SLR July 2017 by 55 North

DAVID MORGAN

The time for tech is now

SPAR LEVEN PROFILE

UPHILL BATTLE

Are the Booker and Nisa deals set to create a two-tier industry in Scotland?

A look inside CJ Langâ&#x20AC;&#x2122;s new store

SWA CONFERENCE

Full review of annual event

CHEESE PLEASE

Cheese sales maturing nicely

Forecourts moving up a gear in Scotland page 38

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July 2017

Contents

Contents ISSUE 171

NEWS p4

Clampdown on proxy purchasing in Lancashire A campaign is launching to tackle underage drinking and antisocial behaviour. p5 Retailers face initial £40m DRS bill Scottish retailers face start-up costs of at least £40.7m if DRS is approved. p6 Costcutter campaigns to set summer free Fascia launches its biggest ever consumer campaign. p8 Camelot to review strategy Lottery group carries out a strategic review after ticket sales fall of 8.8% on last year. p10 News Extra SWA Conference The need to invest in the training and people required for a successful future was the key topic at this year’s SWA Conference. p18 Product News Maryland refreshes brand following a string of new product launches. p20 Off-Trade Diageo extends My Store Matters campaign to help retailers boost their alcohol sales during summer months.

INSIDE BUSINESS p24 Research Digest Some of the latest research relevant to Scotland’s local retailers. p26 Retail technology David Morgan Velocity Worldwide’s COO says you need to get to grips with technology. p28 Store Profile Spar Leven Food to go and fresh are key focus at recently opened Spar. p32 Woodlands Local It’s back to basics and start afresh in Falkirk with a new team and a new strategy. p36 Hotlines A digest of some of the latest products to hit the shelves. p62 Under The Counter The Auld Yin rants and raves about football, the election and other issues of the day. FEATURES p38 Forecourts The forecourt shop fast tracks to the front of the pack. p48 RYO Tobacco Accessories Scottish independents may be letting profits slip through their fingers. p54 Own Label In a world of rising prices, consumers are switching to fascias’ own offers. p56 Cheese An integral player in the chiller morning, noon and night. p58 Confectionery The segment is booming, but which areas are raking in the profits?

ON THE COVER 14

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Will the Tesco/Booker and Sainsbury’s/Nisa deals create a two-tier industry in Scotland?

JULY 2017 | SLR

News UNDERAGE DRINKING Council extends successful pilot scheme

Illicit retailer exits trade The owner of the ‘Babylon Halal’ store in Coventry has sold his shop after multiple raids by Trading Standards Officers during a 12 month period where illegal tobacco was discovered and seized. Numerous concealments were found within the premises on various raids and illegal tobacco was also ‘fed’ into the shop down a tube from a flat above the premises. The Coventry store also had its gantry confiscated by Imperial Tobacco after the series of raids and all sales support was withdrawn.

GroceryAid Ball raises £185k Around 600 grocery and convenience trade colleagues attended the GroceryAid Summer Ball last month, raising more than £185,000 for the charity. These funds will enable GroceryAid to provide 616 much needed respite breaks to those undertaking caring responsibilities.

Modest summer sales growth Retailers reported that growth in sales volumes picked up in the

Clampdown on proxy purchasing in Lanarkshire Following a successful pilot in 2015, a campaign is launching throughout North Lanarkshire to tackle underage drinking and antisocial behaviour. The partnership project between Scottish Alcohol Industry Partnership (SAIP), Police Scotland and North Lanarkshire Community Safety Partnership will also involve local retailers in their communities. Adults who buy alcohol for children (proxy purchase) risk a fine of up to £5,000 or a jail term. This is reﬂected in the campaign’s name: ‘You’re asking for it’. The impact of the 2015 Wishaw and Motherwell pilot contributed to violence across the localities dropping by 30%. Antisocial behaviour reduced by 13% and alcohol-related youth disorder reduced by 21%. By limiting the amount of alcohol in the community, the public reported 53% less street drinking offences. Initiatives such as Challenge 25 have reduced the number of direct sales of alcohol to under 18s. ‘You’re asking for it’ responds to intelligence that under 18s are increasingly

accessing alcohol by other means, such as proxy purchase. Police Scotland will deploy officers to address the issue of proxy purchase and to actively target known hotspot locations and adults who think they are doing no harm in purchasing alcohol for children. John Lee (pictured left), Head of Policy and Public Affairs, SGF and Chair of the SAIP Campaigns Group said: “We know that tackling underage drinking by targeting adults who buy alcohol for under 18s is successful, as proven in our

previous campaigns. By running this new campaign across the whole of North Lanarkshire we hope to help reduce crime, antisocial behaviour and noise in the area.” Divisional Commander for Lanarkshire Division, Chief Superintendent Roddy Irvine (pictured right) had this message for retailers: “Please support us in keeping our children safe and play your part in ensuring that your community is not asking for it.” The campaign runs throughout the school holidays until mid-September.

year to July, according to the latest monthly CBI Distributive

SOFT DRINKS

Trades Survey. The survey of

Product recall on macb

115 ﬁrms, of which 59 were retailers, showed that the volume of sales and orders placed upon suppliers grew modestly in the year to July. Overall, sales for the time of year were considered to be broadly in line with seasonal

Food Standards Scotland (FSS) has issued a product recall notice for macb Strawberry & Kiwi ﬂavoured still water. The affected drink, which is manufactured by Cott Beverages, has a strong odour, an unpleasant taste and has mould and yeast present. Understandably, consumption may leave the drinker feeling unwell. The recall applies to 330ml and 1.5 litre pack sizes with a best before date of AUG 18. The relevant batch codes are: 7131, 7132, 7133, 7135, 7139 and 7149. FSS also advises anyone who suspects any other macb product in their possession is abnormal to contact their local authority.

norms.

Chivas workers vote for strike Members of Scotland’s largest union, Unite, will take industrial action following the breakdown of talks with Chivas Brothers. In a ballot at the Chivas site at Paisley, members voted by 76.4% for strike action and 81.9% for action short of strike. At Kilmalid in Dumbarton, members voted by 90.8 per cent for strike action and 98.5% for action short

SYMBOL GROUPS Nisa invests for future growth

Nisa completes £120m reﬁnancing Nisa Retail has completed the refinancing of its debt facilities following several new contract wins and growth within the existing business. The £120m facilities are being provided jointly by HSBC and Wells Fargo. The deal provides longer term, cheaper, and more ﬂexible capital for the business to further invest in growth over the next three to five years. Nick Read, CEO of Nisa Retail, said: “The retail market is quickly evolving and there is a real opportunity for the

convenience sector to respond to the demands of today’s consumers. For Nisa, it is important that we continue to invest in the skills and capability of our business to support our member network, build a sustainable growth model and continue to deliver high standards of service.” The mutual, which is currently the subject of a proposed takeover by Sainsbury’s, recently returned to profits of £0.6m after a loss of £5.4m last year, although sales dropped 1.9% to £1.3bn.

of strike. KEEP UP WITH THE LATEST NEWS AS IT HAPPENS – FOLLOW US ON TWITTER @SLRMAG

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News DEPOSIT RETURN SCHEME Hefty start-up costs predicted for store owners

Retailers looking at initial £40m DRS bill Retailers in Scotland will face startup costs of at least £40.7m if a Deposit Return Scheme (DRS) is introduced. The eye-watering figure was arrived at by ‘scaling down’ for Scotland the set-up costs of the deposit return scheme in Germany. The German scheme had start-up costs for retailers of over 720 million Euros. The Scottish government environment agency Zero Waste Scotland made the calculation as part of an evidence gathering exercise into the potential impact of a DRS in Scotland. SGF Head of Public Affairs Dr John Lee said there was simply no way that independent retailers in Scotland could or should have to meet these costs. “There are already huge cost pressures on retailers and this would threaten the viability of

most independent stores,” added Lee. “The potential cost to retailers is reason enough for this idea to be scrapped now.” The exercise also showed that the impact on changing consumer behaviour in terms of recycling and littering is likely to be marginal. The Scottish Wholesale Association (SWA) has also voiced its disappointment at the Scottish Government’s decision to ask Zero Waste Scotland to undertake further modelling on different deposit return systems. Kate Salmon, Executive Director of the SWA, said: “We are disappointed that the Scottish Government has decided to move to the next stage of modelling potential schemes. We remain convinced that a deposit return scheme would involve

significant and unnecessary costs and disruption for wholesalers, retailers, manufacturers and consumers.” On the announcement by Environment Secretary Roseanna Cunningham that progress will be overseen by a steering group involving representatives from the packaging industry, retailers and environmental groups, and followed by a full public consultation, Salmon said: “While we are satisfied that options will then be put to the public for consultation before ministers reach a final decision on the future of deposit return, Scotland’s wholesalers will continue to engage with the Scottish Government on this issue and continue to make the case for investment in the existing successful kerbside system.”

£650k for Scottish food and drink Scotland’s Food & Drink Partnership has launched Make Innovation Happen, a single gateway service to support businesses to innovate, supported by a new £650,000 Collaborative Innovation Fund, which is co-funded by Scottish Enterprise and Highlands and Islands Enterprise. The fund supports food and drink businesses working collaboratively on innovative projects to support the growth of the sector.

USDAW negotiates Tesco pay rise Trade union Usdaw has negotiated a 10.5% pay rise at Tesco as the company sees an upturn in proﬁtability. The rise will affect all retail staff in Tesco, taking the basic hourly rate to £8.42 over the next two years. The deal includes improvements to maternity and new starters pay and a partial consolidation of premium pay into the hourly rate.

LIVING WAGE

Abandon living wage rises, SGF urges next government The Scottish Grocers Federation has called on the UK government to prioritise holding down any future increases in the rate of the national living wage. SGF said that the government should abandon the target of a rise to 60% of median earnings by 2020. SGF’s Head of Policy Dr John Lee commented: “Retailers are suffering from the cumulative impact of cost increases. The national living wage has fallen most heavily on the retail sector with over half a million workers being affected, and these constantly increasing staff costs must end. We need a national living wage that reﬂects underlying economic conditions and the ability of different industry sectors to absorb increased staff costs.” SGF has recently engaged directly with the senior team from the Low Pay Commission (LPC) including the Chief Economist. SGF’s evidence will feed into the LPC’s report to the Prime Minister later this year.

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MERGERS

Booker requests fasttracking of Tesco deal

SGF boss joins Towns board

Booker has announced that it has requested that the investigation by the Competition and Markets Authority (the CMA) into its merger with Tesco be fast-tracked “to allow it to move more quickly to examining the merger through a detailed Phase 2”. The company, headed by CEO Charles Wilson (pictured), ﬁrst announced the intention to merge on January 27 and has been working closely with the CMA as they examine the merger. A Booker statement said that “following continued constructive dialogue and further to the commencement of the CMA’s Phase 1 review on May 30, 2017, we have now requested that the CMA uses the ‘fast track’ process.” Fast-tracking has precedents with both the BT/EE and Ladbrokes/ Coral mergers having been fast-tracked. Booker expects the CMA to issue an early decision to refer to Phase 2 imminently.

Board of Directors of Scotland’s

Scottish Grocers’ Federation Chief Executive Pete Cheema has been appointed to the Town Partnership (STP). STP is Scotland’s largest towns hub representing and promoting the diversity of Scotland’s towns and places, and supporting organisations that have an interest in or ownership of them.

Hamlyn’s food for thought Hamlyns of Scotland has conﬁrmed a further 12 months for Food for Thought, the programme funded by Business in the Community Scotland, Education Scotland and the Scottish Government, which aims to help spread the healthy eating message in Scottish schools. The programme also aims to provide a better understanding of the importance of the food and drink industry to the Scottish economy.

JULY 2017 | SLR

News PROMOTIONS Almost 70,000 prizes up for grabs in summer sales push

SRC seeks tax breaks Scottish Retail Consortium Chairman Andrew Murphy used the organisation’s annual reception for industry leaders and parliamentarians in Edinburgh to call on the Scottish Government to do more to assist the retail industry and consumers. Murphy asked for proposals from the SNP’s 2016 Holyrood Manifesto to create a new zero-rate income tax band to be brought forward to effectively raise the tax free personal allowance in Scotland over and above that applicable in the rest of the UK.

Tangerine dream A ﬂeet of 20 new Bibby Distribution traucks are giving confectionery manufacturer Tangerine maximum brand visibility as they transport the

Costcutter campaigns to set summer sales free Costcutter Supermarkets Group has launched its biggest ever consumer campaign to drive retailers’ sales throughout the summer season. With over 68,000 prizes up for grabs, the ‘Set Summer Free’ campaign runs from now until the middle of September. It gives shoppers the chance to win thousands of products instore, as well as tickets to festivals and sporting events, barbecues, FitBits and the star prize of a luxury Caribbean holiday worth up to £10,000. The selection of in-store prizes on offer, which range from ice lollies to summer picnic essentials, will change each promotional period during the campaign.

Retailers can also win prizes, including cash incentives, for taking part in the summer-long campaign. The 12-week campaign uses consumer leaﬂets to drive shoppers into the store to check if their code matches the winning number displayed on in-store POS. An integrated media campaign across print, digital and social media aims to drive mass awareness and engagement with shoppers. Michael Hooley, Costcutter’s Head of Promotional Marketing, commented: “Summer is a key trading period and with less sporting events taking place this year, we want to help our retailers drive footfall and increase their sales opportunities.

“Consumer leaﬂets are a key driver of footfall into store and with so many prizes on offer we’re giving shoppers even more reasons to go to their local Costcutter, Mace or Simply Fresh store to see if they’re a winner.”

Silver Prizes

UK, CI, IOM, ROI 18+. Enter Silver prize draw 22.06.17 – 12.07.17, Gold prize draw 22.06.17- 13.09.17. Silver prizes (2 x Corona Sunset Festival General Admission tickets, 1 x Outback BBQ worth £275, 2 x Fitbit Charge 2 Heartrate and Fitness Tracking Wristband, This promotion is in no way sponsored, endorsed or associated with Fitbit, 3 x Go Ape Family Tickets worth £140 each), exclusions apply. Gold prize – 1 prize (Caribbean holiday worth up to £10k, UK transfers not includ included, date restrictions apply). No purchase necessary. For full terms and conditions visit setsummerfree.com

company’s sweets and snacks across the UK. The trailers, that each have a 26-pallet capacity, have been liveried with designs featuring Butterkist Popcorn and new Softies Fruit Salad and Softies Refreshers. Emma Stanbury, Tangerine’s Brand Manager, said the new trucks were unmissable.

Sandwich range launched Glasgow-based wholesaler Lomond – The Wholesale Food Co has launched a range of sandwich concepts to help retailers deliver affordable foodto-go options for their customers. The two ranges – Eat Around the World and Most Wanted – include a total of 29 ﬁlled sandwich and baguette options in a range of popular ﬂavours.

SGF launches Planning Gateway The Scottish Grocers’ Federation has launched the ‘Planning Gateway’ on its website to help its retail members to easily access information on planning applications and local development plans. The portal includes a direct link to every local authority planning portal in Scotland as well as links to every

FORECOURTS Fine Fuel Company chooses Certas

Hawkhead Road ﬂying with Gulf Hawkhead Road Garage, Paisley has become the latest Scottish forecourt to commit to the Gulf brand. The decision by The Fine Fuel Company to move Hawkhead Road to Gulf is said to be part of a wider business strategy to future-proof the business. It was the company’s second site to move over to Gulf. “Our decision to move to Gulf and supplier Certas Energy has been vindicated already,” said Khurram Fawad, Director, Fine Fuel Company. “Following the reimage we immediately enjoyed an uplift in volumes and that has had a positive knock on across our business. We are in the company of

people who understand the industry and will be there for us in good times and in bad. That is always an important factor alongside a ﬂexible and competitive deal.” Hawkhead Road faces strong competition from local hypermarkets and yet, under the Gulf brand, volumes are up 11% and the future promises even greater rewards with a new development of 1,000 homes under construction opposite. At present the site has no walk-on trade. The nearest conurbation is half a mile away and this is reﬂected in shop sales of just £12k a week on fuel sales of 2.4m litres pa. “We recently re-pumped and undertook a partial refit and we have plans to introduce Costa Coffee,” added Fawad. “It has been difficult to justify any major investment in the shop but things are about to change and we are ready to embrace the new community and ensure that our filling station can maximise its potential, including a complete shop refit further down the line.”

PROMOTIONS

Spar’s Shop & Win returns Spar’s multi award-winning footfall driving campaign Shop & Win is back with new digital innovation, bigger prizes, and pop-art imagery to tie in with Spar UK’s 60th anniversary. This year, Shop & Win gives customers the chance to win £60,000 worth of prizes, as well as a £10,000 grand prize. It runs concurrently with Spar’s 60th anniversary campaign, which sees nine weeks of deals on iconic brands, to help drive sales and footfall into stores. Both campaigns are live now, and run for nine weeks until August 16.

