SLR November 2018 by 55 North

NOVEMBER 2018 | ISSUE 187

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.1 O N E H T M O R F * PROFIT D N A R B Y R E C O R G H S I SCOTT © Snowman Enterprises Limited 2018 THE SNOWMAN™ Snowman Enterprises Limited *Source : Kantar World Panel, Value Sales, Take Home Non-Alcohol Brands, MAT to 22.05.17, Total Scotland

Full review of SGF Annual Conference p24

WITH BARR SOFT DRINKS

SHOPPERS ARE LOOKING FOR GREAT CHOICE AND VALUE AT CHRISTMAS!

WE GET RETAIL BECAUSE WE’RE RETAILERS TOO!

TRULS HAUG

DRS expert looks ahead

DAVID LONSDALE

SRC boss reviews the Budget NOVEMBER 2018 | ISSUE 187

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£11.97:

TRUE COST OF THE LIVING WAGE New analysis by the University of Stirling and SGF reveals the real hourly cost of the National Living Wage

FOOD TO GO BOOST £300k fund unveiled

CIGARS ON FIRE

A great summer tees up a busy Christmas

Cloud Chasing - sign up for FREE to SLR’s unique vaping event p34

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November 2018

Contents

Contents ISSUE 187

NEWS p6 p7 p8 p10 p11 p18 p20 p22

Funding The Food-to-Go fund, which helps retailers install food-to-go stations, receives an additional £300,000. Recycling Scotmid initiates a three-month trial of a reverse vending machine in one of its stores. Energy Efficiency Interest-free loan scheme to cut energy bills launched, offering 15% cashback. Vaping The World Health Organisation refuses to reform its contradictory stance on vaping products. News Extra The Budget There’s little cheer for retailers in the Chancellor’s red box. Product News Mondelez reveals an Easter basket that’s overflowing with Cadbury NPD. Off-Trade News Tennent’s opens a new visitor centre at its Wellpark Brewery, while rum production comes to Livingston. Newstrade Scottish Sun increases its reach by doubling the audience of its radio stations.

INSIDE BUSINESS p23 Research Digest Local retailers will need to cater for increasingly adventurous consumers next year. p24 SGF Conference There was a focus on DRS at the SGF’s centenary conference, held in the Crowne Plaza, Glasgow. p30 Healthy Living SGF calls on retailers to make their voices heard in the junk food debate. p32 2 Minutes Of Your Time Truls Haug The UK MD of reverse vending machine manufacturer TOMRA shares his thoughts on a Scottish deposit return scheme. p34 Cloud Chasing Find out who’s speaking at SLR’s conference on driving growth in the Vaping category. p38 Woodlands Local The latest developments from SLR’s very own convenience store in Falkirk. p42 Hotlines Birds Eye launches a takeaway-style chicken range, plus plenty more new products. p54 Under The Counter With one foot in the grave himself, the auld yin is appalled to receive a sushi coffin recipe. FEATURES p46 Cigars The category continues to grow, with Miniatures responsible for the overwhelming bulk of sales. p48 Christmas Drinks Offering shoppers something special – both alcoholic and soft – will boost your bottom line. p50 Christmas Preview Some top tips on how to make sure you get the most from the Christmas sales period. p52 Snacking Demand for indulgent protein-filled meat snacking products continues to drive sales.

ON THE COVER p14 National Living Wage A University of Stirling/SGF study discovers that the true cost to retailers is far higher than the £8.21 headline figure.

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NOVEMBER 2018 | SLR

News GOVERNMENT FUNDING Extension to popular initiative comes with strings attached

Watchdog gives nod to MFG-MRH merger The Competition and Markets Authority (CMA) has given its approval to Motor Fuel Group’s (MFG) takeover of rival forecourt operator MRH. The watchdog’s decision means Motor Fuel Group is free to combine the two businesses and operate as one company under the MFG banner. For the time being though, 52 MRH stations will be managed independently from the rest of the business to

Extra £300k food-to-go funding announced First Minister Nicola Sturgeon used her keynote speech at the centenary SGF Conference to announce an extension of the Food-to-Go fund, which will receive an additional £300,000 in 2019 to help retailers install food-to-go stations in their stores. However, new criteria aligned to the matched funding initiative

means that successful applicants will now also have to undertake a commitment to reduce food and packaging waste. Sturgeon said: “A diverse and successful convenience store sector is vital in serving communities throughout Scotland. Last year’s Food-to-Go fund was very effective in supporting small retailers the

allay CMA concerns over a lack of competition in several geographic areas. This so-called ‘Hold Separate’ order will remain in place until 15 of these stations, along with 23 MFG sites, are sold to rival businesses.

Scottish success at SuperStation awards Two Scottish forecourts were among the winners at Certas

length and breadth of the country to entice customers into their stores and generate a new income stream for grocers. “This new funding will build on that, helping grocers to provide people with access to good quality, locally sourced and healthy food as well as providing an important focus on waste reduction.” The First Minister also paid tribute to the Federation, praising its “invaluable contribution” to the economy and society over the last 100 years. She also pledged that the Scottish Government would continue to work in partnership with retailers and listen to their concerns over forthcoming legislation that will restrict the promotion of foods high in fat, salt and sugar.

Energy’s 2018 SuperStation Gala Awards Dinner, held on October 11 at the Forest of Arden Marriott Hotel & Country Club. The Green Welly in Tyndrum picked up the prize for Best Forecourt Facilities while Kilmarnock’s Burnpark Filling Station came top in the Best Pace Site category.

Gulf strengthens retail lubricant offer to dealers Gulf Retail has unveiled a new distribution and marketing tie-up with Convenience Distribution Group (CDG) that improves the lubricant offering for Gulf dealers nationwide, including faster delivery times and no minimum order requirement. The partnership includes dedicated visits from CDG’s sales team to improve product marketing and increase revenue potential. A new online ‘lubricant ﬁnder’ allows motorists and dealers to input a vehicle registration number to ﬁnd out the exact Gulf lubricant required. There will be a special promotion to help launch the initiative and Gulf dealers will receive a new planogram and

RETAIL CRIME Survey shows extent of support for a ‘tough new law’

Public backs protection for shopworkers as legislation stalls A new poll has revealed that 85% of UK adults surveyed agree that “the government owes a duty of care to shopworkers who enforce important laws restricting the sale of certain items like alcohol, acid and knives”. Over four in 10 (41%) of respondents also thought – when presented with four options – the best way to protect shopworkers is “a tough new law to increase criminal sentences for anyone convicted of using threats or violence against a shopworker”. The poll of 1,095 people was conducted by the Co-operative Party, and the results came ahead of what should have a been a giant leap forward in the fight against retail violence. The Offensive Weapons Bill, which requires shopworkers to enforce new restrictions on the sale of acid and other corrosive substances, was due to complete its passage through the House of Commons but was withdrawn at the last minute.

An amendment tabled by Labour MP David Hanson would have created a new offence of obstructing or threatening shop staff while doing their job, with fines of up to £2,500. The amendment was supported by the British Retail Consortium and shopworkers’ union Usdaw. Labour & Co-operative MP Alex Norris had already spoken in the Commons to make the case for attacks on retail staff at work to be treated in court as ‘aggravated’ assaults. This would make offenders liable to a longer prison sentence to reflect the fact that their victim was serving the public. Norris commented: “Every day, more than 260 retail workers face violence, just for doing their jobs. Six of those daily incidents involve a knife, two involve a gun. “Nobody should face violence at work, and we have a particular responsibility to protect those who put themselves on the line to enforce the law.”

PAYMENT SERVICES

Post Office/ Payzone deal goes through The Post Office has completed its acquisition of the Payzone Bill Payments business following approval of the deal by the Competition and Markets Authority. The move means the Post Office will acquire an additional network of more than 13,000 Payzone Bill Payment outlets, along with its bill payment technology. Payzone Bill Payments is set to operate as a subsidiary of the Post Office. The Post Office Group will own and operate the Payzone brand, although there are no current plans to change it. Work will also begin on integrating technology in both Payzone outlets and Post Offices, so customers can pay the same bills at either.

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News RECYCLING Groundbreaking pilot scheme gets underway

Scotmid trials reverse vending machine Scotmid Co-operative has launched its first-ever reverse vending machine to encourage customers to recycle soft drink cans and plastic bottles. Entitled ‘Recycle and Reward’, the eco-friendly scheme has been rolled-out for a three-month period in Scotmid’s South Queensferry store – a World Heritage site and a coastal town. The initiative is designed to help Scotmid gain learnings ahead of legislative changes while the Scottish Government completes the Consultation phase of the proposed Deposit Return Scheme designed to increase the level of plastic and aluminium recycling. Customers returning plastic and aluminium soft drink containers – purchased at the South Queensferry

PayPoint launches next wave of retailer survey PayPoint has kicked-off the next wave of its national retailer survey, giving retailers the opportunity to provide feedback on the company’s progress. The survey will be conducted on a regular basis to check in on how retailers feel about their relationship with PayPoint and to identify further areas for improvement in how it does business with its retail partners. The survey only takes ﬁve minutes to complete and, for the ﬁrst time, PayPoint will donate £1 to GroceryAid for

store – into the reverse vending machine can choose to either receive 10p per item off their shopping bill or donate the sum to environmental charity Keep Scotland Beautiful. The aims of the initiative are in line with the Scottish Government’s – to reduce litter, improve the quality and quantity of recycled materials and increase recycling opportunities.

The reverse vending machine was produced by TOMRA Sorting. Scotmid Chief Executive John Brodie said: “Reducing the amount of plastic that ends up in landfill and the decreasing the volume of litter found in Scotland’s streets, countryside and coastlines are the key objectives of not only the Scottish Government but all responsible retailers.”

every completed response. Retailers will receive an invitation participate via email.

Nisa’s 2019 expo halfway to selling out Half of the 260 stands at Nisa’s 2019 annual trade show are now sold with ﬁve months still to go before the event takes place. Next year’s annual exhibition

WHOLESALERS Unitas deal goes through

Landmark/Today’s merger completes The merger of Landmark Wholesale and Today’s Group was formally completed last month, creating Unitas Wholesale, the UK’s largest food and drink wholesale buying group. Current 2018 joint business agreements between the two groups and their suppliers will remain in place until the end of the calendar year. Discussions with suppliers regarding 2019 will start on December 1 with operational alignment occurring throughout next year. The Unitas central office will be located at the current Today’s Group headquarters in Doncaster. “We are excited about the opportunities that Unitas will bring and glad that we have got to this stage

quickly and smoothly,” said Darren Goldney, Managing Director, Unitas Wholesale. “The efficiency of having access to greater scale with less points of contact demonstrates independent wholesale is organising itself for the future. With that increased scale, the best practices that both organisations bring will also make our sales efforts more effective. “Examples include a tighter, more focused own label range; a broader offering of central services that reduce costs for wholesalers and grows the footprint of sales; core range schemes that reach beyond the enlarged symbol estate, and the development of promotional execution processes that improve return on investment.”

takes place on Tuesday 2 and Wednesday 3 April at the National Agricultural Exhibition Centre in Stoneleigh. Tickets for the event’s gala dinner, held on the ﬁrst night of the two-day show, continue to sell fast, again with 50 per cent of these now gone.

Calbee snaps up Seabrook Calbee UK has purchased Seabrook Crisps for an undisclosed sum. Seabrook will continue to operate from its Bradford base, led by Chief Executive Jonathan Bye. Entering the British market in 2014, Calbee UK is a subsidiary

APPOINTMENTS

of Japanese $2.3bn global snack

Key category buyer hire for Filshill

company Calbee Inc. It is best known for its pea-based Yushoi and Harvest Snaps products.

JW Filshill has strengthened its buying team with the appointment of Edward Bentley to handle the Impulse category (consisting of soft drinks, crisps and snacks). Bentley, who will be based in Glasgow, joins the wholesaler from SHS Sales & Marketing where he

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worked for nearly 10 years and was latterly National Account Manager with responsibility for Scotland. Chris Miller, Group Commercial Director at JW Filshill, said Bentley had “an impressive track record of working with high-proﬁle FMCG brands”.

Richard Robison, Managing Director of Calbee UK, said, “We are hugely excited by the obvious ﬁt that Seabrook represents for us in bringing the mainstream snack of potatobased crisps into our product portfolio.”

NOVEMBER 2018 | SLR

News GOVERNMENT FUNDING New green scheme offers up to £10,000 cashback

Energy efﬁciency cashback scheme switches on In this month’s issue of SLR, we talk to PepsiCo’s Wholesale Trading Director, Matt Goddard, to discover his Top 6 Tips on maximising your snacking sales. Walkers is the nation’s favourite crisp brand1 and continues to supply you with its trusted, and much loved core range, selling more than double its nearest competitor2.

READ ON TO FIND OUT HOW MATT’S ADVICE CAN IMPACT YOUR SALES…

The Scottish Government, together with Zero Waste Scotland, has announced a new cashback scheme for SMEs across Scotland. Eligible businesses can apply for an unsecured, interest-free loan of up to £100,000 and receive 15% cashback on the value (up to a maximum of £10,000) to make energy efficiency improvements. The incentive is open to applications from SMEs with resource efficiency projects that demonstrate cost and carbon savings. These include, but are not limited to: Q Investing in LED lighting Q Installing more efficient heating systems Q Improving the insulation of a building or investing in more energy efficient equipment, such as a state-of-the-art oven or a more efficient refrigeration unit STORES SGF and ACS find more shops closing

Shop Report ﬁnds store numbers in decline Tip 1

STOCK THE RIGHT CORE RANGE The crisps category is worth nearly £3bn and the top 25 single SKUs account for 50% of all single sales3, so stocking the right core range is essential. We expect the category to continue to grow - our data tells us that 99% of the population are buying savoury snacks every year, and both the number of trips people are making to store and the amount of items they are buying are in growth4. This is our recommended range for single serve crisps: 1. WALKERS CHEESE & ONION (32.5g) 2. WALKERS READY SALTED (32.5g)

The number of convenience stores in Scotland has fallen over the past year, according to the latest Scottish Local Shop Report. The report, published jointly by SGF and ACS, recorded a total of 4,962 of Scottish c-stores open for business – 324 less than in 2017. The rate of closure has also increased dramatically; in 2016 there was a net loss of only 48 stores. In a further reflection of tough trading conditions, store opening hours are lengthening. The average number of hours open per day is now 14.1 Monday to Saturday and 12.4 on Sunday, up from 14.0 and 12.3 last year. The number of shop owners working more than 70 hours per week has also gone, rising to 22%, up a percentage point from 2017. The report also documented the continued expansion of the food-to-go category. Over one quarter of stores (26%) now offer a customeroperated coffee machine compared to only 17% in 2017. There was also growth in store numbers with kitchens (21%), hot food counters (21%), in-store bakeries (19%), food-to-go concessions (13%) and microwaves for customers (10%).

