SLR February 2016 by 55 North

Plant the right lines on your shelves.

Victory for local store in Aldi fight | Preparing for Easter | Innovative retailing in Glasgow

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FEBRUARY 2016 | ISSUE 154

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DAVID MARTIN

Shops shouldn’t be the target for anti-sugar brigade

INDIE: 1 ALDI: 0

George and Kathryn McCusker’s lengthy battle with Aldi ends in victory as discounter is denied planning permission.

EASTER

Your egg-cellent guide to Easter 2016

DAN HOWELL

A new look milkman

There’s still time to enter the 2016 SLR Rewards! www.slrawards.com

February 2016

Contents

Contents ISSUE 154

NEWS p6

p10

p12

p20 p22

Minimum alcohol pricing breaches free-trade laws The Scottish Government’s proposal for minimum unit pricing on alcohol is a contravention of EU free-trade laws. Sugar tax could be on cards The Board of Food Standards Scotland has accepted proposals on measures to improve the national diet. Scotmid leads the way with member app The convenience chain has become the first UK consumer co-operative to launch a mobile app for its members. News Extra Retail property values on the rise Average business property prices in all sectors once again increased in 2015. Product News Mackie’s at Taypack pops up with new snack range and one-brand strategy for Coca-Cola. Off-trade News Diageo and ABInBev to publish nutritional information on products, and new alcohol limits.

INSIDE BUSINESS p24 Opinion David Martin The Head of Policy and External Affairs at the SRC discusses the nation’s poor diet and what this means for the convenience sector. p26 Market Research Sign of the Times Ensure your store stays ahead of the game by keeping up with the latest consumer trends and habits. p28 Trending #xmassales We ask retailers how their sales were over the festive period and how they plan to keep sales up in 2016. p30 SLR Rewards 2016 As we launch this year’s Rewards programme, find out how you can enter, and what great prizes are up for grabs. p32 2 Minutes of Your Time Dan Howell Talking milk with Müller Milk & Ingredients. p34 2015 Rewards We catch up with more of our Reward winners. p38 Profile Mani Dhesi’s cost-saving success story. p40 Woodlands Local The latest from Woodlands, including updates on our new loyalty scheme. p48 Hotlines Wrigley adds a new Skittles Tropical, limited edition hot cross bun popcorn, and new flavours from Walkers. FEATURES p50 Easter Easter remains one of the most important events in the retail calendar, but the challenge for c-stores is differentiating themselves from supermarkets. p60 Breakfast With a move away from traditional breakfast products like cereal and toast, the breakfast category is changing and retailers will have to be savvy to maximise this growing trend. p64 Hot Drinks Keep your sales steaming hot with our guide to hot drinks. p68 Sharing Snacks Sharing packs allow retailers to cater for specific shopper missions such as big night in.

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ON THE COVER p16 Aldi has been refused planning permission in Hawick. Are we seeing the beginning of the end of its growth?

FEBRUARY 2016 | SLR

News ALCOHOL EU court says MUP breaks laws on free trade

PayPoint sells Online Payment businesses PayPoint has sold its Online Payment businesses (PayPoint. net and Metacharge) to Capita for £14m. Dominic Taylor, PayPoint’s Chief Executive, said: “In line with our strategy, we are pleased to have agreed the sale of our Online Payment businesses. We announced our intention to sell our Mobile and Online businesses at our full year results last May, in order to focus on multi-channel payments where we have retail networks, to concentrate on our best prospects for future growth. “We believe that Capita is a good owner to take these businesses forward and I would like to thank the management and employees for their contribution to PayPoint and wish them well.”

GroceryAid introduces apprenticeship grant GroceryAid has opened up applications for apprentices looking for extra financial support while undertaking

Minimum alcohol pricing breaches free-trade laws, says court The Scottish Government’s proposal for minimum unit pricing (MUP) on alcohol is a contravention of EU freetrade laws, the European Court of Justice (ECJ) has ruled. The issue now returns to the Court of Session in Edinburgh, which had requested the ruling from the ECJ. However, illustrating the complexities of the ruling and the proposed law, both opponents and supporters of MUP welcomed the verdict. “The Court of Justice considers that the effect of the Scottish legislation is significantly to restrict the market, and this might be

avoided by the introduction of a tax measure designed to increase the price of alcohol instead of a measure imposing a minimum price per unit of alcohol,” said the ECJ. The ruling laid out that MUP could only be justified on health grounds under EU law if it proved more proportionate and effective than general taxation. “Although the imposition of a minimum price per unit intended to increase the price of cheap alcohol is an appropriate means of reducing the consumption of alcohol, a practice such as that adopted in Scotland is not justified where it is possible for health to be protected equally effectively by less restrictive tax measures,” the ECJ added. Retailers could still set their own prices and be in competition using taxation, but the proposed 50p MUP on alcoholic drinks would be a restriction on free trade. Scottish Health Secretary Shona Robison was cautiously optimistic in

the face of the ruling: “While we must await the final outcome of this legal process, the Scottish Government remains certain that minimum unit pricing is the right measure.” She maintained that MUP is the most effective mechanism for tackling alcohol misuse and reducing the harm that “cheap, high-strength alcohol causes communities”. The Scotch Whisky Association, which has spearheaded the legal challenge against minimum pricing since the Scottish Parliament voted in favour of the measure, welcomed the news. Chief Executive David Frost said: “The court has confirmed that minimum unit pricing is a restriction on trade, and that it is illegal to choose MUP where there are less restrictive ways of achieving the same end.” However, Paul Bartlett, Head of Corporate Relations for Tennent’s owner C&C Group, saw the decision as a “useful step on the road to introducing MUP”.

training in the grocery industry. Working closely with the Food and Drink Federation and The National Skills Academy,

DAIRY Wiseman has a new name as Dairy Crest business is incorporated into the company

Müller out to shake up milk and ingredients

GroceryAid aims to support a number of apprentices by offering up to £520 per year. This can be used to help with costs such as living expenses, accommodation, travel, study material and equipment.

Co-op gives good causes £750k boost More than 800 good causes across Scotland are set to start the New Year with a boost to their fundraising after “bagging” a share of the money raised through carrier bag charges and sales in Co-op food stores. Successful groups have been notified, with grants of up to £2,500 being distributed over the coming weeks. The Co-op is distributing over £750,000 after calling on Scotland’s local causes and organisations to apply for funding in order to make a difference in their

Müller Milk & Ingredients can play a major role in invigorating and revitalising the UK’s fresh milk and dairy ingredients sector, according to its Managing Director, Andrew McInnes (pictured). But the new business, which is being created by combining the dairy operations of Müller Wiseman Dairies and Dairy Crest, must integrate with pace to realise its potential, whilst continuing to maintain its focus on serving its customers,” said McInnes. “We have the opportunity to build something special in the UK dairy industry with real benefits for customers, colleagues, farmers and suppliers,” he said.

“It is important to recognise that the status quo, particularly within the fresh milk sector, was not working and we must therefore identify and make the changes and savings required to build a combined business which is sustainable, successful and vibrant. “We will listen to our colleagues, customers, farmers and suppliers so that we can validate and refine our plans and estimates based on accurate information. Our commitment is then to communicate the resultant changes and improvements we need to make clearly and in a timely manner. “Our aim is to become a successful milk and ingredients business as quickly as possible. To do this we will prioritise the delivery of great products and service, building an engaged workforce, putting in place common systems and processes, and achieving higher levels of competitiveness through savings from combining the two businesses. “We have an excellent workforce and I am confident that we will make real progress in 2016.” Employees, customers, farmers and suppliers are receiving information directly on the vision and plans for the new organisation, which employs around 10,000 people in 13 dairies and over 70 depots, and processes 25% of Britain’s milk production.

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News REGULATORY Food Standards Scotland recommends levy on ‘discretionary’ foods

Sugar tax could be on cards, says dietary watchdog

Glasgow retailer shot A retailer in the Yoker area of Glasgow was shot while working in his store on 24th February. Naser Hussain, who is 23 years old, works at the

Scotland is a step closer to seeing the introduction of a tax on products with certain levels of sugar, following the acceptance by the Board of Food Standards Scotland (FSS) of wideranging proposals on measures to improve the national diet. As well as a levy on so-called ‘discretionary’ foods and drinks, other proposals given the thumbs-up at a meeting in late January included: regulation around food and drink promotions; portion size reduction; and tougher targets for reformulation of foods and drinks. These recommendations, which will now be put to Scottish Government Ministers, are designed to tackle Scotland’s growing obesity crisis. It is projected that 40% of the population will be obese in 15 years. Ross Finnie, Chair of FSS, said: “We know that we have been missing the Scottish dietary goals for the past 15 years, despite the range of changes already made, so the Board’s view is that a raft of alternative, more radical, measures and interventions must be

considered and introduced if we are to have the impact that is needed.” Finnie said that it was vital that FSS works with industry to set out the evidence to support the introduction of any measures. He cited the case of Mexico, where a 10% tax reduced the purchase of sugar-sweetened soft drinks by 12%. “It’s key that industry plays its part in finding solutions, which is

why we accepted the suggestion of giving manufacturers and retailers 12 months in which to come up with an alternative acceptable solution to a sugar tax,” he added. Underlining FSS’s commitment to improving dietary outcomes in Scotland, Finnie warned that if industry proposals fall short, other avenues – including taxation – would be pursued. Research commissioned by FSS showed that over half (54%) of adults in Scotland claimed to be happy with the idea of unhealthy foods being taxed in order to decrease the price of healthy foods. 16% said it would depend on the amount of tax involved. The same number (54%) claimed a tax on unhealthy foods would encourage them to buy less unhealthy foods. Ogle added: “In five years the best we can say we have done is stand still. Overall, the gains made in sugary drink reduction by the drinks industry have been negated through recycling of sugar into different products within the retail offering.”

INSIGHT Town Centre Investment Management model proposed for high streets

New approach needed to revitalise Britain’s high streets A hard-hitting report has proposed a radical new model to get investment back into Britain’s high streets. The Town Centre Investment Zones report demonstrates that asset management of the high street could unlock much-needed investment for local authorities and communities to transform their areas. Having identified that fragmented ownership and poor asset management are overriding factors in the high street’s inability to adapt to change, the group used three town centres as pilot studies to show that by taking a more structured approach to a high street’s offering, investment can be attracted and bring about fundamental change.

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The report, carried out by Peter Brett Associates with Bond Dickinson and Citi Centric, suggests that Town Centre Investment Management (TCIM), which involves the pooling of a critical mass of property assets into an investment vehicle, will allow the assets to be managed and curated, rejuvenating the high street. The model enables the existing stock to adapt to the various challenges facing the high street, such as changes in consumer behaviour and demands, and the changing retail landscape. It will allow local authorities to radically transform and future-proof their high streets, ensuring that they have a better consumer offering, which

could include housing and more leisure space. The TCIM model is attractive to investors, who see the new opportunities it presents, delivering scale and growth potential. Retail is traditionally an attractive asset due to its good long-term prospects. The report says that the areas designated for the asset management treatment should be set up as Town Centre Investment Zones (TCIZs), to provide coherence, leadership and a clearer focus for all involved, signallig to potential investors that all stakeholders are aligned. These Zones would benefit from a range of concessions and support given to business neighbourhood planning.

KOF Convenience Store on Dumbarton Rd was wounded in the leg and hospitalised following the incident. Police said that a 25 yearold man has been arrested in connection with the shooting and was set to appear in court as SLR went to press. Just days after Naser was shot a second armed robbery was carried out in Hussain’s General Store in the Tollcross area of the city’s east end. A male entered the store brandishing a firearm before making off with cash and cigarettes.

JTI buys Natural American Spirit JTI has purchased Natural American Spirit’s non-United States business. JTI plans to use Natural American Spirit’s strong international presence in the premium-priced category to further extend its brand portfolio outside of the US.

Nisa poaches Amazon tech exec Nisa has appointed Steven Cook as its new Head of IT Operations. He joins the business from Amazon where he held a number of senior IT roles, most recently as the UK Regional IT Manager. Cook brings significant experience to the role, having led teams in an operational environment for over 16 years.

Prices drop at Londis Londis has lowered prices on branded products in a bid to drive sales and attract cashstrapped shoppers during January and February. The latest Londis Price Drop campaign runs until 13th February and features a number of half price offers. Focussing on Big Savings on Big Brands the price drop includes a number of leading brands.

FEBRUARY 2016 | SLR

News RETAIL CRIME Stores report alcohol is most stolen item, but plastic bags are being commonly stolen

Promising start for Perth’s independent retailer card A new gift card, believed to be the first of its kind in Scotland, is already making a huge difference by helping to keep money in the local economy, according to independent Perth businesses. The Perth Card programme allows users to spend pre-paid money at a variety of retail and hospitality businesses across the city. Over £4,000-worth of cards have already been sold. Exel Wines is one of the businesses to sign up for the scheme. Russell Wallace, General Manager, said the card was an “instant must” for businesses.

Licensing expert joins TLT TLT has appointed Niall Hassard as a Legal Director in the firm’s Licensing team. Hassard will work alongside TLT’s Stephen McGowan, Partner and Head of Licensing (Scotland), delivering licensing services to clients

Plastic bag theft on the rise A survey into the items stolen by shoplifters has found that plastic bags are becoming increasingly vulnerable to theft since the UK-wide introduction of a 5p tax on the bags. Alcohol is the most stolen product. Light-fingered customers are costing Britain’s retailers £800m per year, according a survey carried out by MonitoredAlarms.co.uk, which spoke to over 100 British shops and stores, from major chains down to humble family-run convenience stores and found that the top ten items stolen were: 1. Alcohol 2. Perfume 3. Razor blades 4. Bags – both plastic and reusable 5. Coffee 6. Meat and cheeses 7. Electrical goods 8. Phones 9. Clothing 10. Sporting goods

The introduction of the 5p charge has seemingly turned the country into a nation of petty criminals, with one recent survey claiming that over 500 million single-use bags have been stolen since October. “We won’t pretend to be experts on the social and financial reasons that result in people stealing from retailers,” said MonitoredAlarms. co.uk’s Jonathan Ratcliffe, “but each year we see the same products being stolen, and simple measures

can save thousands.” The obvious placing of signposted cameras near razor blades has resulted in the once-favourite thieves’ target dropping down to number three on the list. That’s a testament to retailers recognising that the problem can be solved, Ratcliffe said. “When people are driven to theft by a 5p charge for plastic bags, there’s little chance of driving the criminals from our stores,” he concluded.

across Scotland. He will work out of the firm’s Glasgow and Edinburgh offices. His expertise includes handling high-profile, contentious and multifaceted licensing applications across Scotland covering liquor, gambling and civic licensing. TLT’s Licensing team advises clients on all aspects of premises licensing.

Newsagents call for carriage charge drop Newsagents are urging wholesalers to lower carriage charges in anticipation of fuel prices dropping to 90p per litre. NFRN Chief Executive Paul Baxter said: “For far too long carriage charges have been a blight on news retailers and it’s time that something is done to alleviate this burden, especially given that fuel prices are at their lowest level since 2009 and newspaper and magazine volumes continue to dwindle.” Baxter could see no justification for rising carriage charges and suggested news wholesalers “stop dragging their heels” over the issue.

RETAIL SALES Festive period brings welcome cheer

FUNDRAISING

Christmas sees first food sales growth in nine months

Convenience giants saddle up for landmines charity

A strong Christmas trading period has helped sales of food in Scotland. Total Food sales were +1.1% in December, compared to the previous year, when they had decreased 1.9%. While Christmas was clearly the major factor here, it stands out as being food’s best performance since November 2013, excluding Easter distortions. It is the first time in nine months that there has been an increase in food sales, and highlights that supermarkets were less reliant on major loss-leading discounts over the period, while a relaxed approach to spending allowed consumers to treat themselves. David McCorquodale, Head of Retail at KPMG, commented: “A grocery-led festive season provided a year-end boost for Scotland’s rainswept high streets to provide cheer and optimism for the year ahead. After months in the doldrums, the food and drink sector provided the surprise package over Christmas in Scotland, returning to growth as consumers loosened their belts and treated themselves to a festive feast.” In grocery market share, the discounters Aldi and Lidl continued to make gains on the major multiples, according to the latest Kantar Worldpanel findings. For the 12 weeks to 3rd January, the grocery market was down by 0.2%.

Some of the most senior names from the convenience sector, including SLR Publisher Antony Begley (pictured), are joining forces once again this February in a daring 440km charity cycle challenge across the island of Sri Lanka in aid of anti-landmine charity MAG. Sri Lanka’s three decade long civil war ended in 2009 but innocent civilians continue to die and be horribly maimed every day due to landmines. Antony slips on the lycra in a 25-strong group including My Local Directors Neil Turton and Raj Krishan, Spar MD Debbie Robinson and him! International’s Tom Fender, amongst others. The eight day test from 6th-14th February will see the 25-strong team ride 440 km coast to coast across Sri Lanka to support the lifesaving work of MAG (Mines Advisory Group). Last year, the team raised an incredible £136,440 cycling across Vietnam and Cambodia, smashing through all previous MAG records.