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New fun on-pack promotion this summer Available across 330ml cans & selected multipacks of Fanta, Sprite and Dr Pepper classic and zero variants STOCK UP NOW To find out more contact us at connect@ccep.com or call our Customer Hub on 0808 1 000 000 GB, CI & IoM. 16+. Normal exclusions apply. Promotional packs only. Purchase necessary. Visit www.fanta.co.uk/Merlin, enter unique code under ring pull or insert to redeem offer between 03/07/17 & 19/10/17. £25 off one full gate priced adult ticket at Alton Towers and THORPE PARK when purchasing online, plus a one shot fastrack valid for one participating ride, subject to availability (500 cap per day, per park – exclusions apply). Offer valid for use until 19/10/17. See www.fanta.co.uk/Merlin for full T&Cs. Promoter: Coca-Cola Great Britain, 1A Wimpole Street, London W1G 0EA. FANTA and SPRITE are registered trademarks of The Coca-Cola Company. © 2017 The Coca-Cola Company. All rights reserved. DR PEPPER is a registered trademark of European Refreshments. © 2017 European Refreshments. All rights reserved. ‡

News NATIONAL LOTTERY Operator to take long, hard look at itself

P&H website gong The recently launched Palmer and Harvey transactional website has been recognised by HIM at the recent Wholesale Awards, collecting the Favourite Wholesaler for P-O-P Website Communication award. E-commerce Manager Ed Chartier commented: “Since the launch of the new platform earlier this year, we have seen an uplift in the number of independent retailers using the site and consistent week-on-week growth in sales.”

Fish on the menu 2017’s Easter retail period experienced the highest sales of fresh ﬁsh in three years, with 6,051.6 tonnes of seafood sold during the Easter fortnight (8-22 April), up by almost 188 tonnes (3.2%) since 2015. This

Camelot to review strategy after ‘disappointing year’ on ticket sales Camelot is carrying out a strategic review after achieving total National Lottery ticket sales for the 2016/17 financial year (April 1, 2016 to March 31, 2017) of £6,925.3m. Although the fourth-best performance since the Lottery’s launch in 1994, the figure is a fall of 8.8% when set against last year’s record sales of £7,595.2m. The review is being led by Nigel Railton, CEO of Camelot Global, who took over Camelot’s UK operations following Andy Duncan’s decision in April to step down. It is focusing on four key business areas – commercial plans to boost sales performance; investment in technology and systems; the current business structure; and long-term succession – and an update will be

given when Camelot announces its half-year sales later in the year. Camelot’s performance in 2016/17 saw players and good causes share over £5.4bn, with 393 new millionaires created in the process. Jo Taylor, Chairman of Camelot, said: “Achieving the fourth-highest ever sales, creating a record number of lottery millionaires and raising over £30 million every week for Good Causes is no mean feat. However, sales in 2016/17 fell well short of where we’d like them to be – and that’s largely down to a disappointing year for draw-based games and Lotto in particular. There’s clearly work to be done to re-engage players and address the performance of our draw-based games – and this is

one key area that Nigel is focusing on as part of the wider review he is conducting. “Given the current climate of economic uncertainty and increasing competition from the gambling sector, we expect 2017/18 to be equally, if not more, challenging for The National Lottery. It will therefore take time to turn things around and I anticipate a further sales decline this year. I am, however, confident that the review will enable us to put the business on the best possible footing to get back into growth – and so deliver even more for our players and the millions of people for whom National Lottery funding is so crucial over the remainder of this licence period.”

is according to new market data published by Seaﬁsh, the UK industry authority on seafood. This is the biggest growth in three-years.

Energy bills crippling business

CHARITY Major milestone for Making A Difference Locally

SERVICES

Nisa retailers donate over £7m to community causes

PayPoint increases SIM commission rates

Over half of Britain’s smallbusinesses (56%) feel the rising cost of energy is crippling their future with the majority, including many retailers, say they are currently penalised by energy providers, according to a new survey by energy supplier Utilita. Some 71% say have been caught out by unexpected T&Cs, 45% have been asked to make large upfront payments, 31% are on a high tariff because they are seen as a credit risk and 21% were simply turned down by energy suppliers.

Bolt adds James business Glasgow based e-learning provider Bolt Learning has added James Convenience Retail to its client list, the business run by high proﬁle retailer Jonathan James. Over 600 staff members will soon be developing their skills and knowledge in over 12 core areas, giving the almost 80 Conviviality stores a strong

Donations through Nisa’s Making a Difference Locally charity have hit the £7m mark following a bumper month of donations from Nisa retailers. After donations totalling over £94,000 were made through the charity in May, almost 9,000 donations totalling over £7m have now been made to charities and good causes throughout the UK since the charity’s formation in 2008. Donations made through Making a Difference Locally have funded a wide variety of items and projects, from equipment for local youth sports teams, to community defibrillators and even a boat for Sea Cadets to learn to sail in. Kate Carroll, Making a Difference

Locally’s Head of Charity, commented: “We are thrilled to have reached the £7m mark and delighted that Nisa retailers and their customers have helped to support thousands of causes within their local communities over the last nine years through the charity. “With record engagement with the charity in 2016 and over 500 MADL fundraising tins distributed to members over the last couple of months, we hope to be able to make a difference for even more charities and community causes in the future.” Making a Difference Locally raises funds in independentlyowned stores that are members of Nisa, through the sale of items from Nisa’s Heritage own-label range and a selection of branded products which carry charitable donations from the suppliers. Last year was a record year for the charity, donating over £1.4m to around 2,000 causes across the UK. There are currently over 2,300 stores participating in the Making a Difference Locally initiative.

PayPoint has revealed positive changes to its SIM commission structure for retailers. The new structure gives retailers an opportunity to earn up to 25% more commission on PayPoint SIMs, up 75% since 2015. Improved rates will be seen on invoices from August and in bank accounts from September. In the last year, PayPoint has paid over £1m in SIM commission to retailers. Lewis Alcraft, Commercial Director of PayPoint, said: “PayPoint has developed a strong relationship with all of the UKs most popular networks such as O2, EE, Vodafone and Three, as well as recently adding giffgaff, which means that our retailers are able to offer great value to their customers and enhance their earning potential.”

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News Extra

SWA Conference | Investing In People

NewsExtra AN OVERHAUL IMMINENT AT WOODLANDS P32

CONFERENCE Scottish Wholesalers Association meets

Convenience Matters with the SGF TACKLING RETAIL CRIME

Our 2017 crime report showed that, sadly, 100% of respondents in our survey had been the victims of some form of in-store crime in the preceeding twelve months. 75% of our members experienced shop theft at least once per month. In addition, 92% of respondents had incidents of violence and physical abuse in-store during 2016. The biggest triggers for abuse are refusal of sale and asking for proof of age. These situations are obviously very damaging for shop workers but also for their families, customers and the wider community. At SGF, we believe that it is time for a change in the law. If it was expressly against the law to abuse shop workers who are carrying out a statutory obligation then the police and criminal justice system would take this abuse much more seriously. Retailers are being asked to carry out an increasing number of legal requirements: if they are expected to enforce the law then they should have the protection of the law. Daniel Johnson MSP announced his intention to launch a consultation for a Protection of Shop Workers Bill. This is the ﬁrst step towards a members bill in the Scottish Parliament. At our recent Cross Party Group on Independent Convenience Stores, Daniel spoke about his commitment to the consultation and his intention to begin the work this Autumn. Creating a safer instore retail environment is something that should be supported by everyone. We expect that this proposed legislation will be welcomed by our members and we hope that our elected members at the Scottish Parliament will give it their full backing.

SLR | JULY 2017

INVESTING IN PEOPLE

Steve Fox, Booker

Tim Clay, Asahi UK

Louise McWhirter, HIM

Robert Graham, Graham’s Dairies

The need to invest in the training and people required for a successful future was the key topic at this year’s SWA Conference. BY KAREN PEATTIE

There’s no doubt about it – training and equipping the industry’s future leaders with the tools they need to keep the food and drink industry moving has never been more important. It’s also a subject that took centre stage at the Scottish Wholesale Association’s conference last month. The trade group has always been hot on training but back in 2012 played a rather clever trump card when it launched its groundbreaking mentoring programme – something completely new for the wholesale industry and an initiative that has since been copied by others south of the Border. Two individuals who have benefited from the programme – mentee Bev Kelly, an area manager with Booker and her mentor Ken Cameron, account controller at the award-winning food producer Nairn’s Oatcakes – told their story at the conference. Ken, describing the mentoring programme as a “brilliant opportunity”, said: “It’s up there with the best of the initiatives that the SWA has brought to the wholesale arena over the last 50 years.” Previously with CCSB – now Coca-Cola European Partners (CCEP) – Cameron explained why he had volunteered as a mentor. He said: “I was once described

as a ‘terrific salesman’, someone who has done well selling beer, crisps, ginger and now biscuits to the Scottish marketplace. But I want to be remembered as a passionate people manager who has helped some of the best become even better.” Cameron reminisced about the “heady days” with CCSB sales and merchandising teams and a huge sales force in Scotland. “I want to keep my people management skills fresh and share my experience of 25 years working in an industry in a country I am passionate about,” he told the audience. “But I also want to put a bit back into the SWA having taken an awful lot out.” Pointing out that being a mentor requires considerable time, effort and, of course, confidentiality, he said: “There is no dialogue or reporting back to anyone’s line manager. It is a one-to-one relationship. “All mentees should be supported in their application safe in the knowledge that the new skills and approaches they will learn will be an investment back into the business they work for. “For the mentor, it gives people like me – potentially you – the chance to work in a different way, to offer support to someone who doesn’t work for you or your organisation. Your mentee will

possibly be someone you have never met. So for me, it has been a chance to work with someone who has stuck their head above the parapet and asked for help to develop from someone other than their boss.” Cameron also warned potential mentors that “this is not a management job”. He said: “There is a big difference between coaching and mentoring because you are helping others to think about different things, or indeed think in a different way. It requires the mentor to shut up and not provide immediate solutions – you have to help the mentee find their own path, coax not coach them, and ultimately help them to find their own answers.” For his mentee Bev Kelly, a Booker employee for 25 years who is now based at the wholesaler’s Port Dundas branch in Glasgow, her first experience of the industry came when when she was just 16 and started her career in wholesale at Booker on a YTS scheme. Throughout her Booker journey, Kelly has held various roles, from stock control supervisor and handling deliveries to her current position as manager of its biggest depot in Scotland. Her regional director suggested that she might want to consider www.slrmag.co.uk

SWA Conference | Investing in people

News Extra

James Pearson, Danone

Richard Crabtree, Quorn Foods

Eddie Lynagh, SWA

Peter Nixon, PMI

Matt Norbury, BigDL

Marc Crothall, STA

Laura McKechnie, CCEP

Josh Littlejohn, Social Bite

Ken Cameron, Nairn’s Oatcakes

Bev Kelly, Booker

Andrew Muldoon, Booker

Asim Sarwar, SWA

the mentoring programme. “I was flattered and excited by the proposal but I was also unsure of what lay ahead and what I would gain from it,” she said. “After stepping back and thinking about my future within Booker, I spoke to a couple of colleagues who were previously in a branch manager role and had completed the mentoring programme – both encouraged me to take part as they found it an excellent tool for their development as managers and as people. “When I received the call to inform me that my mentor would be Ken Cameron I was immediately at ease as we have had a good working relationship for over 20 years – any niggling doubts I had were soon forgotten.” Together, they agreed to focus on five areas – effective team meetings, selling tools, interview skills, conflict with peers and ambition. “After speaking to one of my colleagues who was also on the mentoring programme,” Kelly said, “and speaking about his experiences here, I remember saying that it wouldn’t be me speaking at an SWA conference – and here I am. I’ve amazed myself with the help of a great mentor. “I am proud to say that I www.slrmag.co.uk

believe all areas have been strengthened, making me a better colleague and person. The mentoring programme has been an incredible experience for me, making me more confident in my abilities and more assertive in decision-making, and hopefully these qualities will take me forward in my Booker career. “I said to myself 18 months ago that if I learn one thing from the programme then it’s a bonus, but I have learned lots.” Mentoring was also highlighted by Laura McKechnie, head of field sales (wholesale) at CocaCola European Partners (CCEP) who revealed that her company is extending its mentoring and apprenticeship programmes as part of a wide-ranging investment in its people. McKechnie said that while technology would continue to drive change it was important to remember that people remained at the core of everything a supplier does. For example, CCEP is giving all 600 people in its field sales team iPads to be used for internal training and also when dealing with customers, and giving reps more autonomy to make decisions. The company is also introducing a customer portal for online order placement and to provide more information on products and services. Aimed

at smaller wholesalers, it is currently being tested with three wholesalers in Scotland taking part, McKechnie pointed out. You don’t have to be a vegetarian to enjoy Quorn – that was one of the messages from Richard Crabtree, group sales director at Quorn Foods who also spiced things up with a live cooking demonstration. His presentation threw up some interesting figures – 73% of Quorn shoppers are not vegetarian, 38% of evening meals are now meat-free and 41% of the UK’s meat eaters are “flexitarian” which means they also eat meatfree meals. And did you know that Quorn starts life as a fungus? Crabtree explained that it is a highly sustainable protein. The brand, which is growing by 13% year on year, was recently relaunched and is being supported by a £10 million advertising campaign which focuses on Quorn’s versatility and health benefits. Crabtree confirmed that food and drink sales consultancy Scot Serve, headed up by Graeme Clark, will be working with Quorn to develop sales in wholesale in Scotland. Booker’s managing director (retail) Steve Fox told the conference that while technology will play a big role in driving footfall in stores in the future it

has also identified nine key areas to help retailers become “fit for purpose”. As part of its 2020 programme, Booker will focus on food to go, chilled/prepared, instore bakery, events, local/regional, trends, health and habit-forming, and CIES (Core in Every Store). Retailers, Fox said, had to work harder at making their stores a destination for customers with categories like bakery, food to go, and fruit and veg more important than ever. Tobacco is a category that has witnessed considerable change in recent years and Peter Nixon, managing director of Philip Morris, spoke of yet more innovation – the company’s new IQOS brand which he said “will change everything in the tobacco industry”. IQOS, which heats tobacco as opposed to burning it, forms part of the company’s strategy to replace cigarettes with reducedrisk products. Predicting that there might not be many smokers left in 10 years, Nixon said that people would continue to enjoy nicotine but in different ways. The new brand is currently being rolled out in the UK in a controlled way, starting in London. As it heats the tobacco it doesn’t produce smoke or ash, and reduces the risk of people getting smoke-related diseases. JULY 2017 | SLR

Comment

IF THE SCOTTISH GOVERNMENT WANTS DRS, LET THEM PAY FOR IT One of the most galling challenges of working in the local retailing industry is that we so often find ourselves in a position where we have to take a stand against proposals that we have no moral issue with but we simply can’t afford to implement. We have to be the bad guy, left dangling in the wind. The Deposit Return Scheme is only the latest in a long line of proposals that make great tabloid headlines for the government – who’s going to argue against recycling? – but it’s invariably the retailer who ends up footing the bill for a major upheaval implemented off the back of some very, very inconclusive research. Let’s be clear here: our industry can no longer sustain the costs of being the fall guy for every well-meaning but poorly planned initiative the Scottish Government can come up with. Retailers are rapidly getting to the point where they literally can’t afford to keep footing the bill for socially desirable but commercially unsustainable initiatives. Most retailers I know would have no moral problem with ceasing to sell tobacco. Most retailers I know want to pay their staff good wages. Most retailers I know would be keen to recycle more and have already gone to great lengths with cardboard and food. So let’s put the moral thing to bed once and for all. The central issue here is a much simpler four-letter word: cost. Zero Waste Scotland has put a figure of “at least £40.7m” on the start-up costs to the industry of implementing DRS. If the government sees this as an effective way of pushing up recycling rates (which is not at all clear, given the already phenomenally high level of kerbside recycling) then why don’t they reward local retailers for the key role they would play in helping achieve this social policy by footing the £40m bill? It’s draconian of the government to impose legislation after legislation on retailers to achieve wider societal aims (as well as the government’s own politically-driven aims) but wash its hands of the implications and costs of doing so. It’s time the government made an effort to understand the important role local retailing plays in this country. Local retailers enjoy a uniquely proactive, positive and social role in the communities they serve which, in my opinion, is more than can be said of Asda or Lidl or the likes – so how about lending a little support to help us to continue to keep Scotland’s communities vibrant? If it wants the bulk of this vital industry to still be around in five or 10 years, then now’s the time to show it.

EDITORIAL Publishing Director & Editor Antony Begley 0141 222 5380 | abegley@55north.com Editoral Assistant Iain Hoey 0141 222 5385 | ihoey@55north.com Web Editor Findlay Stein 0141 222 5389 | fstein@55north.com

ADVERTISING Advertising Manager Susan Dignon 0141 222 5384 | sdignon@55north.com

DESIGN Design & Digital Manager Richard Chaudhry 0141 222 5300 | rchaudhry@55north.com Designer Lisa Deakin 0141 222 5388 | ldeakin@55north.com

EVENTS Events & Operations Co-ordinator Chloe Buchanan 0141 222 5383 | cbuchanan@55north.com

CIRCULATION & SUBSCRIPTIONS 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.