3. QUAVERS (20.5g) 4. WALKERS SALT AND VINEGAR (32.5g) 5. WALKERS PRAWN COCKTAIL (32.5g)

1. Based on total UK Sales data, Walkers was the best selling crisp brand (Nielsen Scantrack, Value Sales, MAT WE 09.09.18) 2.The total RSV for Walkers Crisps vs nearest competitor (Nielsen Scantrack, value sales MAT WE 09.09.18) 3. Nielsen Scantrack, value sales WE 04.08.18. 4. Kantar Worldpanel

Eligible applicants will receive a dedicated Resource Efficient Scotland advisor to guide them through the process at no cost, helping them identify efficiency improvements with the greatest benefit to the bottom line. To find out more about the SME Loan 15% Cashback incentive, and to apply, you can call Resource Efficient Scotland on 0808 808 2268 or visit the organisation’s website. MULTIPLES

2,500 jobs at risk Asda has issued potential redundancy notices for just under 2,500 workers ahead of its proposed merger with Sainsbury’s. The at-risk jobs, which could be cut as early as February next year, are in combined back office, George desks, petrol, hosting and bakery. In a statement Asda said: “We need to consider changing the roles we need our colleagues to do or the hours needed in particular parts of our stores. We believe the proposed changes we are consulting on would allow us to do a better job for our customers.” Pledging to fight “tooth and nail”, Gary Carter, National Officer of the GMB union, said the announcement’s timing in the runup to Christmas was “doubly appalling”. “These cuts make no sense whatsoever – slashing our members jobs would hurt the service Asda customers receive,” he said. “With all the speculation surrounding the proposed Sainsbury’s merger and potential sell-offs of stores – this news will not put anyone’s mind at rest.” In its initial investigation of the Asda/ Sainsbury’s deal, the Competition and Markets Authority found 463 areas in the UK where the merger could damage competition. This prompted speculation that the two multiples could be forced to sell off anywhere from 70 to 300 stores for the deal to go ahead.

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D E T I M I L N O I T I D E

SWEET SHOP CLASSICS

BUY NOW T E E W S R O F PROFITS

News VAPING World Health Organisation sticks to its guns

WHO refuses to reform global vaping policy READ ON TO FIND OUT HOW MATT’S ADVICE CAN IMPACT YOUR SALES…

Tip 2

INNOVATE, INNOVATE,INNOVATE At Walkers, we continue to analyse trends to develop the best innovation which will appeal to ever-changing shopper demands in the crisps category. This is insight led-innovation which helps the category to perform well. Last year, 16% of category sales were from new products , showcasing the importance of getting this NPD mix right, in conjunction with a strong supporting core range. 2018 has been a busy year for the team at Walkers but here are my top-picks of this year’s NPD, if you don’t have them stocked already, add them to your shopping list! • WALKERS MAX STRONG • DORITOS COLLISIONS • POPPABLES • SENSATIONS STREET MIX • WALKERS CHRISTMAS FLAVOURS

The World Health Organisation (WHO) has ignored calls for reform from the international vaping industry and campaigners, after its tobacco control group refused to reform its contradictory stance on vaping products at its biennial Conference of the Parties in Geneva in October. Organisations from 16 countries across North America, Europe, Asia and Australasia, led by the UK Vaping Industry Association, had signed a joint call to action to the WHO asking it to treat tobacco and vaping regulation separately. Since gathering in 2016, the WHO tobacco control group has encouraged member states to ban vaping products outright as part of a tobacco control plan, despite acknowledging the contribution which vaping could make to reducing global smoking rates. This position is not only at odds with countries who advocate smokers switching to vaping as part of their harm-reduction strategies – like the UK – but could also open the door to potential vaping bans worldwide. Some have argued that

it is also undermining progress in countries where e-cigarettes are used as a harm-reduction tool. The WHO’s reticence to reform its policy also stands in contradiction to the UK Government’s positioning on vaping products since earlier this year. In a review of the evidence to have emerged since 2015, the Department of Health concluded that regulations needed to balance the risks of vaping products with their potential benefits and that restrictions on communicating these potential benefits when compared with tobacco products should be reconsidered.

ILLICIT TRADE New campaign calls on retailers to take action

JTI steps up ﬁght against illicit tobacco JTI has launched a new nationwide anti-illicit tobacco campaign called ‘Don’t Be Complicit In Illicit’, which calls on retailers to join the fight against the illicit tobacco trade. Aimed at motivating retailers and members of the public to take action against the illicit trade, the campaign includes a new microsite which features an easy-to-use ‘report’ function, as well as information on the scale of the problem and its

implications for retailers and local communities. Don’t Be Complicit In Illicit is the latest move by JTI to fight illicit tobacco in the UK. Over the past five years, the tobacco manufacturer has carried out 32 local media campaigns and has removed gantries from 33 retailers found to have been selling illegal tobacco. This year the manufacturer has also supported three private prosecutions against illegal

tobacco sellers, all resulting in successful convictions. The campaign is being promoted via a nationwide advertising campaign in local and trade media, as well as ongoing face-to-face support from JTI field representatives. The UK government estimates that illegal tobacco makes up around 15% of the cigarette market and 28% of the hand rolling tobacco market in the UK.

CHARITY

Nisa raises £40k through charity’s collecting tins Nisa retailers have raised £40,000 for local causes through Making a Difference Locally charity collecting tins sited in their stores. The milestone amount was achieved via more than 850 tins nationwide over the last 18 months, to donate to good causes across the UK and Ireland through Nisa’s charity. The collecting tins were launched to Nisa partners last April at Nisa’s Retail Exhibition. Kate Carroll, Nisa’s Head of Charity, said: “It’s fantastic that our partners have raised such a signiﬁcant amount for good causes in this way, in addition to the support they already give.” Visit www.makingadifferencelocally.com for more information on Making a Difference Locally or follow @MADLCharity on Facebook or Twitter.

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Budget

News Extra

NewsExtra IT’S TIME TO THINK BIG WITH MINIATURE CIGARS – P46 BUSINESS Chancellor disappoints yet again

BUDGET DELIVERS LITTLE FOR LOCAL RETAILERS ONCE MORE The latest Budget has delivered very little in the way of positive news for local retailers in Scotland. Local retailers generally approach each Budget statement with little enthusiasm, given a longstanding trend of disappointments and cost increases – and the latest Budget appears to be very much in the same vein. Chancellor Philip Hammond’s latest 72-minute Budget speech offered little in the way of optimism for the sector with further increases on tobacco duty and another hike in the National Living Wage. Some slight cheer could be taken from the news that duty on beer, cider and spirits wouldn’t rise, coupled with a freeze on fuel duty for the ninth consecutive year. Wine duty will increase by 8p a bottle from February while tobacco prices will continue to rise by 2% above inflation, adding 33p to a pack of 20 with immediate effect. The National Living Wage is to increase by 4.9% from £7.83 to £8.21 an hour from April 2019. The news that a new 2% digital services tax is to be levied on UK revenues of big technology companies

Key points Q Freeze on duty for beer, cider and spirits Q Continued freeze on fuel duty Q Wine duty to increase by 8p a bottle from February 2019 Q Tobacco prices will continue to rise by 2% above inﬂation, adding 33p to pack of 20 Q National Living Wage to increase by 4.9% from £7.83 to £8.21 an hour from April 2019 Q New 2% digital services tax on UK revenues of big technology companies from April 2020

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from April 2020 has been met with enthusiasm, with many observers keen to see the playing field levelled for digital-only retailers. Reacting to the Budget, Scottish Retail Consortium Director David Lonsdale said: “While the Chancellor is right that the industry and our retail destinations need to adapt, regrettably there was little in his Budget which will reduce the burdens facing retailers here in Scotland. “Retailers will welcome the news that the economy is predicted to expand a touch faster and that growth in real wages is set to be sustained. Furthermore, the measures to help consumers with the cost of living are positive at a time where our figures show household spending is under enormous pressure. “For Scottish retailers the focus will now shift to December’s devolved Budget. With significant Barnett Consequential funding accruing to Scotland from the Budget, the Finance Secretary should prioritise measures which reduce the cost of doing business.”

Convenience Matters with the SGF All of Scotland’s Licensing Boards should have updated their statements of licensing policy by November 2018. Over the last 12 months SGF has been proactive in responding to boards’ updated statements. SGF has also engaged with key ofﬁcials through its membership of both the Glasgow and Edinburgh Licensing Forums. SGF recognises the impact new licensing board policies could have on our members in terms of their ability to trade and to offer their customers both convenience and a “full basket”. Operators in the retail sector will want to pay particular attention to a board’s overprovision assessment as it will set out any areas where there will be a presumption against the grant of any new licence or application to increase licensed hours or the alcohol capacity. SGF has made it clear that such restrictions would almost certainly mean that existing retailers would not invest in modernising and reﬁtting stores. SGF has emphasised the key message that modern local convenience store are community hubs which also offer a wide range of products and valued services, and any moves that would lead to a more restrictive range would simply provide a potential customer with a reason to shop at a competitor. Our members are responsible community retailers who put considerable effort into ensuring that alcohol is sold in a responsible way. SGF will ensure that government, politicians and key decision makers continue to be made aware of the unique contribution the convenience sector makes to the Scottish economy.

NOVEMBER 2018 | SLR

Comment

WHAT EXACTLY IS OUR ROLE IN DRIVING THE HEALTH AGENDA? If you haven’t had a look online at the Scottish Government’s public consultation document on ‘Reducing Health Harms of Foods High in Fat, Sugar or Salt’, then I suggest you do. The proposals the Government are considering could have very significant impacts on the way we lay out and operate our stores, particularly when it comes to price promotions and siting of lines designated by the Government as ‘discretionary products’. These products are “typically high in fat, sugar or salt, and yet provide little or no nutritional benefit necessary for a healthy diet”. We’re talking confectionery, biscuits, crisps, cakes, soft drinks with added sugar and so on. In other words, quite a lot of the products found in a typical c-store. In essence, the consultation could lead to new regulations prohibiting multi-buys in these categories and preventing us from stocking these lines at the till point or on promotional ends. The consultation runs until early January and if you have a view on these matters, then the time to make your voice heard is now. But the whole episode brings us back to one of the most important questions in local retailing in modern times: what role should the local retailing sector be playing with regards to the health of our shoppers? I would have to admit that historically my opinion on this has been that local retailers are there to sell products to shoppers and what we stock reflects what they want to buy. It’s not our job to tell customers what they should buy or tell them they can’t have products that are bad for them. Having run Woodlands Local for the last few years however, and having spent many long hours behind the till, my opinion on this issue has changed. I’ve grown reasonably close to some of our customers and have been shocked by some of the consumption patterns I’ve seen. Without doing a disservice to the great people of Falkirk, the diet of the typical customer is in desperate need of change – and this is not unique to Falkirk. So, having served a small community for five years, I have to say that I now believe we, as local retailers, do indeed have a role to play in helping our customers improve their diet and wellbeing. Washing our hands of any responsibility is no longer an option. As active members of the local communities we serve, and bearing in mind the broader and deeper relationships that c-stores have with their customers, I believe that we do – and indeed must – have a role to play. At the very least we can make healthier options more widely available in our stores. And if we fancy going a step further we could also increase the prominence of healthier lines and even take on a proactive educational role, working with our shoppers to help encourage them to take small steps towards a healthier diet. Changing consumption patterns will take years and the path ahead is littered with problems but the Scottish Government quite rightly has the improvement in public health bit between its teeth and change is coming. Our challenge now is to work with the Government to ensure that change happens in a way that takes the realities of our industry into consideration. That requires an open mind from both sides.

EDITORIAL Publishing Director & Editor Antony Begley 0141 222 5380 | abegley@55north.com Web Editor Findlay Stein 0141 222 5389 | fstein@55north.com Editorial Contributor Karen Peattie

ADVERTISING Advertising Manager Robert Aitken 0141 222 5302 | raitken@55north.com

DESIGN Design & Digital Manager Richard Chaudhry 0141 222 5388 | rchaudhry@55north.com

EVENTS Events & Operations Manager Cara Begley 0141 222 5381 | cbegley@55north.com

CIRCULATION & SUBSCRIPTIONS Scottish Local Retailer is distributed free to qualifying readers. For a registration card, call 0141 222 5381. Other readers JUNE 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 JUNE 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 JUNE change. This magazine is fully independent and not affiliated in any way with the companies mentioned herein. Scottish Local Retailer is produced monthly by 55 North Ltd.

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PHILIP MORRIS LEADING THE WAY There are currently 7.4 million smokers less harmful chemicals. The heated in the UK and more than half of these tobacco system uses real tobacco want to kick the habit. 2.8 million people with no liquid. “PMI has invested over £3 billion in in Great Britain have already made the switch to e-cigarettes1 meaning that research and development to devise the size of the ‘alternatives to smoking’ the state-of-the-art heated tobacco technology inside IQOS. As well market presents a huge opportunity as generating less harmful for retailers. chemicals, IQOS does not Philip Morris’ pioneering There produce ash or smoke IQOS device, which heats and has less smell than are just tobacco rather than cigarettes.” burning it generates over 675,500 The IQOS device on average 90% less adult smokers in uses HEETS which harmful chemicals Scotland which are tobacco sticks, compared to cigarettes is 16% of the specially designed for . It’s already used by 1 population IQOS. They come in three more than 5.9 million flavours – Amber, Turquoise consumers worldwide – and and Yellow. Users insert a HEET of those smokers that buy an IQOS, 60% make a permanent switch stick into the IQOS holder, where it is heated not burnt, before using the and stop smoking cigarettes entirely. Mark MacGregor, Corporate Affairs device to enjoy the real taste of heated Director, Philip Morris Limited, explains tobacco. Mr MacGregor explains why they what lies behind IQOS’ success: “Many smokers are looking for an alternative are a must stock for independent to smoking but over 1.7 million1 have retailers in particular: “Vape stores are not found an e-cigarette that is right dominating the vape sector. Now is for them. IQOS offers an experience the time to stock HEETS and that is much closer to the experience get ahead of the heated of a cigarette, but with substantially tobacco market.”

RETAILER TIPS:

Q To maximise the potential of this new market, staff should be trained to help consumers get a good understanding of the category Q Make sure you stock all three HEETs ﬂavours to offer choice and ensure customers keep coming back to your store for more

Q Get to grips with the key features of IQOS – it’ll be Just 7% of the the difference adult population between making in Scotland are the sale or not current e-cigarettes users.4

Ofﬁce for National Statistics, 2018

Average of the reductions in the concentrations of a broad range of harmful and potentially harmful chemicals measured in the IQOS aerosol compared to those measured in the smoke of more than 1,600 cigarette brands in over 40 countries between 2008 and 2017. Aerosol and smoke collections performed under the Health Canada Intense machine-smoking regime. Reduction calculations exclude nicotine.

Daily individual consumption of tobacco sticks used with IQOS represents more than 95% of the daily total tobacco consumption (Source: IQOS user panels and PMI estimates January 2018).

