SLR October 2018 by 55 North

WE GET RETAIL BECAUSE WE’RE RETAILERS TOO!

NICK BROWN CCEP talks sustainability AND

KATHRYN NEIL

New Healthy Living boss speaks up OCTOBER 2018 | ISSUE 186

FILSHILL GROWS PROFITS AND SALES

Glasgow wholesaler grows in tough times

STORE OF THE FUTURE

Inside Premier’s flagship store in Hull

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CBD: THE NEXT BIG THING?

This much misunderstood category potentially offers retailers a major new revenue stream

TIME FOR TEA?

It’s still our favourite cuppa Cloud Chasing – register now for SLR’s vaping and reduced risk products conference p26

NEW

LOW PRICE ROLLING TOBACCO

£10.90 * RRP

£17.80 * RRP

AVAILABLE IN 30g AND 50g POUCH THE FASTEST GROWING BRAND IN SCOTLAND1

* You are, of course, at all times free to sell JTI’s products at whatever price you choose. 1 Nielsen Market Track November 2017 to April 2018

October 2018

Contents

Contents ISSUE 186

NEWS p4 p5 p6 p8 p10 p20 p22 p24

Discounters Tesco launches Jack’s, a new no-frills chain to rival Aldi and Lidl. Wholesalers Newly-formed buying group Unitas Wholesale reveals its boardroom line-up. Appointments Dawood Pervez to take top job at Bestway as Martin Race announces retirement. Wholesalers Despite challenging trading conditions, JW Filshill delivers increased margin and turnover. News Extra Shop Prices Five years of deflation comes to an end, as prices start to nudge upwards again. Product News Quorn launches 12 new products and Tangerine Confectionery has plenty of ideas for Christmas. Off-Trade News Echo Falls launches a prosecco variant. No prizes for guessing its name. Newstrade Falling print advertising revenues and a drop in circulation hit Herald publisher hard.

INSIDE BUSINESS p25 Research Digest A new survey of consumers’ attitudes to food concludes supermarkets ‘may no longer exist’ by 2030. p26 Cloud Chasing Details of SLR’s conference on growing the convenience channel’s share of the vaping market. p28 2 Minutes Of Your Time Nick Brown CCEP’s Head of Sustainability wants to ensure no Coke packaging ends up as litter or in the oceans. p30 Store Profile Premier Hull A tour around Booker Wholesale’s ‘Store of the Future’ offers a glimpse of what lies ahead for local retailers. p34 SGF Interview Pete Cheema SGF boss hails progress in tough times. p38 Healthy Living The hard work is just starting for Kathryn Neil, the SGF Healthy Living Programme’s new Director. p40 Woodlands Local What’s been happening in SLR’s store in Falkirk this month? p44 Hotlines The latest new products that suppliers want to see on your shelves. p62 Under The Counter You have to go a long way – over 13 miles in fancy dress – to get UTC’s respect these days. FEATURES p46 Medicated Confectionery It’s all about stocking the best sellers in this great category for driving winter footfall and basket spend. p48 Hot Drinks – Tea The tea market is evolving and retailers must adapt with it to maximise sales. p50 Hot Drinks – Coffee A good quality coffee offering has gone from being a ‘nice to have’ to an absolute must. p52 Christmas Confectionery Preview The Christmas countdown gets underway, as Mondelez unwraps its festive selection. p54 Scottish Brands Scotland is blessed with an array of fantastic home-grown brands and products. SLR looks at some of the best. www.slrmag.co.uk

ON THE COVER p14 CBD Does this much misunderstood category offer local retailers a much-needed new footfall, revenue and profit opportunity?

OCTOBER 2018 | SLR

News DISCOUNTERS Tesco fights back against Aldi and Lidl

Morrisons’ Chairman appointed IGD President Andrew Higginson, Chairman of Morrisons, has been named as President of IGD, the research and training charity, by its Board of Trustees. Already an active member of IGD’s Policy Issues Council, he succeeds IGD’s current President, Leendert den Hollander, with effect from January 1 2019. Andrew Higginson, Chairman of Morrisons, said: “I have been involved with IGD over many years and I am looking forward to contributing to its important work for such an exciting and dynamic sector of the economy.”