ANTONY BEGLEY, PUBLISHING DIRECTOR

SLR | JULY 2017

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Cover Story

Industry Consolidation

IT’S CONSOLIDATION,

BUT NOT AS WE KNOW IT… 14

SLR | JULY 2017

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Industry Consolidation

Cover Story

With Tesco, Sainsbury’s and Amazon all intent on growth through acquisition, what lies ahead for Scotland’s local retailers – and are we at risk of creating a two-tier industry of ‘haves’ and ‘have nots’? BY ANTONY BEGLEY

or as long as SLR has been published – over 14 years now – we’ve been writing about industry consolidation. It usually comes in waves with the last major flurry seeing the likes of Aberness, David Botterill’s and David Sands sold for very tidy sums and effectively wiping out the era of the independently-owned chain. Then the cash dried up and consolidation all but ground to a halt – but there’s a new wave starting to build and this time it’s bigger than ever, involving bigger sums than ever – and make no mistake, it will change the local retailing industry forever. Tesco’s proposed merger with Booker, Sainsbury’s courting of Nisa and even online behemoth Amazon’s acquisition of Whole Foods will change everything. But what exactly will it mean for Scotland’s local retailers, those 5,000+ independently owned stores? The two deals most likely to throw the market into turmoil will be Tesco’s merger with Booker and Sainsbury’s dalliance with Nisa, no doubt prompted by the Tesco bombshell that rocked the industry when it was revealed on January 27 and miraculously remained one of the best kept secrets in the history of the trade. The Amazon deal is more of an interesting sideshow, not least because Whole Foods only has nine stores in the UK and just one in Scotland, in the somewhat unlikely location of Giffnock on the south side of Glasgow. Known affectionately in the US as “Whole Wallet” – because that’s what you end up spending when you visit one of their stores – it has been unkindly suggested that the only reason Amazon bought it was because billionaire boss Jeff Bezos’ wife likes to shop there. It’s a loss-making business but the real driving force behind Bezos’ deal is far more

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likely to be focused around owning some realworld bricks and mortar businesses, as well as the virtual ones that have made him so successful. Bezos’ proven track record of taking a punt on leftfield diversifications is well known (Google Amazon Web Services as a good example, if you’ve never heard of it) and there’s no doubt his creativity and to all intents and purposes limitless budgets will undoubtedly be perceived as a clear and present threat for businesses trading more directly in competition with Whole Foods. But it would be a foolhardy local retailer who thinks there is little risk of Amazon ever getting involved in c-stores, not least because of its stunning foray into automated, largely staffless convenience retailing with its Amazon Go concept store in Seattle. Don’t forget too that Amazon already has a supply chain agreement with Morrisons for its online grocery shopping Amazon Fresh concept. There has even been talk of Amazon seeking to “own the entire retail sector”. Hugh Fletcher, Global Head of Consultancy and Innovation at ecommerce consultancy Salmon said: “This deal is a clear signal of intent from Amazon to dive deeper into the grocery sector. Amazon Fresh and Amazon Go were the first steps, but this shows the ecommerce player is no longer treating grocery as just another branch in its huge ecosystem. There is no hiding the fact that Amazon is striving to own the entire retail sector.” But it’s the Tesco and Sainsbury’s deals that are game changers, and those changes could come quickly, particularly as Booker has just petitioned the Competitions and Mergers Authority (CMA) to ‘fast track’ the merger. This is not an unusual request and indeed there have been high profile fast-tracked deals

in the past including the BT/EE and the Coral/ Ladbrokes deals – so don’t be surprised if it’s pushed through in double quick time. Booker can of course argue that it doesn’t actually own any of the Premier stores it supplies or, for that matter, the many other independents who buy from it on a daily basis, so the deal wouldn’t actually increase Tesco’s dominance of the food retail market in a direct sense. Buoyed by the boldness of that deal, and many are already calling it the latest stroke of genius from Booker boss Charles Wilson, Sainsbury’s seems to want in on the act too, if for no other reason than to ensure it doesn’t lose ground on its great supermarket rival. Nisa is, on the face of it, a good fit. Despite its recent return to modest profit, the business remains vulnerable and has only recently completed a £120m refinancing deal to help it steady the ship after the loss of both Costcutter and MyLocal supply contracts in a very short space of time. Corporate finance specialists Cavendish went as far as to call the Sainsbury’s proposal “an entirely defensive acquisition”. Jonathan Buxton, Head of Retail at Cavendish, summed the entire scenario up nicely when he said: “Amazon’s acquisition of Wholefoods sent grocery stocks tumbling as the British grocery market becomes increasingly competitive, forcing profit margins and making independent retailers seek safety in scale. The [Sainsbury’s] deal is a reactive move following Tesco’s acquisition of Booker earlier this year, and sees Sainsbury’s adding another brand to its increasingly diverse portfolio, after its acquisition of Argos. The grocery market is undergoing a seismic shift and we can expect to see more acquisitions of this nature from the big four as they compete not only with JULY 2017 | SLR

Cover Story

Industry Consolidation

each other, but also the tech giants who are encroaching on their markets.” Bolt Learning Director and former HIM Managing Director Tom Fender has highlighted food to go and fresh as the two areas where the supermarket-led deals could carry a real threat for local retailers. He said: “Lots of customers love visiting their local independent store, that’s well documented, but the market is moving inexorably towards food to go and fresh – and that’s two areas where the likes of Tesco excel. It wouldn’t surprise me to see Booker customers, and in particular the Premier and Londis symbol stores in Scotland, benefitting from an outstanding supply chain in those areas. “Both Tesco and Booker are also very interested in foodservice and I can envisage a situation where high quality, premium ingredients earmarked for restaurants and hotels could start finding their way into c-stores in the form of good deli offerings or just higher quality ingredients for those cooking from scratch.” After years of venting fury and frustration at the encroachment of Tesco into the convenience market, many Premier, Londis and Nisa retailers are unsurprisingly upbeat about the prospect of having the might of a supermarket behind them. Walter Bryson, who owns a Londis forecourt in Prestwick said that the majority of Booker group retailers he has spoken to are “generally pretty comfortable” with the proposed merger. “We understand that we’ll get better buying power, better promotions and better cost prices so I don’t think we would have too much to complain about,” he commented. One area of concern he does highlight however is what happens when a store is near a Tesco or Tesco Express store. He explained: 16

SLR | JULY 2017

“I have a Tesco Express only a couple of hundred yards along from me and I’m not entirely sure what will happen on that front.” As for Nisa retailers, while that deal is still at a much earlier stage, the sentiments are roughly the same. Mlinathort Nisa retailer Franck Casonato said: “To be honest we haven’t been told much at all so far about the deal. Everything I know I’ve read in the press, but if it delivers better prices and promotions and the chance of a bigger range, then it could be interesting – although we would be very keen to keep the same name above the door.” Consolidation, it would appear, is being welcomed by those set to benefit from it – but what about the rest of the trade? “The honest answer is that nobody really knows,” said Scottish Grocers’ Federation Chief Executive Pete Cheema. “What we do know is that these deals will have a big impact on a lot of businesses right throughout the supply chain. If Premier, Londis and Nisa retailers are all getting better pricing then their competitors will have no choice but to do what they can to match them – so there may be sustained pressure on wholesalers, particularly smaller independent ones. With many of them already operating off of margins as low as 0.6% or 1%, it’s hard to see how they’ll be able to accommodate this. And it certainly looks like it will be exceptionally difficult for local retailers that aren’t part of a symbol group, even if it isn’t one of the Tesco or Sainsbury’s owned ones.” There are, of course, more questions than answers at this stage but it is clear as day that, just as it has had to do continuously over the last decade, the local retailing sector will have no choice but to up its game once more with competition likely to be tougher than it has ever been in the past. www.slrmag.co.uk

News

Products

SIM commission rates rise PayPoint has revealed changes to its SIM commission structure

ProductNews

for retailers. The new structure provides retailers an opportunity to earn up to 25% more commission on PayPoint SIMs, up 75% since 2015. Retailers who currently offer PayPoint SIMs will see the improved rates from August on their invoices and from September in their bank accounts.

Perrier flavours Nestlé Waters has introduced Perrier Flavours to its bottled water portfolio, marking what is set to be the biggest year for the brand in over a decade. The premium range is available in two flavours: Green Apple and Lemon. They are available in packs of six with an RRP of 95p. The launch is supported by a significant outdoor campaign across the country as well as in-

CHECK OUT THE LATEST LINES TO HIT THE SHELVES P36 BISCUITS Cookie brand undergoes refresh

Maryland Rebrands to improve visibility Burton’s Biscuit Company has announced a huge investment in its Maryland brand over the next 12 months, starting with a range-wide packaging refresh, NPD, and a social media campaign. The new pack design, which is currently being rolled out across the entire Maryland range, is a bid from Burtons to improve standout and range navigation for shoppers. The refresh made its debut on the brand’s latest launch: Maryland Thins. Thins are promoted as a lighter snacking option and are available in two flavours, Milk & Dark Choc Chip, and Salted Caramel (rrp

£1.49), in shelf-ready packaging in case sizes of nine. “The new designs will ensure Maryland remains relevant and contemporary, improving standout on-shelf,” says Mandy Bobrowski, UK & Ireland Marketing Director at Burton’s Biscuit Company. “Our new Maryland Thins will enable retailers to attract younger shoppers into the category through new and exciting products targeting afternoon snacking.” The announcement follows recent launches including Maryland Crispies and Maryland Cookie Bites.

store, sampling, digital and video on demand. POPCORN

Trail Mix to share

Butterkist ﬁnds its happy place

Mars has made its Bounty and

As part of a multi-channel marketing campaign, Butterkist hosted ‘an evening of happiness and wellbeing’ following an extensive survey into the nation’s happiness as part of its recent rebranding campaign. Featuring positive psychology expert and doctor of happiness, Andy Cope, the evening was designed to unlock the secrets of the nation’s ‘happy place’ while showcasing the new logo and rebranded Butterkist packaging. It found that the average adult feels genuine happiness up to eight times in a typical week, with nearly two thirds of Brits claiming they are generally happy on a day to day basis. Britons top “happy places” included: cuddling a partner, being on a plane on the way to a holiday, and being on a beach reading a good book.

Galaxy Trail Mix fruit and nut packs available in 150g Snack ‘n’ Share size packs following the success of its 25g Trail Mix shot packs, which launched in 2016. Michelle Frost, general manager for Mars Chocolate Drinks and Treats says: “We are always keen to offer consumers more choices on how to enjoy their favourite chocolate brands. We hope to drive further value growth with these new branded sharing packs in this category.” Bags RRP at £2.99.

Cadbury Mini Egg Promo Cadbury is currently running a Cadbury Mini Eggs on Holiday promotion on limited edition packs. The will feature only yellow Cadbury Mini Eggs and will make over 5,000 consumers instant winners. Up for grabs via in pack vouchers are four luxury tailor made holidays worth up to £6,000 and 5,000 summer goodies, including Bluetooth

ENERGY DRINKS

Red Bull’s limited Edition Red Bull has launched its first-ever ‘when it’s gone it’s gone’ limited edition. New Red Bull Summer Edition is an extension the existing Editions range. Two million cans of the kiwi and apple-flavoured drink have been produced. The new variant is being introduced to the UK following strong performance in overseas markets. Red Bull Editions have delivered £52.8m in sales in the past four years. Gavin Lissimore, Red Bull Head of Category Marketing, said: “The Summer Edition will add a new flavour to the shelf, while demand is high without impacting on retailers’ soft drinks ranges long term.”

speakers, beach bags and sunglasses. KEEP UP WITH THE LATEST NEWS AS IT HAPPENS – FOLLOW US ON TWITTER @SLRMAG

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Products

News

CRISPS

Tabasco plays roulette CHEESE Lactalis launches media campaign

Seriously Smoothsational Lactalis McLelland has launched a wide-reaching summer media campaign, running until September, to support its Seriously cheddar brand. ‘There’s cheddar, then there’s Seriously’ kicked-off with video-on-demand and social media activity featuring new creative copy showcasing the brand’s distinctive taste. The new campaign includes three ads, each promoting a different Seriously Cheddar maturity. Each represents a cheese ‘epiphany’ moment, showing a family’s reaction to the taste of Seriously cheddar for the first time. The Seriously Creamy Mature Cheddar ad shows a mum relishing the first bite of a cheese toastie accompanied by the words: “There’s so-so cheese toasties, then there’s Seriously Smoothsational cheese toasties”. The second and third ads highlight Seriously Strong Extra Mature and Medium Cheddar. The social media activity is complemented by a national outdoor advertising campaign.

Doritos is re-launching the popular Doritos Roulette in partnership with Tabasco Sauce, the iconic hot pepper sauce. The launch this month aims to attract younger shoppers by appealing to millennials and is supported with a TV and digital advertising campaign, kicking off on 3 July and running for 5 weeks. The re-vamped packs will contain one chip is ﬂavoured with Tabasco Sauce in every handful. The launch follows the success of Doritos Heatburst earlier this year. Will Robinson, Brand Manager at PepsiCo, commented: “Roulette is a playful product that lends itself to social occasions.”

North and Scotland MRH is by far the largest independent petrol retailer in the UK with over 450 company owned sites.

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News

Off-Trade

Malibu Ad Coconut flavoured rum brand, Malibu, has returned to TV screens for the first time in four years. The new ad is a part of the brand’s overall ‘Because Summer’ campaign, which includes a host of activity aimed at Malibu’s target audience of ‘Social Butterflies’. The TV advert will be supported by online activity including an #EpicSlowMo online version, a partnership with trendy Shoreditch café ‘Palm Vaults’, and bespoke Snapchat filters.

Carlsberg Towards Zero The Carlsberg Group has committed to eliminating carbon emissions and halving water

Off-TradeNews WHY DO RETAILERS NEED TO GET ON BOARD WITH NEW TECH? P26 CIDER New Zealand brand brings 10-pack for summer

Summer sales soar with Old Mout Premium cider brand, Old Mout, brought a new pack for summer sharing occasions for three of its flavours. The New Zealand cider brand has launched 10-can packs across its flavoured ciders – Kiwi & Lime, Strawberry & Pomegranate and Passionfruit & Apple and a 4 pack Kiwi & Lime – to help retailers target these shopper occasions throughout summer and beyond. “Our new packs are 100% recyclable and have a grab handle

that makes them easy to carry to spontaneous summer parties and barbeques,” says Emma Sherwood-Smith, Heineken’s cider brand director. “We recommend that retailers should stock up on the 10 pack and 4 packs this summer to attract new shoppers to the category and to drive additional sales over summer”. The brand also recently unveiled a new £5m campaign driving consumers into store. The new 10 packs are available at an RRP of £11.

usage at its breweries by 2030 as part of its new sustainability programme – Together Towards

BEER

Zero. An intermediate step

Catona teams with Kronenbourg

includes the exclusive use of renewable electricity at its breweries by 2022. The move is in response to increasing consumer demand for sustainable products in a time of global challenges such as climate change, water scarcity and public health issues.

Tennents exchange As part of its “Here to Serve”

French football legend, Eric Cantona, returned to packs of Kronenbourg 1664, with his Suprême image, following a successful campaign last year that led to 25% growth in value. “We’re thrilled to be featuring this true icon on our packs once again,” says Toby Lancaster, category and shopper marketing director at Heineken. “With Eric’s help, last year’s campaign grew the brand by 25% through the extra sales it brought to our customers and we’re expecting to see another strong performance this year.” Cantona is seen across the full range, which Heineken believes is creating eye-catching standout on shelf which, and is expected to lead to a similar uplift in value for retailers as the previous year. The limited-edition Eric Cantona packs are available to order now across all of Kronenbourg 1664’s bottle and can packs.

campaign, Tennent’s recently created a Currency Exchange giving English football fans a chance to change their cash

BEER

into Scottish notes, playing off

Mark Cavendishes ride for Amstel

the traditional challenge Scots

To mark its sponsorship of Prudential RideLondon, Amstel Bier assembled an amateur cycling team ever – a team of riders all called Mark Cavendish, coached by professional cycling legend himself – Mark Cavendish MBE. The eight-man Amstel ‘Team Cavendish’ consists of people named Mark Cavendish at birth, as well as some who have changed their names to the decorated Olympian’s by deed poll to be part of the 2017 Prudential RideLondon squad.

face when travelling south of the border.

Cactus complaint A complaint about the packaging of two ﬂavours of Cactus Jack’s Schnapps for not being clearly labelled as alcohol and appealing to under 18s has not been upheld by the Independent Complaints Panel (ICP). The complainant asserted that the use of Black Jack and Fruit Salad ﬂavour names and branding reminiscent of the sweets on an alcoholic beverage would particularly appeal to under-18s and breach the Portman Group Code.

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Off-Trade

News

ADVICE My Store Matters campaign provides top tips for summer

Diageo extends ‘Inspire, Display, Sell’ advice Diageo has extended its My Store Matters campaign to help retailers boost their alcohol sales during the summer months. Using the latest research, Diageo has devised new ‘Inspire, Display, Sell’ advice to demonstrate how retailers can tap into the ‘Something for Tonight’ mission by perfecting their chilled range; increasing sales by up to 27%. Research shows that 50% of beer and cider, and 90% of premix shoppers in the convenience

channel will consume their beverage within two hours of purchase. However, Diageo has identified that convenience retailers are not making the most of this opportunity by offering chilled, ready to drink options; a survey of 300 UK retailers revealed that 15% of stores have no chilled BWS at all. Diageo has consequently created a recommended range and planogram. This incorporates must stock lines to drive sales,

as well innovation to generate excitement amongst shoppers whilst ensuring key growth categories such as World & Craft Beer, Fruit Cider and Pre-Mix cans are given sufficient space to enable retailers to tap into the huge opportunity they represent. For further information and advice regarding ‘Inspire, Display, Sell’, retailers should visit Diageo’s refreshed website, www.mystorematters.net or speak to their local sales rep.