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Scottish Health Survey, 2018

NOVEMBER 2018 | SLR

Cover Story

National Living Wage

£11.97 THE REAL COST OF THE NATIONAL LIVING WAGE A study by the University of Stirling in collaboration with the SGF has discovered that the true cost to retailers of the National Living Wage is far higher than the £8.21 headline figure. BY ANTONY BEGLEY

SLR | NOVEMBER 2018

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National Living Wage

o matter which way you look at according the Scottish Local Shop Report it, employing staff in the local 2018. Over half a million workers will be retailing industry is expensive. The affected. long opening hours of the typical But that’s not the end of the story. convenience store make staffing A new paper published by the University such a significant cost for all retailers. Even of Stirling in association with the Scottish small stores have to cover a minimum of Grocers’ Federation (SGF), reveals that the around 200 paid hours per week with many ‘real’ cost of the living wage to retailers is in larger and busier stores looking at two or reality significantly higher than the baseline three times more than that. £8.21 figure. When the Low Pay Commission was In depth analysis carried out by the established in 1998 and the first ever National university has concluded that the true cost of Minimum Wage was introduced the following the living wage to retailers is in fact £11.97 year, many in the industry suspected that an hour. there was going to be trouble ahead. This figure is calculated by including the While very few employers in the retail addition of the various associated ‘on-costs’ industry have a problem with the concept of of employment such as National Insurance, staff being paid a decent wage, the fact that PAYE, sick pay, pension, recruitment costs the minimum wage has risen significantly and so on. and consistently every year without fail does Leigh Sparkes, Professor of Retail Studies cause a problem. at the Institute of Retail Studies at the It’s unlikely there is a single retailer University of Stirling, and author of the paper, out there whose turnover and profits have suggests that the very future of the local increased every year without fail during the retailing sector is under threat at least partly same time period. In because of spiralling fact, as most retailers employment costs. will be all too well He comments: aware, local retailing “Our analysis shows has arguably never that a rate of £8.21 NATIONAL LIVING WAGE PROJECT been tougher. for the employee is THE REAL COST Consider that when transformed into OF EMPLOYMENT A paper from the University of Stirling the minimum wage £11.97 true employee and Scottish Grocers Federation was first introduced in costs for the retailer. 1999 the hourly rate The 30p increase in was £3.60. That was the base rate for April less than 20 years ago. 2019 results in a 67p The National Living increase for retailers. Wage is currently £7.83 In other words, the for those 25 and over; in increase in the retailer other words it has more cost is double that of than doubled in that the employee cost.” time. Sparkes is very clear There are of course about the potential strong arguments that effect of constant, the minimum wage had to rise significantly unchecked growth in the Living Wage: to catch up after years of miserly wage rates “Staff are one of the most crucial resources – but more than doubling in under two in any retail business but retailing as a decades? There is not a retailer in Scotland, sector is undergoing massive change and large or small, that does not view wage rates as the pressures on local and independent a significant stress on their business. Indeed, retailers are immense. The ability to compete there are many who see a steadily increasing and to respond to changing consumers is minimum wage as a credible threat to the dependent on an ability to invest and to make sustainability of their business. a living return for retailers. Sustainable local, What is equally concerning is the fact that independent, convenience retailing is under the continued growth of the minimum wage threat.” is unlikely to slow in the future. The National While he accepts that “it is very difficult for Living Wage for next year (for those aged 25 retailers to argue against a Living Wage for and over) is set to be hiked again to £8.21. their employees” as they “want to feel that Bear in mind that 79% of staff in convenience they are good, sustainable employers and that stores are in the over-24-year-old age range, employees are valued parts of the business”,

Cover Story

“If we want a sustainable local, independent convenience store sector that is a true part of local communities then the costs faced by these retailers, and their limited scope for action, need to be understood, recognised and ameliorated.”

OCTOBER 2018

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- PROFESSOR LEIGH SPARKES

NOVEMBER 2018 | SLR

Cover Story

National Living Wage THE REAL COST OF EMPLOYMENT

he does highlight that employee Components of the pay is another cost pressure on 2016 2017 Total Pay Cost retailers, at a time when they are facing increasing costs across the 1) Wages (NLW) £7.20 £7.50 board. 2) SSP (statutory sick pay) £0.53 £0.55 The Apprenticeship Levy, 3) NI Employee £0.23 £0.24 business rates, rents, the Deposit Return Scheme, auto-enrolment 4) NI Employer £0.24 £0.25 of pensions and more are driving the costs of business up steadily Pension Enrolment/Scheme £0.01 £0.01 and steeply. 6) PAYE £0.81 £0.84 Edinburgh Premier retailer 7) Statutory Holiday Pay – Dennis Williams is similarly £1.00 £1.04 coverage staff understanding of the need to pay a decent wage but is calling on 8) Uniforms £0.04 £0.04 the Low Pay Commission to take 9) Other Statutory decisions on increasing the rate £0.07 £0.08 Payments within a wider context. He told SLR: “The national 10) Lunch Benefits etc. £0.03 £0.03 living wage is a massive strain on our sector just now. The extra 11) Recruitment costs £0.02 £0.02 cost for our own business from 12) Administration costs the first of April has already directly related to £0.05 £0.05 been around £5,000. That is a employment lot of money. I’m all for giving someone a reasonable wage. I 13) Death in service benefits/ critical and terminal £0.04 £0.04 have no issue with that at all, but illness cover we need decisions to be made with an appreciation of the bigger 14) Private health care £0.04 £0.04 picture and the commercial realities.” 15) External Health and Williams stresses that the Safety Compliance £0.01 £0.01 minimum wage is benefitting advice/extremal HR and some but many others are losing employment law advice out. “If you look at the facts and TOTAL £10.31 £10.73 figures, staff hours are getting cut back across our industry, people are not getting replaced and people these concerns: “Rises in the National Living who own businesses are needing to work Wage are part of a bigger picture of constantly longer hours,” he says. increasing costs for retailers. In Scotland the The figures he quotes come from a joint tax burden has increased by almost 30% since submission to the Low Pay Commission 2008. earlier this year by the SGF and the “This latest paper reveals the real cost of Association of Convenience Stores which employment and, at almost £12 an hour, cited a study of 3,000 independent retailers. it’s clear that many retail businesses will be The study found that 75% of retailers had unable to absorb that cost increase without 4 reduced staff hours, 60% had worked more making savings elsewhere. The Low Pay hours themselves to cover staff shortages and Commission must take the increasing tax 39% have had to let staff go. Not exactly the burden, the increasing cost of doing business outcome the Low Pay Commission had hoped and the true cost of employment into account for, presumably. and be extremely cautious with any further Williams broadens the argument out by rate rises in the National Living Wage.” suggesting that this myopic approach belies The final word must go to Leigh Sparkes a lack of recognition of the huge value that who offers a blunt and stark conclusion in the local retailing sector brings to the Scottish his paper: “If we want a sustainable local, economy. Local retailing outlets across the independent convenience store sector that country provide regular employment for over is a true part of local communities then the 40,000 people at a time when stability is costs faced by these retailers, and their limited being eroded in many other industries. scope for action, need to be understood, SGF Chief Executive Pete Cheema echoed recognised and ameliorated.” 16

SLR | NOVEMBER 2018

2018

2019 (projected)

£7.90

£8.20

£0.58

£0.60

£0.25

£0.26

£0.27

£0.01

£0.25

£0.88

£0.92

£1.10

£1.14

£0.04

£0.08

£0.03

£0.02

£0.06

£0.04

£0.01

£11.31

£11.97

£8.21 The National Living Wage from April 2019

£11.97

The true cost to retailers

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News

Products

SOFT DRINKS

Pepsi Max Taste Challenge: the verdict The results of the summer-long Pepsi Max Taste Challenge have been revealed, with 61% of participants choosing it over the UK’s top-selling cola. The Taste Challenge took place at 44 pop-up sampling locations across the country, with approximately 24,000 participants taking part in controlled blind taste tests to decide the better-tasting cola. “This is great news for Pepsi Max and retailers. The results clearly demonstrate the potential revenue power of Pepsi Max as part of a complete retail soft drinks offer,” said Bruce Dallas, Marketing Director at Britvic GB, the brand’s producer in the UK and Ireland. “The Pepsi Max Taste Challenge has undoubtedly heightened visibility and trial of the brand through the heavyweight support package of TV, outdoor and social advertising alongside the pop-up taste test events this summer.” “Pepsi Max has contributed more absolute value growth (+£57.1m vs YA) to the Grocery and Impulse Cola category than any other brand in the last year and we will be focusing on developing plans that drive this growth even further for retailers in the coming months.”

ProductNews RAISE A GLASS TO INCREASED PROFITS FROM CHRISTMAS DRINKS – P48 FOOD-TO-GO Lomond launches ‘Nom Stop’

Lomond offers complete food-to-go package Lomond: The Wholesale Food Co has launched ‘Nom Stop’, an all-in-one food-to-go ‘turnkey’ solution. The Nom Stop setup includes kitchen equipment, marketing material, branding, a step-by-step guide with crib sheets as well as all the legal and food safety requirements, menu display screen, Nom Stop sign and shop fitting. “We take care of everything from the set-up to the food being sold, which makes us a genuine one-stop shop,” said Lomond boss Sam Henderson. “We will also provide ongoing support from our creative, technical and sales teams. “We feature a wide range of products via Nom Stop to ensure that we’re capturing all the latest food-to-go trends, from breakfast rolls and sausage muffins to

soups, mac ‘n’ cheese, burgers and wedges, sandwiches, croques and cake. “Regardless of whether customers are looking for breakfast, brunch, lunch, dinner or just a tasty snack, Nom Stop has something for everyone and is the perfect way for retailers to stand out from the competition.” All the food options have been carefully considered, with

essential allergen information and nutritional data provided, as well as POS cards, stickers and posters for retailers to use. Items can be heated in a matter of minutes, available ‘grab and go’ from the hot-hold cabinet. The Nom Stop food-to-go set up can be created bespoke to customers’ needs and Lomond’s team are available to help with any enquiries on 0141 353 6777.

SNACKS

McCain revamps Home Chips recipe

Walkers sparks Christmas sprout debate with festive range

McCain has unveiled a brand-

Walkers has launched a new festive range of Christmas dinner flavours, including the first-ever Brussels Sprouts-flavoured crisp. Aiming to spark debate across the nation and drive incremental sales for retailers, as well as capturing their customers’ Christmas spirit, Walkers is launching two Christmas dinnerflavoured multipacks, one including a Brussels Sprouts flavour for the sprout lovers and one with an alternative flavour selection. Christmas dinner for sprout lovers includes Brussels Sprouts, Turkey & Stuffing and Pigs in Blankets flavours. The sprout haters can feast on Glazed Ham, Turkey & Stuffing and Cheese & Cranberry. Turkey & Stuffing, Pigs in Blankets & Brussels Sprouts are also available in single-serve packs.

new recipe for its signature Home Chips – giving consumers what it says is “the crispiest, fluffiest and tastiest chip on the market”. The new recipe follows three years of development, including line trials and in-depth consumer research. McCain Marketing Director, Mark Hodge said: “As a brand, it fills us with pride to see that our Home Chips have remained the nation’s favourite chip for over 20 years. However, we never rest on our laurels and recognise that

The limited-edition range is supported by in-store marketing, TV, digital and PR activity. Andrew Hawkswell, Marketing Manager at PepsiCo, said: “Walkers has a proven track record of launching fun and playful ﬂavours that really get the nation talking, and this year we wanted to bring some of that magic to Christmas. The sprout debate is one that divides the nation, so we wanted to offer product solutions for both sides.”

there is always work to be done to make our chips even better.” KEEP UP WITH THE LATEST NEWS AS IT HAPPENS – FOLLOW US ON TWITTER @SLRMAG

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Products

News

CONFECTIONERY Cadbury and Oreo team up in bid to repeat Canadian success

Egg-citing Easter news from Mondelez Mondelez has unveiled a basketful of new products for Easter 2019 and announced details of a £10m marketing spend in a bid to repeat last year’s eggs-cellent capture of 44% of the seasonal market. Two of the confectionery giant’s power brands will unite to bring consumers the Cadbury Oreo Egg (RSP 58p, 31g, 48 packs per case). The new product has already proved a success in Canada, adding 62% in incremental sales to Cadbury Creme Egg. Mondelez’s number one Easter brand will introduce the Cadbury Creme Egg Mega Egg (RSP £4.99, 209g, 6 packs per case) which contains three Creme Eggs and a Mini Creme Egg bag. Cadbury Heroes favourite, Cadbury

Creme Egg Twisted, will launch in a bag format (RSP £1.49, 94g, 10 packs per case). Cadbury Heroes will also launch an Easter Pouch (RSP £5.69, 384g, 8 packs per case). There are a couple of additions to the company’s already extensive shell egg portfolio: the Cadbury Crunchie Inclusion Egg (RSP £12, 570g, 4 packs per case) and, in a first for the subbrand, the Cadbury Picnic Shell Egg (RSP £6, 274g, 6 packs per case). Finally, following the Cadbury Dairy Milk’s Peter Rabbit plush toy, Mondelez is introducing Cadbury Dairy Milk’s Cadbury Easter Bunny (RSP £6.99, 72g, 6 packs per case), which comes

READ ON TO FIND OUT HOW MATT’S ADVICE CAN IMPACT YOUR SALES…

complete with a new parentapproved toy. Marketing support will begin on January 1 with the launch of ‘Hunt the White Creme Egg’ – a convenience channel exclusive promotion, where retailers could win £1,000 if a White Creme Egg is found in their store. Plus, Cadbury Creme Egg hunting season will return to TV, supported by a far-reaching digital media campaign. Off-screen, Cadbury will be organising public egg hunts across the country throughout February and March, with a £6m campaign and the continuation of its National Trust partnership. Mondelez said retailers should stock seasonal selfeats from January then bring in sharing products from February to March and introduce gifting products and shell eggs from April.

FOOD TO GO

Urban Eat talks turkey - and veggie - this Christmas Sandwich brand Urban Eat has unveiled its new festive collection. New to the range is the vegan ‘Veggie Feast’ sandwich, catering for the growing demand for free-from diets and the ‘Turkey, Bacon and Stufﬁng Sourdough Toastie’. The festive range has an RSP of £2.49 to £3.99 and is available from November 5. Retailers can choose to stock some or all of the range. The full collection includes Turkey Feast Sandwich; Turkey, Bacon and Stufﬁng Sandwich; Brie and Cranberry Wrap (vegetarian);

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Turkey Bacon and Stufﬁng Sourdough Toastie; and Veggie Feast Sandwich (vegan). Turkey is always a popular ingredient at this time of year, and festive turkey sandwiches make Urban Eat’s top ten best sellers list whenever they are available. Urban Eat’s brand owner Adelie Foods has pin-pointed when consumers reach ‘peak Christmas sandwich fever’ with ﬁgures showing that more seasonal sandwiches are sold in the second week of December than any other time.

Tip 3 IN-STORE SIGNPOSTING Sign-posting in store is key, both to aid the shopper journey for those with a clear pre-determined shopping list, as well as inspiring those who are more impulsive. Here are my top-tips for catching the right shopper at the right time: • Shoppers are more likely to engage with gondola ends at the front of store, versus the rear, so retailers should refresh this space regularly with the latest new products in-store taking priority • For the top up shopper who arrives with a list, ensure the main flxture is clearly signposted and that similar types of products and brands are blocked together to ensure they can flnd what they need • Social get-togethers” tend to be shopped on impulse so use secondary siting to drive cross category purchases – for example, site Walkers Max Strong next to beers, Sensations adjacent to wines and spirits, Doritos in the carbonated soft drinks aisle or create a ‘big night in’ products display with multiple sharing crisps, soft drinks and confectionery.