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News TECHNOLOGY Scotmid first co-operative to launch member app

Scotmid leads way with member app Q Charles Wells has announced an increase of 4% in operating profit before exceptional costs alongside a steady programme of investment in its assets. The Bedford-based brewer and pub operator recorded an operating profit of £8m in its annual accounts for the year to September 2015. Turnover rose by £1.7m to £188.9m in the same period whilst total borrowings were reduced from £51.2m to £49.8m. Q Nisa had a strong festive season, reporting a “significant” improvement in profitability over the 10 week trading period to 3rd

Scotmid has become the first UK consumer co-operative to launch a mobile app for its members. The app will deliver special offers and other regular member benefits, and is available to download from Monday 25th January for iOS, Android and Windows phones. It will also include information and registration for events Scotmid is supporting and hosting, an up-tothe-minute news feed and a store finder. Production of the app has been project-managed by Laura Paterson from Scotmid’s Membership and Community team. She said: “As well as providing more regular, tangible benefits, it’s hoped that the app will allow for greater direct engagement between the Society and our membership and also show Scotmid as leading the way as a consumer co-operative, by using new technology to improve our membership offering.” The administration of the app has been integrated with the Scotmid website so both can be operated quickly and easily from the same place. This also means that Scotmid members who have already registered with the online ‘Membership Hub’ can use the same log in details for the app.

Scotmid’s Head of Corporate Communications, Malcolm Brown added: “I’m sure this app will appeal to our broader membership too. I am really looking forward to seeing how the app is received.”

January. Profit for the period was £520,000, compared to a loss of £2.4m in 2014. Volume growth over Christmas was 5.7%, while sales value rose 6.3% year on year to £254.3m, against a backdrop of sales deflation of 2.1%. Q Premier Foods has reported an increase in sales over its third quarter, however the company has lamented a warm December, which led branded sales to be 1% lower yoy. Branded sales, which are responsible for almost 85% of the group sales were £208m for Q3. Year to date, branded sales are -0.4% on £514.6m. Q Supermarkets had a merrier Christmas period than many analysts predicted. Tesco saw like-for-like sales increase by 1.3% during the six weeks to 9th January, leading to a sharp spike in its sales prices. Morrisons beat forecasts with a 0.2% like-for-like increase, however the chain did announce the closure of seven stores. With Asda still to report, Sainsbury’s was the only one of the Big Four to report a drop in sales, but its -0.4% decrease was still ahead

TECHNOLOGY Free or heavily reduced cases available to Bestway and Batleys customers

TECHNOLOGY

Bestway and Batleys reward customers with new card

Proximity marketing tested by Costcutter

Bestway and Batleys is launching a new customer rewards card in the latest phase of the group’s 40th anniversary celebrations. The Bestway Batleys Rewards Card will offer customers a free or heavily price reduced case of product every third time they shop in depot. Customers also have the chance to win the value of one of their shops free at their local depot. Salih Sheikh, Marketing Manager for Bestway Wholesale, commented: “Bestway Wholesale has a tradition of giving back to customers through loyalty and reward programmes. The introduction of the new Rewards Card is a way for the group to say a massive thank you to all our customers.” How the Reward Card works: Q Every customer can pick up an exclusive Rewards Card for that

month in branch. Q Customers need to shop 12 times in the month at that depot, having their card stamped on each visit, to be entered into the monthly free prize draw to win the cost of one previous visit (up to the value of £1,000), which will be automatically deducted from their next month’s shop. Q Each of the group’s 60 warehouses will have one winner each month that will be entitled to a free shop. Minimum spend to gain the reward is £300 per visit excluding tobacco and VAT. Q The card is structured as four rows of three shops. To gain a stamp, the customer must also purchase a stipulated product on the first and second shop on each row. On the third shop of each row, rather than having to purchase a product, they will be rewarded with a free case or money off a case. Q When a customer purchases a highlighted product and meets the minimum spend on their visit, their purchase is automatically logged on the Rewards Card system and they receive a stamp.

Costcutter is trialling proximity marketing with a pilot project in York and the West Midlands, which will see 38,000 text messages sent out to support its Love Local Deals campaign. The two regions, which each have a high density of the Group’s stores, will see the Love Local Deals campaign augmented with proximity marketing to help drive footfall. O2 customers within half a mile of a store will receive text messages with a Meal Deal offer which this month is Spaghetti Bolognese, and includes Independent mince, Dolmio Sauce, Independent spaghetti and a choice of Independent garlic bread or salad, all for under £5. Instore offers will also include Love £1 Deals, Love Half Price or Better and ‘Killer Deals’ on everyday essentials from major brands including Costcutter’s Independent range.

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News Extra

Property | Business Outlook

NewsExtra FIND OUT WHAT TRENDS WILL DRIVE CONVENIENCE IN 2016 – P26 PROPERTY Christie & Co Report predicts continued growth in value of convenience stores

Convenience Matters with the SGF SGF is a very active member of the Scottish Alcohol Industry Partnership. The Partnership consists of the major manufacturers and some of their trade associations – SGF is the industry sector lead for convenience retailing. We Chair the campaigns group on the partnership and this meant that last year we played a big role in developing a highly successful campaign on proxy purchasing in North Lanarkshire. Proxy purchasing is a complex issue which is almost impossible for a retailer to deal with in-store – it can only be tackled by a multi-agency partnership approach. A big factor in the success of the project was the commitment by Police Scotland to divert resources towards dealing with the issue – arrests for proxy purchases increased and there were significant reductions in alcohol-related crime and anti-social behaviour over the duration of the project. There was also very effective use of media – anyone logging onto Wi-Fi on local public transport was immediately directed to the campaign website home page. Retailers, of course, played a big part: they were very willing to display the campaign material in-store and several allowed ‘clean art’ street graffiti warning of the consequences of proxy purchase to be stencilled outside stores. Initial talks are underway to roll the project out in other areas of Scotland with Edinburgh being a possible candidate and the North Lanarkshire project has made it to the final round of nominations for the National Police Excellence award. We believe these projects are worthwhile – they take the pressure off retailers but also allow them to play a part in dealing with these issues.

SLR | FEBRUARY 2016

Convenience property values on the rise Average business property prices in all sectors once again increased in 2015 according to Business Outlook 2016 – the annual state of the markets report from property specialists Christie & Co. The increase in average prices across the Convenience Retail sector was 10.3% in 2015, according to Christie & Co’s latest Business Outlook report. The company predicts that the value of businesses across the medium term will continue to rise and outstrip pre-recession levels, in line with any increase in their profitability. The report highlights that the convenience retail sector is still growing at a rate of 5% per year and is now worth £37.7bn to the UK economy. However, in a warning to local independent stores, it adds that the large multiples are still actively acquiring sites to capitalise on changeable consumer behaviour as different grocery formats evolve. With the exception of the Care sector, values largely recovered to pre-recession levels over 2015. Encouragingly, merger and acquisition activity has been evenly spread across all the business sectors covered by Christie & Co – Retail, Hotels, Restaurants, Pubs, Care, Childcare and Medical. This is one key differentiator between 2015 and 2014, when the Hotel market was hectic but other sectors weren’t to the same extent. Steve Rodell, Managing Director – Retail, at Christie & Co commented: “The convenience retail sector is still growing at a rate of 5% per year and is now worth £37.7bn to the UK economy. The large multiples are still actively acquiring sites to capitalise on changeable consumer behaviour as different grocery formats evolve. The South East has the greatest demand for sites and the heated London property market commands higher rents – probably double the market rate in the regions. “2015 saw the conclusion of a seismic shift in forecourt ownership that has

seen oil companies divesting assets and tying purchasing independents into supply agreements. By the end of the year around 70% of all sites were independently owned against 60% just five years ago. This has resulted in the rise of the ‘super dealers’ including Rontec, Euro Garages, MRH and Motor Fuel Group who have all taken significant packages from the oil companies. This activity attracted private equity into the sector as investors saw an opportunity to buy a platform from which to acquire other operators. “2016 will see the convenience property market grow concurrently with real estate generally and we expect a busy year with more M&A activity, possibly through private equity participation.”

Retail average price performance year on year 2012: -0.9% 2013: -1.0% 2014: 11.3% 2015: 10.3%

“2016 will see the convenience property market grow concurrently with real estate generally and we expect a busy year with more M&A activity, possibly through private equity participation.” www.slrmag.co.uk

Comment

IT’S A HOME WIN IN HAWICK, BUT WHICH TOWN WILL BE NEXT? Writing this month’s cover story has been an eye-opener (and I don’t mean the realisation of how bad the road network is in the Borders). I first discovered the potential damage Aldi could do to local retailers when the company revealed plans to build on a brownfield site in the south of Edinburgh – right next door to a hugely successful family business owned by Dennis and Linda Williams. Since then I’ve kept a closer eye on Aldi’s development in Scotland. Watching it nick market share from the mults has admittedly raised a smirk or two, but the company’s expansion plan is greedy, reckless and pays no heed to the damage it could cause small businesses like Dennis and Linda’s – or like George and Kathryn’s McCusker’s Spar store in Hawick. The glaring details of the shambles that has played out in the Borders town over the last couple of years is laid out from p17, and it’s illustrative of a company hell-bent on making as much money as it possibly can from Scotland’s towns regardless of the impact on the local community. Separately, in an interview last month Scottish Lib Dem leader Willie Rennie said Fife would be better off without the controversial Amazon distribution centre. I’m not entirely sure I agree with that statement, but I was struck by his words:“I think Fife would be far better off if we had invested in home-grown industries,” he said. He could easily have been talking about supermarkets, and the ease with which they’ve been allowed to expand at the expense of local businesses. Okay, we don’t live in some truck, barter and exchange utopia, but trampling on independent businesses that have served towns for generations is not a very commendable practice. As much as I find Aldi (and Lidl, by the way) at fault for this practice – Aldi is currently seeking sites in a further 26 towns in Scotland – what is even more troublesome is when short-sighted politicians welcome these stores into their communities with open arms. Yes, consumer choice is a good thing, yes, the discounters offer something new and different, but they’ve faced little political resistance, and therefore little rigorous impact assessment. Not so in Hawick, where despite the support of many councillors, Aldi has been refused planning permission. There’s still half a chance of an appeal, but from those I spoke to, there is little hope of the decision being reversed. So, the independents look to have recorded a rare victory, George and Kathryn can get on with running their store, but with another 26 towns in Aldi’s sights, there are plenty more convenience stores out there who could be in trouble – the question is, will Scotland’s other local authorities follow Scottish Borders Council’s lead?

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CIRCULATION & SUBSCRIPTIONS Events & Operations Manager Cara Begley 0141 222 5381 | cbegley@55north.com Events & Operations Assistant Chloe Buchanan 0141 222 5386 | cbuchanan@55north.com Scottish Local Retailer is distributed free to qualifying readers. For a registration card, call 0141 222 5381. Other readers may obtain copies by annual subscription at £50 (UK), £62 (Europe airmail), £99 (Worldwide airmail). 55 North Ltd, Waterloo Chambers, 19 Waterloo Street, Glasgow, G2 6AY Tel: 0141 22 22 100 Fax: 0141 22 22 177 Website: www.55north.com Twitter: www.twitter.com/slrmag DISCLAIMER The publisher cannot accept responsibility for any unsolicited material lost or damaged in the post. All text and layout is the copyright of 55 North Ltd. Nothing in this magazine may be reproduced in whole or part without the written permission of the publisher. All copyrights are recognised and used specifically for the purpose of criticism and review. Although the magazine has endevoured to ensure all information is correct at time of print, prices and availability may change. This magazine is fully independent and not affiliated in any way with the companies mentioned herein. Scottish Local Retailer is produced monthly by 55 North Ltd.

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Indie vs Aldi

Cover Story

IS THE TIDE TURNING ON ALDI?

After unstoppable growth in the last few years, seeing its share of the grocery market rise to 4.8%, Aldi is one of the major threats to locally owned convenience stores, but in Hawick the German discounter has been refused planning permission – so are we seeing the beginning of the end of its meteoric rise? BY KEVIN SCOTT

AREAS WHERE ALDI IS ACTIVELY LOOKING FOR SITES Q Arbroath Q Banchory, Aberdeen Q Bearsden Q Bridge of Dee, Aberdeen Q Bridge of Don, Aberdeen Q Castle Douglas Q Clarkston Q Clydebank Q Coatbridge Q Dingwall Q Dumbarton Q Dundee (south) Q East Kilbride (north & east) Q Edinburgh (all areas) Q Falkirk (east) Q Glasgow (all areas) Q Helensburgh Q Jedburgh Q Kilwinning Q Milngavie Q Langstracht, Aberdeen Q Largs Q Peebles Q Perth (north & south) Q Shotts Q Troon

ne of the big trends in the grocery sector in 2015 was the continuing growth of Aldi and Lidl. Over the Christmas period, when consumers might be expected to stick to the big stores, Lidl was the fastest growing retailer with sales up by 18.5%. Aldi followed with an increase in sales of 13.3%. The combined share of these two firms now takes almost 10p in every £1 spent in grocery retailers. It’s a remarkable achievement and one that has only been possible thanks to huge investment in new stores. And there’s no slowing down. The company’s website states that it is currently looking to open new stores in 26 areas of Scotland, from Dingwall to Jedburgh, Castle Douglas to Arbroath. Not only have consumers found the companies’ ranges and prices well-suited to their requirements, but the discounters’ growth has coincided with a major shift in site availability. Gone are the days of supermarkets opening 100,000 sq ft stores every other week and as the likes of Tesco and Sainsbury’s advance into the convenience space, the discounters have been able to completely own the 10,000-25,000 sq ft space. Not only does this store size perfectly fit the discounter offering, but coincidentally, this happens to be the size of sites that are becoming available in towns and cities. As Edinburgh retailers Dennis and Linda Williams have discovered, the sheer force of Aldi’s growth is seemingly unstoppable. Despite applying for planning permission on a brownfield site and with thousands of locals opposed, Aldi was granted permission

SLR | FEBRUARY 2016

to build on Dennis and Linda’s doorstep. In Hawick, a similar story has been playing out over the last year, but with one significant difference – this time Aldi hasn’t got its way and planning permission has been refused. This is welcome news for Spar retailer George McCusker, who has mounted a vigorous campaign with his wife Kathryn. “We’re in a good place now,” says George, relieved to have emerged unscathed from the battle – and amazed that the store wasn’t given the go ahead. “I don’t think the story is quite over yet, though. The councillors want to keep going so we need to see how the appeal goes.” SLR contacted Aldi to address the company’s plans for the site, however a spokesman for the company said that as the development was being led through the planning process by the developer GLS the company had no comment to make. George and Kathryn have been supported throughout by the SGF, who provided a template letter for George to send to all local businesses to get them to contact the Scottish Borders Council. The Federation also engaged directly with the planning department to remind them that their own retail impact shows there is no spare grocery retail provision in Hawick. George says: “The councillors aren’t looking at the bigger picture; they just want another big retailer in the town. We’ve already got Sainsbury’s, Morrisons, Lidl, Iceland, Farmfoods, a big B&M and three or four symbol stores.” John Lee, Public Affairs and Policy Manager at SGF says the Federation is delighted for George and Kathryn. “They have mounted www.slrmag.co.uk

Indie vs Aldi

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The future of the former mill site, which was demolished for the new Aldi, is now uncertain.

George & Kathryn argue that there are enough supermarkets in Hawick.

an impressive campaign in mobilising local businesses and they have never given up. We are very encouraged that planning officials have stuck to the findings of their own retail impact assessment – SGF pushed hard for this and fortunately it has paid off.”

