Just Selling Beans

2017 And All That

2017-01-04T09:53:00.000+00:00

As is customary at this time of year, we have a selection of direly pessimistic and overly optimistic predictions for the coming 12 months. Well, I'd hate to exclude myself from all this fun, so here are what I believe will be the big themes for 2017.

Either way, it's going to be an exciting and challenging year in retail. See you on the other side!

The Shrinking Spend
The economy as a whole may have been growing, albeit slowly, for a while now, but the reality on the ground does not reflect that. Rents and mortgages take up at least 40% of expendable income while a figure published this week pointed to rail fares taking up 14% of income for those who commute.

These figures will continue to grow, and should there be even a small interest rate hike, the amount available for households to spend in shops will decline sharply.

Retailers will also need to combat upward cost pressures caused by continued uncertainty over the UK's exit from Europe, both in terms of their direct imports and the costs of their suppliers.

Less spending from shoppers and higher prices will hurt volumes in the long run, which of course will hurt manufacturers who depend on selling volume to keep costs down.

So, price will continue to be important so expect more price wars and pack size reductions. It will be interesting to see how the single price retailers (Poundland, Poundworld, etc) can cope with these pressures.

People In Retail
After many years of depending on state subsidized labour, retail is having to deal with increases in the minimum wage (although it is still well short of a Living Wage) and a growing backlash against under-employment through zero hours contracts. Last year saw increased media scrutiny into conditions at warehouses and I'd expect this to extend beyond the rag-trade this year. During my time in grocery retail, Distribution Centres were tough places to work but the ones I saw weren't as bad as those exposed at Sports Direct last year. However, the workplace has changed a lot over the last 10 years and an undercover exposé could be damaging if similar bad practices are discovered.

The debate on automation will grow too. Amazon's "Go" concept has got a lot of retail analysts excited, but we need to be careful about automation. Some stores I visited in the run up to Christmas were struggling to cope where they had over-invested in self-scan tills at the expense of manned tills which are still the most efficient way of getting shoppers processed. And while retailers may get excited at the reduced manpower costs of automation throughout the supply chain and store, some caution needs to be considered. From a service perspective, people like buying from people (on the whole!) and more importantly, staff are often your most loyal shoppers. With around 2.8 million people in the UK employed in retail, A 10% cut in workforce could wipe £1.2bn of sales out, so it's not something to be taken lightly.

Fight or Flight For Wal-Mart
As I predicted, Asda finally lost the 2nd spot in Grocery to Sainsburys last year despite huge investment in price from their American parent group. A new CEO might make a difference, but years of poor or "bought" performance from Asda under Andy Clarke will take a big effort to rectify.

In the UK, Asda faces a multitude of problems and will need to get smarter to deal with them. Too often, they depend on their one marketing lever - Price - and this is clearly broken after the rise of the hard discounters.

Wal-Mart's aspiration for global simplicity - seen by the Wal-Martisation of the Asda logo - will need to be adapted if they are to succeed in the UK. They have lost their top end to JS and Tesco, their core to the Hard Discounters, and a resurgent Morrisons is causing trouble in their heartlands. They can't rely on George clothing to bail them out as much now with Primark so dominant. I expect their former CEO, Andy Bond, is scenting blood as he merges Pep & Co into Poundland too.

So, what will Wal-Mart do? They've been able to overlook the declining market share over the last few years as Asda has delivered increasing profits, but the loss of 2nd spot, declines in volumes and the tougher GSCOP rules means they can't throw their weight around with suppliers so much and the cash cow might start to run dry.

Another Convenience Revolution
It's been a vibrant channel for a few years now, but Co-op's new format and the One Stop business should make the sector raise its standards even higher.

Nisa and Spar have created some great looking stores in response to the JS Local/ Tesco Express challenge, but the standards of execution in Co-op and One Stop are something else that even JS and Tesco will need to take notice of (and yes, I know Tesco own One Stop!!!).

I would hope a focus on availability, core ranges and shopper-led space management become the new agenda for independents

Bitter Pills For Pharmacies
I will be doing a full blog on this sector soon, but it's worthy of note here as Pharmacy retail faces a big challenge this year with funding cuts from the NHS and threats to reduce the number of licenses.

It is a largely under-developed sector for retail - many pharmacists seem to think retail is below them - but with many pharmacies dependent on over 90% of their turnover from the NHS services, they will need to turn to retail to fill these gaps.

It is a sector ripe for consolidation, with less than half of the 14,000 community pharmacy licenses in the hands of the large multiples. However, until the licensing plans of the government become clearer, I would not expect any major acquisitions from Boots, Lloyds or Well.

Unileverage In The Great Grocery Game

2016-10-13T11:52:00.001+01:00

For as long as I can remember, there have been big spats between manufacturers and grocers over prices. At the end of the day, it's the fundamentals of the game. Never mind customers, grocery is about buying a lower price than the people making the products want to sell it. Every hour of every day, there will be a foul-mouthed shouty row between a buyer and a National Account Manager (NAM) about a 1p disagreement.

Today, we've seen one of those rows bubble over into the public domain with Tesco admitting to availability issues on Unilever products, with Marmite being chosen as the media-friendly brand to lead the stories. A spat between Tesco and Unilever is a big deal, but we've been here before with Sainsbury's taking Pepsi off the shelves, Asda removing I Can't Believe It's Not Butter and even Stella Artois briefly fading from sight in Tesco many years ago. Price is always the battleground, but it's not always the grocer who's the baddie in the argument.

Whilst our grocers are big businesses, they still arent't at the top of the food chain (pun intended!). The multinationals behind our favourite brands outstrip entire countries in their turnover and, often, if you upset one business unit, you upset them all. Much of the dust-gathering NPD on our shelves is there because a Unilever, PepsiCo or P&G has hovered their finger over stopping or disrupting supply of their established brands.

The way our shelves are re-stocked also gives the manufacturers a lot of power. Retailers set inventory targets around the ideas of "just in time" replenishment with no stock held out the back. Our data-driven world has brought us ever closer to the dream scenario where stock arrives at a distribution centre, goes straight onto a wagon to the stores where it goes straight into a waiting space on the shelf without the SKU ever going off sale.

The whole concept is impossible of course - as with much data-led analysis, it assumes a large group of individuals will behave in exacatly the same way, at exactly the same time and day every week. The gaps already appearing in Tesco today following Unilever putting them onto "stop" are testament to that.

Inevitably, the decimation of the value of sterling following the Brexit announcements by the government will be cited as a reason for this dispute. It follows on a long line of reasons - everything from increases in commodity prices to the price of oil - but the heart of it is protection of margin. Retailers are profitable, but their margins are thin. Food in particular - the engineroom that powers our grocers' turnover - is very low margin, hence the need to pump up the share of sales coming from high margin general merchandise and clothing. When you consider that element, the JS purchase of Argos seems like a masterstroke.

But the margins at manufacturers are very high - often NPD won't be launched without at least 25%-30% margin for the manufacturer. In the modern retailing world, many are feeling the pain and it's time for manufacturers to step up to the plate. They will argue that they are taking the risks, developing the new products and building the brands so they need the extra margin. But, when you consider the growth of private label, largely through the discounters, the era of branded food goods might be entering its final days. Innovation these days seems to be drying-up - a white chocolate version of a milk chocolate snack is not innovation, neither is a bacon flavoured popcorn snack. And consumers are increasingly happy with the edited choice that an Aldi or Lidl gives them. So, manufacturers need to take a long, hard look at themselves before expecting retailers - or shoppers - to protect their margins.

Of course, this skirmish will sort itself out. Some of the off-balance ways of meeting halfway are now closed following various financial scandals, but you can be sure that Tesco won't want empty shelves and neither will Unilever want to lose that many distribution points. And some poor Category Manager is going to get a kicking at their next range review!

Asda Keep On Spinning As The Ship Sinks

2015-05-20T18:30:00.000+01:00

Regular readers, if there's any left since I stopped blogging so frequently, will know I've long been critical of Andy Clarke's leadership of Asda.

As he is forced to admit that their performance is below par, even by the low standards being set by the Big 4 these days, all the years of spinning to try and claim that Asda is a viable strong and growing business are coming to an end. Surely?

The alarm bells really started ringing when the over-active PR guys at the Green Pleasure Palace started highlighting double digit profit growth which seemed at odds with their, at best, stagnating market share being shown on Kantar data. As Tesco have spectacularly shown this year, chasing only the bottom line is a dangerous and inevitability futile task in grocery retailing. That's been true before the discounters arrived on these shores as a handy scapegoat. Although I can't help but wonder how much of that profit growth was from the decision to ditch their famous "end with a 7" pricing policy and decide to end with an "8" - the number once described by Darren Blackhurst as "fat and unappealing".

Unlike Tesco, Asda neither has the reach in terms of shops nor the same level of general goodwill that Tesco used to enjoy from the public. Despite the pictures of smiling, happy, and sometimes dancing, colleagues pumped out around Asda House in a way that North Korean State TV would be proud of, the reality in stores is generally the opposite. Undertained, poorly motivated and badly led colleagues usually lead to at least one piece of bad service on every visit. I can't think of any other retailer where I'd see a department manager effing and blinding to one of his team on the shopfloor that he didn't have enough department hours to fill the shelves that week.

Andy Clarke's most famous spin is that Asda "don't do gimmicks". Well, unless you count putting up a 97p bucket to £1 to get it onto a promotion end as they did in 2008 because it's a "round pound". Or Rollbacks which Asda insinuates to its customers are permanent but are generally 12 week promotions. Or the biggest gimmick of all, "Asda Price Guarantee".

Again, my disdain for APG is well documented - not inclusive (not everyone has printers at home), not instant (next day) and, largely, not actually true. They are often cheaper, usually through clever basket manipulation about what counts as a fair comparison or not. Even then, rarely 10%, so APG is basically a targetted coupon given to every customer who spends enough money and has a printer. It keeps some punters coming back, so fair play then.

APG reminds me of the Grocer33 mentality of the High Noon meeting which used to happen (I won't say it still does as it's now 6 years since I escaped from Asda, but given Clarke's obsession with Asda culture, I doubt it has changed!). Senior managers would be castigated on any week that the G33 had gone to a competitor. All long-term pricing strategies were out of the window by mid-afternoon to get the pricing in line. If only they had that level of dedication to real customers!

Clarke is tending to blame discounters for the performance, back in November describing them as a "shockwave" in November last year. Must have been a shock to a man who was COO of a business that tried an anti-discounter format back in 2006 (a Mr. A. Clarke, possibly a relation).