NOVEMBER 2018 | SLR

SLR_61x260_LEADERSHIP_WALKERS_WE'VE_GOT_BAGS_FINAL.indd 06/11/20183 10:34

News

Off-Trade

Off-TradeNews DON’T FORGET YOUR FESTIVE TOP-UP SHOPS – P50 SPIRITS New campaign encourages drinkers to see Scotch in a new light

Haig Club scotches myths about whisky

SHERRY

Cool new look for Bristol Cream For the ﬁrst time in 15 years, Harveys has given its blue ‘The Bristol Cream’ bottle a makeover, with a new thermochromic ink logo that changes colour as it hits the perfect serving temperature. The new bottle (RSP £10 for 75cl) is designed to encourage consumers to reimagine the consumption and drinking traditions of Harveys, by chilling the sherry in the fridge and serving over ice with a slice of orange. When the sherry is cold and ready to be poured, the Harveys logo on the label will turn blue. Along with the bottle refresh, Harveys ‘The Bristol Cream’ has invested more than £250,000 in off-trade promotion, with both sampling and online activity. Jen McCormick, Head of Sherry Brands at Whyte & Mackay, said: “As the number one sherry brand in the UK, we are dedicated to ﬁnding new ways to innovate in the category.”

SLR | NOVEMBER 2018

Haig Club has unveiled its latest print campaign, ‘Make Your Own Rules’, starring brand partner David Beckham. Building on the last year’s TV ad of the same name, the print campaign looks to challenge some of the myths surrounding Scotch, and encourages people of legal purchase age to consider whisky in new ways and occasions. The ﬁrst ad, ‘Who says whisky is for quiet nights in?’ shows Beckham with a group of people in a small bar enjoying a lively night out. The second reveals David Beckham creating a Haig Club cocktail to challenge the myth that whisky can’t be enjoyed with a mixer. The ﬁnal ad presents a different approach to how and where whisky would traditionally be enjoyed, and shows a group of friends including Beckham with Haig Club Clubman and cola cocktails by a poolside.

The new campaign images also feature a redesigned brand logo, which includes the 1627 creation date of the whisky house. Ronan Beirne, Global Brand Director for Haig Club,

commented: “Our philosophy on Haig Club has always been that our versatile delicious whisky is prefect for making your own rules on how, where & when to enjoy it. This campaign is a continuation of that belief.’’

SPIRITS Small batch distiller moves north to expand production

Rum ﬁrst for Livingston The first rum distillery in central Scotland – Matugga Distillers – is preparing to start production at a new facility in Livingston. The £100,000 distillery is equipped with two 200 litre copper pot stills, capable of producing 50,000 litres of rum in its first year. With its golden and spiced rums already popular in France, the company is keen to secure listings in the Scottish off-trade next year when it also predicts a 400% increase in turnover. Matugga was founded by husband and wife team Paul and Jacine Rutasikwa, who originally small batch distilled in England before moving production north of the border. It is hoped the expansion will lead to the creation of five new jobs.

Paul Rutasikwa commented: “Scotland has hundreds of years of distilling expertise and history. This, combined with my African heritage, is what will inspire us to create new and exciting rums. We can think of no better place to be launching our new distillery and beginning such an exciting journey.”

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Off-Trade

News

Cîroc launches ﬁrst-ever winter expression Diageo Reserve has added a limited-edition Black Raspberry expression (ABV 37.5%) to its ultra-premium Cîroc vodka

BEER Tennent’s sinks seven-figure sum into “immersive experience” for beer tourists

Tennent’s unveils Wellpark visitor centre Tennent’s is about to significantly raise its profile with the launch of a new visitor centre at the brand’s Wellpark Brewery in Glasgow. Opening to the public on November 22, the centre is the result of a seven-figure investment by Tennent’s and traces the history of its eponymous lager from the 1500s to the present day. The “immersive experience” features motion capture animations developed by Glasgow School of Art, new artwork from graffiti artist Conzo Throb, personal stories from generations of Tennent’s alumni, nev-

er-before-seen artefacts and a brewery tour. Visitors will learn about the beer’s origins, production, provenance and how to pour the perfect pint. The tour concludes with fresh pints of Tennent’s straight from the brewery floor. Alan McGarrie, Group Brand Director for Tennent’s Lager, said: “We want to give locals and visitors to the city a behind the scenes look at not just a working brewery, but the history of Scotland’s No.1 beer and the cultural icon that is Tennent’s Lager.”

portfolio. The brand’s ﬁrst winter edition is available from mid-November in a striking 70cl back bottle with an RSP of £39. It follows recent ﬂavour launches Summer Colada and French Vanilla.

New Marketing Manager for Accolade Accolade Wines has appointed Lydia Freeman to the role of Marketing Manager, effective immediately. Freeman’s marketing experience spans some of the UK’s largest FMCG companies including Noble Foods, Allied Bakeries and GlaxoSmithKline. She will lead the team on Hardy’s, the UK’s No.1 wine brand, and fastgrowing brand Jam Shed.

Illegal tobacco is damaging your local community, funding organised crime and undermining local businesses We all have a role to play to combat the issue. Don’t be complicit in the illicit trade

Anyone with information about this type of crime should contact Trading Standards on 03454 04 05 06 or visit www.jtiadvance.co.uk/DontBeComplicit

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NOVEMBER 2018 | SLR

News

Newstrade

NEWSPAPERS

Regional news ad revenue tumbling as digital expands The print ad revenues of regional newspapers are tumbling quicker than those of national titles, but the regionals are seeing bigger growth in the digital world. That’s according to a new report on UK ad expenditure by the Advertising Association/WARC. The figures cover the second quarter and first halfyear of 2018 compared with the same period in 2017 and show that ad spend on digital regional newspapers grew by 14% YOY across the first half of the year to a total of £112.7m. As a result, total digital regional newspaper ad spend is projected to grow by 11.4% YOY for the whole of 2018. Last year it grew 9.9% to a total of £212m. Ad spend on regional newspapers in print, however, fell by 15.8% over the first half of the year to £290.8m – still nearly four times digital ad spend. Combining print and digital, a total projected annual fall of 8% is expected for 2018. Conversely, ad spend on digital national newspapers grew by 3.2% in the first half of the year, but national newspaper print ad revenue fell 6.6% to £348.8m over the same period. Total national newspaper ad spend was £223.5m for the first half of 2018, down 7.4%. The report found total UK ad spend grew 6.4% year-on-year to reach £5.6bn in the second quarter of 2018. The market saw an overall ad spend rise of 7.2% during the first half of the year, resulting in the strongest second quarter and first half results since 2014. The growth is being driven by the continued increased spending on internet advertising.

News& Magazines THE SNACKING MARKET IS HUGE SO MAKE SURE YOU TAKE A BITE – P52 NEWSPAPERS News Scotland increases its reach over the airwaves

Scottish Sun radio ﬁgures double The latest figures published by RAJAR, the official body in charge of measuring radio audiences in the UK, have shown that The Scottish Sun radio stations are continuing to grow quickly as audience figures doubled in the past six months with listeners tuning into the stations for longer. The figures, the second such set since The Scottish Sun stations took to the airwaves on January 1, 2018, show that the stations achieved a weekly reach of 27,000 listeners in the six months between April and September, with each listener spending an average of seven-

and-a-half hours per week tuning into the stations. This compares to 13,000 weekly listeners tuning in for an average of six hours per week during the first six months of the year. All in, 205,000 hours each week were spent listening to Scottish Sun radio stations, an increase from 78,000 for the period between January and June. News Scotland and Wireless launched the new DAB and online music radio stations on New Year’s Day, broadcasting in central Scotland under The Scottish Sun brand. The latest figures show growth across all three stations, each of which are targeted at a different

NEWSPAPERS Donations outweigh advertising revenue for national title

Guardian receives donations from 1m readers

audience demographic. These outperform a total radio market reach which remains flat quarter on quarter. All radio listening hours have grown by 4% in areas that transmit either Scottish Sun Hits, Scottish Sun 80s, or Scottish Sun Greatest Hits. Richard Bogie, Managing Director of News Scotland, said: “The Scottish Sun radio stations are a strong addition to our print and digital offering for readers, listeners and advertisers and are a growing part of our strategy. The increasing reach of our brands across platforms is creating excellent new opportunities for commercial partners.”

APPOINTMENTS

Times Scotland bolsters staff Magnus Llewellin, Editor of The Times Scotland, has announced two new recruits for Scotland’s marketleading quality daily newspaper. Mark McLaughlin has started in the role of education and politics correspondent while Kieran Andrews (pictured) has joined as the new Scottish political editor. McLaughlin had been working for AFP news agency and Holyrood magazine and was previously a reporter at the Press Association. Andrews joined from a role of investigations editor at The Courier. Llewellin commented: “We are really pleased to have Kieran and Mark joining us. They are superb young journalists,”

The Guardian has received financial support from more than one million readers since March 2016, according to its editor Kath Viner. More than 600,000 of those donations came from the US and more than two-thirds of all contributions were made from outside the UK. The newspaper says the contributions are now a crucial part of its plans to break even by April next year. The Guardian has already said that donations from readers outweighs its income from advertising. In 2017/18 Guardian Media Group reported profit before tax of £53.2m, up from a loss of £25.1m the year before. The company’s revenues have risen three years in a row.

New Scottish political editor, Kieran Andrews

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SLR | NOVEMBER 2018

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Research Digest

Inside Business

RETAILERS MUST CATER FOR THE ‘ADVENTUROUS CONSUMER’, SAYS NEW REPORT Local retailers must increasingly cater for the needs of adventurous consumers seeking different experiences and benefits from the food they buy.

argeting increasingly adventurous consumers intent on new discoveries and experiences will be key to developments in the food and beverage industry in 2019, according to a new research report from Innova Market Insights. The report highlights the top five trends most likely to impact the industry over the coming year and beyond:

DISCOVERY: THE ADVENTUROUS CONSUMER Consumers are moving out of their comfort zones to explore bolder flavours and food experiences, often with an element of the unexpected.

THE PLANT KINGDOM The plant-based food and drink market shows no signs of slowing down. Even mainstream consumers are keen to add more plant-based options into their diets. For many, going plant-based is about achieving a healthy and sustainable balance between meat and vegetables, rather than an all-or-nothing approach.

ALTERNATIVES TO ALL As more consumers pay attention to health and sustainability, replacement foods and ingredients are on the rise. Health remains the number one reason to buy food alternatives, with one in two US consumers reporting that health is a reason for buying alternatives to bread, meat or dairy.

GREEN APPEAL The industry is increasingly committing to answering customer expectations around sustainability. This is driving corporate goals, as manufacturers commit to sustainable product and packaging development with a range of initiatives. This includes waste reduction through upcycled ingredients and post-consumer recycling, as well as improved biodegradability and new technology, such as compostable capsules and vegetable inks.

SNACKING: THE DEFINITIVE OCCASION For most consumers, snacking is a part of daily life, but the way people think about snacking and what is considered a snack is changing. Snacking is no longer the optional extra, but the definitive occasion.

FOOD RETAILERS EMBRACING GREEN AGENDA

ackling food waste has become the number one issue for food retailers to tackle (48%), more important than managing costs (36%) or technology innovation (15%), according to new research among 225 UK food retailers from global software consultancy ThoughtWorks. Food Waste: Tackling food waste and ensuring that less is wasted during production was the top priority for food retailers (48%). This issue was more important to women than men (57% versus 42%) and was an issue that smaller food retailers (those with less than 50 employees) were more passionate about (53%). Changing diets: Second on the priority list, food retailers acknowledge major change is on the way in terms of consumer attitudes about health and wellbeing, as well as their diets (44%). Some 18% of people between 18 and 24 years old, for instance, believed they will avoid eating meat in 10 years’ time.

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READ ON TO FIND OUT HOW MATT’S ADVICE CAN IMPACT YOUR SALES…

Ethical sourcing: Food retailers are gearing up for much greater scrutiny on the sourcing and origin of foods, as 40% of decision makers said they will be putting a far greater empha on ethical issues in the years ahead. Health and nutrition: The research found that providing improved health and nutritional information and promoting healthy living is fourth on the agenda for forward-thinking retailers (39%). Energy saving: Energy supply is a major issue for the future of food retail. More than a third of respondents said a greater focus on energy saving – using less energy in food production and buying more local food – will become a bigger priority than it has been in the past (36%). Overall, smaller food retailers placed greater importance on the issue of food waste than their larger counterparts – 53% compared with 38% – and were more concerned about the ethical sourcing of food (43% compared to 30%).

Tip 4

BETTER FOR EVERYONE Better For You’ options are becoming increasingly popular with the health-conscious shopper and it’s a key focus for us at Walkers. We offer an unrivalled ‘Better For You’ portfolio, a segment which is growing at +38%1, however it’s important to remember that ‘healthier’ can mean different things to different shoppers. Here are my top tips for creating something for everyone: • Make sure your ‘Better For You’ (BFY) snacks offering isn’t left as an after-thought - it’s vital to have a well sign-posted range that highlights each products’ unique positioning, especially in a fastgrowing segment • Our popular Walkers Oven Baked range contains 50% less fat2 and is the biggest BFY brand in the savoury snacks category3, whilst still delivering the same great taste of Walkers that consumers love • We are continuing to innovate in this area with the extension of our Sunbites range – Nut Mixes joined the line up in sharing and single serve packs last year – and the launch of Snack-a-Jack Minis, ideal for the on-the-go occasion

1. Nielsen, Total Impulse MAT WE 01.09.18. 2. Walkers Oven Baked contains 50% less fat than standard potato chips on average. 3. Nielsen MAT to WE 19.05.18

NOVEMBER 2018 | SLR

SLR_61x260_LEADERSHIP_WALKERS_WE'VE_GOT_BAGS_FINAL.indd 06/11/20184 10:34

Inside Business

SGF Conference

SGF LOOKS TO THE FUTURE AT CENTENARY CONFERENCE

The Scottish Grocers’ Federation marked its 100th year with a bustling conference in Glasgow that had a strong focus on recycling and its implications for the future of the convenience retail industry in Scotland. BY FINDLAY STEIN

he theme of the centenary Scottish Grocers’ Federation Conference (October 25–26) was ‘the dawn of a new era’, and it soon dawned on delegates at the Crowne Plaza in Glasgow that a Deposit Return Scheme (DRS) will be a major factor in the future of convenience retailing in Scotland. “This is going to happen,” said the SGF’s Head of Policy and Public Affairs and conference Chairman John Lee, launching a seminar on DRS. Lee said the Federation initially had serious concerns on the issue, but had since come a long way. The debate now, he stressed, was about how the industry can make it work. Callum Blackburn, Head of Policy, Research and Evaluation for Zero Waste Scotland gave an overview of the current state of recycling in Scotland. He revealed that only 50% of drinks containers are currently recycled. This compares poorly to Germany, with its 98% take-back rate. Germans, however, receive 25c for every item returned. Blackburn then outlined various options for what a Scottish DRS scheme might look like in terms of materials recycled, return locations and administration. He was noncommittal on a timescale for implementation, but the implication was that any legislation won’t come in to force before 2020 at the very earliest. With DRS still very much at the discussion stage in Scotland, it’s easy to forget the number of countries where schemes already exist. Coca-Cola, for example, is currently involved 24