A LENGTHY SAGA The plans have turned into something of a saga since Aldi announced its intention to open a store in the Borders town back in December 2014. Having achieved overwhelming public support at a public exhibition in December that year, Aldi was confident the store, which would be built on the site of the former Wilton Mills on the outskirts of the town centre, would go smoothly. However, site access problems meant the developer had to apply to demolish two listed buildings, including the former mill’s iconic clock tower – a plan that was immediately opposed by Historic Scotland. By July 2015, the developer had illustrated that restoration works would cost an estimated £2m, with the market value of the property £400,000. Although the Council approved the demolition in September, the development was dealt a further blow in November when the Scottish Government Reporter refused a request to change the site status to town centre, which would have brought the site into line with the town centre first principle and the sequential test, thereby making it easier to obtain permission to build. In December 2015 the old clock tower was demolished while two days before Christmas Scottish Borders Council rejected planning permission. Which brings us up to www.slrmag.co.uk

date. The developer, GLS, could still appeal that decision, which would be heard by the Council’s Local Review Committee. Unlike the situation Dennis and Linda faced in Oxgangs, local councillors have backed the development, with Councillor Watson McAteer going as far as to suggest the decision was a disaster for the town. Speaking to SLR he said, “There is a space in Hawick and we are hoping that it can be developed and that that space can be filled with something that will bring people into Hawick. It’s about consumer choice. It is a primary issue for me – we have regeneration or the prospect of an empty space for the next 10 years.” All this highlights the extent to which Aldi and GLS is determined to move into the town. With a Sainsbury’s and a Lidl already situated nearby, George is worried about the impact of a third store near him. Councillor McAteer says: “I appreciate George’s situation, but I can’t support him on this one. What I do know is that he has a good business, it’s well established and I hope he wouldn’t be impacted by the opening of a new store.” However, George reveals that a number of town centre businesses signed a petition against the store opening. He adds: “Not one Councillor is behind a till making a living. They need to see how many shops are going out of business. I’ve been doing business in this town for 45 years, I’ve got family here, I’ve buried family here. And the Councillors think my concerns are purely business related. Well they’re not, I care about this place and I don’t like seeing what’s happening to it.” Councillor McAteer adds that he had not

given up on the store opening. “I’m hopeful if the developer appeals that permission would be granted, but I wouldn’t say I’m confident. Councillors tend to follow recommendations, however the local reporter in its refusal made a statement saying the space could potentially be used for retail.” For now, George and Kathryn are back to running their Spar store and post office without the distraction of a politically-charged campaign. For retailers in the 26 areas of Scotland where Aldi is currently seeking to open new stores, there is now demonstrable evidence that campaigning does work, and that local shops can be protected. As Kathryn says: “There’s a war between multis and discounters and it will intensify. Aldi are looking to buy up property across Scotland and we’re the ones caught on the middle. Shops will be wiped out and if Aldi and Lidl think they’re not making enough they’ll close. What happens then? A lot of towns like Hawick will struggle.” FEBRUARY 2016 | SLR

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HELPING CREATE A HEALTHIER SCOTLAND The SGF Healthy Living Programme has been working with retailers for over a decade and With more official ‘healthier’ products than ever before, the opportunities for retailers just keep on growing.

he drive to create a heathier range in store has been one of the most commendable collective practices in Scotland’s convenience sector in recent times. Much of the credit for this must go to retailers who have realised the value of having a strong healthy offering for consumers looking to carry out larger shopping trips covering more than merely grabbing a couple of essentials. The SGF Healthy Living Programme has been a hugely influential part of this drive since its introduction back in 2004. Now in the final year of Phase 5 of its development, over 1,580 retailers have now signed up for the Programme. After a huge rebranding exercise, each and every one of those retailers has now been visited. The point of sale material and new stands – which back the Scottish Government’s campaign of ‘Eat Better Feel Better’ – have been warmly welcomed by retailers across Scotland. Those implementing the advice given by the Programmes team of Development Managers, and using the free special equipment, have all reported significant increases in sales of fresh fruit and vegetables. What the Programme 18

SLR | FEBRUARY 2016

FOCUS MOVES BEYOND FRESH AND CHILLED Importantly, part of the current phase being undertaken by the SGF Healthy Living Programme is to spread its message into categories beyond fresh and chilled. From cereals that contain under 5g of sugar per 100g and 0.68g salt per 100g, to a whole host of grocery lines from pasta and noodles to oven chips, baked beans and tofu – the Programme’s Development Managers can advise retailers on how they can drive sales throughout their entire store. Ross Kerr, Programme Director, says: “Retailers can gain from the benefit of signposting these products as well as including them in promotions. People are looking for healthier options and if they can’t find them they will go elsewhere.” Retailers are able to access a list of the Scottish Government’s approved lists of products. Kerr adds: “Our Development Managers will be discussing a more disciplined, planogrammed approach to those healthier products with our retail partners.” Retailers could even take this further by creating a healthy mission section in there store. Kerr suggests so. “One method that could be explored would be to have all ambient healthier products on the same fixture, and suitably signposted.” It is also recommended that stores appoint a healthy champion. “With the emphasis on other categories it is even more important that there is at least one member of staff that understands the principle of what is to be achieved,” says Kerr. He adds that training is essential so that staff, and particularly the champion become experts in knowing what is included in the healthier product guidelines.

“More retailers are locating their fresh produce in high profile locations, which helps to build positive perceptions of what is on offer inside.”

has helped achieve is to move fruit & veg from a small corner in the back of the store to a highly visible, attractively merchandised space in a prominent location near the front of the store. Ross Kerr, Director of the Programme since its inception, believes that it continues to have a hugely positive impact on stores. “More retailers are beginning to use fruit and veg as a draw to bring shoppers into their stores,” he says. “And more are locating their fresh produce in high profile locations, which helps to build positive perceptions.” One of the main focuses of the programme is to push into www.slrmag.co.uk

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TOP TIPS FOR DRIVING SALES OF HEALTHIER PRODUCTS Q Locate the fresh ﬁxture near the door Q Use POS across the store to highlight healthier products Q Work with an SGF Healthy Living Programme Development Manager to improve your offering Q Focus on top selling fruit and veg lines Q Work with local suppliers to boost your range of local fresh produce Q Offer low fat alternatives to popular lines such as milk, yogurt, and bread Q Introduce recipe cards and ingredient multipacks for soup and stews, for example Q Cross promote categories to encourage customers to visit other areas of the store Q Create a Healthy Mission ﬁxture in the ambient section Q Appoint a ‘healthy champion’ to ensure Healthy Living areas are always well-stocked and faced up.

areas of deprivation to change perceptions of fruit and veg to encourage more people to embark on healthier lifestyles. A huge 65% of current stores in the Programme are within severely deprived areas. Development Managers are now armed with hand held systems which makes the recording of data more effective, and allows them to capture more information, leading to increased focus in the right areas for individual stores. Another development has been the appointment of an Account Manager whose role will include visiting central offices of symbol and buying groups to encourage them to focus more on healthier products. Cash and carry will also come under this remit, providing retailers with information on how to contact Development Managers, helping spread the Programme’s reach. www.slrmag.co.uk

FOCUS BEYOND FRESH A number of Scottish Government-endorsed messages can be used by retailers to help drive sales of healthier products across a huge number of categories. Consider the following messages:

Q Frozen is as good for you as fresh Q Low fat yoghurt helps cut saturated fat Q Low fat milk helps cut back fat Q Unsweetened fruit juice counts as one portion of your 5 a day Q Fresh, frozen and tinned ﬁsh all contain vitamins and minerals. Q Fruit and veg all contain vitamins and minerals Q Check food labels before you buy and choose those containing less salt Q Adding chopped fruit to your breakfast cereal counts towards your 5 a day Q Adding vegetables to pasta sauces counts towards your 5 a day Q Breakfast is a good way to start the day Q Try lower fat milk Q Lower fat milk is always an option Q Water is always an option Q Fruit is always an option

FEBRUARY 2016 | SLR

News

Products

SOFT DRINKS

One brand strategy for Coca-Cola Coca-Cola has revealed a new ‘One Brand’ marketing strategy that unites Coca-Cola, Diet Coke, Coke Zero and CocaCola Life under one brand in a single global advertising campaign, ‘Taste the Feeling’. ‘Taste the Feeling’ will roll out at various times worldwide in 2016 and will feature 10 television commercials, a new visual identity system and audio signature, as well as a shareable and customisable interactive digital experience. Over 100 campaign images, capturing people from around the world drinking CocaCola in a variety of everyday moments, will be used in print advertising, out of home billboards, in-store as well as digital media. “This is a powerful investment behind all Coca-Cola products, showing how everyone can enjoy the specialness of an ice-cold Coca-Cola, with or without calories, with or without caffeine,” said Marcos de Quinto, Chief Marketing Officer, The Coca-Cola Company. “Through the ‘One Brand’ strategy we will move away from multiple brand campaigns, to one single iconic brand campaign that celebrates both the product and the brand.”

ProductNews GET CRACKING THIS EASTER – P50 SNACKS Mackie’s makes move into growing popcorn market

Mackie’s at Taypack pops up with new snack range Mackie’s at Taypack is expanding its snacks range with the launch of four flavours of popcorn. The range of Mackies Popcorn is available in 100g bags with an rrp of £1.59, in line with its crisps range. Speaking to SLR at an experiential launch event in Glasgow, Managing Director George Taylor said the company had been working on the product for two years, with the packaging alone requiring eight months of careful design. After trialling a number of flavour combinations with consumer testers, the firm has rolled out four initial flavours: Lightly Sea Salted, Sweet & Salted, Butterscotch and Scotch Bonnet Chilli Pepper.

“The market for popcorn is getting increasingly popular,” said Taylor. “But there’s no Scottish brand out there yet and we want to own that space.” He said that the company was constantly looking to drive innovation with its product offering while still sticking to its authentic Scottish roots. “The popcorn is aimed at a markedly different audience than our crisps,” said Taylor. “It’s a younger profile, around 18-35.” At launch the popcorn is produced with a partner, however Taylor said that if sales go as expected the Mackies at Taypack facility where the company’s crisps are currently made could be expanded, with a £2.5m

investment. Smaller sized packs are also being considered. Mackies Popcorn will be available through independent wholesalers in the coming weeks.

MILK

Ballet coup for Graham’s Graham’s The Family Dairy has been named as official health sponsor of Scottish Ballet, in a year-long partnership which is the first of its kind for the dance company. Dancers at Scottish Ballet will be gifted with products from the Graham’s range, including milk, yogurts and cheese, to help keep their bodies in peak condition from studio to stage.

SLR | FEBRUARY 2016

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Off-Trade

Off-TradeNews FIND OUT HOW MANI DHESI IS SAVING £240 A MONTH – P38

Two billion apples harvested in record crop The maker of Strongbow and Bulmers ciders is toasting a recordbreaking apple harvest which saw nearly two billion apples harvested. Heineken, which uses around 30% of all the apples grown in the UK for its ciders, harvested and milled over 128,000 tonnes of apples in 2015.

Heineken unveils new responsible drinking campaign A new ‘Enjoy Heineken Responsibly’ campaign has been launched by Heineken. Entitled ‘Moderate Drinkers Wanted’, it is based on new global research into drinking attitudes of millennial consumers, which revealed that 75% of millennials say they now limit the amount of alcohol they drink. The new campaign

NUTRITION Drinks firms follow food brands with on pack info

Leading firms reveal nutritional information Diageo and ABInBev, two of the biggest drinks companies in the world, have revealed plans to publish nutritional information of their products. On its newly revised DRINKiQ. com website, Diageo is now providing a breakdown of the alcohol, calorie, carbohydrate, protein, saturated fat, sugar, caffeine and sodium content contained in its beverages. This builds on Diageo’s global commitment made in March 2015 to start voluntarily providing nutrition and alcohol content information per standardised serving on all its brands. In the first move to fulfil this commitment, the first shipment of Crown Royal labelled with macronutrient and calorie information was released in the US in October 2015. Carolyn Panzer, Alcohol in Society Director, Diageo said: “As people become more and more interested in their diet

and lifestyle choices, we need to play our part. We know that consumers want nutritional information about what they drink.” ABInBev is going one step further and putting its nutritional information on pack in addition to online. The information will be available per 100ml as well as per portion size and will cover energy values, fat, saturated fats, carbohydrates, sugars, proteins and salt (known as ‘the Big 7’).

aims to add momentum to the global trend towards moderation and includes a new TV ad, experiential and digital activation, as well as paid and earned media support.

WHOLESALE Wholesalers urged to sign up for new scheme

Apply or die: HMRC challenges alcohol wholesalers to prove they play fair Alcohol wholesalers now have to prove they are trading legally or they could find themselves out of business by next year. The window for applications for approval under HMRC’s Alcohol Wholesaler Registration Scheme opened on 1st January 2016 and closes on 31st March. Wholesalers of beers, wines and spirits must apply for registration within this period and satisfy HMRC’s inspectors that they are not buying or selling duty-evaded stock. The process can be accessed through the Government Gateway, with applicants expected to present details of their company for inspection and approval. Companies which fail to apply during the window may find that they are unable to trade in alcohol.

SLR | FEBRUARY 2016

BEER

Tiger chases monkey Monday 8th February marks the move into the year of the Monkey and, from Wednesday 20th January, Tiger will roar into the New Year with the launch of its limited edition 640ml single bottle with Chinese New Year themed sleeve wrap. Building on the fact that food lies at the heart of many Chinese New Year traditions, Tiger has also teamed up with various wholesalers to offer promotions and sampling linked to pan-Asian food, to drive further awareness of Tiger.

www.slrmag.co.uk

Off-Trade

News

REGULATORY Men advised to have no more than 14 alcohol units a week, bringing them into line with women

New alcohol limits see men’s unit intake fall Men and women should drink no more than 14 units of alcohol a week – the equivalent of six pints of beer or seven glasses of wine – in order to stay healthy, according to controversial new guidelines drawn up by the Department of Health. The new guidelines replace the previous guidelines which were published in 1995. Previously, women were advised to drink no more than two-three units a day and men no more than threefour. The new guidelines now advise men and women to drink no more than 14 units of alcohol over the course of three days or more. This is the equivalent of a bottle and a half of wine over the

course of a week. The new rules also advise against saving up units, saying it is beneficial to have alcohol free days. Henry Ashworth, Chief Executive of the Portman Group, the responsibility body for drinks producers in the UK, said guidelines are useful because they “help people make informed choices about their own drinking. “The vast majority of us – more than four in five adults – drink within the current lower risk guidelines. What is surprising is that the UK is breaking with established international precedent by recommending the same guidelines for men and

women. It also means that UK men are now being advised to drink significantly less than their European counterparts.” Around 77% of adults drink 14 units a week or less, compared to the 83% of people who drank within and below the previous weekly ‘lower risk’ guidelines of 21 units a week for a man and 14 units a week for a woman. There are 37 countries that have alcohol guidelines. Out of these, 33 recommend daily limits and 10 also set weekly guidelines. Excluding the UK, there are only five countries that recommend the same guidelines for men and women: Australia, Netherlands, Albania, Guyana, and Grenada.

McEwan’s turns 160 in style this year 2016 will see McEwan’s reach the ripe old age of 160 years, which the Scottish beer brand plans to mark with a number of events and giveaways throughout the year. McEwan’s Export drinkers will have a one in four chance to win a limited edition 160th anniversary pint glass, and there will be a number of other giveaways across McEwan’s social media throughout the year. There will also be celebrations at McEwan’s Party at the Palace – the Linlithgow music festival sponsored by McEwan’s over the weekend of 13th and 14th August 2016. A birthday celebration is also planned, which will be held in Edinburgh, the original home of McEwan’s. Details of the bash will be announced shortly.

BEER Staropramen moves to Molson Coors as Red Stripe heads for Heineken BEER

Brace of Italian craft beers launched Speciality beer importer World Beers is to distribute the awardwinning artisan beer range from the Italian Birradamare artisan brewery. The initial two beers available to the Scottish off-trade are: Na Biretta Chiara (4.9% abv) – this lager has been inspired by Czech Pils, offering “subtle hop aromas and bitterness plus a crisp, clean taste”. Dammenipa (5% abv) – brewed with a nod to the English IPA, this Italian Pale Ale offers “a floral and fruit-filled nose, with a hint of bitterness balanced by malted tones”. The beers are available in 33cl bottles and come in cases of 12.

www.slrmag.co.uk

Major lager brands switch hands Molson Coors has commenced exclusive distribution of Staropramen in the UK. This follows the announcement in June 2015 that Staropramen, Molson Coors’ global brand, was moving to its UK portfolio. Meanwhile it has been announced that Heineken has taken over Red Stripe in the UK following a global deal with Diageo worth $780.5m. From 1st January, the Jamaican lager joined Heineken’s premium range of beers in the UK that include, Desperados, Tiger and Birra Moretti. David Forde, Managing Director of Heineken in the UK said: “The beer has a rich heritage – from its links with music through the decades, to its famous cans and stubby bottles.” Molson Coors commented that as world beer continues to drive category growth, with sales up 8% in the off trade, Staropramen will contribute to the growth plans of the full Molson Coors world beer portfolio. Frederic Landtmeters, Managing Director for Molson Coors UK & Ireland, commented: “The arrival of Staropramen to our UK portfolio is a significant and exciting milestone.” FEBRUARY 2016 | SLR

Inside Business

Opinion | David Martin

NO QUICK FIXES TO DIETARY PROBLEM

Ahead of this May’s Scottish election, the nation’s diet is going to be near the top of the agenda, and with retailers once again innocently finding themselves in the firing line, the solution involves overcoming a number of complex and nuanced issues. BY DAVID MARTIN, HEAD OF POLICY & EXTERNAL AFFAIRS, SCOTTISH RETAIL CONSORTIUM

s the 2016 Holyrood election approaches it is worth pausing to recap on the public policy challenges that have faced us in this parliament and those that might rear their heads after next May. As someone who has been on the front line working day in and day out with our elected representatives it is clear to me that the nation’s eating habits and our expanding waistlines are, and will continue to be, an issue of much preoccupation for our policy makers. On the one hand, this is perfectly understandable. Scotland tops a number of league tables of which, for once, it would be better to be at the bottom. Whether it is childhood obesity, adult obesity or rates of weight-related ailments we really are top of the pops. On the other hand, amongst all of the hand wringing and groans that “something must be done” and the unprecedented levels of investment and innovation from industry and government, Scotland’s track record for poor diet and health remains pervasive and intractable. What this tells us is that poor diet and health are multifaceted and complex issues. It requires a multi-factorial approach delivered at sufficient scale and over significant time in order to be effective. Quite simply, there are no quick fixes. For politicians, always after the immediate fix that fits neatly into the four or five-year electoral cycle (preferably accompanied by extensive popular media coverage) this is quite inconvenient. That is why, instead of being serious about some of the slow-burn, difficult responses and facing up to the fact that it is ultimately up to individuals and parents to control their own and their children’s diet and physical activity, government chooses to focus on only one side of the supply and demand diet equation. As retailers, I don’t need to tell you that it is you and your businesses the government has in its unwavering crosshairs. Tax it, ban it, hide 24

SLR | FEBRUARY 2016

it, demonise it are the watchwords of our political masters. But they are wrong and they are wrong for two important reasons. Firstly, we will never tackle the quite real and serious issue of poor health and obesity unless we recognise that there are two sides to the nation’s relationship with food, one of supply but also one of demand. Secondly, the idea that retailers are not working incredibly hard to ensure that their customers can make healthier choices, without government intervention, doesn’t withstand any scrutiny whatsoever. Major food retailers, for instance, have led the food industry in helping consumers to make healthier choices through a wide range of initiatives including the rollout of our front of pack nutrition labelling scheme, working on reformulation to produce nutritionally improved food and using new media to directly engage the consumer. Optimising product composition has been a priority for major food retailers for many years. Retailers are increasingly offering their customers more nutritious and higher quality foods. This has included reducing the quantity of nutrients of public health concern, increasing the quantity of beneficial nutrients under consumed and presenting products in various portion sizes. Through working on their products, retailers have removed thousands of tonnes of sugar and salt and billions of calories from a wide selection of products that we enjoy every day in Scotland. Retailers have also been the first to remove the use of hydrogenated vegetable fats from all their food stuffs and have gone further by removing large quantities of saturated fat from ready meals, desserts, crisps, pastries and other products. Retailers have also committed to make it as easy as possible for customers to make informed decisions and therefore healthier choices, including using the nutrition information and advice they provide.