Asda - who in 2008 were saying "this is our time" - have a fundamental problem which Andy Clarke has spectacularly failed to tackle; what are they here for? They gave up attempting to be a true mass market retailer when they dumbed down their ground breaking 3 for £10 wine offers and embarked on suicidal less-is-more ranging strategies. Asda is only about price and people now tend to believe the less dogmatic and thereby seemingly more honest pricing policies of Aldi and Lidl.

Their stores have ceased to be relevant - there's been some great work done on George and, to a lesser extend, in General Merchandise, but their food halls are still deeply unappealing places which really don't showcase the product well. It is a pity as they do still have great bakeries (second only to Morrisons in my opinion) and their counter offers continue to be strong. But why would you go to a larger Asda store to see a shrunken range merchandised not too disimilarly to an Aldi when you could go to an Aldi? Oh, and Aldi staff seem to be way more committed to their cause than Asda do.

Asda need to watch out - Sainsburys continue to close in on the number two spot, while Morrisons aren't likely to carry on as a lame duck once Potts and Blackhurst get going in Bradford. Meanwhile Aldi and Lidl are bullish and creating more space for General Merchandsise which further erodes the need for Asda.

Clarke better hope and pray that George don't have a bad season in the coming year - that could finally end his lacklustre tenure.

When Your World Is Shrinking, Grab What You Can

2015-04-10T07:10:00.000+01:00

The reaction to the latest Kantar market share data says quite a lot about of the mood of the industry at the moment.

A couple of months back, JS beating Asda into second place got brushed under the carpet, but this week’s reaction to Waitrose being overtaken by Aldi was everywhere.

The latest Kantar market share data has the big 4 still controlling 72.8% of the grocery till roll, down from 77.9% in December 2009, and trending slowly downwards.

This is still a huge chunk of the market, yet they seem to have stopped trying to really compete with each other and are instead chasing the bottom 10% of the market. I’m increasingly of the belief this is absolutely mad and they are, in effect, signing their own death warrants.

In my old job as a supplier, a buyer from one of the big 4 had the inevitable “how can my category beat the discounters?” discussion with me. He caught me in a fairly relaxed and candid mood. “Easy,” I said, “reduce your store space by 70%, thin out the range, remove all but a handful of branded SKUs and focus on Private Label”. It was easy to say this, even though I represented a branded food manufacturer, as I knew their entire business model was based around funding from branded manufacturers. Of course, the sledgehammer of customer-led ranging that is “SKU Rationalisation” is well advanced, so it looks like they are intent on destroying themselves from within.

I still maintain that we are largely a nation of snobs when buying our groceries. We like choice, we like nicely presented shops. The mults are trying to replicate the opposite in an effort to chase down a small part of the market. Even if Aldi, Lidl and Netto pick up 20% of the UK market – why wouldn’t you just try and ensure that you grow your share of what’s left? Surely it’s easier than taking them on at something they do really well? This is where we come back to Asda’s failure to capitalise on market conditions. They are known for price – someone should let them know that we GET that. Price gets you in, but the trick is to offer people the chance to trade up.

This is what Tesco used to be the masters at and Asda have the mechanics to do – Extra Special is a great premium brand, the concept behind Global Buying was solid – but they then ruin by trying to pretend they’re a discounter. This isn’t the first time they’ve done this – they attracted in lots of more affluent shoppers with their 3 for £10 permanent wine deal in the 2000’s, then annoyed them by taking the SKU count down by 15%!

But will someone break out of this herd mentality? Even if it is to try and take on the other growth that’s happening in the grocery market at the top end of the market! Waitrose are having the easiest ride of all. They aren’t a great supermarket with a fairly dull shopping experience and poor mid-market choices in range. Yet somehow, they’re being left alone to grow unchecked. OK, there are some targeted “upmarket” ranges being adopted by retailers with a hold on demographics, but it’s brand positioning that pulls people in that demographic in, not stocking five different types of balsamic vinegar. And if the big 4 are too obsessed with screaming about price and value, that’s not going to work.

Just targeting your range at the bottom part of the market is a self-fulfilling prophecy. It’s the kind of mentality that led Asda to only offer a Smart Price option for some commodities in their small stores some years ago. If you’re not going to be a pure discounter, you have to offer customers the opportunity to spend more and trade up. We’re in danger of forgetting that.

The big four need to accept that their pie is smaller than it used to – to stop it getting even smaller, they need to start getting back to taking lumps out of each rather than obsessing about an enemy they can’t do anything about.

"Sod This, We Give Up" Announce Tesco

2014-08-29T08:42:00.000+01:00

Today's profit warning wasn't really that surprising and an initial haemoraghing of the Tesco share price was probably exaggerated by quite a jumpy market. However, the accompanying announcement about a scaling back of IT and store refresh projects is a worrying development for the long term future of Tesco and could signal the end of true mass market grocery retailing in the UK.

The store refresh programme was always ambitious and, as I've pointed out a few times, it was hard to see how a load of wood cladding and wicker baskets could improve the aesthetics and sales of much of their older estate. An accusation that could be levelled at Tesco was that they were focusing too much on the easier stores which weren't in that bad nick to start with or were more likely to deliver some tasty results for the city to munch on and keep the shareholders off their back for at least one more quarter.

Nowhere has this been more stark than their approach to their High Street/ City Centre Metro format. Here they have turned out some spectacular, cutting edge stores - but it's easy to do that in locations like Tooley Street, Canary Wharf and, most recently, Hammersmith. But these kind of stores do no make up the vast bulk of the Metro estate - how would these initiatives work in Stretford, Halifax and Margate? The ambitious programme that established the Metro format between 1999 and 2001 refitted all but a couple of stores, bringing a high standard of store onto over 170 High Streets. There has been no indication of any plan to repeat that feat despite the fact that it is these stores who are in the front line in the battle against discounters and pound shops.

But why would a savvy retailer like Tesco ignore huge swathes of its estate? The answer lies probably in the business culture that we now have which is focused on delivering healthy quarterly numbers to appease the city. The fact that grocery has been, and always will be, a business that benefits from long term planning and thinking, is now forgotten. Arguably, the lack of close scrutiny on Asda has helped them get away with doing very little and reaping some benefits now as they've also not been pressured into making short term decisions to grab a quick buck.

If cost cutting is a necessity, they should perhaps look seriously at a nuclear option involving store closures. Running a store is an expensive business and as a result of their massive expansion, the return on space is getting painfully low. An Extra taking in a £1m/week costs not much more to run than an Extra taking £400k/week. And you don't need 5 extras in 3 mile radius (as we have in East Manchester now). With a huge estate, the support services are clearly stretched. It also makes their dependence of making decisions using DunnHumby less viable as the data is based on lower shopper counts when you get to the granularity they now work at.

The business overall needs to get simple again - they owned that word once. They changed the aspiration for mass market grocery. It was more than "all things to all men", it was offering the same choice to all. Now, the obsession with understanding customers to an incredibly detailed level means that they're taking that choice away from many. The idea of some products only being available to customers in a specific demographic is bizarre and not why people used to love them.

The great shame is that no one wants to replace that role in the market - most are engaged in a race to the bottom, with a couple (plus the "Local" movement) looking to cater to only those who can afford choice and service.

Mr Lewis - please prove me wrong....

Keep Your Enemies Close…

2014-07-17T11:29:00.000+01:00

Once I’d stopped laughing at Asda after Sainsbury’s announcing a joint venture with Netto a few weeks back, I started to applaud the move.

Amid the mass hysteria in the traditional mults over the relentless march of the discounters, I’ve been trying to look from a more pragmatic angle. Though clearly the economy and the continued squeeze on shopper’s spending power are driving people to the likes of Aldi and Lidl, the fact that they have become so much more accessible following a fast expansion in sites is also a big driver of their success.

A lot of trends have emerged which point to the increase in the number of Top Up missions. It makes sense really – lots more big shops through the internet coupled with an unprecedented number of grocery stores of all sizes on your doorstep.

In the context of my current job, I was amazed that none of the retailers I work with were considering proximity to the discounters as a way of understanding where the money was going. But when you look at it, even at a category level, there are some very interesting correlations which tie in nicely with the observations about shopper behavior.

For the analysis, I grouped together stores by format and whether or not they had a Lidl or Aldi in the same Postcode Sector as them. The results were fairly interesting, and in some cases, not that unexpected. Smaller stores in poorer areas were bearing the brunt of the impact and significantly overindexing in their share of sales decline. But what was interesting was that larger stores seemed in many cases to be benefitting from having a discounter neighbour. Perversely, it appears that the increased demand for discounters drives footfall to the larger mults who then get a benefit from a complimentary shop.

With this in mind, the announcement this week that the first two new-generation Netto stores will be using dead space in existing Sainsbury’s hypermarkets makes absolute sense. Having a double-reason to shop at the same location is a great idea – it enables “savvy shopping” while minimizing fuel costs. It will also be interesting to see how the Netto brand works in decent locations. At the heart of why I believe the Asda acquisition of Netto was so fundamentally flawed was the fact that the old Netto property portfolio had a dire location strategy. If you are a smaller store, you need easy access rather than being on a retail park, unless that retail park has a great anchor store that will draw in footfall.

That doesn't mean there isn't some risk to the core business - clearly a Netto on the doorstep will take some sales away from the host Sainsburys store, but this will tend to be across lower margin high volume grocery products. With the potential to attract non-Sainsburys shoppers to the site and therefore into the Sainsburys for less mass market products, as well as clothing and general merchandise, the upside should more than account for the downside.

We’ve seen a number of attempts by the old guard to counter Aldi and Lidl – be it competing with tertiary brands (Tesco), pulling the price lever so hard it breaks (Asda) or opening up an upmarket post-industrial format store (M Discount). None of these has really worked, so taking the discounters on at their own game but without damaging your core brand, could yet join them on the scrapheap. But, for some reason, my gut feel is that this is a runner.

And it gives me yet another reason to laugh at Andy Clarke.

I'm Spartacus! or Dalton Goes Large

2014-05-01T17:37:00.003+01:00

Now we’re talking – a proper ding-dong of a price war is underway. For us veterans of the late 1990’s price wars, it’s felt like a cold war over the last couple of years, with the real battles being played out by lawyers arguing about the wording of the price match schemes which have been used instead of actual price cuts.

So far this year, we’ve had Price Drop 2 from Tesco which has felt a bit of a damp squib unless you enjoy seeing beautifully decorated and merchandised traditional market stalls in front of gapy actual produce departments. Co-op have weighed in with a well-designed, but poorly executed, campaign under the “Fair & Square” banner. Asda of course, are always 10% cheaper anyway, which is why I got £10 back off an £80 shop through Asda Price Guarantee recently.