SLR | NOVEMBER 2018

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SGF Conference

Inside Business

in 40 of these worldwide. Nick Brown, the soft drinks giant’s GB Head of Sustainability said “now really was the time to engage with DRS” and shared examples of working solutions for stores of all sizes including a manual option for those that can’t justify the cost of a reverse vending machine (RVM). The installation of an RVM by Scotmid caused a ripple of interest through the industry recently. Norwegian firm Tomra supplied the equipment and the company’s Executive VP Harald Henriksen said that a well-implemented DRS scheme will work in Scotland. He cited Lithuania, which went from a 34% to a 94% return rate in two years. Henriksen had plenty of other interesting nuggets of information to offer, like the different incentives offered by schemes to encourage recycling. Norwegians, for example, can choose to get an entry into a £100,000 prize draw for every bottle returned. The speakers were then joined by SGF Chief Executive Pete Cheema, Scotmid’s Head of Format and Store Development Nick Brown and Tomra boss Truls Haug for an engaging panel discussion. Gordon gave some initial findings from Scotmid’s three-month-long RVM trial. The machine, in Scotmid’s South Queensferry store, has processed around 1,000 bottles and cans in its first week of operation. It dispenses vouchers which can be used in-store. There has been an 87% redemption rate so far. The panel agreed that Scotland’s DRS scheme should be administered by retailers and suppliers. Coke’s Brown said it was vital that it should be run on a not-for-profit basis. The opening day was rounded off with four well-attended breakout sessions from AGL Wealth Management, Camelot, Envipco and Whyte & Mackay before a black-tie dinner in the evening. This marked the end of Dennis Williams’ two-year stint as SGF President, and he duly passed the baton to Asim Sarwar, boss of United Wholesale Scotland. New President Sarwar was first to speak the following morning and said his tenure would have a clear focus on symbol groups and their relationship with retailers, challenging the latter to “get involved”. Kathryn Neil of the SGF’s Healthy Living Programme (HLP) was then joined on stage by Claire Hislop from NHS Health Scotland. The pair talked about a shake-up of the HLP in the New Year and discussed forthcoming legislation on foods high in fat, salt and sugar. Neil called on symbol groups to build on the success of the Big Breakfast programme. Neilsen’s Mike Watkins presented the market research organisation’s latest insights into the convenience sector. Unsurprisingly, alcohol, soft drinks and crisps are still the biggest hitters. Extra spend is coming from meal ocwww.slrmag.co.uk

NOVEMBER 2018 | SLR

Inside Business

SGF Conference

casions, food-to-go and fresh; the latter is now apparently the fastest-growing category in c-stores. Predicting a future of “personalised convenience”, Watkins said high-quality fresh foods will deliver sales. JW Filshill boss Simon Hannah set his sights firmly on ‘the day after tomorrow’ with a rapid-fire discourse on the need for forward planning, citing Kodak as a prime example of a business that didn’t adapt to changing markets. He then reminded the audience that ultimately there is only one boss – the customer: “He can fire everyone in the company by simply spending his money elsewhere.” Hannah was followed by Team GB curler Greg Drummond. Interviewed by day two conference chair Graham Meare, Drummond revealed how lottery funding enabled him to train and compete full-time and ultimately led to him winning a silver medal at the Sochi Winter Olympics in 2014. With obesity rates and the national diet high on everyone’s agenda, Allan Miller – Commercial Director of Paterson Arran – voiced concerns that the healthy eating debate is being framed in terms more suited to tobacco and alcohol. He made his point in a light-hearted manner by highlighting the im26

SLR | NOVEMBER 2018

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SGF Conference plied risks of passive biscuit consumption. “If I eat shortbread you will not get fat,” he said. After an entertaining talk on the history of Golden Casket from its manufacturing MD and Greenock Morton chairman Crawford Rae, AG Barr’s Ian Johnstone took to the stage to talk about Fanny, his office goldfish. Comparing the world of local retail to a fish tank, Barr’s Impulse Sales Controller for Scotland make some interesting points on the importance of relationships and of staying relevant. He urged retailers to work with suppliers for their mutual benefit and said that “NPD is the lifeblood of the convenience sector”. SGF Chief Executive Pete Cheema Pete linked falling c-store numbers to ever-increasing business costs as he launched the 2018 Scottish Local Shop Report. Scotland’s tally of convenience stores had dropped to 4,962, Cheema said, adding that staff costs were now “moving into frightening territory”. In her keynote speech First Minister Nicola Sturgeon announced an extension of the Food-to-go fund, which will receive an additional £300,000 in 2019 to help retailers install food-to-go stations in their stores. However new criteria aligned to the funding means that successful applicants will also

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have to undertake a commitment to reduce food and packaging waste. Sturgeon said: “A diverse and successful convenience store sector is vital in serving communities throughout Scotland. Last year’s Food to Go fund was very effective in supporting small retailers the length and breadth of the country to entice customers into their stores. “This new funding will build on that, helping grocers to provide people with access to good quality, locally sourced and healthy food as well as providing an important focus on waste reduction.” The First Minister also paid tribute to the Federation, praising its “invaluable contribution” to the economy and society over the last 100 years. She also pledged that the Scottish Government would continue to work in partnership with retailers and listen to their concerns over any measures to restrict promotion of foods high in fat, salt and sugar. Speaking after the First Minister, News Scotland boss Richard Bogie brought the conference to a close with a bullish talk on the future of the newstrade, which he described as “rosy” despite the challenges traditional publishers face from social media platforms.

NOVEMBER 2018 | SLR

Walkers sells over double its nearest competitor 1

Walkers is the nation’s favourite crisp brand2 and this year, celebrates its 70th anniversary. It continues to supply retailers with its trusted, and much loved core range, and sells more than double its nearest competitor1. Almost 90% of UK households buy PepsiCo snacking brands3, meaning that you can continuously count on Walkers to drive your snacking sales4. With the top 25 single SKUs accounting for 50% of all single sales5, stocking the right core range is essential to driving your sales and meeting consumer demand, along with staying well-informed of emerging trends. Shoppers want to see products they are familiar with, alongside innovation, giving them a wide variety of choice. Walkers also offers an unrivalled ‘better for you’ portfolio, a segment which is growing +38%⁶.

Merchandising Top Tips Shoppers are more likely to engage with gondola ends at the front of store, versus the rear, so retailers should refresh this space regularly with the latest new products in-store taking priority.

• Don’t forget about the core range and stock flrm favourites to drive sales – Walkers Cheese & Onion and Walkers Ready Salted are the best-selling single serve flavours in the crisps and snacks category7. Topping the charts in sharing formats, are Doritos and Sensations.

Make sure your ‘Better For You’ snacks offering isn’t left as an after-thought and is clearly signposted as healthier snacking options continue to grow – Walkers Oven Baked and Sunbites are brands consumers know and trust, so stock these along with Nut Mixes at the till point to increase impulse buys.

You can count on Walkers to drive your snacking sales

Matt Goddard

Wholesale Trading Director

What you need to know Almost 90% of UK households buy our snacking brands3

We own the top 4 SKUs in the impulse market7 Walkers owns 3 of the top 4 sharing brands in the impulse market8 Walkers offers an unrivalled ‘Better For You’ portfolio, a segment which is growing +38%6 ®

For information on how to make the most of your snacking sales visit www.countsformore.co.uk Source: 1. The total RSV for Walkers Crisps vs nearest competitor (Nielsen Scantrack, value sales MAT WE 09.09.18). 2. Based on total UK sales data, Walkers crsips were the best-selling crisps brand as recorded by Nielsen (52 week data to 18.11.17). 3. Kantar 2018 4. Siop y Pentref Dodmaels Walkers Savoury Snacks Products EPOS Data 76.2% LFL 2016 – 2017. 5. Nielsen Scantrack, value sales WE 04.08.18. 6. Nielsen, Total Impulse MAT WE 01.09.18. 7. Nielsen YTD, Total Impulse WE 15.09.18. 8. Nielsen YTD, Total Impulse WE 15.09.18.

Inside Business

Healthy Living Scotland

HAVE YOUR SAY!

The Scottish Government launched its public consultation on ‘Reducing Health Harms of Foods High in Fat, Sugar or Salt’ last month and the SGF Healthy Living Programme is urging retailers to make sure their voices are heard. BY ANTONY BEGLEY

t is the Scottish Government’s opinion that “too many of us in Scotland have a poor diet and an unhealthy weight, which can have a negative impact on our health and wellbeing, in part because we generally consume too many calories and too much fat, sugar and salt”. Whether you agree with this or not, the Government plans to introduce new legislation to tackle the issue. As part of its plan to improve our nation’s health by improving our diet and weight, the Scottish Government has launched a public consultation on ‘Reducing Health Harms of Foods High in Fat, Sugar or Salt’ which will run until January 9, 2019. While the 48-page consultation document is wide-ranging and covers a lot of health and diet issues, many of the topics under discussion could potentially have very significant consequences for Scotland’s local retailing community. SGF Healthy Living Programme (HLP) Director Kathryn Neil is strongly urging retailers to make sure their voices are heard by contributing to the consultation. She says: “I have no way of knowing what that consultation will lead to, obviously, but the outcome of this consultation is likely to be some form of restriction on selling confectionery at the tillpoint as well as restrictions on how these types of products can be promoted. “The fact that these issues have already been made public in the ‘Scotland’s Diet & Healthy Weight Delivery Plan’ document that was published in July suggests that we can expect developments in this area.” The Delivery Plan Neil refers to is the ‘A Healthier Future: Scotland’s Diet & Healthy Weight Delivery Plan’ unveiled by Joe Fitzpatrick MSP, Minister for Public Health, Sport and Wellbeing. It was this plan that led to and informed the public consultation. In his introduction to the consultation Fitzpatrick makes it crystal clear what his aims are: “We have one of the poorest public health records in Europe. Tackling Scotland’s serious diet and weight problem requires actions on a number of fronts. Poor diet and overweight or obesity cause public health harm. So, it is clear we must take decisive action.” Fitzpatrick specifically refers to a requirement to “restrict[ing] the promotion 30

SLR | NOVEMBER 2018

‘DISCRETIONARY’ FOODS The consultation document speciﬁcally lists product categories that “are typically high in fat, sugar or salt, and yet provide little or no nutritional beneﬁt necessary for a healthy diet”. These foods are considered optional and are therefore referred to as ‘discretionary foods’. The Scottish Government is actively considering targeting the following discretionary categories: Q Confectionery Q Sweet biscuits Q Crisps Q Savoury snacks Q Cakes Q Pastries Q Puddings Q Soft drinks with added sugar In addition, the consultation is seeking views on whether ice-cream and dairy desserts should also be categorised as discretionary foods. Thing of the past?

and marketing of some of the foods we need to eat less” and it is this issue that is likely to have the biggest impact on Scotland’s local retailing sector. “Promotion and marketing works,” he comments. “That is why so much effort is expended on them. By restricting, at the point of purchase, the promotion and marketing of foods that have next to no beneficial nutritional value, it is reasonable to expect less of these foods will be purchased, improving, over time, our diet-related health.”

The key areas under consideration within the consultation which could affect local retail include: Q Price Promotions Q multibuys Q temporary price promotions and mutlipacks or not under consideration Other Forms Of Promotion & Marketing Q placement at checkouts, end-of-aisle, front of store, island/bin displays, etc Q promotion of value (e.g. promotion of price, size or volume) Q shelf-edge displays and signage Q in-store advertising Q upselling Q coupons (physical or electronic) Q purchase rewards (e.g. toys, vouchers, loyalty card points, reduced price for another product, competition entry) Q free samples Q branded chillers and floor display units Q selling or leasing display spaces for foods subject to the restrictions Q promotional or marketing material provided by manufacturers and distributors HLP’s Neil fully expects the consultation to lead to major new restrictions that will affect all local retailers across Scotland, but urges them to embrace these developments positively and start making plans for the continuing evolution of the retail environment. She says: “Firstly, it’s extremely important that retailers participate in the consultation. If they want to have their voices heard, they have to engage with the consultation. “Secondly, when the consultation is complete and the new restrictions are put into place, whatever they may look like, I would encourage retailers to be as positive as they can about working within the new regulations and playing their part in offering helping improve the health and wellbeing of their customers. It’s entirely understandable that retailers will find these changes difficult, but I would ask them to approach these challenges positively. When the consultation is concluded we will have a much clearer picture of how the future lies and the role that the Programme will have in helping retailers move forward and embrace the changes positively.” www.slrmag.co.uk

Inside Business

2 Minutes | Truls Haug

TRULS HAUG With the public consultation on a Deposit Return Scheme (DRS) in Scotland recently closed, we hear from Truls Haug, UK MD of deposit return specialists TOMRA on how he sees a scheme working in Scotland and how local retailers will be affected. SO, IT’S BEEN A LONG TIME COMING BUT WHAT IS THE LATEST SITUATION WITH A DRS SCHEME FOR SCOTLAND? The situation is currently that Zero Waste Scotland is busy going through the feedback they received during the public consultation on deposit return launched in June.

WAS THE CONSULTATION SUCCESSFUL? FACTFILE Truls Haug is Managing Director of TOMRA Collection Solutions UK and Ireland. With more than 17 years’ experience working with TOMRA, where he originally joined as Product Manager, Truls has a strong working knowledge of the retail, recycling and environment sectors. He also led the company’s securing of the deposit return scheme contract in New South Wales, Australia, during 2016-18. He is based between TOMRA’s Norwegian headquarters and the UK.

Yes, it was successful in terms of submissions. It officially closed on September 25 and more than 3,000 replies were received.

SO, SHOULD WE ALL SIT TIGHT AND WAIT FOR THE OUTCOME? Many retailers will choose to do that but there are a number of retailers in Scotland already starting to prepare by conducting live trials in their stores all over the country.

HOW SUCCESSFUL HAVE OTHER COUNTRIES BEEN IN IMPLEMENTING AND USING DRS SCHEMES? Usually DRS schemes are a success from day one. In Lithuania, for example, which only introduced a deposit scheme in 2016, they saw recycling rates increase from 34% to 92% on PET bottles from within two years. I would say that I don’t believe I have ever experienced a scheme that has not been a success.

WHAT WILL A DRS SCHEME MEAN FOR SCOTLAND’S LOCAL RETAILERS IN PRACTICAL TERMS? That’s a little hard to say right now as it all depends on the design of the scheme. For instance, a retail obligation scheme means that if you sell drinks you will also need to take the containers back. Therefore, you will need to have the facilities in place to comply with this obligation.

WILL RETAILERS BE OBLIGED TO HAVE A REVERSE VENDING MACHINE? No, retailers will not be required to invest in reverse vending systems. They can choose to take the containers back manually if they prefer. Norway, with a similar population to Scotland, has around 15,000 return points but only 3,700 of these have a reverse vending system 32

SLR | NOVEMBER 2018

installed. The Norwegian system is seen as one of the most successful.

WILL ANYONE HELP RETAILERS WITH THE COST? Yes. In Lithuania the investment in the reverse vending system infrastructure was absorbed by TOMRA itself. Eligible stores receive a machine free of charge and the operator pays a handling fee per collected container to the store to cover related costs like space, setup, maintenance and data exchange.