Against a challenging economic backdrop retailers have also ensured that hard-pressed consumers can feed their families from a choice of high quality, nutritious food and on a budget. This has included the extensive promotion of fruit and vegetables, provision of menu cards, meal suggestions and cooking tips to help combat the myth that healthy food is more expensive. The challenge of combating Scotland’s track record for poor diet and health is not one for the retail industry alone. That is why the SRC recently published a paper setting out a range of commitments we would like to see each of the political parties adopt in the lead up to the 2016 Holyrood election in order to support further progress not just from the retail industry but also to secure greater responsibility from the wider food industry, from individuals and to support more informed consumer decisions.

“Quite simply, there are no quick fixes. For politicians, always after the immediate fix this is quite inconvenient.” www.slrmag.co.uk

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Market Research | Forward Planning

SIGN OF THE TIMES

Consumers may have more disposable income, but it’s where they choose to spend it that is important to local retailers. To ensure you are getting your share of this increased spend, you have to ensure your store is keeping up with the latest trends in convenience. BY KEVIN SCOTT

t this time of the year, there is a clamour for predictions of what trends will come to define grocery over the next 12 months. This may not always lead to a level of clairvoyance that would trouble Nostradamus, however it does give us a chance to look at how grocery might develop in the coming year, and what technology, product development and shopper insight theories have in store for us. In early January him! held a Future of Convenience seminar, the aim of which was to do exactly that. Three key trends emerged. The first (which may or may not be good news for convenience stores) is that negative inflation and higher wages means consumers have more disposable income, with many choosing to spend it on eating out of the home. Over a third of UK adults are now eating out more often than they were 12 months ago, according to him! Secondly, the trend of healthy living and eating has “exploded”. Him! reported that 57% of UK adults now say they are more aware of healthy foods and lifestyle choices than they were 12 months ago. However, this comes with a downside: a large proportion of shoppers don’t see convenience stores as credible places to buy fresh and healthy products. That is something the sector has to work to work on, to change perceptions and grow sales in an area that is only likely to become more important in the coming years. The final trend observed that consumers have changed the way they eat. One quarter of us are eating dinner on our own; surprisingly this is often people in shared or family houses choosing to cook separately. The cause of this unusual approach to self-sustenance is a remarkable lack of planning around meal times today. These may be wider consumer trends, but trends in convenience shopping habits also help to former a wider picture of where retailers need to focus their efforts. As part of its recent research him! asked 20,000 shoppers in 2015 to rate the factors that are most important to them when shopping in a convenience store, the top three were staff friendliness, availability and ease/ speed of shop. 26

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Research Director, Blake Gladman comments: “When we look at potential issues around the living wage and how this could impact staff in store, as well as factors such as price deflation and the weather impacting on availability of products and the competition focussing on making the world smaller for shoppers and making life easier, it demonstrates the importance that these have on the three most critical factors for shoppers in convenience stores.” Gladman adds: “The evening is precious for the meal for tonight shopper, a massive 56% of c-shoppers want to spend less than 30 minutes cooking their evening meals.” Him! isn’t the only group that have kicked off 2016 with a series of predictions. Another – more focussed on the wider grocery market – comes from IGD, whose Chief Economist James Walton has taken a look at the innovation that may creep into stores in 2016. The first of his predictions is ‘microconvenience’. For local retailers – this is a good thing, because microconvenience is a lengthy word for small convenience store. “Many of the best sites for modern convenience have already been acquired and developed,” explains Walton. “Prices for the

remainder may be unaffordable so operators must be flexible and inventive in order to expand further.” So, that means stores around 1,000 sq ft in prime locations are set to be in high demand. This makes sense. As we’ve previously reported, this sort of microstore (think smaller than a CTN) is commonplace in certain urban conurbations in Asian cities. Such is the demand for space, retailers operate in confined spaces, relying on sharp operational and ranging skills in order to ensure they can maintain a decent offer for consumers. Walton says that the trend for microconvenience also provides a platform for ‘hybridisation’, a concept where a store’s core offering is just part of what it offers – this doesn’t have to be extreme diversification, it could be something as simple as improving the facilities for online parcel collection, which is proving itself to be an excellent footfall driver in independent stores. Foodservice is another area of hybridisation that is likely to expand in 2016. “Foodservice can offer shoppers product customisation, instant satisfaction and foody values and growth in that sector is outpacing food retail at present,” comments Walton. www.slrmag.co.uk

SGF Seminar | Retail Crime

Inside Business

CUTTING OUT RETAIL CRIME:

PLAY YOUR PART On 16th February, the Scottish Grocers’ Federation is hosting the SGF Retail Crime Seminar in Edinburgh which will allow retailers to hear from a wide range of speakers and participate in a breakout session that could help reduce crime in their own stores. Why not sign up today?

n 2015 a staggering 92% of retailers were subjected to some form of in-store theft. This is one of the key findings from the SGF Retail Crime Survey which will be highlighted at the Federations’ Retail Crime Seminar on the 16th February in Edinburgh. The results of the survey will form a core part of the Retail Crime Report which will be launched at the event along with the guide to safer businesses developed in partnership with the Scottish Business Resilience Centre. The impressive line-up of speakers and breakout sessions will also see the Assistant Constable of Police Scotland help to launch the ‘Charter for Safer Businesses’. The Charter

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aims to promote crime prevention and will help to ensure businesses are compliant with a set of minimum standards to ensure in-store security. A breakout session will look at cybercrime and feature ‘live hacking’ by students from Edinburgh University. Replicating the model developed at SGF’s highly successful annual conference in 2015, the event will also feature a trade exhibition for any company or agency with an interest in crime prevention, crime detection, security and reducing the risks to business. SGF Chief Executive Pete Cheema says: “We have put together a great programme based on practical advice and support for businesses

and we have worked extremely hard to make this a FREE event for retailers. We want this to be an annual event so we need the first one to be a success please get in touch with us now to ensure you have a place. It’s also a great opportunity for businesses to get access to retailers by taking an exhibition space – get in touch.”

SGF RETAIL CRIME SEMINAR

16th February Edinburgh For more information contact the SGF on 0131 343 3300 or email j.lee@scotgrocersfed.co.uk

FEBRUARY 2016 | SLR

Inside Business

What’s Trending | #Christmassales

WHAT’S TRENDING?

#Christmassales

We caught up with Scotland’s retailers to find out how sales were over the festive period, what sold well, what they would have done differently and how they intend to grow sales and stay ahead of the market in 2016. Bruce Morgan Best-one at Brownlies Christmas sales were very good this year, much better than we expected. We opened for four hours on both Christmas and New Year’s Day. We opened from 10am to 2pm on Christmas day and we had quite a lot of people coming in to buy last minute purchases, such as alcohol because they had evidently run out and not bought enough. On New Year’s Day we were open from noon to 4pm and we had a surprising number of customers on that day as well. The big sellers were prosecco and champagne, but that was to be expected. We didn’t have much stock left over, a few cards but you just put them away and reuse them next year. Next month

Gerry Begley Woodlands Local Hopes were high over the Christmas period, like they are for every retailer. There’s a lot of expectation put on December and that worries me a little, because if Christmas doesn’t deliver then it can leave a shop with an uphill battle. To that extent we didn’t put excessive targets in place. Sales were certainly brisk though and we’d expect that for the time of year but in comparison with Christmas 2014 they were relatively flat. We were closed Christmas Day and New Year’s day which would obviously have improved things, but it’s important to give staff time off.

Iqbal Sadiq Spar Maryhill Christmas itself was fantastic, the shop was busy the whole month. In fact, we were up 80% on last Christmas. Granted, we had a disaster last year when the power cut on Christmas eve, so perhaps it’s not exactly the best comparison. Over the whole Christmas and New Year period we were +25%, which I’m delighted with. The Post Office has helped as well; when that’s busy the shop is busy and with people sending things through December. The first two weeks in January were quieter, which we expected, but by the end of the month sales were back to where I like them to be, so overall I’m very satisfied.

Brian McCaughey Londis Inveraray Christmas was a bit flat truth be told. It was a bit of an anomaly because we were up 10% for the whole year. But those two weeks were pretty flat, which in part I’m putting down to the fact the weather was so horrendous. I’m still a relative newcomer to retailing so I’m getting used to gauging what influences a good period against not so good, and it’s not easy! We were left with a bit of Christmas stock, which certainly didn’t happen last year. We’ve reduced it and pushed it through in January but we have to turn our attention to Easter now. In general, January has been decent.

#bigideas what one thing would you change about you store? email Émer on eotoole@55north.com

SLR | FEBRUARY 2016

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SLR REWARDS ENTRY DEADLINE: 26TH FEBRUARY 2016

THE SLR REWARDS: AWARDS LIKE NO OTHER The entries for this year’s SLR Rewards are already beginning to pour in, and with a guarantee of a real reward for every winner, it’s no wonder. This year’s Rewards are set to be every bit as big as they have been over the two years since SLR reinvented the industry awards programme. For convenience store owners, entering awards programmes can act as a fantastic way to measure your store against your peers – these fellow local retailers are from all over Scotland and so sharing best practice is very much part of what we’ve always worked towards at the SLR Rewards. Since relaunching our Rewards programme in 2014 the number of entries has soared, and it’s been incredible to see the diversity and innovation among Scotland’s local retailing community. Of course, sharing best practice is just one of the benefits of the SLR Rewards – very much top of that list is the chance to walk away with one of the incredible rewards on offer. This year’s overall Scottish Local Retailer of the Year will win a trip to NACS in the USA, while category winners will get their hands on a veritable bounty of foreign trips, cool tech, away days and a whole lot more. To whet your appetite, just take a look at some of our winners over the last two years. When you’ve done that, head over to www.slrawards.com where you can enter online until 26th February!

DENIS & WILLIAM MCCORMACK In 2014, Denis & William McCormack’s Spar store in Polbeth won Best Refit, winning Denis a trip to Lille in France to visit a UB factory, and soak up some sun. While that experience is one that will live long with Denis, his brother William says awards programmes are great for the whole store. “If you think you’ve got a good looking store, why not enter? It’s great for business, and if you get shortlisted or win, it’s great for staff morale. Plus it’s always a great night out and if you win you can feel like a celeb for the evening.”

WWW.SLRAWARDS.COM

GERRY HAUGHEY Our Confectionery Retailer of the Year winner in 2014 was Gerry Haughey from Spar Thornliebank in Glasgow. In recognition of his incredibly high standards in-store, we sent Gerry to Plymouth for a weekend break with his wife. “The Reward is a definite highlight, but entering awards is all about measuring your store against others, and seeing if you’re hitting the standards you’d like. We’ve been fortunate over the years to win a number of awards and I’d definitely recommend other retailers to get involved.”

SLR REWARDS

ENTRY DEADLINE: 26TH FEBRUARY 2016

SHAUN MARWAHA

COLIN SMITH

In 2014, the Marwaha family in Glasgow won Scottish Local Retailer of the Year for their impressive business growth. Managing Director Shaun Marwaha jetted off to Las Vegas to attend the NACS conference. Since returning Shaun has implemented some of his learnings into his stores, with the company’s food to go offering benefiting in particular. “The NACS show was very, very impressive and we managed to squeeze in an extended study tour to visit a half a dozen different stores of all shapes, sizes and brands. It was there that I first saw the huge importance of food to go. It was just an amazing experience with great networking.”

Operating at the sharp end of retail has led Colin Smith from Pinkie Farm Convenience Store to establish a great store in a short period of time. In 2015 he was named Fresh & Chilled Retailer of the Year and picked up a swanky new smart watch. “Entering awards is important for the business,” he says. “It gives you focus and it certainly helps raise standards to the levels you’d like them to be at. The staff also benefit and there’s the kudos that comes with working in an award-winning store. It is a time consuming process, but it’s absolutely worth it.”

JOANNA & FRANCK CASONATO Our current Scottish Local Retailer of the Year, Joanna Casonato, won a trip to Las Vegas for the NACS conference, with husband Franck joining her. Not only did Joanna and Franck pick up a load of tips for improving their business, but they managed to take in some of the local sights. “Vegas is a great city. It’s not like anywhere else and we absolutely loved it,” says Joanna. “From attending the conference and talking to people we’ve accelerated our learning. There’s always going to be a learning curve when it comes to running a business, but by learning from others, you accelerate your own curve.”

EWAN FRASER Some Rewards are about the community the shop serves, and in the case of Ewan Fraser from Hardthorn Stores in Dumfries which won Community Involvement Retailer of the Year, that is certainly the case. Ewan’s Reward was £1,000 to put towards a community project of his choosing, further establishing his commitment to that community. “It was just a fantastic feeling to hear your name being called out. We do what we can for our community and it’s great for the shop to be recognised.” Such was Ewan’s commitment to his community, he even matched the £1,000 and gave £500 to four different projects.

Inside Business

2 Minutes | Dan Howell

Dan Howell One of Scotland’s best known grocery suppliers has had a name change, so we caught up with Dan Howell, Commercial Director at the newly named Müller Milk & Ingredients, to find out the background to the change and what the company has planned for 2016. WHAT’S THE THINKING BEHIND THE NAME CHANGE? The new name reflects our new combined business. We are now focused on bringing Müller Wiseman Dairies and Dairy Crest’s dairy operations together to create a brand new organisation – Müller Milk & Ingredients – which aims to be the biggest and best of its kind in the UK.

CAN RETAILERS EXPECT ANY CHANGES IN THE WAY YOU WORK WITH THEM? FACTFILE Dan Howell is Commercial Director at the recently renamed Müller Milk & Ingredients.

This transaction is good news for our customers – it will help us to achieve economies of scale, reducing our costs and enhancing our ability to compete. In the first instance, however, it is business as usual. We’ll continue to provide our customers with quality products at good prices. Though in the longer term we believe retailers will benefit as we’ll be able to add value through end to end supply chain solutions as well as enhanced innovation, and we’ll be able to offer a wider range of products. When it comes to pricing, the competitive market conditions will continue to regulate that aspect of the business.

CAN WE EXPECT CHANGES TO THE BRANDS, OR IS THIS JUST A CORPORATE CHANGE? By lowering our production costs and improving our efficiency we can unlock the potential for higher levels of supply chain innovation and product development. In the context of a fresh milk sector, which has not to date been able to innovate in comparison to other key categories, this represents a significant opportunity for our customers and consumers. We see real opportunities for the FRijj brand in particular. Müller’s brand building expertise and 32

SLR | FEBRUARY 2016

extensive track record of growth and innovation within the flavoured milk market in Europe means that we are well-placed to invest in innovation and branding to further enhance FRijj’s performance.

WHAT ARE THE PLANS FOR THE COMPANY IN 2016? Müller Milk & Ingredients can play a major role in invigorating and revitalising the UK’s fresh milk and dairy ingredients sector, and that’s our plan for the future. Our aim is to become a successful milk and ingredients business as quickly as possible. To do this we will prioritise the delivery of great products and service, building an engaged workforce, putting in place common systems and processes, and achieving higher levels of competitiveness through savings from combining the two businesses.

HOW IMPORTANT A ROLE DO YOU THINK MILK PLAYS IN CONVENIENCE? Fresh milk is hugely important in convenience. We know that milk is a crucial footfall driver – one in every eight shoppers say that milk is the main reason they visit their local convenience store, along with news/magazines (15%) and cigarettes/tobacco (14%). And Black & White is helping to grow the overall market, with its MAT volume growth ahead of total milk market (+2.2% vs +0.6% (B&W total market MAT growth +2.2% or B&W total impulse growth +2.5%)). It has been another tough year for fresh milk, however at Müller Milk & Ingredients we are committed to growing the fresh milk market by focusing on adding value back into the category, which is a crucial strategy for us next year. www.slrmag.co.uk

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Inside Business

SLR Rewards 2015 |Food to Go

PUTTING FOOD TO GO FIRST Taking food to go in convenience to new standards with a catering kitchen and a huge range of products made in-store every day, Nisa Local David’s Kitchen is an example of just what can be achieved in the food to go category.

TOP FOOD TO GO TIPS Q Nisa Local David’s Kitchen in Glenrothes puts food to go at its heart, preparing fresh food in-store every day Q With the David’s Kitchen brand, the store also has its own range of ready meals Q Focussing on local ingredients and a changing menu helps drive return business Q Learning as it goes and altering its offer helps keep shoppers interested Q Covering hot and cold food, from soups and sandwiches to a host of meal options, the store has something for everyone.