But this week, Morrisons raised the stakes with a wide-ranging selection of cuts across the store. But “I’m Cheaper” is way more and could potentially be a game-changer for the trade, if not for Morrisons.

First of all, there’s the execution. They’ve been working hard towards maximizing impact in stores with the decluttering that has been happening recently. With less clipstrips and the banishing of the dreaded wire bins and manufacturers shippers, any big launch would be given a chance to be seen. And be seen it is – the design is uncharacteristically simple and is consistent across all categories and all forms of POS. But more importantly, it’s landed in one big hit with no signs of it being implemented. I can’t remember the last time I went into a store at 9am of a big launch and saw everything up with none of the store staff walking around with various bits of cardboard and fixings while scratching their heads. Security covers, barkers, wobblers, displays and even hanging boards (and there’s one in virtually every aisle) were all in place. Even Tesco didn’t get this impact when they launched their “Love Every Mouthful” and, although there’s been better execution of “Down and Staying Down”, its scope is limited to the aforementioned market stalls. “I’m Cheaper” touches every single corner of the store. Wow.

But there’s more – can you remember the last time a retailer was so shopper-focused with their message? Usually price cuts are announced with big numbers hoping to communicate the scale. However, to the shopper they sound more like Dr. Evil in the Austin Powers films saying “a beeelion pounds”. Morrisons are talking about the number of products they’ve the cut the price on – “over 1000”. That’s a number shoppers can understand– it’s big, but not so big that they can’t get their head round it. £100million of price cuts might not seem much when they hear about profits of £1bn plus, but 1000 products seems big, especially as most probably don’t realize that there’s likely to be well over 15,000 products in the average superstore.

So far, so good then. But what this exposes is an underlying weakness with Morrisons in terms of their ability to build a modern dynamic retailer. When they do stuff with scale – a price launch, new channels, store formats, etc – they are market-leading in terms of ideas and execution. But they continually fall down on the small category level projects and even relatively normal work such as range reviews. At this level, from a suppliers perspective at least, there feels like there’s a lack of real leadership and this lets the cultural in-fighting between the pre and post Ken-era people in head office take over. Unfortunately, for all the glamour of the big stuff, it’s selling beans and doing it better than the other grocers that makes the difference. You see evidence of this in the M Local and M Discount formats – great concepts, beautiful shops full of innovative details. But the ranging is terrible – speak to the buying teams and most deny any knowledge of it, and even less interesting in trying to sort it out.

I have a real soft spot for Morrisons – I like their attitude, I like the fact they’re trying new things and they’re certainly the only ones trying other things as well as price to battle the discounter threat. But until they resolve deep-rooted cultural issues internally, they will continue to struggle. Time will tell if this latest initiative works – the “stonking deals” activity in the Christmas run-up did nothing for them, but this is a whole different affair. I wish them luck and also hope to see more great big ideas coming out of Bradford as long as Dalton can hold on.

Tesco Bottle It and Pay The Price

2014-04-16T20:24:00.001+01:00

About 18 months ago, it felt that they were starting to get back at their best, with new store concepts such as Watford, Chelmsford and Tooley Street once again proving that their detractors in retail do so out of fear and envy rather than the pseudo-local/ anti-big rhetoric they spout.

A Tesco who hadn't seen their leader lose some of the best brains in retail under his tenure wouldn't have bottled it, but here we are in a new and scary retail environment seeing Phil Clarke looking like a late era Roman emperor ignoring his empire's problems and blaming everyone but himself. I'm amazed there hasn't been a Downfall video appear on YouTube featuring Phil Clarke's words dubbed over Hitler's last rant. Actually, Clarke's infamous motivationals on YouTube are getting closer to Downfall - where once he would be filmed in a store, nonchantly chatting in front of a fixture, now he's filmed in his bunker on the first floor of the grey Lubyanka in Cheshunt.

Clarke's allies suggest there were critical flaws in the organistation he inherited from Terry Leahy, conveniently forgetting that he would have had a lot of input into those from his previous roles. The reality is very few big businesses are perfect organisations, with processes tending to evolve or adjusted to meet changing demands caused by expansion or the market changing. What makes a great leader of a big business is the ability to keep all the plates spinning - through trusting his senior team and inspiring the business. People at Tesco would do anything for Terry, they'd do anything for MacLaurin. But for Phil? Well, I can't say for certain as I'm not working for them, nor particularly closely with them, at the moment. But the slipping standards in stores suggest he has "lost" the workers in the same way a football manager is said to "lose" the dressing room.

There is still some pride out there as the picture of a produce fixture tweeted recently shows (see below), but there's also countless examples of pure shoddiness (two examples below!)

You have to question priorities in a retailer that seems to accept these two extremes. I've been saying a while that grocers ignore ambient departments at their peril, but Tesco are continuing to put all their eggs into a fresh basket. Trials of push-merchandising kit will help them move store hours away from ambient to fresh (although I doubt they'll let suppliers off the shelf-ready packaging hook if it rolls out!), but you mustn't ignore the ambient departments. If this area starts to look scruffy, unfilled and unloved then that just makes more shoppers see Aldi as an acceptable alternative, no matter how many different SKUs of pesto you range.

The ambient area has also now been effectively sold off to suppliers with branded POS taking over two aisles, but in a standardised way which allows no sensitive care of a category's or shoppers' needs. And of course, is again liable to poor execution:

Events are also being sold off - Homepride Sauces somehow getting into two consecutive events this year...

Ok, so you might be able to justify "world kitchen", but Big Night In? Really? Expect them to also feature in the World Cup Event too!

This kind of brings me down to ranging and the cult of Dunn Humby that is killing off initiative and retail nouse in the trading departments in the same way that an out of control Support Office killed off spontaneous thinking in stores. I won't repeat my views on big data - you can read a previous blog for that - but the reliance on clubcard data is getting worse and the data is blindly followed, now also by suppliers coerced into buying the Shelf Review Tool. Two worrying facts - firstly, even with the larger samples of clubcard data now used for modelling, it is still dependent on Clubcard, a scheme where penetration never went far over 50% and is painfully low in Express and Metro format stores. Yet, this is still regarded as the best guide - and the appalling ranging in some categories in the smaller formats is testament to this. Secondly, the tool has it's final "need states" set by a supplier. If you have two suppliers involved, both will set it differently to meet their own objectives so it will be inherently flawed. But hey, they've paid their money, right?

Admittedly, the crazy city culture that puts quarterly growth ahead of long term thinking isn't helping Clarke. Tesco had what looked like the start of a pragmatic store/shopper led strategy with clearly defined mission based store formats, but to execute things properly you need a steady team at the top and a fiercely loyal team in the stores. You don't need a leader who comes over as flaky and seemingly powerless against discounters and the insipid yet cosy world of Waitrose. Tesco got to be so big through hard graft, a unwavering sense of self belief, an effortless simplicity of message and near worship of the shopper.

Now it's looking at the Dunn Humby tea leaves at "loyal" shoppers and increasingly desperate attempts to hold onto an unsustainable market share.

As for Clarke, I actually like the guy - he is a good retailer, just a terrible leader. If Tesco get flounced during the summer (massive trading this year with World Cup and Commonwealth Games), then I wouldn't be surprised that he doesn't get the chance to oversee another Christmas.

Moriturus te saluto, etc

Shoppers don't exist in a spreadsheet

2014-03-13T17:30:00.001+00:00

There seems to have been a lot of debate around number-crunching recently, including the need for "big data" to be able to have any chance of competing in today's market. Dunn Humby continue to offer ever more complex models and tools, there's an endless queue of data suppliers at my door and a worrying obsession with getting more data, more quickly and more often.

But does complicated data actually tell us anything? No matter how rich and detailed the data is - and we have lifestyles, life stages, affluence, ethnicity, regionaliy, mission, shopper behaviour and even actual sales to choose from - it's always using historical perform to try and predict the future. Unfortunately, shoppers don't act in a rational and logical manner - if they did, there'd be quite a few thousand less jobs in retail and FMCG overnight. I've worked on many ranging projects from different angles over a number of years and every one has had at least one major oversight caused by putting too much emphasis into the output of a spreadsheet and too little trust of retail instinct.

This manifested itself in being virtually lynched in a trial store in Sheffield for delisting Henderson's relish to seeing a SKU our modelling told us had 4 weeks cover on shelf sell out in 2 hours. Data suggested that a relatively expensive small bottle of fresh fruit call Innocent wouldn't sell while a tiny caffeine-packed chocolate bar called Go-co would, while the reverse was true. That was 10 years ago when data wasn't as all conquering and we found out what would actually work by taking a punt and giving them both a go.

But a reliance on data is gradually eroding the old retailer instinct. Young buyers now just point at a spreadsheet and seem unwilling or unable to take a gamble or even grasp the concept of "breadth not depth" when creating a range. Multiples' c-stores have appalling ranges created by just picking from a list of SKUs not even ranked by sales, but by profit contribution.

And then there's clustering.

On one of my categories has 11 different clusters for a convenience channel in a retailer. Whilst shoppers do clearly shop differently along affluence, mission even ethnic lines, creating a cluster of stores almost becomes a self-fulfilling prophecy and also assumes that everyone within a group behaves the same. At worst, an obsession with meeting a clusters' needs means you reduce the core range which serves everyone's needs. It assumes that because you are from an Asian background, you eat sweeter foods, it assumes that if you live in a lower affluence area that you will only buy the cheapest products and never ever trade up. It assumes because you're relatively wealthy, you want Bolivian baked beans in sundried tomato sauce rather than Heinz originals. Well, it does if you just read the data.

Aldi and Lidl don't use this data, don't cluster and are doing ok without it. They are the masters of identifying a core range and applying it broadly. The concept of the core range elsewhere seems to be lost - do you believe anyone in Co-op actually KNOWS what their core range is after several of various failed format options? Ranging processes have changed - most retailers have moved from a top-down approach to a bottom-up, but there's still relatively little time spent on the smaller store plans. The biggest plans may deliver the biggest sales, but your core range reaches all your customers so arguably should have the most time spent on them. This isn't just about looking at the top performers, even looking at complicated composite ranks - although both things are valuable inputs. It's about getting to know your shoppers, meeting your shoppers face to face, watching them in stores and learning about the choices made in front of the fixture. But most of all, it's about empathy - we're all shoppers, yet we seem to forget that when there's some sexy new charts on a PowerPoint waved in front of us.