CAN LOCAL RETAILERS MAKE MONEY FROM DRS? It is very hard to speculate as we still don’t know what the DRS will look like, but in many schemes the retailers get a handling fee. The level of the handling fee needs to be designed so at the very least they don’t make a loss.

WILL A DRS SCHEME INCREASE RECYCLING RATES IN SCOTLAND? Yes. In the UK today the recycling rate is around 44% for plastic bottles. If the Scottish government designs a convenient system with a high enough deposit value, I am positive this will increase to between 85% and 98% within a couple of years on the items that have a deposit.

WHO SHOULD OPERATE A DRS IN SCOTLAND? I hope it will be a non-profit organisation controlled by the industry. By this I mean the producers and the retailers. They will be the ones that are most affected and for that reason should run the scheme, based on requirements and goals defined by the government.

DRS HAS BEEN A CONTROVERSIAL SUBJECT IN SCOTLAND. DO YOU BELIEVE IT WILL ULTIMATELY BENEFIT THE COUNTRY? Yes, I believe it will. Scotland is at the fore when it comes to circular economy and a DRS contributes to this. It will also generate green jobs, improve recycling rates and keep beverage containers out of Scotland’s oceans, streets and landfills. We find that an additional benefit of introducing a DRS is that it has a positive effect on total littering, as it causes people to rethink their behaviour. www.slrmag.co.uk

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he local retailing sector has dropped the ball when it comes to vaping, that much is clear. Convenience only accounts for £160m of sales from the £1bn UK market – the rest goes through online and specialist vapeshops. For a sector that historically dominated the related tobacco market, this represents a massive missed opportunity for local retailers. It looks likely that the vaping category may be set for another growth spurt as there are signs that both Holyrood and Westminster are softening their approach to the category, viewing is undoubtedly the most effective way of reducing the incidence of smoking. That’s why SLR has put together the Cloud Chasing daytime conference next month to provide retailers with everything they need to get ready for growth. It’s an event not to miss and it’s free to retailers. Get in touch now to secure your place.

RICHARD COOK

National Account Manager – Juul This is the first time that US vaping sensation Juul has spoken in the UK (that we’re aware of) and Cook will be discussing how a start-up company in 2015 reached sales of almost $1bn this year, almost three quarters of the US vaping market.

MATTHEW MODEN

Managing Director – Liberty Flights & Eden CBD Moden will discuss the evolution of the vaping category in the UK and will also be discussing his latest venture – Eden CBD – and how he sees CBD as a huge potential growth area in convenience retail.

NEIL MCCALLUM CEO – JAC Vapour

Edinburgh-based JAC Vapour was awarded the contract to supply vapekits to prisoners in Scottish jails as part of the Scottish Government’s plan to ensure all prisons are smoke free by the end of November. McCallum will offer a fascinating insight into this and the wider vaping market.

CRAIG JOHNSTON Co-founder – Hope CBD

Hamilton-based Hope CBD hit the headlines this summer by becoming stadium naming sponsor of SPL Premier League team Hamilton Accies. Johnston will dispel many of the myths surrounding CBD and will discuss the evolution of the Hope business, including its vaping range, and how retailers can cash in.

ED SIMKISS

Regional Sales Manager for Scotland – IQOS Philip Morris International has made a commitment to a ‘smoke-free future’ and sees its IQOS product as a key tool in achieving that aim. Simkiss will examine Reduced Risk Products and how they will help shape the future.

DOUG MUTTER

UKVIA Board Member; Compliance Director – Vaporized Mutter will be discussing the opportunities that lie ahead from an independent UKVIA perspective and will also discuss some interesting work Vaporized is doing in-store with Scottish retailer Harris Aslam.

KHOSROU KHERADMAND Director – Juki Vape

A veteran of the Middle East tobacco market, Kheradmand has been in the UK vaping market since 2013, producing a range of products for the convenience sector. He will discuss how he views the new opportunities that are opening up.

ED SIBLEY

Commercial Director – HIM Convenience sector research and insight specialists HIM will offer their unique views of the UK vaping market with Sibley highlighting what both what we’re doing well and where there’s room for improvement.

HARRIS ASLAM

Managing Director – Eros Retail Well known Scottish multi-site retailer Harris Aslam will offer an insider’s view of work he is doing in a number of his stores with Vaporized to increase the presence of vaping to use the category as an important footfall, sales and profit driver.

BLAKE GLADMAN

Strategy & Insight Director – KAM Media Insight and content creation business KAM Media will be presenting the findings of a specially commissioned piece of research prepared for the conference. Gladman will walk us through these findings and what they might reveal for the sector.

ANDREW MILLER

Head of Next-Generation Product Sales - Imperial Tobacco Miller will offer a big picture overview of the development of the UK vaping market. He will also offer category advice, merchandising support and an update on legislation, as well as the latest news from blu.

WILL HILL

Head of Legal & External Affairs – British American Tobacco UK & Ireland Hill will be discussing BAT’s commitment to transform tobacco by offering consumers a choice of alternative, potentially lower risk nicotine products and how the company is ensuring this journey is carried out responsibly.

THE

IMPORTANCE OF RESPONSIBLE INNOVATION The emergence of the new and innovative potentially reduced risk nicotine product category has been one of the most exciting UK success stories in recent years. The unprecedented coming together of technology, societal change and public health awareness has created a unique opportunity to provide tobacco consumers with potentially less harmful nicotine products such as e-cigarettes. And British American Tobacco (BAT) is proud to be a major part of this changing landscape with great products such as our new Vype ePen3 which is our latest innovation in the form of a pod-mod currently available in the UK. As UK market leaders in retail, BAT is at the forefront of

this new and dynamic industry where fast-paced entrepreneurship and innovation are critical to the uptake of e-cigarettes and the success of the category. However, when developing and marketing these exciting products it is crucial that we remember that these products contain nicotine, are addictive, and should only be aimed at adult smokers and vapers. In recent weeks we have seen media coverage echoing early concerns from society about how our category markets itself and the presentation and marketing of certain e-liquids. Even we are not immune - some third-party brands that we sell on one of our websites were cited in recent coverage, but Iâ&#x20AC;&#x2122;m pleased to say our team took swift action to address the concerns raised by shutting down the relevant section of the website, conducting a full audit of the liquids we list and how they are presented before allowing the full website back online. We believe for this industry to grow all companies need to be 100% transparent in their marketing and communications with consumers and regulators. That is why we are doing our best to set an industry leading example by ensuring a responsible approach to the way we make, market and sell our nicotine products, and the way we respond to

any concerns that maybe raised by consumers or wider society. Whilst associations such as the UKVIA and IBTVA have taken the initial and vital steps in raising awareness of the need for consistent and high standards across the industry, ultimately the responsibility lies with all of us as businesses. Our challenge goes beyond ensuring compliance on our websites and within our vapour portfolio to prevent youth access to our products. Instead, we â&#x20AC;&#x201C; the industry - must foster an environment whereby youth access prevention is at the heart of what we do as we work with partners, retailers and consumers. Post-Brexit, we hope that the UK Government will recognise the value that e-cigarettes have in unlocking potential public health benefits in the UK and will seek to amend the restrictive regulation on advertising and communication as recommended by the House of Commons Science and Technology Committee. However, this will only happen if we as an industry can demonstrate that we can be trusted with any enhanced marketing freedoms by enforcing the highest standards when it comes to manufacturing, marketing and selling these exciting nicotine products for adult consumers. I hope you will all join BAT in showing the world that the UK is an exciting, innovative but also responsible market for nicotine and vapour products.

By Will Hill Head of Legal & External Affairs, British American Tobacco UK & Ireland

SLR | NOVEMBER 2018

www.slrmag.co.uk

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WOODLANDSlocal

Inside Business

Woodlands Local | Monthly Update

IT’S DECISION TIME AT WOODLANDS LOCAL

After five hugely educational and often very frustrating years at Woodlands Local we have now reached, we believe, a crossroads. An exceptionally successful summer followed by a fairly disastrous last few months has led us to undertake a strategic review of the business and where we go from here. BY ANTONY BEGLEY

hen we first bought Woodlands Local around five years ago it was a huge but very thrilling gamble for us. A magazine buying its own store had never been done before and we knew we were getting ourselves into brand new territory with plenty of scope for disasters along the way. Having written about convenience stores for 20 years or so, we knew that we had picked up some reasonably robust knowledge about how a store works and what’s involved in getting the basics right and then building on that with some ambitious in-store projects. As a team, I would say we were certainly nervous on the first day when we picked up the keys but it was a nervous excitement. We were doing something genuinely innovative and that’s why we set SLR up in the first place. Looking back now, I recall all too clearly how it took less than a month for the reality to start to sink in. While we had fond notions of trialling clever new merchandising solutions, bringing next generation tech into the store and creating a unique ‘store of the future’, we quickly realised that 90% of the work involved in running a store is far more mundane, not to mention time-consuming: covering for staff who don’t turn up, dealing with broken chillers, unjamming shutters that won’t open, mopping up floods, confronting shoplifters; the list goes on and on, as all retailers know only too well. The last five years have gone by in a blur and no matter what happens in the future I will always be proud of the fact that we had the courage and the ability to bring this wonderful adventure in retail to life. It would be

SLR | NOVEMBER 2018

impossible to try to explain what I have learned personally and what we as a team have learned from running a store from 6am to 9pm seven days a week for five years – but then again, I don’t need to explain it to most of our readers because they know exactly what I’m talking about. I also believe that five years as retailers has taught the team at SLR more about the murky and often brutal realities of local retailing than any other trade magazine. As SLR has long said on the cover, ‘we get retail because we’re retailers too’. I also humbly believe that the experience of owning and running the store has translated into better quality editorial in SLR which, at the end of the day, is what really matters. We didn’t buy the shop to become great retailers: we bought the shop to allow us to produce the best quality, best informed editorial possible in SLR. On that front I believe it’s job done. Where we find ourselves today is at a crossroads. The Board of 55 North, the company behind SLR, has instructed the business to conduct a strategic review of the Woodlands Local operation and how it fits into our current portfolio. The options open to us are few and can be summed up as follows: carry on as we are; commit to significant new investment and a full-scale refit; divest the business. I like to think that we’ve been extremely open and honest in these pages when covering our experiences of running Woodlands Local and that’s why, once more, I’m telling it like it is. After a hugely tough year last year and a difficult start to 2018, we had a fantastic summer – as most retailers did – but the last few months have seen a return to the www.slrmag.co.uk

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Woodlands Local | Monthly Update

“We didn’t buy the shop to become great retailers: we bought the shop to allow us to produce the best quality, best informed editorial possible in SLR.”

challenges of before. Constant staff issues, inconsistency in getting the basics right, unexpected problems and more. So we have decided to conduct a fairly straightforward SWOT analysis of the store: strengths, weaknesses, opportunities and threats. I guess it comes down to the ongoing benefit we get for SLR from being retailers. Is there more to learn from another five years, or should we conclude our adventure in retail, having learned more than we could possibly imagine, and get back to the day job of being publishers? I don’t intend to anticipate the outcome of our strategic review (particularly as it’s not me conducting it), but owning the store was never intended to be a long-term career. If I have learned anything from the last five years, it’s that the only way I could make Woodlands Local truly successful would be to work there full-time – and that is not an option. It requires heart in the business and skin in the game to get the very best out of a store, in my opinion. Another important factor is the huge commitment that the retail business has on the publishing company. Many members of our publishing team commit long hours every week to help run the retail side and we must never forget that we are first and foremost publishers.

SLR | NOVEMBER 2018

There’s no doubt however that writing SLR takes on an entirely different perspective when you’re writing about a business you actually own. It’s all too easy to write about how tough running a retail business is these days and how the constantly increasing cost of doing business is threatening the future of the industry; it’s much more acute when you actually own a store and see the effects of these challenges first hand. In that sense, we probably have more empathy with Scotland’s local retailers than most – which also explains why we’re so passionate about the industry. That is why we are working so hard with bodies like the SGF, SWA and SRC to fight the corner of what is undeniably one of the most important industries in Scotland. Communities across the country rely on their local retailer in a way that they don’t rely on many other industries. Stand behind a till for a shift, as I’ve done on literally hundreds of occasions, and you get a true flavour of what a convenience store means to its customers. That’s why, no matter what our strategic review concludes, we will always stand shoulder to shoulder with Scotland’s retailers to ensure a profitable, sustainable future. www.slrmag.co.uk

STRENGTHEN YOUR SALES *Kantar Worldpanel, Value Sales, Take home non-alcohol brands, MAT to 22.05.17, Total Scotland

Hotlines

Product News & Media Watch

Mandarin & Lemon Drench Britvic This new citrus addition to the Drench range is available now with an RSP of £1.39 (500ml). bottles. There is also be a convenience channel exclusive in the form of a 12pack of £1 PMPs as well as a 2 for £1.70 option. The launch is supported with PR, shopper marketing and sampling. The full Drench range has also undergone a packaging refresh with a new design.

Melt in the Middle Pudding Aunt Bessie’s Aunt Bessie’s has launched a pair of ‘Melt in the Middle’ premium frozen hot desserts that it’s calling “indulgent treats designed for larger gatherings”. Belgian Chocolate Chip and Salted Caramel variants (500g; RSP £2.50 to £3; serves six) are available. Aunt Bessie’s said the puddings were perfectly positioned to capitalise on the rise in demand for hot desserts during autumn and winter, and enabled retailers to stock up without the risk of products going out of date.

Celebrations Advent Calendar Mars Wrigley Confectionery Available from this month, the firstever Celebrations advent calendar carries an RSP of £2.79. It contains an individual Celebrations sweet behind each door, with two behind December 24. A spokesperson said: “Celebrations is synonymous with Christmas and so it’s only right we introduce a Celebrations Advent Calendar.”

SLR | NOVEMBER 2018

Chicken Shop: Birds Eye brings home a takeaway Birds Eye is launching Chicken Shop, a range of takeaway-style chicken to cater for the in-home sharing occasion. The range (RSP £4) is available now and includes four varieties: Buttermilk Strips (350g and 8 pieces), Hot & Fiery Chunks (450g and 12 pieces), Maple & BBQ Wings (500g and 12 pieces) and Southern Fried Wings (500g and 10 pieces). The products can be cooked from frozen in 25 minutes. The launch is supported with a £3.5m investment spanning TV advertising, digital, social, in-store activations and public relations. Frozen chicken is currently worth £440m and up in value and volume (+9.3% and +4.7% MAT

Smint Xtrm with Menthol and Eucalyptus Perfetti Van Melle With the winter cold season fast approaching, PVM has launched what it’s calling “the first extra strong menthol power mint”, which is available now in cases of 12 with an RSP of £1.15. Hannah Acres, Smint Brand Manager, said: “Our new Smint Xtrm is a must-stock for retailers; the extra strong menthol flavour presents something completely new to the UK mints market.”

respectively). Frozen bone in chicken (e.g. wings) is growing rapidly at +25%, alongside chicken strips at +29%. Markos Papavlasopoulos, Senior Brand Manager for Birds Eye Chicken, said: “We’re seeing an increasing trend towards the informal eating occasion – ‘movie nights in with friends and family’ is a prime example. These occasions lend themselves to foods that are great for sharing, easy to prepare and you can eat quite happily with your hands. “We see a great opportunity with the launch of our new Birds Eye Chicken Shop range. The succulent chicken pieces are combined with seriously delicious coatings and marinades, delivering the same great taste and experience of a takeaway.”