SLR | FEBRUARY 2016

he expectation of what shoppers want from a food to go fixture continues to grow, so retailers have to be increasingly savvy, from using concessions and franchises to offering a diverse range of products to adhere to current trends in the category. Or they can go their own way, and it’s precisely that sort of innovation that saw Nisa Local David’s Kitchen in Glenrothes win our Food to Go Retailer of the Year award in 2015. The scale of ambition at the store is impressive. Having established the David’s Kitchen brand in David Sands stores before selling that business, Sands teamed up with former store manager Keith Fernie to establish a convenience store with foodto-go at its heart. The huge kitchen is bigger than many delis have, and the array of foods coming from the kitchen team includes meals suitable for home heating. The hot food counter has a wide range, and a selection of sandwiches lure in the lunchtime trade. Homemade soups are sold in tubs and the service area is well-designed, with chalk board signs

giving it an authentic feel. “The store is just going from strength to strength since the SLR Rewards,” says Keith. “It’s performing well and we’re improving things as we go.” The biggest change in the business has been the opening of a second store, in Falkirk. “It’s based on the same principal with food to go at its heart,” says Keith. “We’ve taken what we’ve learned in Glenrothes and that’s helped inform the Falkirk store.” The reward for the store last year was £500 worth of Ticketmaster vouchers from Britvic which can be used on any sporting, musical, or arts events in the UK. As yet the vouchers are under lock and key, as Keith explains: “We want to organise a staff night out, so we’re waiting for the right event to come up.”

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Responsible Retailer of the Year | SLR Rewards 2015

Inside Business

BIGGER PICTURE

Family Shopper Lochside in Ayr triumphed in our Responsible Retailer of the Year category at last year’s SLR Rewards, with Sukhi and Jarnail Sanga taking home £500 in Amazon vouchers in addition to the award itself. We caught up with them to discuss their approach to community retailing.

ocal retailers have always been relied upon by the community and this responsible approach to retailing is especially significant for stores located in challenging communities. The first Family Shopper store in Scotland, Sukhi and Jarnail Sangha’s shop is located in one of Ayrshire’s most deprived areas with high unemployment levels, major drug and alcohol problems and a range of social issues. With that in mind, Sukhi and Jarnail and their team go to great lengths to work with the local community to educate them on a range of vital areas. From employing local people with difficult backgrounds to organising training sessions in the local community hall, the team won this year’s award for going above and beyond the call of duty seven days a week. Communication is at the centre of the team’s approach: explaining to customers why they can’t buy certain products or helping them make better choices has been more successful than simply refusing to sell. “This has great long term effects. The restrictions on alcohol results in less family and social problems in the area and, as a result, customers start to realise why the policy is there in the first place. There is the odd customer who doesn’t like our policies but that’s just life,” Sukhi explains. This year, the shop is going through major www.slrmag.co.uk

alterations. There is a coffee machine moving into the store, which is sure to increase food to go sales as well. A post office will also be moved into the store and this will improve convenience for customers by offering them everything in one place. The shop floor is also being rearranged for disability access, in terms of lower shelving. The shop will be closed for a few weeks for these to take place. However, business is thriving. Sukhi expected January to be a quiet month in terms of sales but they have had to order in more bread and milk to keep up with demand. “It hasn’t been amazingly busy but I’d say it has been good for January. I don’t know if it is because people are budget conscious at this time of year so are avoiding filling up a trolley at the supermarkets. It is hard to say,” says Sukhi. Family Shopper’s prize was £500 in Amazon vouchers. Sukhi says she hasn’t spent the vouchers yet but after the shop’s alterations, she is considering buying a printer, photocopier, laptop or iPad for people who don’t have access to one at home. “iPads and laptops may be part of our daily lives but some people don’t have access to these facilities,” Sukhi says. However, she adds that this could be problematic because it would be difficult to determine how much time a customer is allowed to spend on the iPad or laptop.

Sukhi says customers were “overjoyed” that the store won the Responsible Retailer award. She added: “They thought the award was a great achievement as they have noticed many changes throughout the store.”

FEBRUARY 2016 | SLR

Inside Business

Lobbying| SGF Local Shop Report

MAKING OUR VOICE HEARD WHERE IT MATTERS!

Following the publication of the SGF Local Shop Report, the Federation – with the support of Gordon MacDonald MSP – hosted a parliamentary reception to present the report to Members and encourage them to support their own local stores, and SLR was there to report on what was a well-attended and popular event.

Former First Minister Alex Salmond lends his support.

“In Biggar, our high street is busy and people are engaged with their local shops. That could and should be replicated anywhere. It’s in everyone’s interests to support their local shops.” AILEEN CAMPBELL MSP, SNP

Labour leader Kezia Dugdale with SGF Chief Executive Pete Cheema.

“Convenience stores are essential for local people and for local economies. It would be a real tragedy if the market was to decline given the service these shops provide. They’re also a fantastic source of local employment.” MURDO FRASER MSP, SCOTTISH LIBERAL DEMOCRATS

SLR | FEBRUARY 2016

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SGF Local Shop Report | Lobbying

“I’m delighted to see that the number of convenience stores is growing. It reflects the fact that people want something different to supermarkets, and that local services are important to them, that they really matter.” BRUCE CRAWFORD MSP, SNP

Inside Business

“I am fully committed to encouraging and protecting local shops that are unfairly hampered by big store oligopoly. My local high street once had a deli, a butcher; now I can get my hair cut but I can’t buy my dinner. The loss of local businesses leads to a loss of skills and communities. The likes of Bruntsfield and Morningside are examples that prove local high streets can work.” ALISON JOHNSTONE MSP, SCOTTISH GREEN PARTY

“There is a growing sense of diversity in retail in the high street. People are becoming tired of using the same three of four supermarkets. It’s not healthy for communities, for local economies or for the environment for 80-90% of spend to be squeezed into one or two big companies.” PATRICK HARVIE MSP, SCOTTISH GREEN PARTY

“Convenience stores have proven time and again that they are a requirement in local communities. When they come under threat, people tend to show their support. In Kirkcaldy, we’ve been helped by Kirkcaldy For All, which has done a superb job of helping local businesses by organising a series of events in the town.” DAVID TORRANCE MSP, SNP

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FEBRUARY 2016 | SLR

Inside Business

Profile | Mani Dhesi

‘LED’ING THE WAY

Since upgrading his lighting to LEDs, Glasgow retailer Mani Dhesi is saving £240 a month in electricity, paying back his investment in just over nine months. And that’s just one of the tricks Mani has used to drive more value into the business. BY KEVIN SCOTT

ani Dhesi is not a retailer to rest on his laurels. The 2014 SLR Responsible Retailer of the Year has refined and added new aspects to his business over the years, some so subtle that few will notice, but each playing an important role in growing footfall and revenue at his store. For a start, running his Day Today convenience store in Maryhill in Glasgow is only part of Mani’s working life – he’s also a fireman at the nearby Milngavie station. So, when he is in the shop, he makes his time count. The last major refit may have been over a decade ago, but more recently Mani decided to invest in LED lighting – technology he’d had his eye on for some time. “When we did the refit LED was around and I was interested in the cost savings, but it was prohibitively expensive, so we stuck with the standard strip lights,” he says. The result, as most retailers know, is a ‘dark light’ that can be expensive to run, and it can be costly to replace bulbs. These lights played a starring role in Mani’s £890 a month electricity bill. Once he’d made the decision to switch to LEDs he used a contact at his wholesaler to get the right team on board. The work was carried out in a day, with all his ceiling lights

and external lights replaced with LEDs. Each of the panels in the shop cost just £85 – taking his total bill to £2,200. “It was a reasonably small investment,” he says. “But the difference it’s made is incredible.” The savings were immediate. Mani says his electricity bills are now around £650 a month, a 27% saving. “The money was the main reason for doing the upgrade, but it’s also made the shop so much nicer – I’ve always maintained a clean shop, but it looks so much cleaner and brighter now.” What’s more, the units last around eight years, which in Mani’s words means: “I’ll not have to jump out to buy new bulbs in the middle of the shift anymore!” However, it’s outside the shop that Mani has noticed the big difference. Where previously the signage was lit with a couple of old strip lights, there’s now four LED spotlights. “It’s like the middle of the day at night-time,” he jokes. “I’ve noticed a couple of benefits to this – the fascia is much more noticeable, and being on a main road that means more people driving past will see that we’re open. The other benefit is that because our ATM is outside, we’ve found more people are using it at night.” Mani explains that the nearest other ATM is poorly lit, so more people are favouring his

WELCOME TO THE NEIGHBOURHOOD When a new housing development opened up near Mani Dhesi in the west end of Glasgow he saw the residents as potential new customers. However, rather than rub his hands together and wait for the shop door to swing open, Mani swung into action. Working with his wholesaler and half a dozen suppliers, he made up 100 welcome bags and set off for the new houses with a member of staff. “We knocked on every door, explained where we were from, said ‘welcome to the area’ and handed over the bag along with a leaflet with our details and all the services we provide,” he explains. The bags contained the likes of bread, milk, coffee, tea – all those essentials that are the first thing people look for. With the leftover bags, Mani headed for the local foodbank and handed them over, giving both his store and the suppliers a good PR opportunity, while most importantly, helping out those who need it the most. “There are more houses opening in April,” he says. “So I’ll be ready.”

SLR | FEBRUARY 2016

ATM, meaning more are coming inside to spend their money. Installing LED lighting is just one of the ways in which Mani has recently innovated. He also developed a relationship with a dry cleaning business, where he takes in people’s clothes and issues them with a ticket, passes the clothes onto the dry cleaners before handing the freshly cleaned garments back to customers. “That’s been really successful for us,” he says. “It helps that we offer more than a standard convenience offering.” Such was the success of this plan, that a similar deal was made with a local phone repair business – like the dry cleaning, Mani takes receipt of phones and tablets in need of replacement screens, passes them on and can have them back for the customers the same day. “They love that we can turn it round so quickly, and the partner I work with on this does a really good job, so my customers tell their friends to bring their devices in here, and we get more business that way. It’s winwin.” Parcel collection is another subtle addition that has helped the business. “I can see why some people think it’s a hassle,” says Mani. “But we make more commission from taking delivery of 100 parcels a week than we do from PayPoint, so why wouldn’t we do it?” This has fringe benefits too, as Mani points out: “When someone comes in to pick up their parcel they have to show the barcode on their phone – I’ve trained the staff to look out for phone screens that are cracked, so they can remind the customers we can repair them. We’ve had a good bit of business from that.” With a tightly stocked store selling an essential range of convenience goods, Mani proves that to run a modern c-store you have to do more than just the basics. “Shops that are quiet just aren’t reacting to the modern needs of their customers”, he says. “I might frustrate the life out my staff with every little service I add on, but that’s how we need to respond. Retailers need to do everything they can to grow their business.” www.slrmag.co.uk

Mani Dhesi | Profile

Inside Business

Mani Dhesi is a retailer always looking to generate new revenue streams.

Maniâ&#x20AC;&#x2122;s old lights served him well, but the LEDs are far more cost-effective.

The LEDs have brightened up the store, and are saving Mani ÂŁ240 a month!

The new exterior lights have made the fascia more of a beacon for passing trade.

www.slrmag.co.uk

FEBRUARY 2016 | SLR

WOODLANDSlocal

Inside Business

Woodlands Local | Monthly Update

DEFYING THE WEATHER TO DELIVER GROWTH Despite months of heavy rain, poor weather and suppressed footfall, we’ve been working hard to get the store ready for when a bit of better weather arrives. BY ANTONY BEGLEY

s all retailers know, it’s hard to underestimate the impact that an extended period of consistently bad weather has on sales. We’re learning that first hand at Woodlands Local as a year’s worth of hard work, improvements, significant investment and innovation have for the last six months basically been undermined by, well, rain. It’s actually been quite a revelation how hard poor weather hits the business. We undoubtedly have given more customers more reasons to visit the store more often than ever before over the last year, yet footfall remains flat and sales remain inconsistent. And it’s crystal clear to me

A WORD FROM THE EDITOR... OF THE SCOTTISH SUN! Scottish Sun Editor Gordon Smart showed his support for Woodlands Local by leaving his editor’s chair for a morning to get behind the till at Woodlands for a morning last month. Smart welcomed shoppers, served them, and of course tried to ensure they took home a copy of his newspaper!

SLR | FEBRUARY 2016

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Monthly Update | Woodlands Local

Inside Business

Plans are underway to replace all of the store’s shelving and lay a new floor, effectively meaning that we will have refitted the entire store since we took over two years ago. New broader range of e-cigarettes and liquids agreed and due to arrive in store over the next couple of weeks – hopefully drawing new shoppers into Woodlands. Initial reports from the Woodlands Local Rewards Club suggest that Members are spending almost twice that of nonmembers per transaction; a huge result.

that the single biggest factor driving that is the fact that it pretty much hasn’t stopped raining in Falkirk for the last few months! We can deliver all the incentives in the world to draw customers to the store – and believe me, we’ve tried – but it all comes to naught if they look out the window and it’s coming down in buckets. All we can do from here is knuckle down and get ready for the spring, and hopefully some sunshine. We can’t say we’re not prepared for it.

DATA DRIVEN The big psychological problem here, of course, is that we spend a lot of time analysing a huge volume of data coming out of the store. The RS EPoS system we use is highly capable and delivers us massive amounts of very detailed reports, updates, trends and highlights literally every day. It’s great being able to see that amount of insight and truly understand the business from top to bottom and back to front. The downside of that is when most of the data we’re seeing isn’t telling us what we want to hear. A year’s worth of investment and hard work has delivered insignificant sales growth and very little impact on footfall. It can be frustrating to see that, disheartening even, but like every other retailer we have to pick ourselves up every day and stay true to our strategy of continually improving the store and continuing enhancing the customer’s experience. It doesn’t help that 2014 was a bumper year: great weather throughout much of the year and a raft of huge sporting and social events. Repeating the numbers of that particular year was always going to be a toughie, but it’s one www.slrmag.co.uk

thing understanding that 2015 was going to be flatter and an entirely different thing to see it playing out like that day by day, week by week, month by month.

TEAM SPIRIT One particular challenge we face at Woodlands Local is keeping the team in the store driven and focused. We give the senior team a good degree of information on the performance of the store so when they see consistently downbeat numbers it’s easy to see why can begin to wonder what they’re doing wrong. But like all teams, we need to work together to keep building the platform for when the good times (and weather) return, as they surely must. So despite a disappointing year we’re continuing to invest and develop the store, which can be painful at times – financially and emotionally – as I’m sure most retailers can understand. But it’s all about keeping the faith and ensuring that the entire team keep their eyes on the prize. Our latest commitment is to renew all of the shopfloor shelving and replace the flooring; it’s another big commitment but once it’s done it will effectively mean that we have refitted the entire store. Our customers value the fact that we’re investing in their store and we are confident that this will stand us in good stead in the future. Once that’s done, it’s all down to working with the team to drive store standards as high as we can get them and delivering a fantastic experience for our customers every day. If we can achieve that – and the sun makes an occasional appearance – we will start to see more solid and consistent growth. Bring it on!

WHAT’S

HOT

The highs...and the lows of life at Woodlands Local

WHAT’S

NOT Unrelenting torrential rain has caused the collapse of part of the ceiling once more, less than a year after the roof was entirely re-covered. We’ve lost another two LED lighting panels and a section of the ceiling this time. Our foray into real ales hasn’t yet proved successful with only a handful of the new range of craft beers we introduced selling consistently in decent volumes. We will persevere but with a reduced range. Thanks to our new bake-off oven, we’re seeing the electrics trip when it’s on at the same time as the main oven. Grrrr!

FEBRUARY 2016 | SLR

WOODLANDSlocal

Inside Business

Woodlands Local | Reinvestment Plan

CONTINUAL REINVESTMENT PLAN CARRIES ON Practising what SLR has long preached, Woodlands Local’s continuous reinvestment plan is set to carry on with the addition of all new shelving and flooring. BY ANTONY BEGLEY

ince taking over at Woodlands Local a couple of years ago, we have always been extremely conscious of the fact that running our own store meant that that we would have no choice but to practice what we had long preached in SLR on a whole array of fronts. It’s one thing acting as publishers and journalists to encourage retailers to constantly strive for best practice and another thing entirely to actually do it ourselves as retailers. One area where this challenge becomes particularly difficult is in the practice of continual reinvestment. In the pages of SLR we have long been committed to the notion that retailers need to continually invest in their stores to keep pace with the rapid evolution of the convenience retailing market and the changing demands and expectations of convenience customers. It’s something that all trade magazines in this sector espouse. But SLR is unique in the UK in being the only trade title with experience of being on the other side of that fence too. It’s far less straightforward to adhere to a programme of continuous investment when it’s your own money you’re continually investing, as we’re rapidly learning.

BREAKING THE CYCLE Most in-store improvements cost significant amounts of money. We all know that. And there are always so many (valid) reasons why that might not be easy right now. We may even see it as impossible; perhaps the store isn’t making enough money at the moment to justify spending on improvements. But the very tough reality is that it’s this approach that has gotten so many retailers into difficult times in the past. Routinely postponing or cancelling investment means the store is

SLR | FEBRUARY 2016

slowly but surely slipping behind trends in both in-store development and technology. With so much competition out there every retailer simply has to invest to compete. Breaking that cycle can be painful, but it’s something that we’ve had to confront in the store time and again. And it’s set to happen all over again now as we look to replace all of the tired old shelving and lay a new floor throughout the shop to complete phase one of what has been to all intents and purposes a full refit of the shop. Our spend in the store since we took over is now probably north of £70,000 including all new refrigeration, all new energy efficient lighting and electrics, the addition of a new three-phase electrical supply, a full refit of the counter and hot food areas and a new EPoS system. It feels in some ways that laying the new floor is the final piece in the stage one jigsaw, the end of the beginning of our lives as retailers. There is absolutely no doubt that this has been a painful process, in financial terms, but we are confident that the spend has given us a fantastic platform upon which to build an

“It’s one thing acting as journalists to encourage retailers to constantly strive for best practice and another thing entirely to actually do it ourselves as retailers.” www.slrmag.co.uk

Reinvestment Plan | Woodlands Local

Inside Business

A WORD FROM THE BOSS

exceptional store that will provide exceptional service to our customers for many years to come.