Now, I'm no Luddite, in fact I'm quite a geek with data myself. However, I never forget that data alone cannot be used to make good solid retailing decisions. Compared to when I first started looking at formats 15 years ago, the available data is so much more advanced and often genuinely excited. But it is crazy to think we'll ever get to a position where it can fully replaced retail nouse.

That doesn't mean it won't - as each generation comes through more used to data, there's less and less real retailing knowledge out there, not helped by a generation of store managers who are great implementers of centralized plans yet have no ability or training to trade on their own.

Race to The Bottom That Benefits No One

2014-03-09T18:47:00.001+00:00

Woohoo! Cheap milk! Kind of! Farmers moaning, so something must be happening in the world of retail. But, unlike previous incursions in the cold price war that's been going on for well over ten years now, this won feels like we're entering a Dr Strangelove phase, mutually assured destruction and all.

When you consider the catalyst for this latest round, you'd be forgiven for scratching your head. Across the top 4 multiples, there is clearly some loss of market share to the discounters and Waitrose happening, but they are still profitable and stable businesses. In a normal universe, they'd be keeping calm and holding their nerve through these tough times. Yet, instead, we seem to have some insecure CEOs acting like jumpy teenagers. And I would have loved to been a fly on the wall when Andy Clarke heard that the one SKU that probably saved him millions in Asda Price Guarantee vouchers had finally been price-matched!

With the notable exception of Sainsburys, who have so far kept to their sensible policy of doing simple things really well, the other three seem so obsessed with the rise of Aldi and Lidl that they are prepared to go hell for leather into a race to the bottom. And not once, are they seeming to stop and think about their shoppers! They'd need to look no further than Asda to see that suicidal pricing is not working in this new world and, from a growth view, even Co-op seem to have realised that Like for like growth is a much more sensible grail to chase. We have to accept that this weird version of city-driven capitalism demands growth in sales and profits at all costs, but surely only a fool would fail to realize that achieving this solely by adding new space is not a sustainable way to achieve this?

I'm hearing some worrying things come from our retailers at the moment - talk of focusing on the core and driving value may keep city analysts happy with some buzzwords, but the danger is that the incredible choice of products that have been made more accessible to more people over the last 20 years will be removed as everyone tries to replicate the look and SKU density of the discounters. The affluent supporters of anti-"Tesco" will obviously cheer as it will mean the oiks will only be able to get focaccia and balsamic vinegar for bijou artisan stores in nice, twee High Streets, but of course those. It lucky enough to have access to that will be left with endless £1 deals of foods that hit lowest common denominator criteria.

The knock-on effects of a nasty round of price slashing and range rationalisation could be huge. Mainstream retailers depend on extended ranges to manage their margin mix, so proftibility will be hit - this could be a reduced number of store staff. Of course, reduced ranges will have huge implications on manufacturers. Large manufacturers will be able to survive without lower selling products, albeit with some potential lay-offs in their distribution networks and factories, but will really hit smaller companies who may suddenly stop being so vocal in their support of "localism"

Scaremongering? Exaggeration? Maybe, but if you look at what's happening in the last 5 years and then the clear lack of judgement and long term thinking amongst the two Clarkes then I wouldn't rule out movement some way down this path.

I've said it many times before - these are interesting times. Up until now, I've said that I'm glad that I'm no longer on the retail side of things. Now I'm also not so sure manufacturing is such a safe distance either.

A Retail Fable

2014-03-03T14:39:00.001+00:00

Once upon a time, there was a High Street and 3 little pigs who owned shops there.

One day, word came that a big bad wolf was coming to town to open a big new store on the edge of the town. The local newspaper reported that the big bad wolf was a nasty person who’d eat everyone and anyone nearby so the little pigs all went back to their shops to make plans.

The first little pig covered his shop with paper leaflets trying to scare the local people about the big bad wolf. The leaflets were full of confusing numbers with no explanation as well as the word “local” spread all over them despite the fact he sourced stock for his shop from a 100 mile radius.

The second little pig added foreign sounding words to all his products, bought some second hand wooden tables and decided he would only worry about the rich people who lived in the town.

The third little pig, who’d always had had the best kept shop with the best customer service and the best choice of products, did nothing but carry on doing what he’d always done.

The day of the Big Bad Wolf’s opening came and the people of the town talked loudly as they walked to the big new shop.

They walked past the shop covered in leaflets and said loudly “Glad I don’t need to use THAT shop anymore – he never used to say a word when I went in and now it feels like I’m being lectured”.

Then they walked past the posh shop and said “I can’t afford that place anymore”

As they walked past the 3rd pig’s shop, they waved at the little pig inside “We’ll be back in a bit”, they said. And, after they visited the big bad wolf’s shop, they did go back.

Today, only one of the little pigs is still running his shop.

The moral of this story is if you have to wait for a big bad wolf to come along for you to make an effort with your shop, you’re letting your shoppers down. And when that big bad wolf comes along, they’ll remember and then let you down.

Let Them Eat Aldi

2014-01-29T11:16:00.001+00:00

All the retailers I deal with at the moment are concerned with these days is how to stop their market share being eaten away by the discounters. And who can blame them - in the 12 weeks to January 5th, Kantar Worldpanel's data showed Aldi and Lidl had gained 1.3%pts of share compared to the same period in 2013. Combined, they're now at 7.1% market share - bigger than Co-op and with considerably less stores.

I must confess that I've become a convert myself - Aldi in particular is a great store which suits my top-up shopping ways. Their fresh food is good quality and, as a self-confessed Germanophile, I revel in the choice of imported cold meats and schnitzels. For top-up shopping, the alternatives are fighting my way round a 50,000 sq ft (or larger) superstore or a cluttered and poorly ranged c-store (independent OR multiple owner), the latter usually coming along with a price hike too. I've also mentioned previously that I rate Aldi's no-nonsense approach to their own-label products - match the brand or stock the brand if you can't - and this further boosts their appeal.

But, once you get past the basics, they aren't perfect. A bit like TK Maxx, you have to go in with a mindset that you might not get exactly what you want, but you will get something and that it will be a bargain. For example, I do a lot of stir-fries at home and Aldi sell incredibly good value straight-to-wok noodles at around 65p - none of the big four comes close to this price, and not all even bother with private label versions. I can also get soy sauce (though not the light one I prefer), good meat and veg but, I always sprinkle Chinese 5 Spices liberally over my creations and Aldi's small, confusingly mixed-case offering of herbs and spices doesn't deliver anything more exotic than chilli powder.

Discounters are full of these examples, and this is one of the problems facing the big traditional supermarkets. Shoppers who have enjoyed unprecedented access to the best ranges of food in Western Europe in some of the best looking and certainly most organised supermarkets in the world over the last decade are "down-sizing". They are happy to go into a small, cheaply-fitted store with a very edited range and checkout service that prioritises speed over niceties. Actually, on the service part, I have NEVER had a problem at the tills in an Aldi - the staff are consistently friendly, efficient and responsive to changes in queues. I certainly have not heard them moaning to each other about the unfairness of where they work, or a manager on the shopflooring wailing about his hours being cut to his team. If they roll-out self-scan, I bet the voice in the machine won't be as smug either.

Aldi and Lidl's share gains are a mix of "savvy shoppers",who are using them for their core basic shopping needs and using indies and superstores for the "nicer" things, and the poorer in society who are coming to depend on them - largely due to a well-thought out location strategy. This will particularly hurt Asda and Morrisons whose core shoppers are a very close demographic and lifestyle match to those flocking to the discounters. Morrisons probably have more about them to stem the tide, particularly as M Local expands and they move online. Asda, however, have already shot the online bolt and are cranking their one lever - price - so hard it's going to come in their hand soon. I'm hearing about more "value" bays and a policy that sounds like "Less is more" coming back to Asda - policies that lost them middle-class customers in the past and just make their stores look like larger and more expensive versions of Aldi.

Tesco aren't out of the firing line, but they're also battling the High Street discounters. As I've mentioned previously, the High Street lobbyists always conveniently forget the huge investment Tesco have made into High Street sites, mainly through their Metro format but also with some Express stores and also as superstore anchors in town centre developments. Here, Tesco are battling with the likes of Home Bargains, B&M, Poundland, Poundworld, 99p Stores and so on. These guys are hard and fast to compete with. They trade with the industry very hard with all their focus on margin with no handcuffs of keeping shoppers happy through range choice. At best, we have price-marked packs engineered to hit a £1 price point to a set margin, at worst we have short-coded stock and grey-market imports.

Ironically, Tesco and Asda have both run trials in the past that could help them now. In 2005, Tesco setup Metro stores in Sheffield and Edgware as "discount convenience" concepts. This saw a dramatic cut in SKU count and staff and sought to address new insights from deep cover research into very low affluence households. The challenge as always when targeting these shoppers is that the tend to focus on core grocery lines which, due to their high volume status, also tend to have wafer thin margins. The "choice" lines that help create a better margin mix for retailers become far less relevant so you have to look at reducing store operational costs - less products to fill, less staff.

The following year, with more shouting to the media, Asda launched the first 2 of a 200-strong chain of Essentials stores. These own-label stores were an unmitigated disaster with the Northampton store closing less than 6 months after opening amidst rumoured weekly turnover of less than £7000. The concept was sound in theory, but poor choice of locations and an own label offering nowhere near the strength of "Chosen by You" meant the enterprise was doomed from the start.

So perhaps the answer is already out there for the mults, possibly in the form of a new fascia that sets out a stall of a simpler "edited choice" range and a bigger emphasis on own label products. It would be a bold move, however, and you have to question whether any of the current chief execs would take the risk. Asda have the sites most suitable for this with their former Netto stores and a successful implementation could mean they wouldn't need to hide that group of stores' underperformance behind legacy stores roped into the Supermarket banner. I'm sure Tesco could do well too - stores like Edmonton Green which haven't been refitted or rebadged for over 30 years would certainly benefit from a lick of paint to stop their terminal decline. And what about Morrisons? Well, maybe Preston is a step down that very path.

Whatever the answer, the UK grocery scene looks certain to continue in an entertaining way indefinitely. We are seeing the biggest shift in shopping behaviour since the advent of self-service. These interesting times will show us who the best are at adapting.

The High Street Debate aka The New Class War

2013-12-07T14:34:00.000+00:00

The #local hashtag is everywhere at the moment and is rapidly becoming the flag of convenience for the chattering classes who have decided that Tesco aren't de rigeur any more, conveniently forgetting that it was them pouring into the stores from the mid-1990s that made them the most successful retailer the UK has ever, and I'd say will ever, produce.