WINE Wine favourite offers pairing advice

Echo Falls pairs up The UK’s second largest wine brand, Echo Falls, has transformed the face of its wine labels, attributing each wine to a ‘fun and lively persona’. From Sauvignon Blanc, which it deems the perfect accompaniment to your ‘getting ready soundtrack’, to the ‘dark and oh so handsome’ Shiraz, Echo Falls has attempted to encapsulate the personalities of each wine to make them relatable and to bring the range together to appeal to specific occasions. The new packaging also sees a spectrum of colour introduced across the front of its label in its signature wave. Each label has been given a specific colour that aims to distinguish the flavours and reflect the grape variety so consumers spend less time reading labels. Each boasts a specific ‘personality’, with the Merlot defined by the brand as follows: “If there was a wine that could match up to your favourite cuddly jumper, Merlot would be it. So when you’re at the peak of comfort, grab a glass and fill it with its perfect partner, Merlot. Just don’t spill any… it’s a pain to get out!”

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BEER

Tiger’s new SKU Heineken’s Asian lager brand, Tiger Beer, has introduced a 4x330ml can pack to its range, aiming to capitalise on the small cans trend, which Neilsen data shows to have undergone +35% value growth. Toby Lancaster, Category and Shopper Marketing Director at Heineken, said “Tiger Beer’s courageous spirit appeals to a trendconscious consumer, and we know that the new can-pack format is right up their street. We’re conﬁdent the new SKU will help our customers unleash higher lager sales this summer and beyond, so retailers should stock up now to reap the beneﬁts.” The new 4x330ml can pack is available at an RRP of £4.50. Tiger is also available in a 640ml bottle, RRP £2.

Q: I’m refurbishing my shop and creating a deli counter along with a seated area for customers. Do I need to do anything from a licensing perspective? Michael McDougall: Yes, you will need to consider two matters: (1) the operating plan that is part of your premises licence should set out that you will be serving food/drink (no alcohol!). You will have ask the licensing board for permission to introduce this as an activity; and (2) if the layout of your premises has changed you will have to have your architect or shop fitter prepare updated plans for the licensing board to approve. I recommend that you speak to a specialist licensing lawyer to identify the best way forward. Q: My convenience store recently failed a test purchase and the local licensing police inspector has asked that I attend an intervention meeting. I’m not sure what to expect! Niall Hassard: This is a formal process whereby the police will work with you to fix any licensing issues in the hope that further enforcement action can be avoided. For example, you may be asked to retrain your staff or adopt more stringent policies. You should see this as a positive opportunity to engage with police. You may wish to have an expert licensing lawyer accompany you to any meeting to make sure that your interests are protected especially as the outcome of an intervention could be referred to in further enforcement action. Q: I am thinking about introducing a National Lottery terminal into my shop. Do I need to amend my premises licence to allow this? Michael McDougall: No – the National Lottery is not considered a form of “gaming” in terms of licensing legislation so no variation application requires to be made. You, however, should bear in mind that lottery tickets are an age restricted product and you should make sure you train your staff accordingly.

JULY 2017 | SLR

News

Newstrade

Jill Greenshields promoted to Deputy Head of Sales at News Scotland

News Scotland – publishers of The Times Scotland, The Sunday Times Scotland and The Scottish Sun – has promoted Jill Greenshields to the newly created post of Deputy Head of Sales. The appointment follows a recent restructure designed to refocus roles within the company’s commercial offering, The Bridge, to put data at the forefront of how the publisher works with commercial and other clients, as well as with the rest of the business and its titles. News Scotland has a relationship with millions of consumers across the UK and The Bridge brings together the company’s data, creativity and insight resources in one place to create multi-channel, bespoke, targeted, measurable campaigns to connect brands to their audiences. Greenshields said: “Our growing audiences offer a commercial opportunity for clients that is unrivalled in Scotland’s media market. “I’m thrilled to be part of a team that, during a time of unprecedented industry change, is bucking the trend with increased audiences, both for print and digital.”

News& Magazines FORECOURT FOCUS P38 MARGINS Good news for retailers as cash margins increase

Margin boost for retailers as Sun on Sunday cover price rises News UK has announced that the cover price of the Sun on Sunday is to rise this month to £1.10 but retailer margins are being held at 21%, meaning they will earn 23p per copy. The cash injection is welcome amidst a flurry of cash margin reduction in recent months and the NFRN has voiced its approval while using

the opportunity castigate regional publisher Johnston Press. National President Linda Sood said: “This good news from the publisher of the Sun on Sunday also comes quickly on the heels of the new Sun Savers initiative to drive readers into stores. I would urge members to reciprocate by giving the Sun on Sunday their full support.

NEWSPAPERS

Guardian and Observer to become tabloids in early 2018 The Guardian and sister Sunday title The Observer are to become tabloids in early 2018, having switched from broadsheets to mid-size Berliner formats 12 years ago. The move is part of a “transformation programme” aimed at seeing the loss-making papers break even by 2019, according to publisher Guardian Media Group. The move will also see the closure of printing sites in Manchester and London with printing outsourced to Trinity Mirror. A consultation with print workers affected by the change has been launched and could affect up to 50 jobs.

MARGINS Regional publisher cuts margins as low as 10%

Johnston Press slammed for dramatic margin cuts News retailers have condemned regional publisher Johnston Press for cuts to retailer margins on 41 of its titles, some to as little as 10%. The cuts accompany cover price increases of between 10p and 20p. NFRN National President Linda Sood said: “Johnston Press has displayed complete contempt for hard pressed and hardworking independent retailers. This move is a travesty, made even worse by the fact that there has been no prior consultation.” NFRN Head of News Brian Murphy added: “Raising the cover prices is misguided, unprecedented and downright disgraceful. We want some urgent answers from Johnston Press, not least as to whether independent retailers are the only ones to see such vicious cuts to their margins or whether larger news retailers are having their trading terms hacked too.”

“News UK’s actions are in complete contrast to those of regional newspaper publisher Johnston Press. By hiking cover prices and slashing retail margins to as low as 10% on some of its newspapers, it will now have to work even harder than before to regain the trust of retailers and, more importantly, space on their news fixtures.”

CIRCULATION

Times in growth The Times Scotland has enjoyed a 13.42% circulation increase since last May, according to the latest set of ABC ﬁgures published for May 2017. Daily circulation was 28,283 for the period, while The Sunday Times increased its dominance of the quality Sunday market with a 5.56% increase in circulation. The Sunday Times now has a larger circulation than its two biggest competitors combined. The Times Scotland has now grown its year-onyear circulation for the 28th consecutive month. Full price sales are up year-on-year, driven by strong availability and a highly targeted sampling strategy, which has paid dividends on the newsstands and with increased subscriptions. The Scottish Sun on Sunday has maintained its lead of the Sunday popular market with a circulation of 151,981. The Scottish Sun continues to lead the daily popular market with a circulation of 196,459, which compares to the next biggest title’s circulation of 142,489. These successful ﬁgures follow the recent launch of The Scottish Sun’s new loyalty club – Sun Savers – the richest loyalty scheme in the country, giving readers £5 cash for every 28 papers they buy.

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Inside Business

Reaserch Digest

YEAR-ON-YEAR FOOD SALES UP 4.3% IN MAY Total Food sales grew by 4.5% in May in Scotland when compared with May 2016, according to the latest SRC-KPMG Scottish Retail Sales Monitor. This is the fastest food growth since July 2013, and pulls the threemonth and 12-month averages up to 4.1% and 1.1% respectively. This is the fastest threemonth average since August 2013. This compares with an overall increase in total Scottish retail sales of 0.8% on a likefor-like basis compared to May 2016, when they had decreased by 0.6 per cent. This is the highest overall growth since December. On a three-month basis, like-for-like sales grew by 0.8%, the fastest rate of 2017 so far.

SOFT DRINK SALES ‘TO TOP £8BN BY 2020’ Red Bull announced at its recent Category Summit that it expects energy, water and cola to drive sales of soft drinks to £8bn in the next few years.

FOOTFALL DOWN AFTER MONTHS OF GROWTH The latest BRC-Springboard Footfall Monitor for May 2017 has shown that footfall in May was 1.0% down on a year ago. This comes after two months of consecutive growth, leaving it below the three-month average growth of 0.7%. On a three-month basis, footfall grew 0.7%, the same rate as in April. High Street footfall fell 2.0% in May on the previous year’s rate of 1.1%. This is the first decline in High Street Footfall since January 2017.

SHOP PRICES PUSHED CLOSER TO INFLATION BY FOOD Shop prices continued to fall once again, albeit at the slowest rate for years, boosted principally by increasing food prices, according to the latest BRC-Nielsen Shop Price Index for May 2017. Overall shop price deflation was 0.4% in May, a slight deceleration from the 0.5% fall in April. This is the shallowest deflation rate since November 2013. Food prices increased by an average of 1.4% in May, higher than the 0.9% increase in April and the highest since January 2014. Fresh Food reported an increase of 1.2% in May from the 1.0% rise in April while Ambient Food inflation increased to 1.8% in May from the 0.8% increase in April. Mike Watkins, Head of Retailer and Business Insight at Nielsen, said: Consumer expenditure on food and drink has held up well so far this year with shoppers visiting more often to seek out savings and to find the best value for money, strategies which are helping manage changes in their budget.” 24

SLR | JULY 2017

ed Bull has announced that soft drink sales will exceed £8bn by 2020, with 97% of future growth KEY DRIVERS driven by just three core sub-categories: Energy, Q Energy Water and Cola. The brand looked to historical brand Q Water evolution of mature categories, as well as projections Q Cola from Mintel, Canadean and Euromonitor to determine this impressive ambition. Revealed at its first-ever Category Summit in Banbury, customers from across the grocery, convenience, driving and foodservice channels were invited to a day of insights and trends to help offer solutions to propel their business. With soft drinks continuing to grow at 6.3% (£453m) within the last six years, according to IRI, and forecast to expand a further 6.4% to £8.1bn over the next three years, retailers are being advised to take learnings from the evolution of mature categories, such as cola, to determine their optimum range. Although NPD has an important role in driving excitement into the category, a minimal 9.6% of total soft prink products drive 80% of category value sales. This is despite a total of 2088 new launches in the last three years, of which just three remain in the current top 60 skus. Gavin Lissimore, Head of Category Marketing at Red Bull UK, suggested: “Customers should focus on core brands and skus to really strengthen the category, and try not to be blinded by a dependence on NPD. Within energy, specifically, core skus account for 50% of the market, with diet and sizes driving the growth by 60.4% and 14.7% respectively.” www.slrmag.co.uk

Research Digest

NEXT GENERATION HAS BIG APPETITE FOR FOOD TO GO

Post-millennials are ‘extremely engaged’ with the food to go market and are hungry for ranges that meet specialist dietary requirements, says IGD.

ost-millennials are extremely engaged with the food-to-go market, according to the latest report from IGD into this highly influential generation. Not only are 18-25-year-olds shopping more for food-to-go than older shoppers, but they are particularly interested in ranges that meet specialist dietary requirements. IGD’s research on postmillennials, which refers to 18-25-year-olds born between 1992 and 1999, found that 30% of them completed a food-to-go mission on their last shopping trip, compared to 13% of over26s. The research also found: Q When shopping in convenience stores, post-millennials were twice as likely to buy food-togo compared to their older counterparts (48% vs 24% over 26-year-olds) Q One-third (32%) bought foodto-go at supermarkets and hypermarkets, compared to 9% of over-26-year-olds Q Almost a quarter (23%) shopped for food-to-go at a food discounter vs 7% of over26s The research also shows postmillennials are more interested

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in expanded ranges of food-to-go than those over 26. Half (49%) wanted to see an increase in vegetarian ranges, compared to 32% of over-26-year-olds, while 41% were seeking more vegan food-to-go options (22% over-26year-olds). Dairy and gluten free ranges were also something postmillennials wanted to see more of (39% and 35% respectively), while these were only of interest to 24% and 22% of over-26-year-olds. Rhian Thomas, Shopper Insight Manager at IGD, said: “To capture the post-millennial pound, retailers must think about the way they merchandise products. This is especially true in convenience stores, as we’ve seen that almost one in five (17%) of 18-25s see this as the best place to visit when purchasing food-togo. Being clever about product placement can really benefit food-to-go sales in convenience stores.” Post-millennials are showing a preference for food-to-go specialists, with a quarter (25%) saying they were their favourite places to buy food-to-go products, while 24% cited quick service restaurants. These outlets are just ahead of larger stores (21%) illustrating the opportunity across many UK shopping channels.

Inside Business

TOP TIPS FOR SUCCESSFUL IN-STORE SALES FROM In the final instalment of the Inspire, Display, Sell advice columns from My Store Matters, Diageo looks at how retailers can grow sales by improving the value perception of alcohol in their stores.

SELL

Sets out a series of key recommendations for retailers to effectively achieve this within the convenience channel. The three key elements of this advice are: 1: PMPs Stock PMPs to reassure your customers that they are getting value for money on their favourite brands.

2: PROMOTIONS Run promotions both from shelf and in off shelf space at key times of year to drive impulse purchases and boost perception of value amongst shoppers.

3: UPSKILL STAFF Staff initiated conversations can triple sales. When it comes to alcohol, train staff and ensure they can talk to customers confidently about the category, encouraging them to trade up and drive associated purchases.

PMPs ON PREMIXED DRINKS

Since implementing the advice into his Grocery Station store, Layes Miah says; “I never used to stock PMPs, even though I would see other shops doing so, because I didn’t really understand the benefit. However, I recently started stocking Smirnoff PMPs and have since introduced others after witnessing first-hand that consumers trust them more. This has had a really positive impact on sales.”

For more information on Diageo’s NEW My Store Matters advice, visit WWW.MYSTOREMATTERS.net or speak to your local rep today.

JULY 2017 | SLR

Inside Business

Retail Technology | David Morgan | Velocity Worldwide

WHO NEEDS DATA & TECHNOLOGY?

SLR | JULY 2017

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David Morgan | Velocity Worldwide | Retail Technology

Inside Business

Think you don’t need to get to grips with data and technology in-store? Think again says Velocity Worldwide Chief Operating Officer David Morgan.

n days of old, when knights were bold, and smartphones weren’t invented, the shopkeeper told us what to buy, and retail choice was prevented.” Apologies for cannibalising that old, often rather rude, “rhyme”, but 100 years ago this was the picture. The local community store was the key destination (and often the only option) for food and household needs. Shoppers, their families and their needs were known by store owners and recommendations were common; the service was personal and purchases could be delivered to home if wanted. Over the decades, stores got bigger and the shopper was asked to do more and more for themselves – travel further, select what they want, unpack and repack at the till and then take it home. Now, even the checkout is done by the shopper in many cases. Small-format, local stores were squeezed and became “convenience” stores, narrowed down to impulse and emergency purchases. However, something else was happening, too – shoppers were adopting technology. They were becoming better informed and issue-aware; mobile and inter-connected with likeminded people. Channels and formats proliferated. Media fragmented and so did shopping habits. “Loyalty” schemes with the lure of rewards as a means to gather data have become so common. Who doesn’t have a wallet or purse full of plastic or a pile of loyalty cards now left at home? The iPod taught us we could “unbundle” what others had “packaged” (e.g. individual tracks from an album). Starbucks gave us the illusion of ultimate customisation (e.g. skinny, grande latte with an extra shot and a dash of syrup). On-line commerce like Amazon showed us personalised and engaging experiences. Smartphones put us at the centre of our own world . I expect that most, if not all, reading this article know all this. There are an endless number of disruptive technologies available in the retail industry like iBeacons, mobile apps, digital coupons, Wi-Fi, digital displays, on-line orders/ click&collect, QR codes, video analytics, ANPR cameras, e-loyalty, social media, big data, NFC, RFID, biometrics, self-scanning, ESL, mobile commerce, and light tracking to