Coca-Cola zero sugar Cinnamon CCEP Coke has kicked-off its Christmas countdown with a new limitededition festive cinnamon flavour, which is available now in a 1.25-ltr PET pack format.for Coca-Cola zero sugar. The launch coincides with a five week on-pack promotion across the Coke portfolio, offering consumers the chance to win a daily prize of a pair tickets to Capital’s Jingle Bell Ball in December.

Christmas Snowy Snowballs Lees Foods New for the Christmas season, Lees has unveiled limited-edition Snowy Snowballs. The new product features a light white mallow filling, is covered in a white chocolate coating and is showered with a blanket of coconut. Wrapped in a festive-themed design, each pack contains eight individual Snowy Snowballs and has an RSP of £1.29. A miniature variant is also available.

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Product News & Media Watch Sweet Shop Classics Barr Soft Drinks

Cadbury Reindeer Cake Premier Foods

Tapping into the trend for retro confectionery, Barr Soft Drinks has launched two limited-edition flavours – Sherbet Lemon and Rhubarb & Custard – as part of a ‘Sweet Shop Classics’ sub-brand. Both are available now while stocks last in two price-marked pack formats – 330ml cans (45p PMP, outers of 24) and 500ml PET (69p PMP, outers of 12). Both variants are low in sugar.

Mocha Muffin Aryzta Food Solutions

The new Chocolate & Caramel Reindeer Cake (RSP £3) is a festive twist on Cadbury’s traditional chocolate gateau. Serving eight, the 408g cake features a chocolate sponge with caramel-flavoured crème, covered in Cadbury chocolate and topped with a white chocolate Rudolph plaque.



Crunch time for radio station Golden Wonder has joined forces once again with Capital Scotland. Continuing until the end of February 2019, the campaign will reach nearly 800,000 listeners as Golden Wonder sponsors Capital Weekends. The pair had teamed up earlier in the year to give away over 10,000 packs of crisps at various workplaces around Scotland.

Love at first bite with Dr. Oetker Mermaid Decorating Kit Dr. Oetker Baking

Aryzta’s 15-strong 2018 Christmas range includes the Mocha Muffin (RSP £1.25/115g), a moist coffeeflavoured chocolate chip muffin with a smooth deep-fill coffee frosting and decorated with a mocha chocolate bean and icing sugar. Mary Byrne, Arytzta’s Retail Marketing Manager said: “A good range of freshlybaked options is sure to appeal to those looking for a quick bite in between Christmas shopping!

MEDIAwatch

Hotlines

With an RSP of £4, the 199g six-piece Mermaid Decorating Kit includes fondant icing, blue and violet colour gels, gold writing icing, two sprinkle sachets, tail templates, a recipe leaflet and some simple to follow instructions for creating 12 cupcakes.Riccardo Panichi, Head of Marketing for Cake and Dessert at Dr. Oetker UK, commented: “Mermaidinspired food is one of the biggest trends in home baking this year.”

Dr. Oetker Ristorante has kicked-off a sixmonth partnership with Channel 4 show First Dates. It runs until March 2019 and includes new TV ads which capture the moment a husband surprises his unsuspecting wife with a romantic First Dates-style dinner. The campaign also includes dedicated social media content and an in-pack competition.

Baxters back with super new advert Baxters is back on television screens for the first time since 2012 with a new 30 second ad titled “We Make Super”. The ad runs until February 2019, exposing over 34 million consumers to the campaign. Baxters will also sponsor Sky channels CBS Action and CBS Reality between November and March, reaching a further 10 million adults.

Glitterberry back for Christmas Florette Lunch Bowls Agrial

Dino’s Famous Stackers PWbrands

Intended as a healthier alternative to a sandwich, the lunch bowls come ready to eat using the included plastic fork. They are available in three flavour combinations: BBQ Chicken & Bacon Crispy Salad (195g); a Chicken & Sweetcorn Crunchy Salad (205g); and a Feta & Tomato Crispy Salad (200g). All are available now to Nisa stores with an RSP of £2.50.

American brand Dino’s Famous has added a range of US-style, sliced pickles to its line-up. Dino’s Famous Stackers are available in three bold – Sweet Stacker Pickles, Sour Stacker Pickles and Chilli Stacker Pickles – with the chilli stacker becoming hotter for the first few weeks after opening the jar. Each comes in a 530g jar with an RSP of £2.49 and is available in cases of six.

Britvic’s J2O Glitterberry flavour is back on screens for the first time since 2011. The 10-second advert, which airs through to December 31, stars J2O’s brand ambassador Mojo; the brightly-coloured alpaca dispenses pearls of wisdom to festive partygoers and encourages them to be bold and hit the dancefloor with Glitterberry in hand.

Totally Tildalicious A new TV advert titled ‘Tildalicious’ brings to life the culinary journey of different Tilda rice grains through the hands of real-life cooks from all over the world, via their UK kitchens. The ad airs until the end of November and is part of a £1.5 campaign from the rice brand – the biggest since it was founded over 45 years ago.

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

NOVEMBER 2018 | SLR

LETâ&#x20AC;&#x2122;S TALK

Cigars

Feature

THINKING BIG WITH

MINIATURES The Cigar category is confounding expectations with its continued growth, with Miniatures responsible for the overwhelming bulk of sales.

he cigar market in the UK is currently worth £199.6m and the category is growing at 0.8%, according to IRI MarketPlace data from September. This growth is driven principally by an increase in demand for Miniatures (up 4.5%) and Medium/Large cigars (up 5.6%). Miniature cigars continue to dominate the market, accounting for a huge 72.6% of the total cigar volume and £103.5m in value sales. Within this segment, the Scandinavian Tobacco Group UK (STG UK) portfolio of miniature brands is the runaway leader, contributing 70% of all value sales.

FESTIVE OPPORTUNITY? In the lead up to Christmas sales of cigars tend to increase. Last December, sales of cigars increased by 7% in comparison to the previous month, with larger cigars from the Medium / Large cigars segment, such as Henri Wintermans Half Corona, reporting a 14% increase [IRI, Jul 2018]. Given the growth being seen in the Medium/Large segment at present, it makes sense to stock a strong range of larger cigars such as Henri Wintermans Half Corona, the top selling cigar in the segment.

www.slrmag.co.uk

MINIATURE GROWTH The company is hoping to develop this segment even further with a relaunch of its market leading Café Crème brand. Jens Christiansen, Head of Marketing & Public Affairs STG UK, explains: “We’re really excited to be continuing the evolution of Café Crème, one of the world’s leading cigar brands, with the launch of its new Signature brand name. While the cigar itself will remain wholly unchanged, the new name has been proven to resonate exceptionally well with consumers, offering them reassurance on the exceptional quality synonymous with the brand.” The new Signature brand name will be rolling out in stores from February 2019 with a phased transition to ensure high awareness amongst retailers and consumers alike. This will include the launch of new transition packs, available now, which feature an on-pack flash highlighting that the name will soon be changing to Signature. Each pack will also include an inlay inside the tin with additional details informing consumers of the name change and reassuring them the cigars will remain the same. The rebranding covers Signature Blue (previously Café Crème Blue) (30.1%), Moments Blue (17.7%) and Signature

STG OFFERS REWARDS FOR ‘LOCAL HEROES’ To celebrate the launch of its new trade website (www.stgtrade.co.uk) this month, Scandinavian Tobacco Group UK (STG UK) has launched a new initiative inviting retailers to share their stories of how they have, or intend to, give back to their local community. The deserving ‘Local Heroes’ will be awarded a host of prizes, including a £2,000 cash prize to put towards their proposal. STG UK will select a deserving retailer to be named a ‘Local Hero’ every three months and along with the cash prize, the retailer will also receive a selection of product stock to help support their business. To enter, retailers simply need to visit the new website and complete a form with details of how they have, or would like to, support their local community. The site includes tips and to guide retailers through their applications. The Local Heroes initiative is running as part of STG UK’s ongoing ‘Let’s Talk’ campaign which has been developed as a result of research that highlighted retailers are missing out on vital tobacco sales due to a lack of proactive engagement with customers.

NOVEMBER 2018 | SLR

Feature

Cigars

STG UK TOP TIPS

STOCK THE BIGGEST BRANDS Many consumers remain loyal to well-known brands they can trust so it’s important for retailers to stock the biggest brands from each segment, such as the No.1 cigar brand in the UK, Signature Blue (previously Café Crème Blue).

COVER ALL SEGMENTS Make sure you include the top-selling brands from each segment as a minimum: Q Miniature cigars: Signature Blue and Signature Original (previously Café Crème), as well as Moments Blue Q Panatella/Small cigars: Moments Panatella, and Hamlets Q Medium/Large cigars: Henri Wintermans Half Corona and Corona Sumatra

KNOW YOUR CUSTOMERS Retailers know their customers better than anyone else - by paying attention to what customers are buying and reviewing sales data, retailers can see what’s performing well and stock their range accordingly.

MAINTAIN STOCK LEVELS The simplest but most effective piece of advice to follow is to stay stocked up. If a product isn’t in stock, consumers can’t buy it, so retailers should make sure they monitor stock levels carefully to avoid this happening.

SLR | NOVEMBER 2018

(previously Café Crème) (11.9%) which account for three of the top four brands within Miniatures. But it’s not just Signature/ Café Crème that’s keeping the Miniatures segment buoyant. STG UK’s miniature brands portfolio collectively represent £72m in value sales over the last 12 months – that’s nearly 2.5 times bigger than all the other miniature brands combined. Looking specifically at value for money miniature cigar brands, the Moments Blue line is bigger than all the other brands together, at a value of £14.6m, making it an important must stock.

THINK BIG Within the Medium/Large cigar segment, Henri Wintermans Half Corona holds the top position as the UK’s favourite Medium/Large cigar brand, reporting an increase of 2% to 73.4% market share and value sales increases to £14.6m. With a seasonal rise in cigar sales expected over Christmas, this growth may well continue. Overall, the top 10 cigar brands account for 89% of the total cigar sales and 85% (£168m) of value sales, highlighting just how important it is for retailers to ensure they’re stocking the leading brands to take advantage of the sales and strong profit margins available within the cigar category.

LOOKING AHEAD But what lies ahead for cigars? Christiansen comments: “Within any tobacco category, it’s difficult to predict how the market is going to perform in the months and years to come and it’s no different with cigars. However, given the positive growth within the Miniatures segment, there is clearly still a major drive towards value and given the uncertainty of the what lies ahead for the UK’s economy, it’s unlikely we will see a shift in this trend anytime soon.” Growth within the Medium/ Large segment could well be down to a trend towards premiumisation as consumers seek out products such as Henri Wintermans Half Corona that offer shoppers a little affordable luxury in their lives. “Given the consumer openness to trying cigars identified through our recent research, this could well be a sales trend we see continue to grow year on year if retailers can harness the opportunity effectively,” adds Christiansen. The research he refers to here was commissioned earlier this year to examine shopper tobacco purchasing habits and the results showed that most smokers are actually very open to trying to cigars and willing to consider switching given the right factors.

He comments: “The research findings highlighted that 59% of male smokers who don’t normally smoke cigars would be willing to buy them. While 32% of traditionally non-cigar smoking males said they would buy cigars for their taste, and 27% would if they were cheaper than cigarettes. The research also showed 79% of smokers who regularly visit a convenience store would try an alternative tobacco product, such as cigars, if it was recommended by store staff.” Christiansen says it’s vital that retailers make the most of this opportunity by training their staff. He says: “Retailers should invest in upskilling both themselves and their staff to grow their understanding on the different cigars available in each segment, and what type of consumer they are most suited for. In doing so, retailers will be able to offer customers the allimportant guidance they need and desire, to help them make informed choices on what cigar would be right for them.” Combine these insights with the fact that cigars have around double the profit margin of cigarettes (enabling retailers to possibly make an additional £250 profit for each consumer that switches to cigars) and it’s clear there is an opportunity for retailers to capitalise. www.slrmag.co.uk

Christmas Drinks

Feature

CHEERS TO A GREAT CHRISTMAS! READ ON TO FIND OUT HOW MATT’S ADVICE CAN IMPACT YOUR SALES…

Tip 5 MAXIMISING SEASONAL EVENTS AND OCCASIONS Make sure you take advantage of seasonal occasions and build relevant displays to drive sales. Christmas remains a lucrative opportunity for retailers. With Christmas around the corner, we

Christmas wouldn’t be Christmas without a few cheeky drinks, so offering your shoppers something a little special this year – both alcoholic and soft – will boost your bottom line. SLR picks out a few products that might do the trick. SPAR GOES BIG THIS CHRISTMAS Spar is taking a big run at Christmas this year with a raft of own label drinks launches. The company has unveiled three new ontrend spirits in a move to tap the trend for premium and dark spirits. The three products are premium French Grain Vodka (RSP £17.99), Rhubarb & Ginger Flavoured Gin (RSP £17) and a new Dark Rum (RSP £12.50). Also new are two Italian sparkling wines: Esprello Bianco and Esprello Rosato. Spar’s range of sparkling wines now stands at nine offering ‘good’, ‘better’ and ‘best’ options giving customers plenty of opportunities to trade up for gifting or indulgence.

FESTIVE FLAVOUR FROM COCA-COLA CCEP is kicking off the Christmas countdown with a new festive flavour for Coca-Cola zero sugar and an on-pack promotion across the Coca-Cola portfolio, offering consumers the chance to win tickets to Capital’s Jingle Bell Ball in December. A new Cinnamon limited-edition variant has joined the Coca-Cola zero sugar portfolio, the fastest-growing cola brand during Christmas 2017. The launch builds on the success of the Coca-Cola zero sugar Vanilla, Cherry and Peach variants and will help retailers tap into the rise in carbonated soft drink sales around the festive season. The limited-edition festive packs feature a bespoke red and gold design to highlight the premium new flavour. Coca-Cola is also offering consumers the chance to win a pair of tickets to Capital’s annual Jingle Bell Ball. The on-pack promotion features across onthe-go packs of Coca-Cola original taste, Diet Coke and Coca-Cola zero sugar for five weeks.

are delighted to be launching a new festive range of Christmas dinner flavours, including the flrst ever Brussel Sprouts flavoured crisp. Flavours include Turkey & Stuffing, Pigs in Blankets & Brussels Sprouts. The limited edition range is available now.

14. Based on total UK sales data, Walkers crsips were the bestselling crisps brand as recorded by Nielsen (52 week data to 18.11.17). 15. The total RSV for Walkers Crisps vs nearest 48 competitor SLR |(Nielsen NOVEMBER 2018 Scantrack, value sales MAT WE 09.09.18)

GLITTERBERRY HITS THE SMALL SCREEN Britvic’s festive J2O Glitterberry flavour is back on TV for the first time since 2011. This festive blend of grape, cherry and winter spices with edible gold glitter was the top performer in its category last Christmas based on rate of sale, and is back in time for the festive party season. The ad runs until December 31, coinciding with the product arriving in stores earlier than ever to help retailers make the most of the Christmas opportunity. Glitterberry made a huge impact on the category in 2017, when £9 out of every £10 spent on the flavour was incremental to the category. The variant also falls below the soft drinks industry levy.