Numbers are being batted around and money staying in the local economy, warm memories of gran feeding everyone by shopping in the local High Street are being bandied around and everything that is big is surely bad.

Personally, I'm an advocate of a healthy mix of stores and sensibly-sized High Streets. But in an increasingly polarized and bitter debate, common sense is being left a long way behind, as is the idea of community that includes everyone.

The attitude of many pro-Indie/Local lobbyists is that everything needs to be local and small-scale in order to keep money in the local community. A widely varying stat is that 50-125% of every £1 spent stays in the local community compared to 1-43% spent with a mult (extremes taken from Twitter posts of pro-local lobbyists and MPs). Irrespective of the fact few can settle on a figure and even

fewer are willingly to point to any data that can be checks, I have no doubt that shopping locally can keep money local. My problem is that so did the feudal system in medieval times.

Like it or not, multiple retailers provide one of the most consistent, meritocratic and transparent methods of social mobility in the UK. Working in a local shop won't give you the chance to better yourself, to learn skills, become a manager, change your life. That's what Tesco gave me and I owe my current comfortable lifestyle to them taking a chance on a council estate kid with a rubbish degree from a third rate university.

But, of course, this whole debate isn't about people, it's about greed. It's about local businessmen not having to bother with building a good business through graft, rather more about easy profits in nice, pleasant middle class places. It's organic and worthy nonsense and you'll never see these lobbyists worrying about the access of poor people to hand-made Lincolnshire sausages sold from a farmer who travels over 100 miles each weekend to a "local" farmers' market to protect a healthy profit margin. Harsh? Maybe, but this one sided debate needs a more transparent view of the ethics behind it all. As it stands, the indie lobby attitude to the working class estates is "let them shop at B&M"

Retailing is a business. It is not a charity, but when done well it does benefit communities. That can be a sensibly sized mult employing and developing local people and using a corporate community budget or a successful indie getting stuck in with local events. Size means nothing, the quality of the business means everything. I wish the same effort of the lobbyists was spent on finding ways to incentivise retailers to take better shops into poor areas, the places that really do need them, rather than harping on about business rates for boutique stores with huge mark-ups.

Of course, mults are no saints and have become excessive themselves, but they are not in the same league as banking and, as I have pointed out many times, they never shut down a good business.

So, as we await a January of doom and gloom, once again I open this challenge out - will someone with genuine sway in the world please start preaching peace and harmony to get everyone in retail working together for the benefit of everyone?

Yep, I'm a dreamer!

Merry Christmas everyone - hope your tills ring and we all have a prosperous 2014!

When You Aspire To Be What You Are....

2013-11-15T10:40:00.000+00:00

It says a lot about Asda that there is no easy link from their Asda.com homepage to press releases and information about the business. They are a business that is built on spin – whether it be the internal brainwashing of their colleagues or the incredible lengths they go to in the stores planned for Wal-Mart analyst visits. And now, after using the expensive brains of McKinsey to come up with a new strategic 5 year plan, Andy Clarke is revealing his vision.

And to be honest, I’d be asking for a refund from the consultants!

As ever, price is at the heart of their response to the threat of the discounters with a £1bn investment promised over five years to make them 10% cheaper than their competitors and a dig at competitors’ “gimmicks” of price-matching vouchers. Of course, Asda have been “10% Cheaper Guaranteed” for a few years now, but that clearly wasn’t a gimmick. Actually, with them admitting to being 6% cheaper, it was a lie and goes some way to demonstrate their contempt for their shoppers. After all, the Tesco and Sainsbury’s gimmicks give you a voucher on the spot, while Asda disenfranchises those without access to the internet and their own printer when they fail on their promise. In other words, the people who need the cheapest prices can’t get them – this isn’t redefining value, it’s creating natural selection.

When Andy Clarke took over the top job back in 2009, he made a big fuss about the huge strides that Asda had made with the quality of its own label products, relaunched under the “Chosen by You” brand (or “It’s all YOUR fault, deal with it” as I call it). So, why the need to invest another £250million in quality now? Again, those pesky discounters could be to blame! Aldi have a very pragmatic policy towards their range – identify the foods that matter the most to shoppers, try to source a private label manufacturer who can match the quality of the leading brand and then, crucially, if they can’t then go and list the brand itself. This is a real game changer for the traditional mults and is at the heart of why the discounters are very difficult to beat once one turns up in your neighborhood. Asda have made some big strides in their own label offering, although their lack of ranging nouse means that they often create wonderful new niche foods while ignoring the core, in particular on fresh.

I worked at Asda for 5 years, during which time Andy Bond announced 100 Essentials stores, 200 “Market Town” small supermarkets, 200 Living stores and 5 C-Stores. In the end, there 5 market town stores and Living was up to 25 in total. Of course, that’s all in the past, so Andy Clarke announcing 1000 click & collect sites is entirely plausible – well, at least to my former colleagues in Asda House who are still under the spell of the Cult of Asda! They should be given credit for trying with Click & Collect, although my experiences with the non-food and clothing side have been invariably chaotic at store level, while the idea of a grocery van being parked up outside a store is ludicrous when you compare it to the smart little huts Tesco are using. I’ve used the PFS sites in Sale and Leeds and they are “ok”, but nothing to write home about and the store operation seems to be hamstrung by the usual Asda issues with ranging driven by dogma, rather than shoppers and availability. The plan for C-Stores that I mentioned earlier was brought to an abrupt halt just a month after their announcement after the realization that the Asda distribution model is designed exclusively around moving pallets of stock from big warehouses to big shops. I’m sure some improvements have been made, especially with the establishment of the Supermarkets format, but can they really service c-stores? And more importantly, can even their infamously creative store accounting procedures make a shop that just acts as a pick-up point appear profitable to the Bank of Bentonville?

Of course, Asda has a bigger need than most for a dot com grocery offer as it gives a unique benefit of not having to visit their stores. Morley in Leeds has recently had a refit and, apart from some green paint on the walls and black shelves replacing grey ones in the bakery, it’s the same old poor shopping experience with operational efficiency being put way ahead of shopper needs. Pleasant looking, well-lit Health & Beauty fixtures still have top-stocking shelves full of cardboard boxes above and merchandising is designed to hammer home “value” rather than help shoppers find what they’re looking for. The non-food area has been relaid with tangential fixture flows and rather than tempting shoppers in, it now heards them through and makes the admittedly good looking produce and counters area, virtually invisible. If your shops are actually worse than the stripped-down Aldi and Lidl stores, then why would you expect NOT to lose shoppers? If we believe what Asda are telling us about the performance of online and Supermarkets, then it doesn’t take a genius to work out that they’re superstores are failing desperately.

Ah yes, Supermarkets – the greatest spin of all! Andy Clarke has a lot to lose personally if the Netto acquisition was ever to be revealed as the abject failure it has been. The Supermarket format is growing, but closer inspection of the detail generally shows that it is the pre-Netto stores that have been added to the format’s numbers that are driving the performance. These stores, many of which were former larger Co-ops, Kwik Saves and Sommerfields acquired in the mid-2000s are good, compact stores in good locations – so it’s not surprising they are doing well in an environment where increasing number of shoppers are rejecting hypermarkets. Asda apparently had a pipeline for their “market town” stores which would have been a far sounder investment than Netto, but short-termism crept in and they’ve ended up with a poor portfolio of stores which, some might argue, dragged them down into the discounters’ arena.

The last time I offered an honest opinion to Andy Clarke, he turned red and shouted at me, but I don’t let things like that worry me, so here’s MY 3 point plan for making Asda a real success and stopping JS taking their number 2 spot:

1 – Get the basics right – that’s core range, shop standards, natural customer service, availability

2 – Leverage their hero departments – In-store bakeries head and shoulder over the rest, George clothing, Home essentials

3 – Dial down the price message – after 14 years of successfully manipulating the Grocer33, shoppers KNOW you’re cheap and don’t need it rammed down their throat

Of course, Andy Clarke doesn’t need my advice, not do they need proper growth as long as the profit margins keep skyrocketing. It would be nice to see some effort to contribute to a better retail environment though, wouldn’t it?

Asda - Death of A Mass Market Grocer

2013-06-17T19:16:00.000+01:00

In the UK, we just love shops. We like Grocers who give us an experience and give us the chance to feel better about ourselves. Well, we used to - the unprecedented squeeze on household budgets over the last five years has made us seriously consider the idea of discounters and Aldi and Lidl picked the right time to go on a building spree to capitalise.

Asda, a retailer based on one trick only - Price - should have been taking advantage since 2008. A former board member proclaimed at the start of the recession that "This is our time". It's been anything but with a static market share which would be bad enough if they hadn't added over 150 new sites in the same period. Losing share at both ends of the spectrum would make most boards panic, but Andy Clarke has stuck rigidly to the same policy. This week though, in openly declaring a price war against the discounters, he's effectively killed off any ambition for Asda to be a true mass-market retailer.

There was a time, around 2007, when Asda were actually starting to attract ABC1 shoppers, largely through a dramatically improved range of wines and a hugely successful 3 for £10 deal across the category. But these shoppers, a big chunk of the UK grocery market, also demand shopping experiences. They are generally not big fans of soul-less barns - as their desertion of Tesco over the last few years has proven. To be fair, Asda have tried to make their shops nicer - the grey (sorry, "Taupe") walls have gone green and maroon while fridge carcasses have gone black. On non-food and clothing, they've actually led the way by bringing learnings in from their stop-start Living format. But while the new work looks very pleasing in some of the Supermarkets, the superstores and supercentres which deliver the big money remain hideous places to shop. In terms of major multiple refits or new stores of the last year or so - Tesco Bishops Stortford, Sainsbury's Welwyn Garden City and Morrisons St Albans all deliver a great shopper-focused vision of how retailing should-be. At Asda Trafford Park, we ended up with some low MDF cabinets for produce (plus the chilled produce black "maze") and the bakery fixture went from grey to black. No innovation, nothing for the shoppers apart the same tired message of engineered £1 price points.

It must interesting to see what McKinsie's are digging up. I really don't rate them highly myself - they are master in renaming solutions already found within in a business. But, in Asda, they might just work. During the 5 years I spent in the cultish world of Asda House, I worked with some of the brightest and most innovative retailers I have ever had the pleasure of working with. The problem was that inertia and an incredibly political reading of the "culture" at Asda House meant very few of those ideas ever saw the light of day. Often the mantra of "everyday low cost" was heard - certainly more than the question "what do our customers want?"