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name a few. But the biggest disruptor in retail today is not technology – it’s the shopper. Shoppers are coming back increasingly to small-format, local stores as destinations providing compelling propositions – freshly prepared food, great coffee, support for local community and food producers, sensitive to restricted budgets, ethical issues and dietary needs. At the recent SLR awards, one could not fail to be impressed by the initiatives of not only the winners but all the nominees. So I prefer to avoid the term “convenience store” and instead I want to talk about community, local, accessible and trusted. They happen to also be convenient. That begs the question then: “Who needs data and technology?” in this market sector. The answer is any retailer that wants to remain competitive and continue to meet and exceed the expectations and needs of today’s shoppers. The big players don’t stand still – deploying propositions and technology, trying to gather more and more data and crunching it like crazy to get shoppers into their store, not yours, getting them to spend more when they are there (which means less for you) and giving them reasons to come back. But local retailers have advantages that can be exploited – they have agility, community and trust. Technology can help continuously and consistently engage shoppers pre-store, instore and post-store using their preferred method of communication – email, SMS, social, mobile app messaging – proactively or reactively, as they wish, when they wish. But the technology itself is not the answer. Installing multiple “vertical” or siloed solutions can deliver some benefit but end up creating fragmented views of shopper behaviour, limit ability to action and worse still can end up confusing the shopper. This creates complexity for them and for the retailer. We must put the shopper at the centre of what we do, understand what they want, how and when they want it and recognise that their behaviour will evolve and vary based upon many factors – time of day, immediate needs, events, ethical values, life changes – and will evolve and change. By integrating the right technologies and solutions, we can simplify complexity

with a single view of the shopper to provide personalised and relevant experiences for them at all stages of their journey. Picture a “cook from scratch” shopper during a limited lunch break versus on Friday evening while thinking about the dinner for friends the next day; a busy “professional” with a considered health kick shopping without a time crunch versus rushing in at 10 pm on Wednesday for essentials like toothpaste and milk; a “family feeder” with a gluten intolerant child looking for new ideas to provide an interesting meal for tonight. And how do we know what they want? Ask them. They will tell you if they feel there is “fair value exchange” and trust. This is the strong domain of local retailers. Add to this the data of what they actually do and a picture emerges that, with their permission (opt-in), we can use to better serve them. Retailers can use technology to customise the ambience, “look and feel” and even advertising or information on display to make the store seem more personalised and relevant. Free Wi-fi can help make the store a destination for surfing or checking emails while drinking coffee and, based on their preferences, to engage with them every time they connect to provide something they value while learning more about them. Retailers can provide access to one or more mobile apps, suited to different demographics to enhance the experience, but must also ensure that non-smartphone users can be included through pre-store engagement and in-store self-serve tablets — or even talking to a real member of staff. Every interaction is a learning. This is why a single view of the shopper is so important and can only be achieved with an integrated, realtime approach centred on the shopper with actionable insights that are easy to understand and implement, consistently. So I leave you with what I think are three key steps for retail success: l Simplify complexity – integrate relevant technologies and solutions centred on the shopper journey. l Engage shoppers pre-store, in-store, post-store to understand their preferences and behaviours. l Personalise the experience with relevance – more shoppers, spending more, more often. JULY 2017 | SLR

Inside Business

Store Profile | Spar Leven

FOOD TO GO IS KEY FOR LEVEN SPAR Spar Scotland wholesaler and retailer CJ Langâ&#x20AC;&#x2122;s latest store focuses on food to go and fresh, and offers an impressive insight into just how much local retailing has evolved in recent years. BY ANTONY BEGLEY

SLR | JULY 2017

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Store Profile | Spar Leven

Inside Business

“The first week’s sales alone ended up well ahead of the company’s five-year projection figures for the store.”

par Scotland wholesaler CJ Lang holds a unique position in the Scottish local retailing sector, operating as it does as both a wholesaler to every Spar store in Scotland but also as a retailer through its rapidly-expanding chain of company-owned stores. The latest addition to that companyowned portfolio is Spar Leven, the 118th link in the chain. CJ Lang Company Owned Stores Director Jamie Buchanan has always insisted that he has no set growth targets every year in terms of store numbers, preferring quality

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to quantity, but the group is growing at a steady rate with “a few more irons in the fire” likely to add to the number of stores under his control by the end of the year. The company’s reputation precedes it however, which is how Buchanan came to take a call from a developer last year asking if he was interested in this brownfield site after it looked like the deal with another retailer was falling through. Demographic surveys, competitor analyses and number-crunching done, the decision was made to go for it and a full fit-out kicked off towards the end of last year.

Spar Leven is, frankly, a striking example of both how CJ Lang envisages the future of convenience retailing and a fine case study for how much local retailing has evolved in the last few years. The economics of running a store as part of large chain (with an accompanying large overhead) mean that it’s principally stores at the larger end of the scale that attract Buchanan’s attention these days. With rapidly rising staff costs, thanks to the living wage, as well as escalating costs on pretty much every front – rates, waste management, utilities, pensions and so on – it’s only in a larger store, both in terms JULY 2017 | SLR

Inside Business

Store Profile | Spar Leven

of square footage and weekly turnover, that the company-owned model can be “futureproofed”, as Buchanan puts it. Spar Leven, therefore, offers a great insight into how CJ Lang is thinking these days. It’s a big store at around 2,000sq ft and it uses every inch to give customers as many reasons as possible to visit, without feeling cluttered. The key focuses are clearly food to go and fresh, and that’s reflected throughout the store. There’s the more or less obligatory Subway, a Costa Coffee machine, a massive chilled range, lots of frozen space, some exquisitely presented locally sourced fresh and bakery offerings as well as a lot of locally sourced meat and produce. A gluten-free bay and a Polish foods bay also add a little specialist and locally-targeted flavour. The shopfitting by Vertex is to the usual high standards and the design incorporates some very nice touches without getting too experimental. The extensive alcohol range includes a standout rustic-style merchandising unit for premium wine and spirits that will undoubtedly encourage trading up, while the area around the entrance of the store has been thoughtfully livened up with a series of attractive artisan bread and fresh produce standalone fixtures. It’s fresh that dominates as shoppers cross the door, as is so often the way these days, with a huge run of fresh fruit and veg opposite a long run of chilled produce, merging a lot of branded and locally sourced lines with a range of Spar own label products. Sited on one of the two main roads on the way down to the sea in Leven, the store will undoubtedly benefit from significant passing trade with around nine or 10 parking places outside. The store is not short of competition with Lidl, U-Save, Nisa and Premier all nearby but the offering available in this new store makes it unique in the area, particularly for anyone looking for food to go. Naturally, the Subway that sits against the back wall of the store is already proving a big hit. On the day we visited, the lunchtime queue for the Subway was 12 or 14 deep. One of the many benefits of operating a chain of stores is the fact that store manager Carol Gray, brought over from nearby Spar St Clair Street in Kirkcaldy, is already fully Subwaytrained so she didn’t need to go through the highly intensive and time-consuming training course again. 30

SLR | JULY 2017

CJ Lang now has a Subway in 21 stores and Buchanan is effusive about how important the food brand is in instantly turning the store into a destination for many customers. With long experience with Spar under her belt, Carol was able to hit the shopfloor running and, to be fair to her, on SLR’s visit the store still looked immaculate, like it had just opened the day before, even though it was by then a couple of months old. To help the launch go with a swing, CJ Lang choose to run with a few exceptional deals on staple items like a half-dozen eggs for 50p and a loaf for 59p – and these deals were still live on SLR’s visit, justified by the fact that they have been effective in driving up footfall and bringing new customers through the door. After their first visit, they tend to return. Upselling at the till is also an ingrained practice at CJ Lang and was in full swing in Leven, helping to drive up impulse sales. Buchanan comments: “We worked hard at getting this store just how we wanted it and we worked very hard for the launch to bring as many customers across the door as we could. We knew that once they visited they would come back because we believe the store has a fantastic offering that’s unrivalled in this area.” That work paid off to a surprising extent with the first week’s sales alone ending up well ahead of the company’s five-year projection figures. Fresh participation is already running at over 50%, a phenomenal achievement and a testament to CJ Lang’s strategy. As for Carol, she’s enjoying the challenge of coming to terms with a brand-new store in a new area. “I’m just enjoying every day of it,” she says. “Keeping on top of the store and tweaking the range for local demand is challenging but rewarding and we’ve already started working on building links with the local community, schools, charities and so on. But it’s not just on the shopfloor that some neat ideas are unfolding. Behind the scenes has witnessed some innovative concepts, including a biometric scanner for staff to clock on and off, saving money and time as well as minimising head office administration and payroll. It’s still early days for Spar Leven but the excitement surrounding the store suggests both the in-store team and the Dundee head office team are pleased with the results so far – and it’s not difficult to see why. www.slrmag.co.uk

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WOODLANDSlocal

Inside Business

SLR | JULY 2017

Woodlands Local | Monthly Update

TIME FOR A FRESH START AT WOODLANDS

Despite significant investment and huge effort, Woodlands Local continues to perform well below its potential – so it’s time to get back to basics and start afresh in Falkirk with a new team and a new strategy. BY ANTONY BEGLEY

etting down and dirty in the retail trade by buying our own shop has been both a hugely rewarding and enormously humbling experience. Three years of retailing has taught us a lot of things but most of them have been around just how hard it is to run a convenience store efficiently and profitably. It’s also striking how 15 years of writing about local retailing

provides very little preparation for actually running a real, live store. In retrospect, we were naive to think that all we had to do was execute the things we were always advising retailers to do, often with a ‘how hard can it be?’ undertone. The harsh reality has been that the success of convenience store has very little to do with producing efficient planograms and running www.slrmag.co.uk

Monthly Update | Woodlands Local

regular re-ranging exercises and analysing Epos data. Sure, all of that is important – but what takes up 95% of the time is the hard yards of retail that very few trade journalists are privileged to see. Fixing problems like leaky roofs and broken fridges and faulty alarms and cranky tills and dealing with staff issues and more. Every retailer reading this knows what I’m talking about already and is undoubtedly thinking the same thing I’ve heard so often in the last few years: “welcome to our world!” So it’s with ever increasing admiration for the many local retailers in Scotland that we have come to the conclusion that it’s time for fresh beginning at Woodlands. It’s been a hard and often dispiriting few years, but I like to think we’re a lot better for the experience and we are in a better place than ever to develop our Woodlands Local 2.0 strategy. In short, everything is up for grabs at the store. We’re starting with a clean slate and that includes everything from staffing and store layout to suppliers and procedures. Our relatively new Store Manager Arlene Nixon has made a huge impact in the store, taking a much more hard-nosed retailer’s approach to working the shop much harder – and we’ve realised that it’s more of the same we need. That means a largely new team who will be issued with detailed procedures for every aspect of managing the store and will be expected to toe the line on all fronts and work their tails off every hour they are in the store. It also means a more standardised set of procedures right across the store, rather than the hotch potch of systems we have allowed to develop with every member of staff doing things slightly differently, mostly with good intentions, but often with poor results. The gloves are off. We are currently recruiting for three or four new members of staff and have already added one very promising member and we will be operating a one-strike-and-you’re-out policy with regards to time-keeping, effort, adherence to procedures and attitude towards the customer. A monster procedures manual is also nearing completion outlining how everything – literally everything – is to be done, from opening the store in the morning and cashing up at night to how to make a ham salad roll, from cleaning the coffee machine to ordering stock, from stock-taking regimes to recording waste, from discounting short-coded stock to merchandising promotions. Everything. So far it’s been done verbally and passed between the staff with varying degrees of efficiency. Now, every member of staff will be issued with a hard copy of the manual and will also be obliged to follow an online training procedure course being prepared for us by www.slrmag.co.uk

Bolt Learning. We have also identified a host of vital ‘areas where we are clearly under-performing and losing sales or money. Our aim is to get these sorted and proceduralised within two weeks. They include, but are not restricted to: Q newspapers and magazines: redeeming vouchers is haphazard at best, the returns process is clunky and seat of the pants Q hot food: management of waste has been sloppy Q tobacco: stock taking and handling from secure area to gantry is under par Q fresh & chilled: ranging has not been responsive enough to seasonal changes in availability, sell through rates and establishing the ‘right’ range for the store Q food to go: our range has evolved too slowly and we have not capitalised on a demonstrable high demand for hot and cold food to go with a lack of creativity and poor customer communications Q promotions: the promotional stock ordering process has been unscientific, the merchandising of promotions has been less than optimum, although this has improved significantly under Arlene’s tenure The list goes on, but you get the picture. As part of this we are also re-evaluating the macro-space planning of the store. The mission-shopping based layout has not been successful with shoppers keen to simply find products where they expect to find them, rather than ‘conveniently’ dotted around the store where we were trying to make it easier for them. We also plan to engage with a number of the major suppliers to come on board and help us take a fresh look at every single category from a wider perspective. This will include confectionery, BWS, spirits, crisps, soft drinks, biscuits, bread, grocery and frozen. We are under no illusion that we have a lot of work ahead of us, but three years have taught us that this is simply the way the trade is. There’s nothing for nothing and we have to earn every customer and every penny. It will also mean taking a closer look at categories where, with some experience under our belts, we see some potential to drive new footfall and bring new customers to the door, categories like vaping, craft beers, greetings cards, specialist spirits, free from. We’ve had a go at most of these categories in the past but have not given them the space and time they need to develop into solid sales deliverers for us. And who knows, maybe we need to look at some more radical ideas like a pizza oven, a delivery service, home news delivery or a fully fledged cafe area out front. It’s all up for grabs but we’ve got our mojo back and we’re going to give it 100%.

Inside Business

With some new construction work going on in the area, we’ve benefitted from a new glut of workies visiting the store each morning and lunchtime, driving hot food sales as well as sales of newspapers, confectionery, soft drinks and crisps. New manager Arlene Nixon is starting to make real headway in reforming a lot of our shopﬂoor related practices, making odering more efficient, reducing waste and ensuring far better availability than ever before.

WHAT’S

HOT

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

WHAT’S

NOT The recent Falkirk Fair Fortnight has caused a major slowdown in footfall and, consequently, in sales as families leave on holiday. Hot food sales have been affected as have overall store sales, resulting in a fall in weekly sales of over £1,000. Another flood -this time caused by a leak in one of the council-owned flats above the shop, helped to cause damage to several ceiling tiles as well as flooding the shop floor for a couple of days. Finding the culprit has proved impossible,as it always has done in the past with similar incidents!

JULY 2017 | SLR

Inside Business

Woodlands Local | Wrigley Project

It’s sampling time at Woodlands!

WOODLANDSlocal

As part of our project with gum and sugar confectionery giant Wrigley to deliver the perfect in-store experience, last month saw us run a sampling day on a range of products.

SLR | JULY 2017

ne thing that is more straightforward in local retailing than most is handing out free sweets – so the team in the store had a great time last month as we handed out cases and cases of a variety of Skittles and Starburst products for free to customers. If our experience in the store is typical of that of other retailers in Scotland, Skittles and Starburst are just as popular with adults as it is with kids – so we had no shortage of takers when we were handing out the freebies. The idea behind the sampling of course was not simply keep our customers happy with free stock, it was more around encouraging

“I buy normal Skittles anyway and work my way through them when I’m sitting as my desk but these Fruits & Sours ones are a revelation. I like sweeties that draw your jaws!”

SKITTLES WEEKLY SALES IN THE WEEK AFTER SAMPLING: Q Skittles Crazy Sours Standard – 26 Q Skittles Dark Side Pouch – 29 Q Skittles Fruit & Sours Standard – 12 Q Skittles Fruit Pouch – 14 Q Skittles Fruit & Sours Pouch – 78 Q Skittles Fruit & Sours Bag PM – 43

all of our shoppers to try the product in the hope that they then become regular, or semiregular, purchasers. As we only handed out the samples to customers actually buying something in the store, we managed to squeeze some extra sales out of the giveaway too, which always helps.

“I haven’t had Starburst for years – in fact I still think of them as Opal Fruits! – but they’re actually quite tasty. I can see me wolfing the whole packet down in on sitting, mind you.” IAIN, 54

DEREK, 31

“I don’t ever buy Skittles but I don’t really know why. These are brilliant though. Thank you very much.” JAMES, 11

www.slrmag.co.uk

Quorn Trial | Woodlands Local

Inside Business

EMBRACING THE MEAT-FREE GENERATION WITH QUORN

t Woodlands, we’re always looking for developing new categories that can help us bring customers to the store and drive up spend in areas where we previously didn’t trade. The sudden growth of the overall ‘freefrom’ category in the UK is one area that we have been looking at for some time and have introduced a few lines on a more or less random basis over the last six months. We were keen, however, to take a more organised approach to developing free-from sales – and where better to start than with Quorn, the UK’s leading meat-free brand. Quorn is well established in supermarkets but is starting to make some serious in-roads into local retailing, and that growth will certainly be accelerated in Scotland thanks to the recent appointment of former Burton’s duo David Grant and Gary Routledge, a pair well known to the Scottish trade. The IRI statistics speak for themselves: meat-free products are now bought by around 9.5 million people and almost three quarters of those are non-vegetarians. Meat-free shoppers also spend four times as much instore as non-meat free shoppers, according to Kantar, making a massive difference to the basket spend. Healthier, meat-free eating has become a lifestyle choice for many customers, and Quorn is the number one beneficiary of that growth. www.slrmag.co.uk

The brand is growing at 13% a year, so it was the perfect choice for our first serious foray into free-from and meat-free. We decided to take the top five selling SKUs into Woodlands, a mix of chilled and frozen: Quorn Sausages, Quorn Cottage Pie, Quorn Deli Ham, Quorn Lasagne, and Quorn Nuggets. The trial is still very new but initial signs are very encouraging – we’ve sold 62 units in a few weeks – even if we initially had our reservations about how well meat-free lines would go down in our part of Falkirk. In fact, we sold our first pack of Quorn Sausages within 20 minutes of putting them on the shelf for the first time! Julian Cooke, Head of UK Category Management at Quorn, told us: “Shoppers are more health conscious and discerning than ever before. That’s why meat free category is now valued at over £270m and is bought by almost nine and a half million shoppers, 73% of whom are non-vegetarians, and they are looking for great-tasting, nutritionally healthy, sustainable products such as Quorn.” We chose Quorn as a bit of a beacon brand for the store because it’s the best known name and lets our customers know that we have meat-free, healthier options available. We have already had some unexpected success with the Alpro brand range of soya and rice milks which we bought by accident once and then quickly sold out, alerting us to an opportunity we hadn’t been aware of before!