PayPoint One passes the 10k milestone There are now 10,000 PayPoint One devices live across the UK. The milestone means over half of PayPoint’s legacy yellow terminals, due to be phased out

Dave launches Jack’s In a bid to combat the continued rise of Aldi and Lidl, Tesco has launched its Jack’s discount chain with boss Dave Lewis opening the first store in Chatteris, Cambridgeshire. A second store opened in Immingham, Lincolnshire. Both are Tesco sites that never opened their doors to the public but were mothballed when the company was forced to curb its expansion plans in 2014. Tesco plans to launch 10 to 15 Jack’s stores in the next six months. These will be on a mix of new sites, adjacent to existing stores and in converted Tesco Metros. The stores, named after Tesco founder Jack Cohen, stock around 2,500 SKUS, comparable to the German discounters. Around 80% of food and drink products are grown, reared or made in Britain and union jacks feature prominently on packaging. Lewis denied this had

Tesco CEO Dave Lewis anything to with Brexit, but was “what customers are asking for”. In a price check on a basket of 18 popular items conducted by the Guardian, Jack’s was cheaper than Lidl, Aldi and indeed Tesco. Journalists given a tour of the Chatteris store before it opened noted a broadly similar layout to Aldi and Lidl, with wide aisles, a ‘Fresh Five’ rotating selection fruit and veg and a ‘When it’s gone, it’s gone aisle’

centre aisle of home and garden wares. They were also quick to point out spelling mistakes on instore signage, with a picture of a ‘Confectionary’ display doing the rounds on social media. Dave Lewis commented: “Jack Cohen changed the face of British shopping. He’s an inspiration for all of us and that same spirit still drives Tesco now.”

next year, have now converted to the new platform. Lewis Alcraft, Commercial Director for PayPoint, said: “We’re delighted to have reached this significant milestone and that retailers continue to show a big appetite for adopting cuttingedge technology in their store.” PayPoint One is an all-in-one retail services platform which delivers cloud-based Epos technology and can process contactless card payments and PayPoint services.

GroceryAid names two new trustees Two leading industry figures have been appointed to GroceryAid’s Board of Trustees: Louise Stigant of Mondelez and Morrisons’ Helen Murray. Stigant replaces Mike Taylor, having taken over the reins as MD of Mondelez in June 2018. Murray joined Morrisons in 2013, where she is currently Special Projects Lawyer. Ruston Smith, Chair of GroceryAid Trustees, said: “We are delighted to have Louise and Helen further strengthen our

BUSINESS COSTS Retailers shouldn’t have to pay for reverse vending machines, says Federation

SGF seeks funding from Scottish government for DRS Scottish Grocers Federation is calling for the Scottish government to set up a new £50m investment fund to enable convenience retailers to meet the cost of a Scottish Deposit Return System (DRS). The proposal forms a key part of SGF’s submission to the Scottish government consultation on DRS, which will ultimately set the parameters for the system in Scotland. Based on the system in Norway, which provides a useful benchmark for Scotland in terms of population and geography, it is likely that Scotland will require 3,700 automated collection points. The new ‘Circular Economy Fund’ would enable retailers to meet the cost required to install a Reverse Vending Machine – the most efficient way of taking back containers. SGF Head of Public Affairs Dr John Lee said: “The Sottish government has stated that DRS should be developed in a way that addresses the specific needs of

small retailers – to deliver on this the government needs to establish this fund to guarantee that the system is established on a full cost recovery basis and that small retailers are not left at a competitive disadvantage with the big supermarkets.” SGF also argued that the body which runs the system should be controlled by industry, without government interference, and be comprised of both manufacturers and retailers. It is also developing a series of in-store trials of Reverse Vending Machines with its retail members and the main RVM manufacturers.

CRIME

Border raiders strike Co-op Ram raiders have used a telehandler stolen from a nearby farm to remove the ATM from the Co-op store in Gretna. Three balaclava-clad bandits struck in the early hours of September 20 before fleeing in a silver Vauxhall Vectra, also stolen. The car had been adapted to accommodate the cash dispenser. It is understood the ATM held a five-figure sum of cash. The telehandler, a versatile type of forklift common in the agriculture and construction industries, caused considerable damage to the front of the store, which opened in June last year. The police appealed for witnesses and are keen to speak to anyone who saw a forklift or a silver Vectra in the vicinity at the time of the robbery, around 2:45am.