SLR_61x260_LEADERSHIP_WALKERS_WE'VE_GOT_BAGS_FINAL.indd 06/11/20185 10:33

BECKS BACK IN PRINT David Beckham is starring in a new print ad campaign from Haig Club which aims to challenge some of the myths surrounding Scotch, encouraging people of legal purchase age to consider whisky in new ways and occasions. The new campaign images also feature a redesigned brand logo, which includes the creation date 1627 of the historic whisky house, with the Haig heritage going back almost 400 years.

www.slrmag.co.uk

Holidays coming ARE

AND SO ARE BIG FESTIVE SALES!

Iconic ‘Holidays are Coming’ TV advertisement returns! The Coca-Cola Christmas Truck will tour Great Britain spreading festive cheer New Father Christmas festive packs from GB’s No.1 cola range* Stock up now to take advantage of the cola segment which grew by 5.4%** last Christmas!

To find out more visit www.cokecustomerhub.co.uk or call Customer Hub on 0808 1 000 000 *Nielsen Total GB value – 23.06.18. **Nielsen Total GB – 4 weeks ending Dec 20th 2017. © 2018 The Coca-Cola Company. All rights reserved. COCA-COLA, the design of the Contour Bottle and TASTE THE FEELING are registered trademarks of The Coca-Cola Company

Christmas Top-Up

Feature

TOP UP FESTIVE PROFITS READ ON TO FIND OUT HOW MATT’S ADVICE CAN IMPACT YOUR SALES…

Planning for the Christmas sales period gets earlier and earlier every year which makes the need for regular ‘top-up’ shops by retailers a critical part of the approach to the big day. SLR offers a few top tips on how to make sure you make the most of the period.

C Tip 6

MAKE YOUR SALES COUNT FOR MORE Make sure you help make your sales count for more, by signing up to our online rewards and category management website, Counts for More. The one-stop hub is vital in helping our retail partners to take full advantage of their savoury snacking sales. The site is packed with incentives and competitions to win stock, POS, as well as store takeover activations. It’s also a hub of information in terms of best-in-class category advice, so sign up today and get started.

www.countsformore.co.uk

hristmas is a vital period each year for retailers and planning for the festive period seems to get earlier and earlier every year. This definitely helps retailers make the most of the season but creates its own problems, as popular lines can sell out before those vital few weeks before December 25. This is where the ‘top-up’ shop comes into its own just as much for retailers as for shoppers.

THE BIG NIGHT IN

DUAL FOCUS

REDUCED ALCOHOL CONSUMPTION

Trystan Farnworth, Commercial Director, Convenience & Impulse at Britvic, highlights a focus on two areas as key to truly leveraging Christmas: fast-moving single serve products; and strategic merchandising and promotions. “Busy customers will either be looking for a refreshing soft drink to quench their thirst during their shopping trip or stocking up for social occasions,” explains Farnham. “To help your shoppers easily locate items, retailers should group mixers and sharing formats of brands like Pepsi Max and 7Up Free together, and place them alongside accompanying alcoholic drinks [subject to licensing laws].” He also advises placing multipacks and offers near the store front or till to drive incremental sales.

Research conducted last year by Censuswide UK on behalf of Britvic revealed a growing demand for alcohol-free options at Christmas. Almost half of consumers (45%) were set to buy more soft drinks and over a fifth (21%) planned to drink less alcohol.

HEALTH & WELLBEING A key driver this year will be health and wellbeing, and this is true across all categories. This is a trend well worth embracing when doing the festive top-up order.

Christmas top-ups should also take into account the fact that there has been a real rise in the amount of people staying in to party. In 2017, 78% of shoppers opted to celebrate New Year’s Eve at home [HIM CTP, 2018]. This is creating a bigger opportunity to capitalise on sales of sharing and multi-packs across various categories like Soft Drinks, Confectionery, Crisps & Snacks and BWS.

MAKE IT SPECIAL CCEP’s Trade Communications Manager Amy Burgess, encourages retailers to stock special Christmas editions: “At Christmas time, people will be looking for something special to add some sparkle to their celebrations.”

THINK BEYOND CHRISTMAS Jenny Leetch, Brand Manager at Costcutter, urges retailers to think beyond Christmas. She says: “The festive period often brings new shoppers through the doors, so give them a great shopping experience and they’ll be back in the New Year. Making the shopper’s visit as stress-free as possible is more important than ever at this time of the year.”

BRITVIC’S TOP TIPS FOR INCREASING CHRISTMAS SALES Q Cover all occasions – From Diwali to New Year, there is plenty to celebrate. Q Listen to customers – Keep in touch with the latest customer trends and adapt your range to suit customer’s ever-changing tastes. Q Merchandise effectively – Group relevant products together and use POS. Q Don’t stop at one format – Stock a range of popular brands in a variety of formats.

SLR | NOVEMBER 2018

SLR_61x260_LEADERSHIP_WALKERS_WE'VE_GOT_BAGS_FINAL.indd 06/11/20186 10:35

Q Offer value for money – The festive period can be an expensive time for families so customers are searching for bargains. Promotions and PMPs build trust and show you are offering value-for-money. Q Add a festive sparkle – Small additions like using festive POS, decorating the store or playing Christmas music in store can create that festive magic.

www.slrmag.co.uk

e v i t s e F FAMILY FAVOURITES

J2O

NO.1 ADULT SOFT DRINKS BRAND IN THE UK1

FRUIT SHOOT

NO.1 KIDS BRAND2

ROBINSONS

NO.1 UK SQUASH3

PEPSI MAX

NO.1 SUGAR FREE COLA BRAND IN THE IMPULSE MARKET4

ADD SOME sparkle TO YOUR SALES WITH YOUR NO.1 CHRISTMAS RANGE

STOCK UP NOW

Sources: 1Nielsen, Total coverage, latest 52 weeks data to 29.06.18, CGA Total Foodservice and Licensed, latest 52 weeks data to 21.04.18 values sales within adult soft drinks 2 Nielsen, Total Coverage/Total Brand 52 weeks to 8.7.18 3Kantar usage panel Aug 2017 in home occasions 4IRI Total Convenience/Total Brand and flavour variants Volume 52 weeks to 8.7.18

Snacking

Feature

MEAT THE FUTURE

Despite the apparent stellar growth of veganism and vegetarianism, the demand for indulgent proteinfilled meat snacking products continues to drive sales in local retailing outlets in Scotland.

he way that shoppers consume food and drink has changed dramatically over recent years with the trend for grazing giving way to a trend towards simply buying more and more food on the go. With busy lives and convenience a priority, local retailers are in the perfect place to meet all hot, ambient and chilled snacking demands. The most recent megatrend is of course towards healthier, better-for-you eating – and the snacking category has responded well with a raft of great innovation. But it’s not all about healthier snacking: there is still room for the odd indulgent treat. It’s all about balance, as we all know. Pavan Chandra, Marketing Manager at Peperami and parent company Jack Link’s, comments: “In the past few years, there has been a dramatic shift in the snacking world that reflects wider trends toward healthy living and changing preferences around protein and sugar consumption. Nowadays, protein is widely viewed as healthy, with its role having evolved from niche muscle building to having a broader everyday appeal where energy and vitality feature. As a result,

there has been an evolution of the snacks consumers are purchasing. Meat snacks, for example, have seen an increasing appeal from health-conscious shoppers, with rising sales year-on-year.” Peperami, the leading brand in the meat snacking category [Nielsen, Aug 2018], has

launched a 100% Classic Beef variant, an addition proven to be a natural fit to both channel and shopper, filling the gap in the market for convenient, high protein meat snacks. Similarly, to raise brand awareness in this category, Jack Link’s recently launched a new Biltong made from 100% lean beef to a traditional South African recipe. The product is gluten-free and protein-rich, appealing to on-the-go consumers. The biltong is made from British beef, marinated and cured with authentic South African spices. Jack Link’s is one of the fastest growing brands in the ambient snacking category in the UK, up 132% year to date [Nielsen, Oct 2017] and is dedicated to driving the category forward and bringing innovation to the market. As the ambient meat snacking category has grown +2.1% in the last year and shows no sign of slowing, the introduction of biltong, appealing to a broader audience and demographic, has come at the perfect time. Price marked packs (PMPs) can be very effective in driving sales of meat snacking products with PMPs in general growing at 13.1% YTD [Nielsen, Jun 2018].

MERCHANDISING ADVICE Q With the health agenda changing the UK’s eating habits, retailers need to ensure that chilled, high-protein snacks are prominently displayed in store. Q Food-to-go based merchandising is key to helping busy shoppers navigate. Having a dedicated chilled aisle could be the perfect one-stop solution. Q If products such as cheese, beer and cold drinks are placed together in a designated section (where alcohol legislation permits), consumers can quickly access the products they are looking for, encouraging incremental, complementary purchases. Q Clip strips and display units are a great short-term solution to drive visibility of meat protein snacks as alternatives to confectionery and crisps. Q Convenience stores should also ensure that food-to-go products with offers or deals are displayed in visible areas of the store, as this will further encourage consumer engagement. Q Last year, Peperami introduced a new case and pack design enabling retailers to merchandise product vertically, helping to increase visibility in store, reduce space requirements and maximise purchase opportunities.

SLR | NOVEMBER 2018

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A CUT ABOVE... 100% LEAN BEEF

HIGHSNACK PROTEIN

UTC

HALLOWEEN SUSHI COFFINS ANYONE?

You’ve got to hand it to the Japanese. Nobody does uncomfortably weird quite like them. Take the Halloween Sushi Coffin as a wee for instance. UTC was part appalled, part fascinated to receive some seasonal recipes recently from Japanese sushi company Yutaka. These recipes, said the press release, make it easy for anyone to “create their own sushi cemetery with just a few simple ingredients”. Imagine the stunned silence at SLR Towers. The release went on to explain how the coffins are a lot healthier than traditional trick or treat sweet treats and even highlighted how the creative cook can “make a small hand out of a piece of parsnip or sugar icing to add a touch of authenticity”. Needless to say, SLR’s resident coffin-dodger will be giving these particular coffins a miss as well.

SEA-AGED CHAMPAGNE. DISCUSS.

Not much of a champagne drinker himself, UTC was bemused to learn of the latest bit of bawbaggery to emanate from the heady world of fizzy wine: seaaged champagne. And yes, it is what it sounds like: champagne that has been aged 30m underwater for three years. Why, you might ask? Good question, UTC would respond. But according to Champagne Drappier president Michel Drappier, the idea was to find the “perfect environment for achieving complexity and texture when compared to traditional cellar ageing”. Having tried to age wines at high altitude to “make the most of consistent, cool temperatures”, Drappier was gutted to discover it didn’t work because he was “losing lots of bubbles because of the high pressure”. So he then went to the other extreme and submerged bottles of his fizz off the bay of Saint-Malo in Brittany for three years. UTC scoffed at suggestions it was a bold and innovative move, citing the fact that he distinctly remembers ageing some cans of Tennent’s in Loch Lomond for three or four hours during a camping trip way back in the 1950s.

DESPERADOS MEETS MARY WHITEHOUSE Some members of the great British public will complain about literally anything, and UTC’s patience has worn a bit thin with “bloody Mary Whitehouses”, a reference that will mean nothing to readers under the age of 30. So the auld yin’s eyes were rolling when he heard how someone had written to the Independent Complaints Panel (ICP) because he believed the sale of Desperados in a 250ml can could appeal to under 18s due to it “being in the same size can as energy drinks”. The complainant believed the size of

SLR | NOVEMBER 2018

the can could mean that the product could be downed in one – which perhaps reveals more about the complainant than the product. To be fair to the ICP, the complaint was thrown out, presumably much to the relief of Diageo too, who wouldn’t want to be accused of luring any 14-year-olds into inadvertently nailing a premix can of Gordon’s & Tonic in a wanner either.

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Promoting responsible community retailing since 1918 to ensure a sustainable and prosperous convenience industry in Scotland SGF CENTENARY YEAR

Scottish Grocersâ&#x20AC;&#x2122; Federation

SGF EVENTS DIARY JANUARY

Wednesday 30th

2019

SGF Finance & Events Committee Meeting

Fife Creamery Training Centre, Kirkcaldy

SGF National Executive Meeting

Fife Creamery Training Centre, Kirkcaldy

SGF Cross Party Group Meeting

Scottish Parliament, Edinburgh Committee Room 3 at 6 -7.30pm

FEBRUARY

Thursday 7th (TBC)

SGF Crime Seminar

RBS Business School Gogarburn

(TBC)

SGF Study Tour

Dunoon

APRIL

Wednesday 30th

SGF Mini Summit

McDonald Inchyra Hotel, Falkirk

MAY

Wednesday 22nd

SGF Finance & Events Committee Meeting

Federation House, Edinburgh

SGF National Executive Meeting

Federation House, Edinburgh

AGMs

Federation House, Edinburgh

SGF Cross Party Group Meeting

Scottish Parliament, Edinburgh Committee

MARCH

Room 3 at 6 -7.30pm

JUNE

AUGUST

(TBC)

SGF Networking Event

RBS Business School Gogarburn

Wednesday 28th

SGF Finance & Events Committee Meeting

Federation House, Edinburgh

SGF National Executive Meeting

Federation House, Edinburgh

SGF Cross Party Group Meeting

Scottish Parliament, Edinburgh Committee Room 3 at 6 -7.30pm

SEPTEMBER

OCTOBER

NOVEMBER

Wednesday 11th

SGF Golf Outing

Cameron House, Loch Lomond

1st to 4th

NACS Congress

Georgia World Congress Center, Atlanta, USA

(TBC)

SGF Annual Conference

TBC

Wednesday 27th

SGF Finance & Events Committee Meeting

Federation House, Edinburgh

SGF National Executive Meeting

Federation House, Edinburgh

SGF Cross Party Group Meeting

Scottish Parliament, Edinburgh Committee

Room 3 at 6 -7.30pm

222 Queensferry Road, Edinburgh, EH4 2BN, Tel: 0131 343 3300, e-mail: info@sgfscot.co.uk

IS THE WALKERS OURITE FAV NATION’S RAND CRISP B 1

Walkers sells over double its nearest competitor 2

You can count on Walkers to drive your snacking sales3

Sharing is now the biggest segment in the crisps, snacks and nuts category4, Walkers owns 3 of the top 4 sharing brands in the impulse market5 ®

Visit www.countsformore.co.uk for more information Source: 1. Based on total UK Sales data, Walkers was the best selling crisp brand (Nielsen Scantrack, Value Sales, MAT WE 09.09.18) 2. The total RSV for Walkers Crisps vs nearest competitor (Nielsen Scantrack, value sales MAT WE 09.09.18) 3. Siop y Pentref Dodmaels Walkers Savoury Snacks Products EPOS Data 76.2% LFL 2016 – 2017 4. Nielsen LT 12, Total Impulse WE 15.09.18 5. Nielsen YTD, Total Impulse WE 15.09.18

SLR November 2018

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