Well, yes, customers DO want price - and increasing numbers want this above all else. But if you are a retailer who wants to retain the number 2 spot, you can't just chase those customers. For every great piece of work that Asda do that might appeal to more affluent shoppers, for example the Leith tie-up with the ever-improving Extra Special range, going out and shouting out about prices and trying to attract the great unwashed will drive them back to Sainsburys, the expaning Waitrose or the resurgent (store-feel wise, at least) Tesco. For these customers tend to want a great experience - and, yes this is a harsh truth, they won't tolerate a scruffy shop if has scruffy shoppers as well.

Their mainstream competitors are getting it at the moment - all are investing in store environments, extending ranges to create points of difference AND still getting a price message across. You could argue that in times when price is so important to customers, you can assume that they will already find the value - and after about 15 years of "Price Wars" and the various Price Match schemes, they will now make their choice around the other stuff. The small, but growing, percentage who don't care about shops will head to Aldi and Lidl and won't even consider Asda any more. Those who do care, will see the further dumbing down and find somewhere they're more comfortable with.

Tesco Chelmsford - Believe The Hype

2013-06-12T18:11:00.000+01:00

There are some who say "never go back". Well, today I visited the store where I learnt the basics of retail during 8 wonderful years. It is a small, unassuming store tucked away behind a busy town centre in a south eastern county town. And last month, Tesco changed it in a way that makes it completely unrecognisable from the store I left behind 13 years ago.

For my retail alma mater is Tesco in Chelmsford and no, not the big sexy one, but the 30 year old superstore in the town centre. It's already causing a buzz on Twitter and is such that the supplier I work for actually asked me to visit (usually I tell the boss which are the hot stores)

For this is their latest trial concept - Super-convenience. Although its DNA lies with Tooley Street Metro and smaller scale front of store work in Chester, it owes a lot to the Morrisons Fresh Markets. This isn't surprising. as Tesco aren't always the innovators but are always the implementors . That healthy paranoia gives a healthy respect to their competition and they always start with an assumption that others are doing things better than them. This is why it pains me to see the money-draining "pro" indie brigade say you can't take them on. It's a cliche, but really it isn't rocket science - it's knowing your market!

Superconvenience is one of 3 current concepts in the Tesco superstore world and a clear sign that they are finally flexing their greatest asset in their engine room stores - adaptability.

We all think we know Tesco, but unless you're someone in the trade who travels around the country looking at hundreds of stores, your definition of a typical store is your local branch. I recall a journalist having an anti-Tesco rant last year and picking on their identikit clock towers popping up everywhere - a design feature they phased out over 15 years ago!

But this diversity can become an asset if you know how to play it. Asda don't get this - they have a brainwashed belief in the Bentonville mothership vision of the locality reflecting the store, not the other way round. While this does work with genuine hypermarkets (where the store IS a genuine destination), it doesn't elsewhere - Asda regard a small market town store in North Wales the same as their store in the middle of Bury or one on a big council estate in Leeds. Few shoppers are bothered about locally-sourced products, but they are passionate about the right choice of products to suit their lifestyle.

And that's where Chelmsford gets it so right - a clever "for now/ for later" split of the store is intuitive yet still offers temptation to take you round the whole building.

On entry, you can't help but think of Morrisons fresh market - low level produce followed by ready meals and essential dairy on low level chillers with food to go and more traditional counters along the side.The core of the food to go section is a tidy, well organised corner in a pleasant lime green with grey tiled flooring. Even though there was a steady lunchtime stream of people during my visit, it never felt congested - just bustling. And infectious

The food to go offering is attempting that holiest of retail grails - time of day - with a choice of bacon rolls, breakfast panini, granola and porridge that switches to hot pizza slices, salads and soups at lunchtime. By the way, I had the pizza - £1.50 a slice and it was beautiful!

But while this section is matched by Morrisons, where the store steps it on is in ambient - something Morrisons seem to have abandoned once you're past Beers, Wines & Spirits.

Visitors to stores such as Salford, Bishops Stortford and Kensington won't find anything new here but the well-executed simplicity and subtle tricks are well executed. The general merchandise and clothing area - with a blue-grey take on the now ubiqituous wood flooring for this kind of area - is compact and well located at the back of the store. It kind of makes it into the "for even later" part of the store. If you're rushing round doing just a top-up food shop, it's visible but not in a way that makes you resent it by forcing you to walk past aisle upon aisle of stuff you really don't want to buy on that trip.

I'd also like to pray tribute to the staff in the store. From the greeters, the guys on the counters, the guys trying to explain the new car park ticketing system to the people replenishing the shelves - service was genuine, warm and efficient. You could feel the pride in their store and it's one of the most important things to have if you're trying to improve store ambiance. It's not the pretentious "ownership" of the partners in a Waitrose nor the happy-clappy cult followers who work in Asda - it's real, the belief that makes you work hard for your customers and your team. A lot of credit must go to the store manager, who I'd like to extend my warmest thanks to for speaking to me today and coping with an over-excited and emotional retail geek! She's doing a great job with the store, the team and dealing with what must be a constant stream of nosey blokes like me.

I'm loathe to make wild claims, but I think this is as close to a perfect store as you will find in the UK right now. It is the right offer in the right location sold in the right way by people doing things the right way. Is it sustainable? I think so - Tesco's simplicity is there underpinning it and the riskier elements look to be flexible enough to avoid adding uneccessary wastage costs. Tesco stores built in the mid-80's tend to be this kind of size and location, so they could be sitting on a goldmine.

In terms of the competition - JS probably don't need to worry just yet, Asda simply just have the guile or the balls to do any of this while Morrisons - well, they've had their bluff called. If this works, Tesco will be going hell for leather to roll this out and Morrisons will need to match them. Indies? Visit the store - look at the photos. There's EASY stuff to copy for YOUR store there.

Photos to follow

Indies Need To Find A Better Bogeyman

2012-12-01T08:49:00.001+00:00

Apparently, a small group of men in a non-descript office located in an industrial estate in Hertfordshire are currently unleashing an evil plan to destroy every High Street in the UK. I know, it's shocking, isn't it. And having tried to get a small piece of signage rolled out to 150 shops, I'm also guessing it's unlikely.

For Tesco aren't really the bogeyman for independent retailers, no matter what the industry that has grown up "supporting" the High Street claims. One of my old projects at Tesco spent several million pounds revitalising over 150 Metro stores which helped keep High Street and suburban shopping centres alive. The flipside of that particular project was that if the trials hadn't worked, these would have more than likely been shut down. Since then, the Express format has exploded again investing in local shopping areas and making them viable.

Tesco aren't alone - JS and now Morrisons are all investing in High Streets, so why don't Asda get more abuse from the High Street campaigners? After all, their three formats are all anti-High Street locations. Asda Living is staunchly Retail Park based - retail parks are truly horrible and soulless locations which, although being very family-friendly in terms of access and parking, are also very anti-competitive towards new entrants to the market. Asda's core superstore business is about big out-of-town boxes, while most Asda Supermarkets are also on Retail Parks. Hardly great for communities really, are they? And let's face it, their US owners have form when it comes to store location policy.

I won't disagree that Tesco aren't a fearsome competitor and if I was running my own indie grocery store, I know that I'd need to raise my game. Express and Local have changed the face of community grocery, bringing higher standards of shop-fitting, display, and range. Pricing may be a bone of contention, but its more consistent and arguably more transparent. From a shopper's perspective, it's no surprise that they've become immensely popular and forced many an indie grocery to contemplate their career choice.

That's not to say it's impossible not to coexist with a mult c-store on your doorstep. The centralised ranging, although often tailored using local demographics data, will never be as good as one chosen by a local owner. And the supply chain constraints present many challenges that an indie wouldn't even think possible (a "mis-pick" - what's that?!). Joining a symbol or fascia group makes it even easier to compete these days. All the main groups have really upped their game in response to the mults, particularly Nisa who have really stepped up to the Tesco challenge. Whenever I've spoken to people who their head office, they often benchmark themselves against Tesco and sometimes even demand the same treatment as them - after all, they too have over a 1,000 shops with their logo on. It's a fair point, and their change to a national solutions applied locally approach mirrors a lot of the ideas that gave Tesco their hard-won place at the top of the retailing tree.

But it's not just about having the signwriter put a local street name on the front of a national logo - I was doing that with Metro 12 years ago - it's about engaging with your local customers. A couple of months back, I was lucky enough to visit a new Spar in the East Midlands which our Field Sales team had helped open. The owner was doing everything I'd expect - he'd considered the local competition, he'd identified range gaps and he was flexing that local power that the nearby Co-op manager would probably kill for. Whilst in the store, a shopper asked about a particular product - he didn't have it, but promised it would be in the store next time they came in. "Doesn't matter if I can get it through Spar," he told me, "I can get it through the local Cash & Carry". That's local decision making at its best.

But the High Street isn't just about grocery - it's about a broad selection of shops and services from big and small retailers. And this is where I believe there's a much more positive story - in at least, retailers who are great at what they do are riding these current storms and, in some cases, thriving. Being a mediocre or bad retailer will hurt in a downturn - it doesn't respect the size of the business. Look at the empty excess space that makes up High Streets look scruffy and and it's mostly collapsed mults.

I don't know it it's luck or perculiar to Leeds, but the last two places I've lived have had excellent High Street areas. In Garforth now, there's a good Cooplands bakery (which competes well with the Greggs opposite), there's an amazing Greengrocer/Deli which survives in spite of the Tesco at the edge of town and the Co-op three doors away, as does the butcher. Commuting across to Manchester everyday means I'm restricted to evenings and weekends to use my local shops, but even in the even, I don't have to use the JS Local or Co-op as there's an excellent off Rhythm and Booze off license which is very active in community work. And you can't beat the coffee in Baraka - we're clearly not worthy of the shocking brown steam that you get in Costa.

So, if it's not Tesco actually killing off High Streets, and the "campaigners" won't be drawn on Asda. The government has to take a lot of the blame. The effective bailout to property developers infests our High Streets with charity stores, and keeps an unrequired excess of space on the books when it could be put to be better use, e.g. housing, community space. And then there's business rates that will hit the whole industry really hard next year, pushing costs through the entire supply chain. This will raise prices at the till, cut margins and won't respect even great retailing.

If only the industry could stop bickering about "us and them" and focus on this one issue. Mults and indies can, do and should co-exist to keep out vibrant and exciting retail industry alive. We have the best retailers in the world in the UK - let's remember that and get on with selling.