LAUNCH SALES STATS While we are only a few weeks into the trial of five Quorn SKUs, the unit sales numbers are already looking encouraging: 1. Quorn Sausages – 18 (£1.99 RSP) 2. Quorn Cottage Pie – 12 (£2.29 RSP) 3. Quorn Deli Ham – 9 (£1.50 RSP) 4. Quorn Lasagne – 8 (£2.49 RSP) 5. Quorn Nuggets – 15 (£2.29 RSP)

DID YOU KNOW? Q The meat-free category is now worth over £270m Q 73% of meat-free product purchasers are non-vegetarian Q Almost 9.5 million people buy into the category Q The Quorn brand accounts for more than half of all meat-free sales Q Quorn annual sales values top £161m and the brand is growing at 13%

FROZEN OPPORTUNITY Q the meat-free frozen sausage sub-category is growing at 17% Q frozen meat-free burgers are also growing at 27% Q Quorn’s Southern Style burger is worth £2m within the frozen category Q Quorn’s biggest sausage SKU is worth £4.9m

JULY 2017 | SLR

Hotlines

Product News & Media Watch

Cook-in-pack Aryzta Food Solutions The Heinz Cook-in-Pack range recently launched and comprises: Heinz Beanz Slice with Cheddar Cheese, Heinz Beanz Slice with Pork Sausage, HP Brown Sauce Pork Sausage Roll, and Heinz Tomato Ketchup Pork Sausage Roll, while the new Bake-in-Pack Panini range comprises: Chilli Chicken & Cheddar Panini, Ham, Cheddar & Wholegrain Mustard Panini, and Pesto, Mozzarella & Sun Dried Tomato Panini. All RRP between £1.65 – £1.85.

Oetker Extra Strong Dr Oetker Home baking brand, Dr. Oetker, has re-launched its range of Food Colour Gels with stronger, brighter colours. Extra Strong Food Colour Gels (RRP £1.29) include red, blue, pink, yellow, green, violet, black and orange and can be used to create a range of shades from pastel to bold.

Big changes go ahead! Popular on the go biscuit bar brand go ahead! has launched its biggest-ever campaign to support its latest NPD and the refresh of its core range. The campaign, which includes TV, VOD and social media, supports the launch of their new Goodness Bar, which is made entirely from natural ingredients and has no added sugar, tapping into the trend for raw fruit, nut and oat bars. Available in Cocoa & Orange and Cocoa & Hazelnut, Goodness Bars are gluten-free and high in fibre, with an RRP of £2.29 for a four pack. Also from go ahead! arrives new Crunchy Dippers – mini breadsticks which boast a high fibre content and come with a Salted Caramel or Creamy Coconut dip and an RRP of £1.99. The biscuit maker’s Fruity Bakes have been renamed to Fruit and Oat Bakes with an improved recipe including more oats and reduced in sugar, and a new Banana variant. The full range has had a packaging refresh to a ‘fresh and natural’ green. Kerry Owens, Marketing Director Sweet Biscuits, said: “2017 is a really important year for go ahead! and we’re extremely excited to introduce a range of new products and launch the brand’s biggest-ever campaign. We recognise that what ‘healthy’ means has changed considerably to the consumer over the years which is why we’re committed to modernising the range and providing our customers with snacks which suit their needs and, most importantly, taste great!”

Hunters Chicken sandwich Ginsters of Cornwall

Heritage Sizzling Sausages Nisa

Ginsters has launched two new limited-edition sandwiches – Hunters Chicken and Ham Hock & Piccalilli which join the range for the summer. They have an RRP of £3 and are available across convenience, impulse and travel. The Hunters Chicken sandwich is made with British roast chicken breast, and the Ham Hock & Piccalilli sandwich is made with British shredded ham hock.

Nisa’s own label Heritage has doubled its range of sausage lines for the summer barbecue season to six. The three new lines in the Gourmet range are the Pork & Apple, Pork & Onion and Pork Chipolatas. The previous pricing of £3 per pack or Buy Two for £5 has been maintained.

SLR | JULY 2017

Aloe Vera new look Grace Foods UK Grace Foods UK is introducing a new look to its range. The launch of the new pack designs, with prominence given to a new strapline, ‘Say Aloe’, coincides with the rollout of a limited-edition range of £1.15 price-marked 500ml packs. In addition to Grace Aloe Vera Original, the £1.15 price mark will be ﬂashed on top-selling Mango, Strawberry and Lychee ﬂavours.

Glaceau Sparkling Fruit Coca-Cola European Partners CCEP has announced the launch of three new Glacéau smartwater sparkling ﬂavoured variants. Berry & Kiwi, Lemon and Green Apple ﬂavours join the portfolio, and come in 600ml PET bottles. The launch is supported by an ongoing £5.4m nationwide smartwater marketing campaign which includes advertising, PR, sampling and instore POS.

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Product News & Media Watch Hovis low carb Gores Group/Premier Foods Hovis is meeting consumer demand for a healthier and more balanced lifestyle with the launch of the Hovis Lower Carb range. The range is available across all channels and sits alongside mainstream white, wholemeal and seeded loaves. The launch is supported with shopper, PR and social media activity. Loaves carry an RRP of £1.

Kinder Bueno Coconut Ferrero

Jumping on the coconut bandwagon is the special edition Kinder Bueno Coconut. The variant is made of pods of smooth hazelnut cream encased in a coconut milk and white chocolate-covered wafer bar and dusted with coconut ﬂakes. Kinder Bueno Coconut will have an RRP of 74p and is available in case sizes of 30.

Hotlines



MEDIAwatch Irn Bru Xtra revives the dead

AG Barr is running a new TV advert for its latest brand fixture. The campaign, which sees a series of Irn-Bru Xtra drinkers championing the effect of the drink, allowing them to learn Mandarin, turn invisible and return from the dead, is supported by extensive digital and social media support as part of a £5m brand investment throughout 2017.

Is it ok for guys? M&M’s Peanut and Hazelnut Mars Chocolate UK Mars has launched M&M’s Peanut & Hazelnut, a new limitededition variant that combines the most popular M&M’s variant with one of the most popular ﬂavours in the UK. M&M Peanuts & Hazelnut is available in 90g Treatbag (RRP £1.19), 128g Pouch (RRP £2.09) and 220g More to Share (RRP £3.29). The Treatbag is also available in a £1 PMP format.

Milkybar Milk First Nestlé Confectionery White chocolate favourite, Milkybar, is getting even milkier as Nestle increases the volume of milk in the recipe, making it the brand’s primary ingredient, increasing from 26% to 37.5% across the full Milkybar portfolio. Nestlé Confectionery will be running a £4m media campaign including TV, outdoor and social media until September to support the change.

Lynx continues its push to make the brand more diverse and challenge ‘manly’ stereotypes with a campaign starring boxer Anthony Joshua. Lynx is now looking to highlight that guys are hiding behind digital screens to ask the questions they can’t face asking out loud, such as ‘Is it OK to do yoga?’

A sensational carnival Walkers is re-positioning its Sensation range as “a feast for the senses”, which includes updating its entire portfolio with a modern, premium packaging design, as well as the introduction of three new exotic ﬂavours. It is supported with a TV advert, filmed at the Rio Carnival and the Holi Festival in India, depicting the excitement of carnival.

Spotlight on Spreadable Pot Noodles Pasta Unilever

Vimto Bon Bons Remix Tangerine Confectionery

Pot Noodle has launched a new range, featuring the nation’s favourite pasta recipes in a convenient snack pot format. Available now, the Beefy Bolognese, Creamy Carbonara and Cheesy Broccoli variants will be supported by a £2m ‘You can make it the Italian way’ marketing campaign. Available now, Pot Pasta has an RRP of £1.39.

Tangerine Confectionery has launched its latest addition to the Vimto range: Vimto Remix Bon Bons. Available in 165g £1 PMPs, each pack Vimto Remix Bon Bons offers a mixture of fizzy and chewy bon bons in the signature mango, strawberry and pineapple remix ﬂavours.

Lactalis McLelland has backed its Seriously Strong Spreadable brand with the roll out of an awareness-raising marketing campaign, spearheaded by television advertising. The ten second ad communicates the key brand message: ‘The same great Scottish taste, just spreadable’, and is running on national television channels.

Vimtoad’s toad off Vimto has announced a nine-month distribution drive for its hugely popular RTD range. This year’s ‘toad off’ campaign is expected to have over 15.4 million impressions. In addition, a suite of Vimtoadthemed POS is available to retailers to engage and excite shoppers at the point of purchase.

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

JULY 2017 | SLR

Feature

Forecourts

AT THE FOREFRONT OF LOCAL RETAILING The forecourt continues to shed its grubby image as it fast tracks its way to becoming the leader of the independent retail pack.

one are the days when the words unkempt and unloved were synonymous with forecourts. The once-grubby façade of the petrol station has been wiped away, replacing the half a dozen pumps and a kiosk selling a lukewarm can of coke, a packet of Quavers and a scratch card with everything a modern-day shopper could need and then some. Forecourts have turned the model of being a pump-with-a-shop on its head into becoming a shop-with-a-pump. But, as any local retailer will attest to, a shop’s success can only come from hard work, careful management and maintenance. Operators have risen to the challenge, taking on board the evolutions in petrol station industry as well as those in convenience retail and ensuring they are more than competition for their major multiple counterparts. The most recent Association of Convenience Stores (ACS) Forecourt Report acknowledges this rise, with forecourts growing into a fuel-stop-convenience-store hybrid. From food to go to doing a load of washing, the modern forecourt is much more than it used to be. But just what are the biggest opportunities that lie ahead and where should retailers be focusing their efforts to be bringing in shoppers for more than just a fuel stop?

THE FOOTFALL DRIVERS The ACS report shows that 77% of UK forecourts now offer cold food to go, 70% have a coffee machine, 46% have a hot food counter, 35% have incorporated an in-store bakery and 29% offer a microwave for customer use. In other words, food to go is here to stay. It is a megatrend in convenience retailing in general and for the forecourt it is no exception, especially as forecourts are by definition an on the go location. Commuters are among the most likely to visit a forecourt, and as the average commuter spends more than £10 a day on lunch, coffee and other on the go food and drink occasions, maintaining a strong offering will stop drivers making a pit stop elsewhere. Jet’s Retail Accounts Manager for Scotland, Paul Yates, observed a rising consumer demand for high quality on-the-go coffee, which led to Jet’s decision in 2015 to join forces with eXpresso Plus to introduce 38

SLR | JULY 2017

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Forecourts

Feature

“The focus on food will continue with fuel providing the footfall driver while the search for differentiation will develop further as new roadside offers, with High Street origins, become commercialised. The consumer revolution will continue with more people than ever considering a filling station to be their ‘local shop’. It’s been a fantastic turnaround and it’s hurting the supermarkets so we must all be ready for the backlash.” RAMSAY MACDONALD, RETAIL DIRECTOR, CERTAS ENERGY

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JULY 2017 | SLR

JET

THE fuel brand of independent Scottish dealers

From Dumfries in the south to Thurso in the north, and from Kyle of Lochalsh in the west to Duns in the east, JETâ&#x20AC;&#x2122;s network of independent Scottish forecourts is going from strength to strength. In Scotland alone, we supply over 1 billion litres of fuel every year to independent dealers, other oil companies, hypermarkets, major resellers, and commercial and marine customers.

* Source: Phillips 66 analysis based on Catalistâ&#x20AC;&#x2122;s latest price data.

More and more Scottish dealers are making JET their fuel supplier of choice and here’s why... • Security of supply: JET is Scotland’s only branded dealer supplier with its own UK refinery – offering security and flexibility • Competitive supply price: Our competitive supply price meant that JET was the lowest priced nonhypermarket fuel brand in Scotland in 2016* • Compelling fuel card offering: Our two fuel card options help maximise dealer margins. Our JetCard provides lock-in for local businesses and Fleetone provides national coverage for use at 3,000+ UK locations

• An award-winning standards and service programme: Our ‘Proud to be Jet’ standards and service programme rewards dealers who deliver high standards and offer excellent customer facilities • Big brand alliances: Our brand partnership with SPAR UK enables JET dealers to transform their sites into convenience destinations that maximise on both fuel and food sales • Retail support: Our compelling range of retail support services and partner offers help dealers to drive forecourt footfall and customer loyalty • Consumer promotions: At no cost to our dealers, our innovative national and local promotions have been proven to drive up forecourt footfall and fuel volumes

JET is 100% committed to the future of fuel retailing in Scotland and the continued expansion of our dealer network. We’d love to talk to you about how we could help your business thrive now and into the future.

T 01926 404 333 W jetlocal.co.uk E connect2jet@p66.com JourneywithJET @JETPetrol

Feature

Forecourts

“Ultimately, the ‘winners’ of 2017 will be those who can deliver on the fundamentals of fuel supply: quality and competitively priced product that is delivered in the right timeframe to a well imaged site. Only then will additional initiatives or incentives produce any real value for the dealer.” MARY WOLF, MANAGING DIRECTOR, UK & IRELAND, PHILLIPS 66

SCOTTISH RALLY DRIVER’S DUNOON PIT-STOP Jet’s Cot House Services in Dunoon was at the heart of the action on Saturday 24 July when it welcomed a number of rally drivers and their cars on the ‘Dunoon Presents Argyll Rally’, the fifth round of the ARR Craib MSA Scottish Rally Championship. As the Jet forecourt sells super unleaded fuel and is within the rally’s liaison route, a number of the rally drivers made the Jet forecourt their pitstop in between the six stages of the day’s racing. The rally, which returned to Dunoon for the first time in 14 years, is organised by Mull Car Club and supported by Dunoon Presents, the local Business Improvement District (BID). Alastair Murray, owner of Jet Cot House Services, comments: “It was very exciting to see the cars pull up onto the forecourt one by one. With just a minute lag time between each competitor, it was a hectic couple of hours, but we were delighted to be part of the action. The organisers told me that it’s a long and arduous route through the surrounding forests, so competitors were relieved to make use of our filling station.”

SLR | JULY 2017

a coffee-to-go initiative for its independent dealer network. With 48% of food-to-go shoppers making unplanned additional purchases there are strong commercial arguments for enhancing a forecourt’s range. For any retailer, having a unique selling point can be a genuine driver for shoppers. Fuel may be the obvious pull, but it is by no means unique, and Gavin Rothwell, Senior Retail Insight Manager at grocery research organisation IGD, says that a forecourt is well placed to carve itself a destination for specific dietary needs in the on the go market. He champions forecourts as paving the way for a wider food-to-go offer, saying: “Although many retailers and specialists are focusing their efforts on breakfast, this is a relatively small market and spend per trip can be quite modest. Food-to-go shoppers are especially interested in products that suit particular diets, with 34% looking for a larger range of vegetarian products, 25% more dairy-free products and 23% seeking more vegan or gluten-free options.” Other features such as car-washing and tyre-filling facilities are expected, as well as the availability of special buy items like in-car essentials or wood and coal. Many forecourts are also becoming click and collect pick-up locations with Amazon shoppers able to collect their purchases from parcel lockers located in a number of fuelling stations. As forecourts are both accessible and secure on a round-the-clock basis, having an Amazon parcel locker can attract more drivers to the stations, who may go on to buy petrol or www.slrmag.co.uk

Forecourts goods from the shop on their pit stop. Several forecourts in Scotland have also installed self-service laundry units from Photo-Me including Denis McCormack’s Spar store in Polbeth and Mahmood Saleem’s Nisa store in Stevenston. The units provide not one but two reasons for shoppers to visit – to put their clothes into the machine and then collect it when it’s finished.

put its Sainsbury’s Local Shops on five Euro Garages forecourts which have traditionally been with Spar shops. MRH recently announced its intention to trial with Cooperative shops on a number of its forecourts. More than 16% of forecourt shops (1,232) have no brand, although this is 130 less than the previous year. Less than 9% (750) of forecourts have no shop whatsoever.

INDUSTRY OVERVIEW

WHAT NEXT?

Although the UK forecourt industry is undergoing general improvements, it is worth noting that in recent memory it has become a sector in decline. A decade ago there were around 14,800 open forecourts reported in the UK. Today that number has shrunk by 43% to 8,425 sites. This is a drastic decline, but if you look back to this time last year, the figure was 8,487, a net reduction of 62 sites, showing that the decline has significantly slowed. In terms of shop fascia, Spar has overtaken Tesco with 1,054 shops. The retailer broke the 1000 forecourt stores mark in 2016 after adding 141 forecourt shops over the course of the year. The Tesco/Tesco Express shop fascia is in second place, remaining on 691 sites (including the Esso/Tesco Alliance sites as well as the shops on their own Tesco forecourts), falling marginally behind Spar with a 16.5% share of the forecourt shop market. Morrisons stopped its trial of Morrisons shops on Motor Fuel Group forecourts and is now testing with Rontec. Sainsbury’s has

Despite the current focus on retail, forecourts remain be definition a place for drivers to top up on fuel. There is of course an ongoing battle between the supermarkets and dedicated fuel suppliers, but in recent years the price gap has been closing, which is great news for independent retailers. Be it tech or food to go, the forecourt is gaining momentum and there is a clear sense of optimism and enthusiasm surrounding the industry.

