrivateLabel #OwnLabel #Competition #Inflation