FINAL PIECES The addition of new shelving and flooring effectively means that everything in the shop – from the customer’s point of view – is under two years old. Their tired local store has been transformed into a modern, bright, clean and attractive convenience outlet. Don’t get me wrong: there’s still lots to be done, and there’s lots that we would do if we had more money available – but the reality is that we don’t. So we’re cutting our cloth, but we’re literally reinvesting every penny we can afford to. The new shelving and flooring are vital to our plans however. It will give us the opportunity to introduce a huge new range in the store and present it in the best possible fashion. We’re excited about finally having a store we can genuinely proud of. But that doesn’t mean we’re not nervous about doing it. At the end of the day, though, if we don’t take the tough decisions like these that we’ve long encouraged our readers to take themselves then there’s not much point in us owning a store. www.slrmag.co.uk

“Our spend in the store since we took over is now probably north of £70,000.”

Well, that was January then, was it? I don’t know about everyone else but for us January was another wet and mostly miserable month that saw footfall a fair bit lower than this time last year. It’s been a pretty tough last six months or so and I put that down more or less squarely to the fact that it hasn’t stopped raining here for months – give or take the odd day where it’s snowed. It’s frustrating to say the least. We’ve been making so many positive changes in the shop and giving our customers more and more reasons to visit more often – only to have our hard work undone by rain, rain and more rain. And right on cue, the roof gave way yet again at the end of December, destroying another couple of our nice, expensive LED roof lighting panels, as well as a small chunk of the ceiling. That flat roof is turning out to the be the bane of our lives; that and unreliable workmen! But the rain can’t last for ever and we’re keeping a stiff upper lip and just working away at doing the best job we can for our customers. On a far more positive note, our Woodlands Local Rewards Club is really starting to make a difference now and those customers who have joined are spending far more per transaction than non-members, so that’s a bright spot. Actually, January’s sales are very slightly up on last January’s, we are still making progress, so there’s that to hold onto – but I’m hoping and praying for a wee spell of better weather. It’ll also be good to get to pay day again because most of our customers are struggling for cash come the end of January, for obvious reasons. Roll on February and let’s see what that brings.

Gerry FEBRUARY 2016 | SLR

WOODLANDSlocal

Inside Business

Woodlands Local | Food To Go Refit Results

FOOD TO GO REFIT DELIVERS SALES AND PROFITS RISES The refitted food to go section of Woodlands Local has already begun to deliver very significant uplifts in both sales and margins.

ood to go has long been the key shopping mission at Woodlands Local. Even from the days before SLR took the shop over, there would be customers waiting for the doors to open in the morning. The store is well known in the area for its hot and cold foods, with breakfast and lunch sales always consistently very high. We knew that we could drive this side of the business even further though; there were product lines we weren’t offering. So, we decided back at the end of last year to capitalise on that by fully refitting the food to go counter area within the shop as well as adding a whole new range of kit including a new hot hold, new serve over refrigerated cabinet and a new oven. Part of that refit also involved adding a new, much expanded range of savoury and sweet

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SALES AND PROFITS ON THE UP Since the refit of the food to go section of the store and introduction of an expanded range from Cuisine de France the section has delivered consistent growth on all fronts:

OCT-DEC Sales: +3% Margins: +2.85%

products from Cuisine de France – and as we hoped, it has proved to be successful. That kicked off in earnest after the refit at the end of last year and the great news is that both sales and profits have risen, despite the abysmally poor weather over the last two months battering our footfall figures. Sales have been up by just over 3% which is good – and mildly surprising news – given the weather, and even more importantly, profit margins are up by 2.85%. This is on top of the already very solid profit margins that the food to go section of the store was already providing. Safe to say that we are pleased with the results and intend to continue to focus on the section over the coming months, adding in new products including bake-off breads, doughnuts, pastries and more.

CORE RANGE With relatively limited freezer space and a customer base more used to a basic menu, we decided to start the introduction of our Cuisine de France range with some solid favourites: Q Steak Slice Q Cheese & Onion Slice Q Sausage Roll Q Bacon & Cheese Turnover Q Croissants As time goes by we will be introducing a wider range of savoury pies, chicken products, pizza slices, breads and sweet items.

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Inside Business

Rewards Club Update | Woodlands Local

REWARDS CLUB MEMBERS SPEND 43% MORE THAN NON-MEMBERS!

While it’s still very early days for the Woodlands Local Rewards Club, we’re already starting to see some truly astonishing results emerging. BY ANTONY BEGLEY

t’s not unfair to say that the first couple of months of having the Woodlands Local Rewards Club (WLRC) running in the store have been challenging, but we’re already beginning to see some fascinating data emerge. The latest, frankly astonishing stat, is that WLRC members spend an average of £7.08 per transaction; that compares to the standard non-member

figure of £4.94. Or to put it another way, Members spend 43% more than non members every time they visit the store! Let’s be clear: the base here is very, very small so we’re absolutely not getting carried away yet, but the fact remains that members seem to be spending far more than nonmembers.

TEETHING ISSUES Stats like those serve to re-energise our commitment to the Rewards Club as a key spoke of our strategy going forward. The challenges so far have indeed been significant, although this was almost entirely down to issues relating to getting the EPoS system www.slrmag.co.uk

and the Darius shopper engagement system that powers the WLRC to talk to each other efficiently and well. Integrating software systems that have never been integrated before was always going to be a challenge and to be fair to our EPoS provider Retail Solutions and to Velocity Worldwide, the people behind Darius, they have worked tirelessly to tackle every issue that has arisen. Velocity in particular has been an impressively enthusiastic and committed partner in this project and has pushed the Woodlands Local and SLR teams to hit some very demanding goals in just a couple of months.

WHAT’S NEXT? A recent roundtable saw a big contingent from Velocity and Woodlands gather to plan the next quarter’s marketing activity as we endeavour to keep rewarding members, and keep incentivising non-members to join. It’s a relentless and complex task which requires us to have four or five marketing messages active at any one point on time, every week of the year. But with the great results we’re already starting to see, it’s very clear that the WLRC could be the beginning of something very big indeed. FEBRUARY 2016 | SLR

WOODLANDSlocal

Inside Business

Woodlands Local | Soft Drinks Remerchandising

OPERATION O REMERCH: SOFT DRINKS

The latest category to be overhauled part of our Operation Remerch strategy to remerchandise the entire store saw us tackle the hugely important soft drinks category.

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peration Remerch – our project to remerchandise the entire store is now well underway and the latest category to get the treatment is the soft drinks category. As in most convenience stores, soft drinks are massively important to Woodlands Local. Soft drinks is in fact the biggest selling category in the store by volume so it’s extremely important that we take regular fresh views of the category. Over the months and years we have, like most stores, managed to gather a far wider array of products than is optimal. Range proliferation is a real problem as new lines have a curious habit of finding their way into the chiller: through free stock or samples from suppliers, from pushy sales reps, from inaccurate deliveries and more. Once a product is on the shelf, our re-ordering processes currently ensure that it’s unlikely they’ll be identified and delisted quickly.

THE PROCESS So the process began with running 12 months of EPoS numbers giving us a good, broad view of the category sales. We then overlaid data about promotional sales (which skew the overall sales figures) and data about when any products were introduced over the last 12 www.slrmag.co.uk

Soft Drinks Remerchandising | Woodlands Local

Inside Business

“During the remerchandising of the soft drinks chillers we ended up delisting more than 50 SKUs!” months. This allowed us to gain a half decent picture of which products are doing well and which less so. That done, we drew a figurative line in the sand and decided to delist everything with a lower rate of sale than approximately a case a month. That meant we had to delist in excess of 50 SKUs! We ran our usual sense-checks for each delisted product to ensure it didn’t regularly appear in unusually high basket spends but found once again that none of the delisted products was in any way unusual. In order to get rid of many basket loads of delisted stock we have created a temporary ‘clearing’ shelf in one fridge to sell the delisted lines through at a 50% discount. We anticipate that all delisted stock will be gone within a couple of weeks. What remains is stock that we know for sure has proven its worth and has very solid rates of sale.

MERCHANDISING Next we decided how the category should be remerchandised in our chillers. Nothing too clever here. With one large dairy deck and one double door chiller for soft drinks, we packed the dairy deck full of the biggest selling, bigger ticket brands. We did retain some cheaper brands with much lower margins but shifted them into the farthest away corner of the doored chiller. If our customers are desperate for low margin products then we’ve made them work to find them. Within the main dairy deck we now have energy drinks top shelf (highly visible but not within the reach of kids), colas and fruit flavoured carbs on the eye level shelves (the Coke and Irn-Bru family of products) then a full shelf of our best-selling Lucozade lines. Below that we have larger format packs of our most popular lines. Within each of these sections we’ve hugely increased the space for our very top selling lines like Irn-Bru, Coke and Red Bull. Not only does this make the products more impactful for customers, it also makes keeping the fixture well stocked much easier. There’s now room to put entire cases of these products on www.slrmag.co.uk

GUIDING PRINCIPLES

shelf in one go which means a tidier stock room and a quicker replenishment procedure. In the closed door chiller we have added the kids drinks (Fruit Shoot), the fruity drinks (Ribena, Vimto, Oasis) and the plain and flavoured waters on the right hand side with the sports drinks on the left hand side. The plan is very straightforward but we’re hoping to see an increase in sales volumes and, more importantly, an increase in cash margins.

1. Delist everything that sells less than a case a month 2. Sell all delisted stock through at 50% discount to clear quickly 3. Create more space for big selling lines by adding more facings 4. Allow enough room in the chiller for the biggest selling lines to be restocked a full case at a time 5. Merchandise the sub-categories in a sensible structure to make navigation within the category as easy as possible.

FEBRUARY 2016 | SLR

Hotlines

Product News & Media Watch

Crunch time for McCoy’s KP Snacks An improved more crunchy texture will be launched across the entire McCoy’s range, as well as a stronger flavour across its top-selling packs: Salt & Malt Vinegar, Cheddar & Onion, Original and Paprika. Available now, the changes follow the brand’s recent re-design and aim to strengthen its appeal to a younger male audience. The packs will now also feature a front of bag flash.

Seeing the tropical rainbow

Limited Edition Hot Cross Bun popcorn Tangerine Confectionery An limited edition Hot Cross Bun popcorn (rrp £1.49) has been launched by Butterkist for the Easter snacking market. It will be the first Hot Cross Bun popcorn on the market developed following consumer research that 95% of consumers are interested in seasonal popcorn.

Naked Kale Blazer PepsiCo Naked Kale Blazer will add to PepsiCo’s Naked portfolio. The new Kale Blazer smoothie is made up of 30% of vegetables, two thirds of which is kale, and is a source of potassium, Vitamin K and fibre, and provides two of your five a day. Kale Blazer will be available in a 450ml on-the-go bottle (rrp £2.36) and 750ml format (£3.49).

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Wrigley is adding a juicy new variant to the Skittles range, with the launch of Skittles Tropical. Skittles Tropical single bags (55g, rrp 49p), hanging bags (125g, rrp £1), and sharing pouches (174g, rrp £1.28) offer flavours including Orange, Passion Fruit, Tropical Punch, Watermelon and Pineapple.A £1 pricemarked hanging bag will also be available. Skittles Tropical is a bestselling Skittles flavour in the US, and UK consumers voted it as the product they would most like to see added to the existing £38m Skittles range. A fast-growing flavour trend, tropical has been mirrored in other categories and is performing exceptionally well with value growing year-on-year. Skittles Tropical is expected to deliver +1.5% fruit confectionery category growth. Forming part of the brand’s multi-million pound investment for 2016, the launch will be supported with a brand-new television commercial. The brand’s digital campaign will reach over 10 million people, while in-store execution will also support the launch phase. Dan Newell, Wrigley Confections Marketing Manager, commented, “Tropical flavour has always been popular in the UK. As such, it represents huge sales opportunity for retailers to keep up-to-date with the latest flavour trend in the fruit confectionery category. “The Skittles Tropical launch also offers a great platform for retailers to generate in-store activity during the winter months by bringing flavours of the tropics to the UK winter.”

Coca-Cola life recipe Coca-Cola Enterprises The sugar content of Coca-Cola Life has been reduced so that it will contain 45% less sugar than regular (full sugar) colas. The new recipe replaces the first version of Coca-Cola Life which was launched in 2014 and contained a third less sugar and calories than regular colas. The product will continue to be sweetened with a blend of sugar and stevia plant extract.

Coca-Cola Zero Cherry Coca-Cola Enterprises In a bid to attract a new wave of young adults to the brand, CocaCola Zero Cherry has been launched in single packs of 330ml (rrp £1) and 500ml (rrp 49p) PET formats. The launch is an attempt to tap into the consumer trend for new, lower calorie flavour variants whilst on-the-go, and comes at a time when Cherry flavours in +22% growth. Coca

Walkers Meaty Mix Ups PepsiCo A new Meaty addition will add more variety to the Walkers Mix Ups portfolio. The new flavour is available now in a sharing format (rrp £1.99), and contains a medley of Doritos, Monster Munch, Wotsits and French Fries. Within the first eleven months of launching, Walkers Mix Ups drove 14.4% penetration to the market.

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Product News & Media Watch Max Flame Grilled Steak and Max Cheeseburger Pepsico

Limited Edition sandwich range Ginsters

Following the launch of Max Flamin’ Hot last year, Walkers is continuing to expand its range with two new flavours: Max Flame Grilled Steak and Max Cheeseburger (rrp 75p). To help retailers maximise sales, Walkers is providing a three case stacker for the pack.

Tear ‘n’ Share Pepsico

Two new limited edition sandwiches (rrp £2.99) have been launched by Ginsters. The new flavours were launched on 13th January and will be available for a limited time only. The Chicken Balti Sandwich is 100% British roast chicken breast in a smokey balti sauce with lightly spiced cumin yoghurt dressing and spinach leaves on malted grain bread.

Cookie Notti Empire Bespoke Foods

Walkers is bringing innovation to the sharing segment with Tear ‘n’ Share: a bag that turns in to a bowl (rrp: £1.99/150g). The new range features a thicker cut crisp in a pack that can be transformed into a sharing bowl for family and friends. Launch flavours are Lightly Salted, Salt & Malt Vinegar, Cheddar Cheese & Onion, Sticky BBQ Ribs and Sweet Chilli.

Following a rise in sales for its Duo Penotti chocolate hazelnut spreads, Empire Bespoke Foods has added Cookie Notti (rrp £2.59) to its range. The four caramelised cookie spreads are available in Original, Crunchy, Cappuccino and Espresso. The smooth and crunchy variants are made using real Belgian Speculoos biscuits and the Cappuccino and Espresso lines are made from ground coffee.

MEDIAwatch

Hotlines

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Britain’s Next Top Model Head & Shoulders above competition This year, Head & Shoulders will be the official shampoo sponsor of the new season of Britain’s Next Top Model, which will come to entertainment channel, Lifetime, in January. The series will contain a special Head & Shoulders sponsored episode, where the models will communicate its benefits.

Tetley launches £10m investment to engage shoppers with tea The market for tea is predicted to return to growth within 10 years so Tetley has invested £10m in a marketing campaign to change shopper attitudes to tea. The campaign will begin with the launch of a new TV advert, ‘It Starts With Tea’, scheduled to run for eight weeks until March and again in April.

Kinder spreads the joy A retailer competition launched by Kinder is set to drive customers into store and increase Easter sales. The competition winners will receive everything they need to create an Easter Egg Hunt in-store or within their local communities, including marketing materials such as posters for shop windows, branded goods, free stock and customer prizes.

Red Bull hits the gym Haggis meatball Macsween

New look singles Cadbury

The world’s first haggis meatball has been launched by Macsween. The Macsween Highlander Meatballs combine beef with Macsween’s haggis and a blend of spices and pepper. The Highlander Meatballs have an rrp of £2.

A new look for Cadbury’s singles is set to roll out this month. The new look will feature purple bookend wraps to provide a stronger on-shelf appeal and help retailers to display the full range more easily. The new packaging will feature on singles of Wispa Gold, Crunchie, Boost, Picnic, Starbar, Flake, Boost Duo, Fudge, Chomp and Curly Wurly.

Red Bull is out to get the public off the couch and onto the treadmill with its latest marketing activity. The ‘One Can and You Can’ campaign promotes the message that one can of Red Bull can give consumers the energy and motivation to get moving, positioning the brand as the difference between a night on the sofa and a night at the gym.