“We expect UK pump prices to continue upwards propelled by further weakness of Sterling versus the dollar and strengthening oil prices due to the recent OPEC and other producers output agreement.” BRIAN MADDERSON, CHAIRMAN, PETROL RETAILERS ASSOCIATION

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FORECOURT NEWS IN BRIEF: MRH close to acquisition MRH has five potential acquisitions on the go that could close this side of the summer, according to the company’s chief executive Karen Dickens. She said: “As we’re looking at reinforcing the MRH brand and the service and everything that stands for, we’re looking at acquisitions that build our network to make sure that more people can experience what we have to offer across the whole country. We want to be in the islands of Scotland right down to Penzance. A lot of the acquisitions we’re looking at are in areas where we don’t have a strong presence today. It’s a geographical strategy, not a numbers strategy. A really good performing single dealer in a good location where we don’t have a presence, could be as interesting to us a small group dealer.”

Jet expands Scottish network Fuel brand Jet recently welcomed a Kirkmuirhill Service Station in Lanark to its network. Since Penny Petroleum bought the village site in March this year, Kirkmuirhill Service Station has been reimaged with JET’s latest brand on the canopy, stanchion, pumps and polesign. The site now incorporates food-to-go from a local baker Aulds, a Costa Express, a large off licence, a wide range of fresh food, a slushie machine and a customer toilet. Two jet washes, air and vac have recently been upgraded. Over the next six months, Penny Petroleum plans to invest over £250k on improving the shop interior and installing new pumps. Lottery and Paypoint will also be added in the near future.

Gulf comes to Paisley Hawkhead Road Garage in Paisley is the latest to Scottish site to commit to the Gulf brand. Khurrum Fawd, Company Director of site owner, Fine Fuel Company, said: “It has been difficult to justify any major investment in the shop but things are about to change and we are ready to embrace the new community and ensure that our filling station can maximise its potential, including a complete shop refit further down the line. This is a move for the future, protecting our asset and growing volumes and revenues.”

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JULY 2017 | SLR

Established locally...

•

Over 1,000 owned tankers delivering quality fuels and lubricants nationwide

• Contract flexibility to support your business • Industry-leading cards package that will drive down costs and attract new customers • Acceptance of BP and Shell cards available across the 500-strong Gulf network • Bespoke and tactical forecourt promotions to deliver growth and customer loyalty • A dedicated team available 24/7 • Endurance, Gulf’s higher margin premium fuel grades

Join the brand of champions Call 0345 456 6300 Visit retail.gulfoil.co.uk/package

...recognised globally

Present in over 100 countries, Gulf is a truly global brand, recognised for its technical excellence across the world. From its 40-year pedigree at Le Mans with marques such as Porsche, McLaren and Aston Martin, to its current sponsorship in World Superbikes and official partnership with Manchester United; the brand represents Passion, Quality and Endurance for motorists young and old.

Join the brand of champions Call 0345 456 6300 Visit retail.gulfoil.co.uk/package

Forecourts

Feature

THE FUTURE OF FORECOURTS? CASE STUDY: ARDEER SERVICE STATION

t is one thing to maintain a forecourt, but it is another to refurbish one. Teaching the masterclass is Mahmood Saleem, whose recent upgrade of the Ardeer Services in Stevenson scooped him the Retailer of the Year Award at our SLR Rewards earlier this year, and it’s easy to see why. In 2016, Mahmood invested £1.5m in a complete transformation of his existing Aryshire site, with the end result being an 18-nozzle Jet forecourt and a 2,700-sq feet Nisa store which boasts the very latest in retail innovation and convenience technology. Jet Ardeer Services is a two-storey building with a Subway franchise, ice cream parlour, customer toilets and storage room on the ground floor. Upstairs is a staff kitchen, offices, a meeting room and walk-in fridge/ freezer storage. “Before, when staff had a break, they had to have their lunch or dinner at the counter,” Mahmood explains. “There was nowhere for them to go. If I had reps coming for a meeting, I would worry about more than one person showing up, because there was nowhere for them to stand.” One of the upstairs offices doubles as a stockroom for the tobacco products, ensuring that all tobacco stock is secured away from customers. Each slot in the unit is reserved and numbered for a different product line. Tobacco was always a big seller for the existing store, so when planning the new store, in order to maximise retail floor space and adhere to changes in tobacco law, Saleem

SLR | JULY 2017

introduced a state-of-the art tobacco gantry system. The bespoke tobacco gantry system was designed and installed by Birmingham-based automated specialists, Navarra Retail Systems. Saleem is one of the first forecourt convenience stores in the UK to introduce this solution. At the tills on the ground floor, staff use a touchscreen to request customers’ choice of tobacco product. The selected product is then dispensed from the secure vending unit upstairs through a chute to the till. The system is integrated into the EPoS, so if a product is out of stock, staff are unable to complete the sale at the till. “The system is a bit like a very sophisticated vending machine, with the chosen product dropping down a chute to the tills,” Mahmood enthuses. “When customers ask for tobacco products staff simply click on the product icon on the till and the requested pack is in their hand within seconds. It’s fast and secure, but it also frees up space behind the tills for non-tobacco products and ensures that I’m adhering to tobacco legislation which requires that no products are on display.” It’s easy to see that it was money well spent, but it does beg the question as to what triggered the massive revamp. “The reason we wanted to spend so much money here is the potential in the location,” says Mahmood, and it’s easy to where the money has gone, with no expense spared. “So many people around here don’t have the time or the patience to go to Morrisons. It can take 25 minutes to get one item from Morrisons, but here it would only take five minutes. They can jump in and jump out.” www.slrmag.co.uk

JOIN US NOW FOR A 2017

WITH NISA, IT’S GOING VERY WELL. ITS RANGE IS UNPARALLELED SO I CAN COVER ALL THE BASES “We’ve been Nisa members since day one when I bought the shop. This was largely to help cater for both old and new customers. For that, I needed a large range of products to pick from at a cost which made me as competitive as I could be.

Ordering is simple and fully automated – we place orders online and they turn up two days later. I came from the wholesale sector, so I know what it’s like, and I can’t fault Nisa at all for availability and the way it delivers to retailers.”

I married Nisa’s suggested range with what the store already stocked. I wanted to make sure I was giving the existing customer base what it was looking for. New customers have provided the opportunity to stock more indulgent lines.

Colin Smith NISA MEMBER SINCE 2014

To find out why joining Nisa is as easy as 1-2-3 visit www.join-nisa.co.uk

Range: “ Product range of

13,000

skus enhanced with 100’s of promotions

Feature

Roll-Your-Own Tobacco Acessories

ROLLING IN PROFITS

Just over one in three tobacco sales in the UK involve a roll your own (RYO) product but many Scottish independents are letting profits slip through their fingers BY IAIN HOEY

JTI’S ADVICE ON SELLING TOBACCO PRODUCTS.

o non-smokers, roll your own cigarettes can seem more effort than they are worth. It is a fiddly process which, to the inexperienced hand, ends up with a sad, usually damp excuse for a cigarette. And almost every RYO smoker will testify the unrelenting presence of stray filter tips in every pocket they own. But not only does the market for RYO remain strong, it is a category in growth in the increasingly uncertain tobacco market following the EUTPD2 legislative changes. The reason it is so popular? For a start, it’s significantly more cost effective than buying 48

SLR | JULY 2017

pre-rolled cigarettes, and value RYO brands are seeing some of the strongest growth. It is easier to stretch a bag of tobacco out and determine the size of a cigarette if you roll it yourself. There is also a public perception that RYO cigarettes are better for you than pre-rolled as they contain less chemicals and produce less smoke. Plus there is an incomparable satisfaction that comes from rolling a perfect cigarette yourself. And so, despite the sweeping changes in the tobacco market, Scotland’s tobacco accessories category remains in growth of over £25.7m. By failing to offer what the

Q Availability – It’s vital that the tobacco gantry remains well stocked – 100% availability 24/7 is key. Remember to review stock levels each morning and prior to peak trading times. Out-of-stocks will only lead to lost sales as 59% of shoppers choose to buy elsewhere if their intended item is unavailable. Q Range – Offer a wide choice of cigarette, RYO and cigar brands. A range of pack sizes can help demonstrate to adult smokers that they are getting the best possible choice and value. Q Training – Ensure staff are well trained on the law surrounding the sale of tobacco and are kept up-to-date with the latest regulatory and legislative changes. Visit www. tobaccoretailing.com for further information, support and guidance on retailing tobacco responsibly. Q Innovation – Support new tobacco products and pack innovations in store. These have been developed in line with trends in the market place. Look out for educational point of sale material in cash & carry depots, which highlights product development and helps decision making. Q Sales – Take time to understand what’s happening in the tobacco category. Make sure you know which areas are in growth, what the most popular pack formats are and what sells well in your region. Q Technology – Data and information is vital for the retailer of today. The key to profitable tobacco is range and availability, so running out of stock could be a critical error. Understanding what is happening in your store and being able to pinpoint key sales trends is a priceless insight. A good EPoS system will help get the balance right.

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Feature

Roll-Your-Own Tobacco Acessories

“Multiple facings of 30g and 50g packs on your gantry will help make sure you meet your customers’ needs.” JEREMY BLACKBURN, HEAD OF COMMUNICATIONS AT JTI

nation’s growing number of RYO smokers are looking for, independents are letting crucial sales slip through their fingers in a category that continues to shed its social stigma. The Value roll your own segment is gaining shares in the RYO category, holding 22.8% of total volume sales in the market as existing smokers are seeking out ways to reduce the amount of money they spend on tobacco. This shift in consumer spending is likely due to the new EUTPD2 legislation, where larger packs of tobacco, such as the 50g pouch, are providing smokers with the option of improved value for money.

“With the current trend towards value, larger RYO packs are expected to become increasingly popular,” says Jeremy Blackburn, Head of Communications at JTI. “The continues growth of many of JTI’s RYO brands such as Amber Leaf can be attributed to the face that in recent years many existing adult smokers have chosen to switch to products which offer greater value for money – a trend which has manifested itself in the considerable growth of the Value RYO within the UK tobacco category.” Recent trends in the roll your own market have included an increase in the popularity of the box formats, which sees an increased sales value of 7.1% in the last year, growing to encapsulate over 30% of the RYO pack sales. In order to take advantage of this trend, Blackburn advises that retailers stock both pouch and box variants for every RYO brand that has this option available.

SLIMMING DOWN

TOP 6 SMOKING ACCESSORIES Q Q Q Q Q Q

Swan Filters Extra Slim 120’s Rizla Silver Cigarette Papers KS 32’s Rizla Green Cigarette Papers 50’s Rizla Blue Slim Cigarette Papers KS 32’s Swan Menthol Filters Extra Slim 120’s JPS Make Your Own Cigarette Tubes 100’s

SLR | JULY 2017

While there may have been huge changes to the way tobacco is sold, the continuing popularity of rolling tobacco means the accessories market remains buoyant. From papers to filter tips, lighters to rolling machines, it pays for retailers to have a wide range, and like the rest of the tobacco category, availability is key. IRI market data shows that filters are the best-performing sector of the UK’s accessories market, last valued at £70m. Size of filter has risen up the RYO smokers’ agenda and many people are opting for slimmer roll-your-own filters because they enable them to make thinner cigarettes. The Zig-Zag Unbleached paper range, featuring transparent and unrefined rolling papers, for example, provides RYO enthusiasts with a smoother taste and richer tobacco flavour. Gavin Anderson, General Sales Manager for leading RYO accessories supplier

Republic Technologies (UK) Limited, says the combination of value, choice and quality of RYO accessories is proving attractive to consumers. “The display ban means retailers must think long and hard about how to promote and maintain tobacco sales,” he says. “Size of filter has risen up the RYO smokers’ agenda and many people are opting for rollyour-own filters because they enable them to make thinner cigarettes.” Republic Technologies is meeting this demand for innovation with products designed to cater to changing shopper needs. Recognising the need for greater choice, the company launched Swan Ultra Slim; the thinnest ever Swan filter and a premium quality product aimed at smokers looking for a smoother taste while reducing the amount that they smoke. “RYO smokers are more discerning than ever before,” says Anderson. “Many of them are taking environmental considerations into account when making purchasing decisions.” In 2016, Republic Technologies responded to this demand and introduced more choice to the filters market with the launch of the first ‘Eco’ filter from Swan. What has been deemed by Republic Technologies as the most environmentally-friendly Swan product ever, Swan Extra Slim Eco Filters are biodegradable, featuring a naturally coloured filter and unbleached paper wrap. In addition to consumer demand for environmentally-friendly RYO products, there has also been increasing demand for ‘make your own’ products from cash-conscious consumers looking for an alternative to readymade cigarettes. Republic Technologies has recognised this demand with the launch of Swan Kingsize Cigarette Tubes. New for 2017, the Swan tubing machine allows consumers to roll cigarettes with ease, with packs available featuring both 100 and 200 tubes in both www.slrmag.co.uk

DO YOU SELL E-CIGARETTES IN SCOTLAND? STORE From 1st April 2017, under the Health (Tobacco, Nicotine etc. and Care) (Scotland) Act 2016, all retailers of nicotine vapour products in Scotland are required to be registered by law. If retailers do not register and continue to sell nicotine vapour products, they could face a fine of up to ÂŁ20,000 and could be sentenced to up to 6 months in prison.

ACT NOW! Retailers have until 1st October 2017 to register their business.Â Registration is QUICK, FREE and EASY. The simplest way is online at: www.tobaccoregisterscotland.org Alternatively, paper applications can be downloaded from the website, or obtained by telephoning the Scottish Government on 0131 244 2169

Feature

Roll-Your-Own Tobacco Accessories

Standard and Menthol variants. In 2016, Republic Technologies also announced the launch of a combined Zig-Zag Silver Slim Papers and Tips product, exclusive to the Scottish market. The combined packs of 32 papers and 32 filter tips are designed to be displayed vertically, taking up less shelf-space in comparison to competitive packs. In addition to filters and papers, there is also an active demand for matches and lighters, with IRI market research valuing this segment of the accessories market to be worth £87m in total value sales. Alongside its Swan and Zig-Zag brands, Republic Technologies also supplies matches and lighters under its Cricket, Poppell, Scottish Bluebell, Vulcan, Cooks and Bryant and May brands.

IN THE FACE OF CHANGE These progressions come, of course, on the backdrop of the recent changes in the cigarette scene: EUTPD2. EU Tobacco legislation came into force from May 2016, at which point the manufacture of packs of less than 30g roll your own tobacco ceased. Since then there was been a year’s sell through period, meaning retailers had until 20 May of this year to sell current branded stock. In addition to these EU rules, the UK government passed plain packaging legislation, which meant from May 2017, retailers lost the ability to sell branded distinctively tobacco products. As a result, it has become far more difficult for retailers to promote and maintain tobacco sales in their stores. So how should retailers adapt? “Now that RYO tobacco under 30g is no longer available, we predict that sales of larger packs sizes will increase, so keeping range and availability 24/7 is key,” says Blackburn. “Multiple facings of 30g and 50g packs on your gantry will help make sure you meet your customers’ needs.” Keeping gantries consistent and easy to navigate post legislative change is important 52

SLR | JULY 2017

FASTEST GROWING RYO BRANDS Q Q Q Q

Gold Leaf Pueblo American Spirit Players Red

for staff in order to ensure they remain accustomed to where the stock is currently merchandised. “We recommend,” says Blackburn, “that retailers maintain their current planograms to avoid confusion and keep spare stock in branded outers in the stock room to help quickly identify packs. “Retailers should ensure their gantry is easy to navigate in a post EUTPD2 environment. Multiple facings of bestseller will help maintain space and ensure customer needs can be met.” JTI recommends that retailers ensure tobacco is in a visible, easy to access location to maintain best levels of service and to avoid loss of customers. “We suggest that retailers promote best practice customer service and manage sales out to avoid returns and unhappy customers, which could result in lost sales long term,” Blackburn advises. Overall, in the face of legislative changes and the rise of e-cigarettes, the RYO category remains a strong one, but like any other it needs maintenance. Ensuring that gantries are stocked up with a range of products (filters, papers, matches and lighters) as well as the latest NPD are fundamental to driving sales. And be sure to stock a core range of papers (Green, Blue and Silver in both standard and King Size variants) plus other options such as Unbleached and flavoured and make sure you have multipacks available to combat the discounters. If a RYO customer’s desired product is not stocked, it is highly likely that they will take their business elsewhere.

“With the current trend towards value, larger RYO packs are expected to become increasingly popular.” JEREMY BLACKBURN, HEAD OF COMMUNICATIONS AT JTI.

CATEGORY MUST STOCKS Q Q Q Q Q Q

Amber Leaf Gold Leaf Golden Virginia Golden Virginia Yellow Cutters Choice Pall Mall

www.slrmag.co.uk

£7 RR .3 P 5 PLAYER’S SMOKERS PAY LESS!*

RRP: Forr the avoidance of doubt, retailers are free at all times to determine the selling price of their product. *Based on Player’s KS Red 20s RRP £7.35 as at May 2017.

P 0 R .9 R 9 6.5 £ g £1 30 g 50

Fantastic price points offering great value Available in 30g and 50g pouches, all pack weights include papers A smooth and quality smoking experience

The UK’s No.1 Economy RYO brand* QUALITY

BLEND *ITUK Estimates May 2017. RRP: For the avoidance of doubt, retailers are free at all times to determine the selling price of their products.