Ambient Needs Ambience

2012-10-30T08:45:00.001+00:00

I’ve muttered about this before, but after visiting the latest wood-covered Tesco showstore in Bishops Stortford last week, I’m going to get on my high horse again.

Trends come and go, but ambient grocery is a constant. The emergence of packaged foods was a key step towards the grocery industry we all know and love now, but it’s never been the sexy end of retail. Whenever one of our grocers go down a heritage route, we see boater-wearing moustached guardians of cheese counters, not the lads in aprons stacking tins. They should – how about the Asquith Brothers cutting out coupons from tins of beans in order to fund their permanent price cuts? It’s part of our history and the reason why most people visit supermarkets, but yet it remains the poor relation.

I’ve now been to all the top 6’s current landmark stores and not one of them seems to have spent more than 5 minutes on their ambient grocery department. This seems a big miss to me – ambient offers some vast untapped opportunities to trade shoppers up through engagement at fixture. With the current dependency on promotional activity on ambient areas, surely an attempt to snap shoppers out of auto-pilot and turn them onto new, unpromoted and higher margin products is a good thing?

All the current effort is being placed on three areas – Fresh, BWS and Health & Beauty. Not long ago, it was Clothing and General Merchandise, but the huge seasonal clearances on these areas suggest that those initially high margins aren’t translating to the bottom line through the cycle. Even George, arguably the best supermarket clothing brand, is resorting to car boot sale style clearances in Asda car parks and my local Tesco stores seem to have a permanent set of rails with marked down products.

Fresh has the same issues. It is an incredibly high risk strategy in terms of generating waste. With clothing, you have a couple of months to let something sell, with fresh it’s a week at best. In my past, I’ve had increasingly irate store managers phoning me up and begging to be allowed to initiate local delists of fresh products following new range launches. And now, amongst the brightly coloured cabinets and segmentation signage, there are yellow stickers everywhere. Bishops Stortford Tesco’s wood-encased over-sized Food To Go area was full of exotic looking sandwiches at reduced to clear prices. Even in what looks a busy Morrisons in Cheadle Heath, the fresh department is littered with clearance items.

Now, I should mention that I work for an ambient food manufacturer these days, so I do have a slight bias against fresh areas. That said, I approach my job with a category view and preach to my colleagues the value of whole store context. Ambient departments have shrunk over the last decade in the dash for non food space and now they are losing space again, this time for fresh. I honestly believe this is wrong for shoppers and contrary to the two-nation trend which is polarizing shoppers into discount and choice camps. Ambient Space can take a certain amount of squeeze – items added to a range to deliver choice tend to be in smaller packs and all but the biggest unit volume products could benefit from smaller case collations to improve space efficiency on shelf. However, in many medium sized stores, losing more space could see more shops heading towards the core. And the core is where the discounts happen and price competition is the most fierce so any gains made on fresh and quickly lost when you add up the potential profitability of the full basket.

To be fair, I have seen some ideas creeping in. Tesco have introduced their goalpost kit into the cooking aids aisle to highlight Herbs & Spices, while Sainsbury’s clever hanging boards with icons indicating locations of the most sought after products, such as eggs and tomato ketchup. Other ideas have not been such a hit – Asda’s “New” bays have been touted around for some time, but unless you have a reliable pipeline of guaranteed hits in a category, they rapidly become a dumping ground for secondary promotions and detract from the aisle as a whole.

The solution in Health & Beauty seems to have been to tap up the big-money suppliers and let them run wild with branding and imagery. I don’t believe this is the right solution for ambient grocery either, but giving the department more personality does have legs. Every category has something unique – this should be celebrated, as should some of the incredible product innovation that has come through over recent times. Home Baking is a great example of this – Asda now have an incredible range of baking products which has actually ousted Toys as my kids’ favourite part of the shop. Shouldn’t they be shouting about that? They’ve got the converted recycling bins full of ice and covered with POS telling us all about how great their fish in – shouldn’t there be some similar inspiration to get people down one of the most unloved aisles in the store?

Even “ethnic” food areas are selling themselves short. POS is used by all the big 4, but it’s very functional and targeted specifically at the ethnicity the food comes from. I was passionate about breaking ethnic ranges out of their target – what foodie of any ethnicity wouldn’t be excited about getting their hands on genuine foods? My Line Manager at Asda thought I was mad for trying to get proper Balti pans into all my stores – yet, my friends were bemoaning the lack of good pans!

I know I’m not a typical shopper – 20 years in retail have destroyed any chance of that – but less geeky friends share my views. It’s all very well getting blown away by a stunning entrance full of gorgeous looking fresh veg and counters. But what about when you turn the corner and start filling your trolley? That’s the missing part – kudos and profits to the retailer to gamble and invest in the dull stuff!

Sanity on Sunday

2012-08-17T15:01:00.000+01:00

Well, it was inevitable really - after a few weeks of relaxed Trading Laws on Sundays, naive industry experts are calling for the change to be made permanent to help the industry. Asda's Andy Clarke has also weighed in claiming his shoppers are asking for it. The fact that Asda is the only one of the Top 5 UK Grocers who don't have stores under the magic 3,000 square foot barrier is I'm sure a coincidence, as was his choosing to talk about this on the day Asda announced sluggish Q2 LFL sales and a clear slowdown from Q1.

So, would an extra 18 hours a week trading really make a difference? Evidence would suggest otherwise - this sign was outside Tesco Seacroft Extra back in July...

And this sign was outside today...

After just one month, a typical hypermarket with a genuinely wide catchment area has already decided that it doesn't need 6 of the extra hours on offer. It's a fair assumption to suggest that the hours at the other end of the day aren't the busiest of the week either.

The fact is that there's already 150 hours of trading available during the week and additional hours on a Sunday can only spell worsening quality in our shops. From a grocery point of view, 24 hour trading has been a disaster for store standards and Sundays provide a brief respite for stores. Overnight filling is still the most efficient replenishment method and should help manage inventory, both physical and recorded. Having to be conscious of customers wandering around restricts a store's ability to really crack on with a big delivery.

From the shopper's perspective, shopping when the twilight crew are about isn't the best experience as anyone who has had to shop an aisle filled with roll cages can testify to. Add in the checkout balancing act between having staff doing actual work and managing queues and you're not looking at the most efficient operation. I recently did a large trolley shop at 6.30 in the morning and had to use the self-scan tills. There was no one nearby so when the carrier bag scales finally gave up under the strain, I was left waiting for help. It was only by chance than an off-duty member of staff was also passing through at the same time and put his over-ride code in. At least that showed me Tesco do have staff that care even when they're off-duty!

I've also heard the libertarian view that government has no right to state when businesses can trade. Free market thinking and deregulation brought us the banking crisis so it's hardly a great starting point for an argument. This is a wonderful view for middle-class managers in comfy ivory towers, but a 24/7 culture puts added pressure on working class families. I absolutely agree with the right to open on Sunday and am certainly no religious person - I remember crossing lines of bible-bashers when my store first started opening back in the early '90s. Justin King has it right when he calls the current laws a "British compromise" and we should be proud of that. The current system guarantees many some down-time, something that's valuable in times like these where we all need to be working hard the rest of the time. There's no extra money to be spent, so what good would an extra 18 hours do?

It's not just the mults, my local Home Bargains has been trading 1 hour extra - last week at 4.40pm, there was me and some very bored looking staff. Busy? Not since 3 love came the reply.

Perhaps we should looking at shortening them, not lengthening them?

Tesco Pride

2012-07-25T06:59:00.001+01:00

Yesterday morning, I had the privilege of walking through the doors of Tesco Prestwich. Perhaps it was the fact that it was a bright sunny day and already warm that was putting me and the store staff in a good mood, or perhaps it was the smell of freshly installed wood.

Yes, Prestwich has been refreshed. For those of you who don't know the store, it has been as grim as the M60 which it overlooks for as long as I can remember. With its location, it used to have one of the broadest geographical spread of Clubcard users in the country and so could be seen as a bellwether store who Tesco.

The refit has literally just finished and store staff were still putting up the signs to proclaim this when I entered. But they were all smiling - I kept looking to see if there was a camera crew filming the latest motivational video as it's not something you see enough of in Tesco, or any other grocer, these days.

As with the Refresh My Superstore programme about 8-10 years ago, the refits are not really radical, but just a subtle updating and some TLC for tired old stores. Prestwich now boasts the usual excess of wood, but also a stunning entrance foyer with a clear Food To Go and Tobacco area, acres of space for the shoppers and a great view into the produce department. Of course, it's only a matter of time before that space gets filled with pallets but we'll all enjoy it while we can.

One of the subtle elements of the refits is the communication. Posters proclaiming things like "Thanks For Not Changing Your Store While We Changed Ours" hit good notes with shoppers, and having a big sexy foyer display with a photo of one of the store's own managers on it really does personalise the experience and place the store back in the community.

Most retailers and retail-geeks will know the package for the refits now and there's no evolution of note in Prestwich, but as Carrefour showed with their stalled "Planet" programme, it's one thing to land a great trial but rolling out can be harder. I've worked on a roll-out with Tesco - 150 Metro refits in 18 months - and its tough, so I can appreciate just what Tesco are doing with this current programme. What must be worrying their competitors is that it seems to be a reawakening of the "machine" - and key to the machine, as always, are its people. And people seem to be making a difference again.

As a walked around Prestwich, I got the same buzz off the staff as I did when I visited Hertford and Barking stores not long after their refits. A real sense of pride is creeping back into Tesco - there's been a few years of negativity flooding through the business with increased centralisation, a new generation of store managers trained to implement rather than trade and, crucially, shops that are opened and left to fall apart. A few miles away from Prestwich lies a former concept store in Irlam and there's great evidence of what happens when you don't regularly revisit and update your shops. A refit gives the staff something to believe in - working in shops is hard, always has been, so you need a good environment to work in and a shop that your proud to be a part of.

But will this be enough? It will certainly stop more shoppers leaving to other retailers, and word of mouth is still powerful and could bring back some lapsed Tesco shoppers. Of course, there's a growing "big must be bad" cabal fueling an "Anyone-but-Tesco" mentality and better shops alone will not fix that, if anything. However, its a very good start and the gusto with which Tesco are tackling their stores must be causing worries in Leeds, Bradford and Holborn.

This is just any Deja Vu...

2012-07-13T07:15:00.000+01:00

Do you get the feeling we've been here before with Marks & Sparks?

As you all know, grocery is much more my area expertise than General Merchandise. However, I do occasionally shop at M&S and this is how I see its latest woes.