Purdey’s thrives with Idris Elba Multivitamin fruit drink Purdey’s is launching its biggest-ever campaign – titled ‘Thrive On’ – in collaboration with actor Idris Elba. Purdey’s says the campaign will “explore, celebrate and inspire people who have the courage to follow their own path, who value a life built on experience and discovery, and who continue to strive to better themselves.”

for all the latest product news, head to www.slrmag.co.uk/category/product-news/ www.slrmag.co.uk

FEBRUARY 2016 | SLR

Feature

Easter

ALL EYES ON EASTER

Easter remains one of the stand out events in the retail calendar, but the challenge for c-stores is differentiating their offer from the deep discounting at the mults. So, what products have launched this year? And how can local retailers make the most of the period? BY MIA HUNT

ith the Easter occasion in long term value growth, up from £319m in 2011 to £340m in 2015, it continues to be a significant sales opportunity. Of course, Easter wouldn’t be Easter without chocolate and for retailers, success is all about making confectionery relevant to the season. “It also needs to be special and relevant, offering something different to everyday treats, capturing a ritual, getting into the spirit of spring and offering brand favourites that consumers love,” says Susan Nash, Trade Communications Manager at Mondeléz International. “For convenience retailers, success is all about making seasonal confectionery standout and capturing the impulse opportunity.”

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TREATS FOR EASTER STOCK UP NOW Kinder Kids Easter Confectionery

double digit growth* is in

*Nielsen Scantrack, Total Impulse, 12 weeks to Easter 2014 vs 12 weeks to Easter 2015 www.ferrero-trade.co.uk

GalaxyÂŽ is the 2nd biggest chocolate brand worth over ÂŁ200m CSV *

Stock up early from January 2016 until Easter

Easter small sharing is in 16.9% growth**

GalaxyÂŽ is a registerered trademark. ÂŠMars 2016. Source: *Nielsen ScanTrack, all data to w/e 27.12.2014.**3YR CAGR, Nielsen scantrack data to WE: 4th April 2015. Easter 2013: WE 30th March 2013. Easter 2014: WE 19th April 2014. Easter 2015: WE 4th April 2015

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Easter

THE

RIGHT PRODUCTS, IN THE

RIGHT PLACE, AT THE

RIGHT TIME

tocking the right products at the right times is key to winning this Easter and Mondeléz International recommends retailers get off to a fast start with self-eat treats available from January onwards. In the middle third of the season sharing products should be introduced and in the final third of the season, the range should be completed with a small shell egg and gifting range for top-up gift sales. Mars is also advising retailers make the most of the seasonal sales opportunities by keeping stocked up on Easter treats early and to start utilising off-shelf distribution points as treat sales peak in the first seven weeks of the season and then have a second burst of sales in the last week of Easter. “Gifting has become a major factor at Easter so it is important to cater for all ages and budgets with a range of Easter eggs; those retailers constrained by space are advised to stock large and luxury eggs which offer greater ROI, as well as novelty impulse products,” says Bep Dhaliwal, Trade Communications Manager, Mars Chocolate UK. With 86% of eggs sold in the last four weeks leading up to Easter, products should be kept in stock for the duration of the Easter sales window while promotions key to triggering purchase should be utilised. And to capitalise on the sales opportunity that comes with the buzz of a new product launch, POS should be used to deliver in-store theatre. “Easter is a busy time in store so these types of displays will have maximum effect,” says Dhaliwal. While it is important to maintain a standard confectionery display, she also advises siting Easter products at front of store and on prominent branded off-shelf displays that are more likely to encourage purchase.

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MAGNUM EASTER FOR UNILEVER Unilever has partnered with Kinnerton Confectionery to introduce a Magnum Easter egg. The partnership with Kinnerton will see Unilever UK’s number one ice cream brand, Magnum, introduce a new, premium Magnum Egg with an assortment of Magnum Signature Bars. Chloe Irwin, Senior Licensing Manager at Unilever, said: “We’re excited to be able to offer consumers a quality tasting Easter egg from one of the UK’s most trusted and loved ice cream brands. This, combined with the relaunch of our popular Pot Noodle and Marmite eggs, is guaranteed to add excitement to any confectionery display this Easter.” Magnum’s Egg and Bars rrp individually at £5.

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Easter

IMMEDIATE CONSUMPTION

long with novelty products, the continuing appeal of immediate consumption lines is an incremental sales opportunity for convenience stores, and a popular area of Easter confectionery worth £122m. It is in this sector that c-stores can actually give supermarkets a run for their money. In the immediate consumption sector, Cadbury Creme Egg remains the UK’s number one product at Easter. It had a strong season in 2015 with a high-profile TV and outdoor campaign seen by 78% of people and supported by a Facebook campaign seen by over 12 million people. The brand generated £29m value sales at Easter last year, more than the rest of the self-eat segment combined. This year a £4m marketing investment will run until March and includes TV, digital, PR, in-store and outdoor activity. Mars Chocolate UK’s Malteaster Bunny is the number two in this sector,

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and returned this year with an rrp of 62p. Nestlé’s Smarties Little Choc Chick (rrp 65p) is the third best-selling impulse novelty in the market with the Milkybar Bunny (rrp 65p) at number four. Cadbury Dairy Milk Egg ‘n’ Spoon is another mainstay, having sold 14.5m packs in the UK since its launch in 2013. Last Easter, it was the number one Easter novelty and is back for 2016 in both chocolate and vanilla mousse variants. The Cadbury Caramel Egg has also returned for spring alongside new addition Cadbury Dairy Milk Bunny Vanilla Mousse. The Galaxy Bubbles Filled Egg is back on the market with an rrp of 44p. And Nestlé’s Aero Bubbly Egg (rrp 65p) has returned with an impactful new design following a successful first year – 86% of shoppers were new to the brand and it drew in a lucrative audience of older shoppers, good news for stores.

KINDER SPREADS EASTER JOY Kinder has revealed its biggest launch of the year, Kinder Joy, in time to capitalise on the lucrative spring sales opportunity. Available now with an rrp of 99p, the limited edition plastic egg features a tab opening up into two halves – one half consists of layers of creamy milk and cocoa cream, and the other will includes a fun toy, along with a spoon to enjoy each mouthful. Kinder Joy was added as a seasonal sub-brand to the existing Kinder portfolio – currently worth £98m – and features premium seasonal packaging that uses bright spring colours creating stand out on-shelf and giving shoppers a new Kinder experience that taps into the novelty nature associated with Easter purchasing. “Kinder Joy offers a potential £3.6m incremental sales opportunity for the confectionery category and as you would expect with our biggest launch of the year we will be supporting it with a heavyweight marketing campaign designed to capture the imagination of mums,” says Levi Boorer, Customer Development Director at Ferrero. “We anticipate that this launch will replicate the success of Kinder Joy in Ireland where 40% of buyers were completely new to Kinder Surprise and 8% were incremental to the entire Easter confectionery category. The amazing results in Ireland give us real confidence that Kinder Joy will be a huge success in the UK as the consumers have very similar purchasing habits.” In order to drive incremental sales Kinder Joy should be stocked alongside the existing Easter Kinder range in the seasonal aisle. Retailers should also maximise sales further by requesting POS materials, suitable for all store sizes, on the Ferrero trade website.

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FEBRUARY 2016 | SLR

Feature

Easter

SHELL EGGS & GIFTING

ifting is most prevalent in the final part of the season when shoppers are looking for Easter eggs and other gifting products that will help make the Easter weekend special for their friends and family. Mondeléz International is the market leader in spring, with 33.9% market share, and is also number one in ‘traditional Easter’ with a 45.4% share. This Easter, Mondeléz International will continue to invest in its ‘power brands’, launch new seasonal products and a new Easter packaging design for its Cadbury brand. Cadbury – which has eight of the top 10 shell eggs within the segment – will be getting a new look across its Easter range using a key seasonal icon, the purple egg. The new design will combine Cadbury purple with yellow, the number one colour at Easter, and will include an illustration of an egg cracking open and releasing the first warm rays of sunshine. In tests, the new design was significantly preferred to the 2015 range and was seen as delivering more modernity and joy with strong standout.

RANGE REFRESHMENT Cadbury has refreshed its product ranges in line with consumer research to ensure that it has a tight range that offers the right shell egg for each member of the family, and will be supporting its 2016 Easter range with a £10m investment. “For children’s token and main gifts, consumers look for products that can bring joy for kids on Easter morning and offer something extra – such as crafts or hunts – that can add to family rituals during the celebration of the day, while teenagers and adults are looking for a wide range of their 56

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Easter

favourite everyday brands,” says Nash. “There is a place for shell eggs in c-stores for top-up and distress purchases so retailers should concentrate on stocking customer favourites in the medium shell egg range to help maximise sales,” she adds. New for this year, Mars Chocolate UK has launched the Galaxy Golden Eggs Large Egg, an eye-catching variation on the UK’s number two chocolate brand with a rrp of £5.29.

SOMETHING ON THE SMALL SIDE As an area for potential growth, Mars also has the small eggs category covered with its Malteaster Mini-bunnies Egg at a £1 price point, while in the medium egg category its biggest brands – M&M’s, Mars and Maltesers – have been consistent performers year after year and have returned in 2016 with a rrp of £3.05. If stores have limited space, Dhaliwal advises retailers to stock up on large and more premium options that offer a greater return. Mars has a number of options across their household names including the Galaxy Golden Eggs Large Egg and Maltesers Teasers Large Egg, Malteaster Bunny Extra Large Egg, and Celebrations Large Egg, which made up three of the top ten bestsellers in the category last year. These large and extra-large eggs are available from a rrp of £5.29. “Adult eggs are the main gift bought for adults during Easter. This segment has grown by an impressive £30m since 2011, and was up 5.5% in 2015 alone. The mid- to late season is critical for sales of adult eggs, with nearly 70% of sales coming in the last three weeks before Easter,” says a Nestlé spokesperson. 58

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“With limited space on shelves, ensuring favourite brands as well as a variety of products are on offer is key to sales success.” At Nestlé, 2015 saw it launch its range of inclusion eggs. Each egg has the same crispy and crunchy filling within its chocolate shell as the core product, providing consumers with well-known treats in an innovative new format. The inclusion eggs were launched in three varieties –Matchmakers Mint Egg, Matchmakers Orange Egg and Nestlé Crunch Egg (all rrp £3.00) and in their first year they attracted 720,000 households and generated £1.5m

sales. A substantial 40% of shoppers added the inclusion eggs to their repertoire, whilst 14% of shoppers were new to the entire Easter category; no mean feat given Easter already garners 70% penetration. Whilst adult eggs are up 5.5%, white chocolate adult eggs are up an impressive 65%. To capitalise on this trend, Nestlé has launched the new Milkybar Milk & Cookies Egg (rrp £3.00) for 2016. Building on the success of the Milkybar Milk & Cookies chocolate sharing block which launched in January 2015, the egg contains real cookie pieces embedded in Milkybar white chocolate. As for large eggs – the four ‘insider’ eggs from Quality Street, After Eight, Rowntree’s Randoms and Munchies are all rrp £5.41. And in the giant eggs category, the Nestlé range accounts for 35% of sales, with the total segment growing 19% since 2011. New for 2016 is the Nestlé Crunch Collection. This giant egg comes complete with a large milk chocolate egg and a selection of milk and white chocolate Crunch bars. It joins the Kitkat Chunky giant egg – the priority pack for retailers with limited shelf space – as well as the Nestlé Caramel Collection giant egg, Aero Selection giant egg and Yorkie giant egg, which attracts the hard-to-reach younger male demographic. All have an rrp of £7.49. Added value eggs have proven a success with shoppers, outperforming the market by 20% in 2015. Capitalising on their continued popularity, the mug eggs from Kitkat Chunky, Yorkie and Toffee Crisp are back for 2016 and make for a collectable gift – all three eggs have an rrp of £5.99.

NON-EGG As for non-egg gifting, novelties this year include the Cadbury Dairy Milk Bunny range, a new range of top-up gifts likely to help drive incremental sales towards the end of the season. The range features three giftworthy packs – a Hollow Bunny in both small and large sizes and Cadbury Dairy Milk Mini Hollow Bunnies. Mondeléz International is also introducing Cadbury Dairy Milk Mini Hollow Freddos which includes five individually wrapped Freddo characters in each pack, while Cadbury Dairy Milk with Buttons Chick and Cadbury Dairy Milk Egg Heads have returned for 2016. www.slrmag.co.uk

SHARING

Easter

Feature

BURTON’S INTRODUCES NEW PRICE-MARKED PACK FOR CADBURY CREME EGG BISCUITS The UK’s best-selling Easter biscuit, Cadbury Creme Egg Biscuits, has returned with a new £1 PMP for 2016. Cadbury Creme Egg Biscuits is available in the traditional 6-pack format (rrp £1), but has been joined by a new £1 PMP 6-pack, available until Easter Monday. Both SKUs are available in shelf-ready packaging of 12. The product is back by popular demand for a third year, after delivering £1.7m RSV in just 13 weeks between 1st January and 5th April 2015, and bringing new shoppers to the Creme Egg portfolio. The 2016 launch is being supported by in-store activation and full POS kit. “Customers have really taken to the delicious combination of Cadbury Creme Egg and biscuit, and with the introduction of a new £1 PMP, we’re sure demand will be high among shoppers looking for a ‘treatier’ biscuit to enjoy at Easter, at an affordable price point,” says David Costello, Head of Customer Category Management at Burton’s Biscuit Company. With 86% bought on impulse, Burton’s is advising retailers to merchandise Cadbury Creme Egg Biscuits in a highly visible area to drive sales and maximise the Easter opportunity in store.

haring products are big business at Easter with many products in the category doubling up as treats for children’s Easter egg hunts. As well as its Galaxy Golden Eggs Large Egg, Mars Chocolate UK has added an 80g sharing bag to the range featuring a combination of Galaxy chocolate and crunchy caramel pieces rolled in gold foil, with an rrp of £1.30. “We know that 78% of shoppers buy Easter chocolate as a gift or to share at gatherings with friends or family, creating a massive potential sales opportunity for retailers,” says Dhaliwal. “With sharing occasions set to boost Easter sales this year, we recommend retailers stock up on products like the new Galaxy Golden Eggs in order to grow their sales by capitalising on this trend and offering their customers something new and unique.”

www.slrmag.co.uk

Another launch for this year is the new Malteaster Family Pack which includes four Malteaster bunnies, six mini bunnies and two bags of Maltesers fun size. Ideal for sharing occasions, it has a rrp of £3.99. As for mini eggs, sales grew 2.2% in 2015 and are now worth £57m. Smarties Mini Eggs and Milkybar Mini Eggs both grew ahead of the market up 17% and 13% respectively, benefiting from a motivating £1 rrp price point. Both packs will return to the range this Easter. At Mondeléz, Cadbury Mini Eggs was the second biggest Easter confectionery brand in 2015, and its Handy Bag was the best-selling Easter product for the third time in a row with £21.8m RSV. The Handy Bag will return for 2016 along with the tubes and Gift Egg pack. A new product to the market for 2016, aimed at adults, is the Black Magic Mini Eggs (rrp £2.00). FEBRUARY 2016 | SLR

Feature

Breakfast

THE BREAKFAST REVOLUTION

With an increasing number of consumers opting to eat on-the-go, and a move away from traditional breakfast products like cereal and toast, the breakfast category has been revolutionalised. Retailers will have to be savvy to maximise this growing trend for food on the move. BY ÉMER O’TOOLE

TOP TIPS FOR SELLING BAKERY 1. Bake little and often. This helps to reduce waste as retailers will only bake what they need, rather than a huge amount at the beginning of the day. It also means that the products are at peak freshness level. 2. Freshness is a key factor for shoppers. For bigger outlets that are baking more frequently, put a chalkboard near the in-store bakery (ISB) to state when the last bake was. This reassures the shopper that the products are freshly baked on site, and can be a real USP for the retailer versus other coffee shops/retail outlets that do not bake on site. 3. The Allegra Coffee Shop Report shows that 70% of consumers want something to eat when buying coffee, making an ISB situated nearby a fantastic impulse driven upsell opportunity. If the retailer has a coffee offer in store, they should make sure that there is a Viennoiserie offer next to it to encourage additional purchase.

he breakfast market has seen a huge drive towards convenience – in fact, almost half of those eating breakfast at home rate foods being quick to prepare as a factor influencing choice. Breakfast sales cover a wide range of categories – cereals, bread & bakery, and drinks such as juice, tea and milk – making it crucial to get right. Cereals is an obvious place to start when it 60

SLR | FEBRUARY 2016

comes to driving breakfast sales. The so-called Government-led ‘war on sugar’ last year led to consumers making healthier choices in store, and cereals were hit the hardest in the breakfast category due to the heightened concerns around sugar – according to Mintel research, 82% of UK adults see flavoured cereal as being high in sugar. This has seen shoppers move towards lower sugar options, such as porridge and granola. And within this sector there is no shortage of competition, Quaker Oats is one big-spending brand that continues to fuel market share of the hot cereals category. The Cuppa Porridge range taps into the growing trend for convenient products and the granola range offers consumers a healthier alternative. Porridge sales have increased by 10% in the last two years and seven out of 10 households choose to purchase porridge across the year, so it is unsurprising that the breakfast category continues to be a huge sales opportunity for convenience stores. The old adage about breakfast’s importance continues to be ignored, with one in three people regularly skipping breakfast in the UK. Consequently, the breakfast opportunity has been ripe for innovation, with manufacturers and retailers looking to meet the challenge of a convenient alternative. Cereal bars offer the ideal solution for consumers opting for breakfast-on-the-go. Nature Valley’s range of cereal bars gives consumers a healthy and nutritious snack that can be enjoyed at breakfast, or at any time of the day. Over the last year, the brand has launched Coconut Crunch cereal bar and Crunchy Bites – bite-sized pieces of its best-selling www.slrmag.co.uk

th On ro T ug V ho ut

20 16 Win in the mornings with the No.1 Breakfast biscuit

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On the-Go pack

Price marked packs also available

***

Stock the range today *Kantar data to 2015 **The Nielsen Company, 05.09.15 *** Retailer are free to set RRP

Breakfast

Feature

cereal bars in a re-sealable bag — to appeal to consumers wanting to try something new. Belvita’s breakfast biscuits range also offers a solution for breakfast on the move.