QUALITY

BLEND

Own label

Feature

OWN YOUR SALES In a world of rising prices, consumers are switching to own brand products. BY IAIN HOEY

here is a comfort among consumers when it comes to brands. A recognisable label gives an assurance that a product is trustworthy, and a product’s brand symbol can be the make or break point for consumers when it comes to branding. The major multiples put great effort into championing their own-label products from the hyper-budget Tesco Value range to the increasingly ludicrous offerings Waitrose Essentials. But independents are not to be left out of the game with many taking their own stab at own-label offers – and for good reason. New research from Palmer & Harvey (P&H) was recently unveiled, showing that almost half of consumers have said they will cut back on eating out and switch to own-brands to save themselves some money. The research, conducted by Retail Economics, found that 73% per cent of respondents said they would prefer to stay at home and cook a meal rather than eating out, and 47% said they would switch to cheaper shops altogether, as well as switching to own-branded products. P&H managing director Martyn Ward

SLR | JULY 2017

said that: “An uncertain political and macroeconomic backdrop and a weaker outlook for personal finances means consumers are less optimistic about the future of the economy and are poised to tighten their belts as inflation outstrips wage growth. “Our research shows that it will be critical to the success of food and grocery retailers, wholesalers and suppliers to rapidly adapt to changing consumer behaviour, a shoppers shift towards own-label, cheaper alternatives and cut back on any non-essentials. Those that quickly grasp the opportunity to evolve their product mix and pricing will be the winners in this challenging environment.” Hoping to take advantage of the consumer consciousness are Spar UK with the roll out of the latest phase of its Easy Meals promotion. The activity uses a core range of 15 existing Spar brand products to show shoppers that they can find everything they need for delicious, simple evening meals at their local Spar. Cath McIlwham, Spar UK Head of Brand, says that: “By continuing with our Easy Meals campaign, we are telling our customers that SPAR is the place to shop for their meal for tonight, throughout the entire year. It also means we can also make sure our retailers are stocking the bestselling products from each category, for the best sales return possible.” At Nisa, its own label Heritage offering recently doubled its range of sausage lines for

the summer barbecue season. The gourmet sausage line now boasts six varieties for consumers to choose from, up from the three previously available. The previous pricing of just £3 per pack or buy two for £5 has been kept to maintain value. Andy Cowin, Nisa’s Trading Controller for meat and poultry, says: “We work hard to secure the highest quality meat products whilst also ensuring retailers are getting a good deal. The multibuy deal drives sales value and also delivers great cash margins for retailers.” It’s not just food either, with Spar offering own-label products across their entire store, including the medicine cabinet. Its own label medicine range, consisting of four Paracetamol and Ibuprofen lines, recently grew with the addition of the three new products: Spar cold relief capsules, Spar diarrhoea relief capsules, and Spar hay fever & allergy relief tablets. McIlwham says: “The medicine market is growing annually and our customers want more product choice offering better value for money.” Aside from value, own-label products have a built-in loyalty value – if a product or a deal is exclusive to a fascia then a successful product can be a selling point for customers. But sales are unlikely to be guaranteed without some form of promotion, so retailers should look to champion their own-label products and be on the lookout for the best deals available from their fascia. www.slrmag.co.uk

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Feature

Cheese

SAY CHEESE!

It’s an integral category of every dairy chiller, and a category that retailers can’t afford to miss out on. BY IAIN HOEY

rom sandwiches, paninis and afternoon snacks to pasta bakes and morning-after reheated breakfast pizza, there’s a place for cheese in many occasions. Whilst the staple for most is likely to be a mild, medium or mature block of cheddar, the cheese category is a diverse playing field and there is a lot of potential to make room for it to grow in convenience. The volume of cheese being sold in the UK each year is rising, with 10,000kg more cheese being sold every month than the same time last year according to the latest report from AHDB Dairy. Whilst it is gratifying to note that the major multiples are taking a hit and their sales falling by 4%, it is the hard discounters that are undercutting the rest of the market by a third, picking up the sales growth, and bringing down the average sale price of cheese. So what should retailers be focusing on to make sure they’re not losing out? The areas in biggest growth are soft continental cheeses, such as Brie and Emmental, and processed cheese products, like spreadables and string cheese. Cheddar still dominates the market with almost half of all cheese sales, but this can be further broken down. The cheddar market split is roughly two-thirds going towards branded cheddars and the remaining third going to independent, private labels, indicating a strong market for locally-produced cheeses. One of the biggest growers within the

SLR | JULY 2017

cheese category is spreadables, with popular brands such as Cathedral City bringing its own Seriously Strong offering in a spreadable format. The Lactalis McLelland favourite is currently seeing promotion nationwide with a television marketing campaign championing the brand’s Scottish heritage with the tagline ‘The same great Scottish taste, just spreadable’. Mike Chatters, Sales Director for Lactalis McLelland explains that the popularity of their spreadable product lead helped it break into the spreadable cheese portion segment to join the likes of ever-popular Dairylea and Laughing Cow. “The launch of the new Vintage variant last summer was closely followed by the roll out of Seriously Strong Spreadable Squares, which saw the brand tap into the portions segment for the first time,” Chatters says. The other area of cheese showing significant growth, which is likely to be profitable for convenience, are snacking cheeses. Kerry Foods launched its new range entitled, GoGo’s, which offers adult shoppers the chance to snack on cheese bites alongside a range of delicious and nutritionally packed ingredient combinations, including dark chocolate covered coffee beans, pretzel sticks, seeded flapjacks and chorizo bites. For kids comes Cheestrings Scoffies, a new ‘3-in-1’ snack solution. The new line-up includes three ‘mixable’ varieties, offering kids the exciting opportunity to ‘swap them’, ‘switch them’ and ‘save them’ as each pack has a convenient re-sealable tab. “The cheese landscape is changing,” says Susan Nash, Trade Communications Manager at Mondeléz International. “Snacking Cheese has been a success as it provides added value for shoppers looking for convenience. Nine out of ten households are buying in the subcategory each year, on average once a month.”

CHEESE MERCHANDISING TIPS FROM MONDELEZ INTERNATIONAL TRADE COMMUNICATIONS MANAGER, SUSAN NASH Q Stock the best sellers within each subcategory Q Cheddar, processed cheese and soft white cheese should be located in best-selling areas of the fixture. Q Avoid duplication Q Offer a range of cheese segments (continental, grated, sliced and snacking cheese etc.) Q Meet the missions: Small packs, cheese snacks Q Product visibility is key: front face products rather than ‘penny stacking’ Q Use manufacturer POS to increase visibility

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Â®

Feature

Confectionery

SWEETEN YOUR SALES

Confectionery is booming, but which areas are raking in the profits? BY IAIN HOEY

onfectionery is one of the broadest categories in the independent retail market. From chocolate to sweets, to mint and gums, there is simply so much to choose from to stock that it can be a challenge to choose what to stock when the space is limited. “Confectionery is an area where people are prepared to try new products,” says Tim Eales, Strategic Insight Director at IRI. “Generally speaking, new products are more expensive than existing ranges in store. That little premium new products have can help add disproportionally to their value sales.” If your shoppers are anything like this features writer, trying a new type of confectionery is one of the best excuses to indulge in a sweet treat, making NPDs an important part of any store. Much like the time Kit-Kat Chunky Peanut Butter came out when it took looking in six different stores nearby SLR towers before tracking down the bar at a nearby independent to try it out, it can be a genuine reason for shoppers to visit and (hopefully) revisit. But is this a big enough reason to give shelf space to NPD? Recent research from IRI shows that the number of confectionery products stocked by UK retailers has declined by 2.4% over the past three years. This balances with the findings that overall sales from new products in categories across the board were down 6.5% over the same period, indicating that consumers don’t have as much of a taste for the new as they used to. But why the slowdown? “There’s a profit argument in here,” Eales says. “Once [sales] hit the ceiling, retailers concentrate very hard on making as much money out of their whole business, partly by using their shelves as efficiently as they possibly can.” He explains that stocking a new product is not an instant sales guarantee for retailers, and rather than immediately putting new product on shelf 58

SLR | JULY 2017

as soon as they come out, some are likely to see how a product performs in the market before they stock it in their store. “It has been proved in the past that sometimes, sales actually improved by having a lower range in store because shoppers could make faster purchasing decisions,” he says. Regardless of the sales of a new product, there are always going to ne NPD and hefty marketing campaigns as companies attempt to capture the consumers imagination. SLR can print over and over how important it is to stock certain products, but when it comes down to it, it varies from store to store. What matters is keeping a close eye on your own ranges and consistently reviewing them, paying attention to the market and being generally savvy when it comes to where the biggest profits are.

Halloween to Christmas, it captures the heart of the Scottish people as a gift for any occasion. Some of key players are: Galaxy Swirlers, Cadbury Dinky Deckers, Mars £1PMP treat bags, and Bounty Protein bars.

MINTS It is a small category, but mints and gum are among the most impulsively purchased products in convenience, and they are a consistent sales driver in c-stores if organised well. Ferrero’s Customer Development Director, Levi Boorer, category says sales can be maximised by siting in disruptive locations such as at the counter or beside the newsstand. The category has a small but vital role to play in the confectionery aisle as insights from Kantar show that 45% of consumers buy into the category.

OLD FAVOURITES

SHARING BAGS

For every action, there is an equal and opposite reaction, meaning that for every customer looking to try something new, there will be another one right in after them who is far more sceptical of NPDs and looking to buy their favourite long-established confectionery treat. There are too many to list them from but some of the top sellers time and time again are: Skittles, Star Burst, Fruitella, Love Hearts, Wine Gums and Refreshers.

Whether for a big night in or to keep hidden away in a drawer as a work motivator, sharing bags are a consistent success story in the confectionery category. Evening snacking is worth over £6.5bn and counting, according to Kantar research, and chocolate remains the top choice for those settling down for a night in, with sweets in second place. Over half of all confectionery occasions take place with other people present, so having a range of sharing products, is key if retailers are to maximise the opportunity.

CHOCOLATE SLR’s chocolate feature last month gave a lengthy look at the chocolate category, but for those reading who haven’t pinned up the 3 pages spread to their stockroom wall, the important thing to remember about chocolate is its importance as a special indulgence snack. While consumers are generally looking for healthier food options, they will trade health for indulgence when it comes to chocolate. The other important thing to remember is its importance as an occasion treat – from Valentines to Easter,

PMPS PMPs are relevant in nearly every SLR feature, and there’s a good reason. More than two thirds of shoppers buy PMPs in convenience stores as competitive pricing encourages impulse sales, with more than half saying it reassures value (HIM). There are few better ways to drive confectionery sales than an obvious PMP. www.slrmag.co.uk

Feature

Confectionery

WHAT’S GOING ON IN CONFECTIONERY? ADOPT A COW

M&MS GOES NUTS

Cadbury Dairy Milk is championing its iconic glass and a half of milk credentials in its ‘Adopt a Cow’ on pack-promotion. Available on singles and multipacks of Cadbury Dairy Milk Buttons, Cadbury Dairy Milk Freddo and Cadbury Dairy Milk Little Bars, the promotion is to remind consumers of the great taste of Cadbury and offer families the chance to adopt one of 20 cows and win a ‘farm-tastic’ weekend away to meet their new friend. Spectacular.

Mars Chocolate UK announced the launch of M&Ms Peanut & Hazelnut, a new limited-edition variant that combines M&Ms with the third biggest flavour profile in the chocolate category. Mars says tgat hazelnut currently has a lower share in Bitesize compared to Block – an opportunity M&Ms Peanut & Hazelnut is tapping into to deliver even more growth to the category.

SINGLES SENSATIONS

Mentos freshened up for summer with several new launches: a new fliptop format for its white gum range, a new a fruity Bubble Fresh flavour in a bottle in three sugar-free flavours; peppermint, spearmint and bubble fresh, a new fruity mint flavour to its popular bottle format.

The ‘Singles Sensations’ campaign, leverages the strength of Cadbury’s core singles range, driving awareness to attract a new generation to the category, and reminding existing consumers of the repertoire of brands available. The ten second ads show off the brand’s five topselling adult singles: Cadbury Twirl, Double Decker, Crunchie, Boost and Wispa.

MAYNARDS CAMPAIGNS Maynards Bassetts Wine Gums brand recently returned to the small screen in with a TV campaign as a part of the brand’s £6m marketing programme for 2017. Maynards Bassetts is also pushing an on pack promo competition this summer which will see the brand give away what it deems ‘marvellously bonkers days out’ to more than 100 consumers.

GET MINTED Trebor recently launched an in-store competition, ‘Get Minted’, to excite shoppers and retailers, offering them a chance to win one of 102 prizes ranging from £50 to £5,000. The promo is also giving away prizes with the top three winners scooping a pair of flights to New Zealand, complete with £2,000 spending money and possibly tickets to the ‘Wacky Sheep Race’ event. We’ll leave you to imagine just what that might entail.

COCO ES BUENO Ferrero is the latest to jump on the coconut bandwagon with a special edition Kinder Bueno Coconut variant. It joins the ever-popular range, which includes Classic, White and Dark. It launches as a special edition product to reflect the rise in popularity of the exotic seed.

MENTOS FLIPTOP

MILKYBAR GETS MILKIER White chocolatier Milkybar has increased milk in the recipe, making it the products number one ingredient. The percentage of milk in the new core range recipe increases from 26% to 37.5%, and it will be used across the full product range of MILKYBAR bars, blocks, buttons and sharing bags. Nestlé Confectionery is running a £4m media campaign including TV, Outdoor and Social Media to promote the promotion.

VIMTO BONBONS Tangerine Confectionery, unveiled Vimto Remix Bon Bons. The Remix sub-brand launched in 2016 with a three fruits combo ‘Mango, Strawberry & Pineapple’, and now the new Vimto Remix Bon Bons, offer a mix of both fizzy and chewy bon bons in each pack in the signature mango, strawberry and pineapple remix flavours with the added secret Vimto taste and come in 165g PMP £1 bags.

MERCHANDISING ADVICE Jon Eatly, Wrigley Customer Excellence Director, gives his six steps to help retailers successfully maximise confectionery sales: Visibility is key in such an impulsive category, so popular confectionery items should be located just below eye level, at ‘buy level’, to take advantage of incremental sales. Availability is crucial – remember to re-stock each morning and prior to peak traffic times. A fully stocked display will help maximise your profit potential and guarantee repeat visits from customers. Ensure shoppers are aware of the choice and range on offer by keeping a clear and tidy confectionery display and merchandising by format and sub-category – e.g. single serving fruit confectionery, share bag fruit confectionery, single serving chocolate confectionery, chocolate blocks, sharing bags chocolate etc. Rotate stock regularly so that older stock is sold through first. Champion new products in store in order to raise sales and capitalise on early consumer demand. Use eye-catching POS materials to draw attention to your confectionery display encouraging customers to buy on impulse. Make the most of your display and interrupt the shopper with eye catching confectionery secondary displays, clearly labelled with price and POR.

SLR | JULY 2017

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UTC

SAME OLD FIRM, SAME OLD STORIES... As a committed Hamilton Accies fan, UTC has very little interest in either side of the Old Firm, other than wishing them both heavy defeats and ill will on a weekly basis, but he has spent many a long year living in Glasgow so he has developed a feeling for some of the sensitivities of football supporters on either side of the green and blue divide. So he always enjoys an ill-advised marketing campaign in Glasgow carried out by a blissfully ignorant company wondering what the hell all the fuss is about... Exhibit A – The Tim Card Canadian coffee chain Tim Hortons recently opened in Glasgow to great fanfare – and huge queues, as snapped by UTC one recent morning. But you can imagine the kerfufﬂe on the blue side of the city when customers were encouraged to sign up for the company’s loyalty scheme and get their very own ‘Tim Card’... Exhibit B – Rangers promotion? Following last season’s particularly miserable performance in the league, UTC’s bushy and unruly eyebrows were raised last month when a press release entitled ‘Rangers promotion’ landed on his desk. Turns out it wasn’t Ibrox’s finest, but an on-pack promotion by Mondelez for their wee spongey bear treat Barney where shoppers can win a trip to South Africa for a safari tour where they can meet some real bears...

SLR | JULY 2017

DON’T TELL ME YOU HAVEN’T BEEN TEMPTED...

It’s your last day at work before you head off for pastures new. Perhaps you haven’t enjoyed the job as much as you’d hoped. Perhaps you’ve just ﬂat out hated it. So when you’re boss tells you that your final shift is to be spent facing up the cereals aisle....

WAITROSE GET YOUR VOTE? The latest General Election has proved beyond reasonable doubt that the world has gone to hell in a handcart, certainly as far as UTC is concerned. So his interest was piqued by a survey from research specialists GlobalData who, for reasons that remain unclear, were asking shoppers leaving supermarkets who they intended to vote for in the run up to the election. Interestingly, the majority of Tesco and Sainsbury’s shoppers were proConservative while the majority of Asda and Morrisons shoppers were proLabour. Even more interestingly, Lidl and Aldi shoppers have swing from being mostly pro-Labour to now being mostly pro-Conservative. No prizes for guessing which party you were likely to vote for if you live near a swanky Waitrose... A spokesman from GlobalData commented something or other...but UTC wasn’t paying attention by then.

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ISN’T IT TIME

YOU MADE A

delicious difference to your sales?

With the UK’s No.1 meat free brand* • Sales growth +10.7%* • High basket spend category with shoppers spending 4 times as much as the average convenience store shopper** • £10m media support in 2017 *Source; IRI 52we 28th Jan 17 – TOTAL UK VALUE SALES. **Kantar World Panel 2016 Quorn products contain Mycoprotein, which is nutritious because it’s a source of protein.

STOCK UP ON

TODAY