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

SLR | OCTOBER 2018

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News WHOLESALERS Newly-formed buying group names team

Strong Scots presence in Unitas boardroom JW Filshill boss Simon Hannah has been John Schofield, Finance Director for named as Deputy Chairman of Unitas Today’s Group will act as Transformation Wholesale, the new buying group formed Director for the new entity, before retiring from the merger of Landmark Wholesale from the business in May 2019. and Today’s Group. Commenting on the appointments He takes up the role when the merger of Goldney and Mills, Sam Wilcox said: completes on November 1, with Blakemore “Darren and John have worked hard Wholesale MD Sam Wilcox filling the and collaboratively over recent months Chairman’s seat on the Board. to cut through previous organisational The board comprises eight member differences and focus on the vision and Directors from Today’s and eight from strategy that will work for both groups’ Landmark. These include Amaan Ramzan of Simon Hannah members and suppliers in the long term United Wholesale Grocers, Jim Cummiskey and both Boards thank them. of Failte Foods, George Hepburn from JWG, and United “Their complementary range of skills will be vital to Wholesale (Scotland)’s Asim Sarwar. drive our development agenda and bring the great Today’s Group boss Darren Goldney will pick up the experiences of both organisations together to form a new reins as Unitas Managing Director, with Landmark MD one.” John Mills taking on the deputy role. The appointments follow a resounding ‘Yes’ vote from Andrew Thewlis, Finance Director of Landmark members of Landmark Wholesale and Today’s Group for Wholesale; Today’s Group Trading Director John Baines; the two buying groups to join forces. Of those who voted, and its Retail Director John Kinney will continue in the 96% were in favour of the merger in a bid to stave off the same roles for Unitas. threat posed by widespread industry consolidation.

Camelot shakes-up lottery Camelot has revealed changes to its Lotto and EuroMillions draws, and announced preliminary details of a new annuity game that will launch next spring. On Lotto, new bigger, fixed cash prizes in the main game will replace the raffle. The Lotto jackpot will be won or shared more often and a new ‘Rolldown’ mechanic will see the jackpot shared across all winning cash prize tiers if no one matches all six main numbers in a must-bewon draw. On EuroMillions, the prizes on the main game will stay exactly the same, but Camelot will run more special draws in which multiple guaranteed £1m UK winners are created. To help fund these, every draw will only have one guaranteed UK millionaire instead of the current two. Subject to regulatory approval, a new annuity game is expected to offer a top prize of thousands of pounds every month for at

BUSINESS COSTS First Minister announces new Rates Bill

Business rates legislation on ScotGov’s agenda The Scottish Government has signalled its intention to introduce a Non-Domestic Rates Bill to implement recommendations from the Barclay Review. The announcement came as part of the First Minister’s Programme for Government, delivered during a speech to the Scottish Parliament (September 5). The Bill will propose moving to a three-year valuation cycle, improving administration of the system by reducing the number of appeals and improving quality of information available, and reforming reliefs and tackling known avoidance measures. The Scottish Government will also progress work on Barclay Review recommendations which can be implemented without the need for primary legislation. It will do this through an advisory Group, which will report later this year. The First Minister also confirmed that the Scottish Government will consult this autumn to restrict the

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promotion and marketing of targeted food and drink high in fat, sugar or salt as set out in the Scottish Government’s Diet and Healthy Weight Plan. A new Fair Work plan will see living wage, gender pay transparency and the exclusion of zero hours contracts become conditions for business support from St. Andrew’s House. A programme will be initiated to provide every business in every part of Scotland with superfast broadband. Looking at the bigger picture, the Programme for Government also set out a ‘national mission’ to reach the most ambitious long-term level of infrastructure spend ever in Scotland, with a commitment to invest an additional £7bn on schools, hospitals, transport, digital connectivity and clean energy by 2026. The First Minister also announced plans to bring forward legislation to establish a Scottish National Investment Bank.

APPOINTMENTS

least 25 years.

Stephen Brown to join CJ Lang

Nisa’s charity raises £10m for local communities

CJ Lang has named Stephen Brown as its new Head of Food-to-Go. He takes up his new post this month. Brown’s background and experience has been with David Sands, then latterly, Scotmid Co-op. He has been a key player for both companies in their development of Foodto-Go and Local Scottish Supplier sourcing initiatives as key points of market differentiation. Brown will report directly to CJ Lang’s Chief Executive Officer Colin McLean.

Nisa’s registered charity, Making a Difference Locally (MADL), has raised over £10m for local communities, it has been announced. As of the end of August, over £10.03m had been raised since the charity’s formation in 2008, buoyed by the changes made earlier this year to the way the charity is funded. Back in May, MADL introduced a new funding model whereby all branded products featured on the Nisa consumer leaflet would contribute to MADL – in addition to the existing contribution from all Heritage own label products – bringing in extra funds for retailers to donate locally. The significant milestone follows news recently that Nisa partners have supported local causes with over 10,000 donations over the last decade, in an already successful year for the charity.