Their last big recovery was driven by simple shops. They took out loads of rails, gave space back to shoppers and, for the first time that I could remember, they actually had an enjoyable shopping experience. However, over time, rails have come back in and the old habits have come back.

To the casual shopper like me, the stores are incredibly hard to navigate again. And its not just extra rails this time, its stands with bandwagon jumping tat on - how many people will suddenly feel the urge to pick up a tin of Jubilee Shortbread when they're trying to find socks? Could the solution to their current trading issues be as simple as taking rails out and letting the shops breath again? The "if we build it, they will come" school of thought in retailing is long dead, yet M&S seem to have missed the obituary.

With food, the growing importance of the Simply Food c-store format has created a cultural shift in the way M&S approach food - but some habits have died hard. While you can get away with constantly changing the flow of a food hall in a department store, it's a retailing faux pas to do that in convenience where shoppers depend on "muscle memory" to get in and out quickly.

It's the opposite on range though. When Tesco were benchmarking ready meal quality against M&S, the trouble was their constant innovation. That seems to have slowed right down as has the pace on sandwiches, another area when a constant level of change was actually a big draw for regular shoppers who'd otherwise get bored with the same selection week-in week-out and head to other shops in search of newness.

What they have got right with Simply Food though is location and this should them up well for expanding Click & Collect. This should come natural to M&S as one could argue that their "Collect by Car" schemes that they've been running for decades was a forerunner of Click & Collect principles.

The next 12 months will be critical for M&S. Having had a previous slump still in the memory, it is hard to believe that their loyalists will be forgiving for a second time, especially as people like Next have kept their "generation" of customers to almost become more M&S than M&S. Bolland has to get back to basics and quick - who are his customers, how do they want to shop and how can he make the shops simple again.

Bricks, Clicks & Cars

2012-07-10T22:57:00.000+01:00

Click & Collect is THE buzzphrase in retail at the moment, and it shows no sign of abating as the focus moves onwards from non food to grocery.

The concept is well established for non-food and clothing now with Tesco Direct counters even in Metro stores, Asda offering it from the previously under-used George counters and Next pretty much driving their business from it.

Grocery is still in its infancy, but Tesco now have 45 stores with its little wooden (obviously) cabins in its car parks and Asda are trialling it in 6 stores. Based on what I have observed in Asda’s Leeds Killingbeck store, they are opting for a lower cost option of painting some lines in the recycling bay near the petrol station rather than a full cabin solution. Whilst this is arguably a sensible approach while they try to prove the model, it does seem to lose a bit of the point when you see the orders being driven from the store in an Asda.com van.

Worryingly, this trend is being led by French retailers, perhaps showing that 15 years of constant price wars have finally knocked the innovative streak out of the UK industry. Auchan, Casino and LeClerc have all got "un drive" solutions which, at their extreme, are effectively dark stores with a place for cars to pull up instead of delivery vans. These have really proven popular with French shoppers and could be part of the reason why Carrefour’s much vaunted Planet hypermarket concept has stalled. Carrefour themselves are offering Click & Collect through their very credible “City” urban store format.

The idea is almost perfect. I'm sure I'm not alone in getting frustrated waiting 1 hour 59 minutes into a delivery slot before the man in the van turns up smiling as he tells me there are 8 substitutions. Click & Collect gives you the full benefit of internet shopping – the easier ways to find the deals, the lack of other shoppers getting in your way, etc – but gives you control of exactly when it gets to your house. And it gets you out of the house, so when you have the inevitable out of stocks, you can do something about them.

I'd love something one stage further where you could order the bulk online and you pop in for the stuff you want to pick yourself and add it to the online bill, paying only once. You could also imagine a hybrid store with all dry grocery, frozen and non-edibles pre-ordered and packed for you while you go in to get your hit of retail enjoyment as you browse fresh food and maybe select some wine. The ultimate modern shopping experience? Maybe, but I won't be hanging around waiting for it to happen.

With all these developments, it brings us to the age-old question of Ocado. Its very likely to take more online share away from them, but these new ways of accessing online services are often going to be incremental to the existing market. Of course, there's no reason why Ocado could not create its own "un drive" service attached to its existing dark stores. Very little investment and suddenly access to a whole new group of customers. A little bit more investment and you could have some small portakabins served by the depots to quickly increase coverage. Far-fetched? A couple of years ago, you'd have said the same about the French standalones!

Our High Streets Are Becoming Yellow Brick Roads

2012-06-21T18:57:00.001+01:00

You know the story of "Wizard of Oz?" - a group of disparate losers band together, pulled together by faith in sham guru? And that sham guru somehow keeps the naming rights?

As the Minister For Portas proudly proclaims that there will be a second wave of "Portas Pilots", the media-friendly reality TV star has to deal with a PR crisis in Margate. It is a real pity that the governments attempts to revive our High Streets is being dragged down to this level, but when you see an "expert" turn a presentation to a government committee into a public pitch to a television company, what do you expect?

If I were Grant Shapps, I'd be a bit worried. If Mary Portas wasn't such a darling in the press, I'm sure they'd be pointing out that her forthcoming TV series is a serious breach of the Civil
service Code. OK, so she's not on the government payroll, but her report and subsequent puts her into a special adviser bracket, and directly profiting from government work in this way is at the very least incredibly unethical. And that's before the alleged threats to Margate.

Despite the recent problems government ministers have had with special advisors (and indeed people who write for newspapers), Mr Shapps has just let the bandwagon (or should that be gravy train?) roll on. By the way, I have publicly challenged him on this issue via Twitter, but have been roundly ignored. I'm open to giving him a right to reply but not sure if he will have time between TV appearances.

One good thing that has come out of this has been unifying councils and retailers, albeit as they scramble for the pitiful sums of money on offer. As in
the "Wizard of Oz", the main characters didn't actually need the guru as by working together, they had already achieved what they wanted to.

Councils and retailers should have been working together already anyway. Retailers shouldn't be in awe of someone who has proved that, with a nationally aired prime time TV show, you can open a shop - they should be looking to be the best they can be. That's what Tesco do, there's nothing stopping them.

Meanwhile councils should be taking fully holistic views of developments - is the extra space needed? What happens to displaced units? Is there enough parking and transport links? Rather than the developer pay for a new roundabout and some hanging baskets, could they fund a park & ride?

The answers are all out there. Our toes have great retailers, big and small, there are great ideas out there like Independents Day (4th July - go support your local indie!!!). Every retailer can become their own guru - every town just needs a couple to work together. And will TV exposure make a difference? Surely winning back the local people who are driving past currently will be enough! Unless of course it's your town that has the outrageously camp guy or bimbo who the TV company give unequal airtime to. And lets face it, they won't hang around too long as they'll be on the next "Celeb Big Brother"

So High Streets of Britain, beware of false gurus - roll up your sleeves now and get on with becoming great! It's in YOUR hands!

Medicinal Compound

2012-06-20T22:13:00.000+01:00

It was a quiet week until yesterday. True, there was a bit of speculation about Morrisons and Costcutter knocking about, but there's just speculation about that. No, yesterday saw a multiple story splash on the front page of the Retail Week website under the banner of "Deal of The Decade"

Yes, ladies and gentlemen, in these unprecedented weird times in retail, where we're all uncertain as nothing we used to know is true any more, the upcoming merger of Walgreens and Boots is about replace our old universe with something infinitely more complicated.

Am I getting carried away? Is this just an old retail geek getting over-excited? Well, it wouldn't be the first time, but there's some real beauty in this deal.

Walgreens are a great business - their model was looked at a while back by Tesco and we incorporated some of their concepts into the Metro format. The term "drugstore" is very different from a UK style "chemist" with BWS and a bigger food offering.

Looking at a recent IGD store visit of a flagship Chicago store, you can see how Boots might want to bring some of the concepts into their UK estate. Boots have managed their stores very well over the last few years, bringing in on-trend concepts at the right time and, as their recent decision to scale back on in-store photo labs showed, knowing the right time to exit.

But to get continued growth, they will need a new stream of ideas. "3 for 2s" on health and beauty have been copied by the grocers successfully while their famous Meal Deals have become an industry standard. They have plenty of space to play with and generally have great locations for their larger stores (the single most important factor for a successful High Street store!), so why not use new experience in the group to take the fight back to the grocers? Although Tesco appear to be regarding Metro as a focus again, only Iceland, Waitrose and Co-op are serious players in High Street locations and finding a point of difference against them shouldnt prove too difficult.

I should point out at this point, that I can't see any of this happening until much further down the line. There's so much in terms of product and supply chain to get through first and I would expect to see some similar to Asda's Global Buying Initiative to be replicated with multi-national brands. However, there's a lot of potential in this move and I get the feeling we're not going to get bored of talking about it for some time.

"New" Tesco - First Impressions

2012-05-02T20:50:00.001+01:00

I'm in the middle of a UK Tour of stores, but amongst the stores I visited today were Tesco in Hertford and Barking - both recipients of the new refresh treatment - so I think that warrants jotting down my first impressions.

The common theme across the store is wood - and lots of it. The totems outside now have a wood surround, the trolley bays are wood framed and I'm certain that Costa were only the nod as the cafe supplier as they have wooden floors.

This is of course not an original idea, and the counters run is uncannily similar to the latest Sainsbury's stores.

However, Tesco made their name by fretting over details and the big "Hello" sign that greets you at Barking (see pic) is testament to that. New benches, ornamental trees and another big "hello" around the entrance are all wonderful little features that put you on a good frame of mind as you enter the store.

Given that Hertford was set up for the press, I was expecting more and must admit to being largely disappointed. The store was "ok", but then so was the unrefreshed store I had visited in Hemsworth earlier in the day. Part of the problem with Hertford is that it has no power aisle due to the shape of the building. This results is long gondola runs - thankfully without top-stock shelves - which in ambient grocery look quite dull and get no true benefit from the new paint on the walls. A large number of stores built in the 1990s have this configuration and a solution will need to be found to resolve this problem.

Barking was a different proposition altogether - the space of the power aisle gives the shopper the full benefit of the new colour pallet. I know this store well from my days at Tesco and there seemed a real buzz with the store staff that I'd not seen for a while. Giving their store teams something to be proud of again is really valuable and I hope it can be replicated.

As a side note, there's also a real buzz around the new Everyday Brand with store teams I have spoken to. With products like the cake in the photo, I'm not surprised. The speed at which blue stripes are disappearing is phenomenal and they have already overtaken Asda's rollout of the new Smart Price brand.

Again, this is giving store teams things to be proud of. Store Managers who are proud of their store and their products are set up for success. From what I've seen today, rumours of Tesco's death are grossly exaggerated