TOASTY SALES Bakery is already the second most frequently bought category in convenience and, even more importantly, in-store bakery shoppers spend over 70% more in-store than average – breakfast plays a major part in this. Symbol shoppers on average buy at least two more items within the category, highlighting the benefit of offering customers freshly-baked goods, and the importance of getting things right when it comes to giving your on-the-go breakfast offering a boost. According to Mintel research, more than half of adults opt to eat breakfast out of home, with two out of every 10 consumers eating out two to three times a week. The fact that so many people now choose to eat breakfast on the go demonstrates the significant opportunity available for independent retailers looking to maximise this growing trend for food on the move. More and more independent retailers are also looking at dual-siting their in-store bakery fixture next to a coffee machine to give added appeal for shoppers looking for an allround breakfast solution on the move. It’s a simple but effective way to boost in-store bakery sales. Offering a multi-buy deal on a bakery item and a coffee is proving hugely successful for a number of retailers. For those with an instore bakery, baking little and often will not only help to prevent wastage, but will ensure that the fixture is well-stocked for shoppers looking for that freshly baked taste. Aryzta Food Solutions recommends

HEINZ TOMATO KETCHUP 50% LESS SUGAR A bacon or sausage roll is a popular breakfast choice, so try experimenting with cross-category merchandising by siting ketchup beside bacon or rolls to drive additional sales. The Heinz Tomato Ketchup 50% Less Sugar range was launched in response to customer concerns over the sugar content in Tomato Ketchup and the new range already has a 3.7% share of the Tomato Ketchup market.

HOW TO SELL BUTTERS AND SPREADS 1 Merchandise clearly Product visibility and standout are very important and pack colours are key visual triggers. Separate products into Butter, Butter Spreads, Health and Baking. Within each sector, block products by brand. 2 Review your product range If appropriate for your store’s area, experiment with higher value products, such as cholesterollowering spreads, as this sector is on the increase. As taste preferences can vary across regions, use your local knowledge to determine whether you need to add a locally produced product to your range. 3 Use visual reminders such as POS material or promotions Butter and spreads are often purchased by shoppers while they’re browsing for other items so use reminders such as POS material or promotions to encourage purchase.

SLR | FEBRUARY 2016

having a wide selection of breakfast pastries that can be eaten on the move, as convenience and choice are key factors for shoppers when making their selection. Aryzta offers a range of best-selling pastries including traditional favourites such as Croissants, Danish Pastries and Pain au Chocolat, as well as a wide selection of easy-to-bake sweet lines, including muffins for consumers eating on the move. Bakery products also have a big role to play in the breakfast market. Warburtons Crumpets, Toastie loaf, Muffins, Pancakes and Potato Cakes help to drive growth of the wrapped bakery market. It is worth placing spreads such as butter, jam and Marmite beside the bread section to encourage cross category promotions. With 99% of households buying into the category each year, butter, spreads and margarine (BSM) is a key top-up and distress category for convenience stores. Breakfast is the biggest occasion for butters and spreads so siting butters and spreads with bread, croissants, pancakes and hot cross buns offers a key sales opportunity. Remember to focus on drinks as well as food. Normal tea counts for about 72% of tea sales overall, but this is higher in convenience with the rise of top-up shoppers, so give this area sufficient space. Tea is a key distress purchase with 165 million cups consumed nationwide per day. Put it in a prominent position beside associated breakfast products, such as croissants and pastries. Breakfast will always be a key sales driver in convenience so stock up on a wide range of products to cater for all tastes. The increased diversity of the category has led to on-the-go taking the lead so focus on cross-category promotions, NPD, and fresh products to increase sales.

www.slrmag.co.uk

Feature

Hot Drinks

GETTING PROFITS DOWN TO A TEA

The hot drinks category is one that sells well all year round, and it doesn’t have to be restricted to tea and coffee. Recent new products in the hot chocolate sector have changed the look of the hot drinks section in stores. BY ÉMER O’TOOLE

TETLEY SUPER GREEN TEAS

he tea category in the UK as a whole is currently worth over £59m. As the UK’s leading choice of beverage, second only to water and with 20.4 billion drinking occasions, tea is in a very strong position to drive sales for retailers and continues. Tea is a staple product in convenience stores but retailers need to work hard to keep consumers interested. Simple changes could make a big difference to sales. In convenience the top selling tea brands account for 85% of sales so stocking the best sellers and blocking

brands so customers can find what they want easily will benefit sales. “The big brands help shoppers find what they want in everyday black tea, so it is important to make sure you know who the leaders in tea are”, says Andrew Pearl, Director of Customer and Shopper Marketing for Tetley. Everyday black tea continues to dominate sales across the board and Tetley remains the preferred tea brand in Scotland with 44% volume share. Space on shelf should reflect the preference for everyday black teas, but stores should explore the potential to increase

Tetley Super Green Teas are the first functional green teas in the UK with proven health benefits. The four SKUs in the range are supported by European Food Standards Agency (EFSA) approved health claims relating to supporting your immune system and helping reduce tiredness and fatigue. Tetley Super Green Tea Immune contains Vitamin C and comes in two flavours, Tropical or Lemon & Honey and Tetley Super Green Tea Boost has added vitamin B6 and comes in Berry Burst and Lime flavours. Available in multiples since last Autumn, sales have been strong achieving £1m in a year. They have been rated the leading NPD in green tea and research shows that the range has one of the highest repeat purchase rates of any NPD; nearly 28% of buyers are completely new to tea which is great news for tea for not only are they new customers they are making a higher spend per cup so adding value.

sales in the growth areas of tea particularly in greens, fruit and herbal and decaf teas. Shoppers spend less time at the tea fixture than most packaged grocery goods, 47% spend less than 30 seconds. Teas need to be

PG TIPS CAPSULES At the end of last year, PG Tips launched a range of tea of capsules compatible with Nespresso machines, to offer consumers their favourite tea at the push of a button. The product is available in Green Tea, Peppermint, Raspberry & Apple and a new variant from the brand, Caramel and Vanilla. The new flavour taps into the growing consumer trend for new tastes and flavours within the category. PG Tips capsules are set to tap into the increasing popularity of capsuled beverages. Worth £105m, capsules are the fastest growing segment in hot beverages, growing 36% in the past year.

SLR | FEBRUARY 2016

www.slrmag.co.uk

Feature

Hot Drinks

presented in a logical order so that shoppers can see what is available and find what they want to buy quickly and easily. Smaller packs like 40s are the big sellers in smaller grocery stores, 80s, 160s and 240s offer a great opportunity to up the sale, but think carefully about the layout of your fixture to assess where your emphasis should be. Additionally, volume sales of everyday black decaf are up 6.0% in Scotland. These drinkers are loyal and committed and won’t replace their choice with an everyday tea, so if a decaf variant is not available a sale won’t be made. Tetley research shows that many are unaware of the varieties of tea available beyond everyday black tea. Simple signposting on shelf can encourage shoppers to linger and look beyond black teas to different varieties, which can add value to the sale. The fruit & herbal Tea market is worth over £75m in value sales while the green tea market closely follows at £37m, so it is worth tapping into these categories. Green teas are becoming an increasingly popular choice. In convenience stores, overall volume sales have increased 14.0% with value sales exceeding this at 28.4%. Stores in Scotland have been slower to take advantage of the trend in greens teas so there remains unexplored potential here.

FUELLING COFFEE SALES If the tea market’s £591m is impressive, consider that the coffee market is worth over £1bn in the UK. Within this sector, premiumisation has taken a firm foothold. Martin Andreasen, Marketing Director for Retail at Jacobs Douwe Egberts, comments: “Fuelled by the explosion in coffee-shop

culture over recent years, consumers now expect products at home that are both easyto-make and of similar quality to that of their favourite coffee chain. This premiumisation trend is something that convenience retailers should look to take advantage of by stocking innovative wholebean instant formats such as Kenco Millicano.” Kenco Millicano was launched in 2010 and has since achieved incredible success, currently worth £30m and holding a 39% share of the Microground Instant sub-sector. Millicano also holds the highest repeat rate and penetration of any product within the category, at 46% and 12% respectively. The product combines premium freeze-dried coffee with finely-milled roast and ground coffee beans, delivering a taste that is closer to roast and ground with the convenience of instant. The main driver however remains everyday coffee – the likes of Kenco and Douwe Egberts are must-stocks. “The premiumisation trend doesn’t necessarily mean that consumers are turning away from their firm favourites; many still continue to choose brands they know and trust for that little bit of everyday indulgence,” adds Andreasen. At the value end granule products such as Kenco Rappor and Douwe Egberts Classic Roast are ideal for shoppers who are simply looking for an instant caffeine boost, without the need of a luxurious or premium experience.

HOT CHOC & BEYOND Coffee and tea aren’t the only products that dominate the

PREMIUM TEA Consumer tastes in tea are changing and although everyday black teas still dominate tea sales shoppers are trading up to higher value teas, which offer higher margin sales for retailers. The Tetley Blend Collection brings added value to black tea and gives shoppers an opportunity to trade up to a new taste experience for little more spend per cup. Each tea in the collection offers something extra, whether extra strength, a blend of green and black or a refreshing special blend of tea. The Blend Collection is a strong offering with sales of around £3.3m, but this is a high-end niche sector when you consider it against the dominance of everyday black tea.

hot drinks category. The chocolate drink market is worth over £100m in the UK. Susan Nash, Trade Communications Manager at Mondeléz International, says: “Challenging perceptions of hot chocolate as simply a functional ‘warm me up’ or ‘help me to sleep’ product will be key in helping to grow the category.” Cadbury leads the sub-categories of Drinking Chocolate, Instant Chocolate and Hot Chocolate Cocoa and has a number two position in Diet Chocolate beverages with its Highlights range. Currently only one in two households buy hot chocolate, yet it is a highly popular drink in the out of home market thanks to rise of the café culture, proving that the category has significant area for growth.

MERCHANDISING THE COFFEE FIXTURE Q Ensure the growing sectors are well represented within your store. Cover a range of qualities within instant coffee from granules to wholebean Instant. Q Focus on top sellers, with brands consumers know and trust. Q Make the most of Pricemarked Packs. Shoppers perceive them as good value. Q Use POS to promote associated categories such as sugar and milk. Q Consider holding staff tasting sessions when you introduce new lines, so they can talk with confidence about the different types of coffee available. Q Don’t let lack of space be an excuse. A wide range of tastes can be catered for in two or three shelves. Q Range hot beverages near to your breakfast offering. Q Make the most of media investment and be aware of who is on TV at any given period.

SLR | FEBRUARY 2016

www.slrmag.co.uk

7.3m cups of kenco are drunk everyday*

Feature

Sharing Snacks

SHARE IN THE SUCCESS Strict new year budgets mean more nights in, which maintains the momentum of sharing snacks. Not only do these packs allow retailers to cater for specific shopper missions such as big night in or people looking for larger pack formats to share with family and friends, but they tend to favour bigger baskets. BY ÉMER O’TOOLE

haring packs are bought at least once a month by 86% of households in the UK and according to him!, evening snacking is worth £5.2bn, with a growth rate of +2.8%. Chocolate is the biggest category by value in the evening at £3.5bn, closely followed by biscuits, crisps, fruit, sugar confectionery, mints and gum. Chocolate, crisps and drinks are all popular choices with customers who are planning to stay at home that evening. Retailers should display bestsellers from within each of these categories in sharing bays, and position sharing products from different categories in a dedicated ‘Big Night In’ section to encourage consumers to buy all the products they need for an evening at home from their shop. Biscuits may not be first to mind when you think of sharing, but boy do they count. With increasing concerns over sugar, there has been a recent demand for healthier biscuits. Savoury biscuits are on trend at the moment as consumers view them as more permissible than fried snacks. As a third of all biscuits are bought on impulse in convenience, retailers need to engage shoppers by displaying sharing packs prominently to get the best sales. Bagged savoury biscuits are in fact one of the top-performing areas of the sharing sector.

SLR | FEBRUARY 2016

I was into this market that Burton’s launched Burton’s Fish ‘n’ Chips in a 125g sharing bag. This was boosted by the recent introduction of Curry Sauce and Pickled Onion flavours. David Costello, Burton’s Head of Category and Shopper Management, says: “Savoury biscuits are bang on trend at the moment as consumers view them as more permissible than fried snacks. As a third of all biscuits are bought on impulse in convenience, retailers need to engage shoppers by displaying sharing packs prominently to get the best return.” A competitor here is Ritz Crisp and Thin sharing bags, which are available in four flavours: Cream Cheese & Onion, Sea Salt and Vinegar, Sweet Red Chilli and Sea Salt and Black Pepper. On the crisps front, Walkers Mix Ups

are available in shareable packs and offer a selection of different flavours all mixed together in one bag, providing shoppers with a whole new taste experience. The range is available in three formats – snacks, popcorn and crisps. The just-launched Walkers Tear ‘n’ Share will see high demand too. Retailers should consider secondary sitings to make sure that shoppers see the products in impulsive category, as only 13% of people visit all the aisles in convenience stores. Retailers should also ensure that displays are highly visible and well-stocked towards the end of the week to cash in on top-up shops before the weekend when the ‘Big Night In’ is most likely to take place. Make the most of manufacturers’ media investment by stocking and displaying products when activity is running. It’s not just about savoury though – chocolate is a big part of the sharing sales opportunity. Cadbury Dairy Milk’s new launches last year – Marvellous Creations and Puddles – are set to bring further growth to the category. Candy bags, such as Bassetts Jelly Babies and Maynards Wine Gums, also contribute considerable value to the confectionery category at £572.6m. Stock up on a variety of chocolate and sugar confectionery in sharing bag formats and make sure you display products in the right place – best-sellers should be 1m-1.4m high. It is worth splitting chocolate and sugar confectionery on the sharing fixture. Group sugar into two subcategories: traditional and family favourites, this will make merchandising of your fixture much more efficient and will also drive shelf presence and brand stand out. www.slrmag.co.uk

g n i n n i -w d r a w a e From th biscuit brand savoury

• Number 1 in bagged savoury biscuits in Impulse1 From the £25m Burton’s Savoury portfolio2

• Taps into demand for Bagged Savoury Biscuits • Pack sizes for single and sharing occasions available

STOCK UP NOW!

1. Nielsen Total Impulse MAT 2/1/16

2. Combined Kantar & Nielsen read MAT to 5 Dec 2015

UTC

PLAY TIME ON THE PROPERTY MARKET?

STORM IN A TEACAKE

While many men across the world have nothing but admiration for Hugh Hefner, UTC has never really gotten on with the old bugger, not since he began a generations long objectification of women in the 1950s that has been partly responsible for the continually misogynistic attitudes that persist to this day, causing societal disharmony and preventing women from, for example, earning the same as men for the same job. But still, when he discovered that the Playboy Mansion was for sale, UTC was quick to slip an arm down the side of the sofa in search of the £138m that is required to get his hands on the five-acre plot (which has its own petting zoo). He came up £137.99999m short, but no matter – it turns out letting Shug continue to live in the house is a condition of the sale, and UTC would rather stay in his dank two-bed semi than make boiled eggs for that clown every morning.

There was something of a stooshie at the turn of the year when Tunnock’s revealed that it was removing the lion rampant from its packaging in a bid to sell more teacakes south of the border. A certain minority of Scots took what could only be called the hump at this, and began a laughable attempt at a boycott. A London Underground campaign highlighted ‘The Great British Teacake’ could have been seen as an attempt to expand a Scottish icon, but in a post-referendum Scotland it’s important to not politicise such decisions, which is why Boyd Tunnock commented: “Everybody has their own agenda and is entitled to their own opinion. I’m a Tory and I tell everybody that… we had a referendum here and 55% of Scottish people wanted to be in Britain and that’s why we’re calling it the British tea cake.” So there.

FANCY A QUICK INCREASE IN LIFE SATISFACTION? If Under the Counter has learned anything in life it’s that you pay attention to the boffins at Oxford University, because they’re awfy clever and usually get it right. And so, it is with great delight that UTC can reveal that said boffins have revealed that people who have a ‘local’ pub are not only significantly happier than those who do not, but also have higher life satisfaction and more close friends. The report, written by Professor Robin Dunbar for CAMRA, outlines that having a strong social network significantly improves both your happiness, and with that, UTC is off to improve his wellbeing... 70

SLR | FEBRUARY 2016

WHEN TECH GOES AWRY Under the Counter relies on his great-grandson to fill him in on the latest tech breakthroughs, but even the wee man was confused when UTC asked to him to explain the benefits of an HDMI-to-garden hose connector. Presumably it’s really good for streaming.

IN THE MARKET FOR A LARGE DOG?

When UTC was going about his business, the postie piped up at the door with a new catalogue. UTC isn’t convinced this one sells what it claims to sell.

I’LL DRINK TO THAT

A 109 year old woman in Scotland has given two fingers to the health lobby (not literally, ed) by putting her longevity down to a nightly dram. Grace Jones – no seriously – is now the oldest person in Worcestershire, and you can bet your last that she celebrated her big day with a glass of the good stuff. www.slrmag.co.uk

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