OCTOBER 2018 | SLR

News WHOLESALERS Bestway boss to step down after 30 years with company

SRC seeks two-year freeze on headline poundage rate The Scottish Retail Consortium has warned that retailers could face an extra £18m on their annual rates bill from April 2019 if the ONS Consumer Price Index (CPI) maintains its current rate of 2.7%. The CPI figure is used this month as a basis for next year’s business poundage rate. If the Scottish Government chooses to make the calculation using RPI (currently 3.5%) instead, the figure could rise to over £23m. SRC Director David Lonsdale said it was “ridiculous” to consider further increases to property taxes paid by retailers given the current economic climate and called for a two-year freeze on the poundage in this year’s Scottish Budget.

Cyclists raise record amount for GroceryAid Over 90 industry colleagues have raised more than £105,000

Martin Race retires from Bestway Wholesale The finishing line is in sight for Martin Race, Managing Director of Bestway Wholesale, who has decided to retire from the role and will leave the business on November 30, 2018 to spend more time at home with his family. He will be replaced by Dawood Pervez, who will work alongside Race in the interim before taking up the reins on December 1. Race has spent his entire working life in Wholesale, 30 years of which with Bestway and Batleys. He started with the group as manager of Batleys Cleveland in 1988. After playing an instrumental role in the introduction of the Ab initio trading software into Batleys, Race became Operations Director in 2000. He retained this position through the Bestway takeover in 2005, playing

a significant role both during and after the takeover, helping to ensure as smooth a transition as possible without any major impact to the businesses. In January 2014 Race took over as Trading Director, before being promoted to Managing Director in July 2016. In this role he oversaw Bestway’s transformation to a modern wholesaler, driving consistent and strong profitable growth, as well as expansion. Martin Race commented: “I’ve thoroughly enjoyed the last two years as MD and take great heart from the improving performance of the business. I would like to thank the Exec, the larger leadership team and all colleagues for their support and hard work, but I feel that it is now time for a younger man to take the company forward and for me

to spend more time with my family. I have worked closely with Dawood for 13 years and am fully confident that he is the right man to lead the business forward and I wish him the best of luck in the future.” Pervez joined Bestway as a qualified solicitor in 2002. He has headed up various functions across the business including Legal, HR, L&D, Property, HSE and Marketing. He has played a key role in acquisitions and also established the group’s digital presence and export business. Most recently he has led the Trading department. Dawood Pervez said: “I am delighted to be succeeding Martin as the Managing Director of Bestway Wholesale, and I would like to thank him personally for all of his support over the years.”

for charity GroceryAid, by completing a three-day, 240-mile cycle to Paris from London. The sum marks a record total raised by the annual event, now in its 11th year.

BUSINESS COSTS Shopworkers union says its ‘time for better pay’

SUPPLIERS

Usdaw seeks minimum wage rise

Crunch meeting for KP SnacKPartners

The funds will help to provide 140 crisis grant payments for colleagues who’ve been thrown a curve ball in life and find themselves in need of support. The event returns in September 2019. Please contact events@groceryaid.org.uk or call 01252 875925 to register your interest.

Golden sprinter meets Spar’s community hero Dina Asher-Smith, triple gold medallist at the European Championships, has met Zahra Butt, a winner of Spar’s People’s Podium campaign, to present her with a cheque for £2,000. Butt, from Nottingham, is the UK’s first hijabi boxing coach and supports women who have struggled with domestic violence and gender inequality. She plans to invest her prize in training and developing more female boxing coaches in her

Shopworkers union Usdaw has called for a £10 per hour minimum wage for all workers over 18. The move came as the union’s General Secretary Paddy Lillis launched a ‘Time for Better Pay’ campaign. This also seeks minimum contracts of 16 hours per week for all employees who wish them; the right to a contract based on an individual’s normal hours of work; and an end to the misuse of zerohour contracts. Usdaw surveyed over 10,000 people working in retail and related sectors about to low pay, short-hours contracts and insecure work. Paddy Lillis, Usdaw General Secretary, commented: “As inflation continues to outstrip average earnings, low paid workers and their families

Paddy Lillis are under pressure to make ends meet. With many forced to claim in-work benefits and take second jobs, it’s clear that the Government’s socalled ‘National Living Wage’ is not a wage that people can live on. So our demand for a £10 an hour minimum is fair and reasonable.” Short-hours contracts were just as exploitative, Lillis added. “One in four of the workers we surveyed are contracted for just 16 hours or less per week. Many workers are regularly working extra hours that aren’t guaranteed in their contracts, leaving them extremely vulnerable.”

The KP’s SnacKPartners ambassadors met recently in Birmingham to participate in the group’s fourth annual forum. The event featured leading independent and symbol group retailers like Dee Sedani and Raj Aggarwal, alongside a panel of expert speakers that included Tolga Necar, Out of Home Consumer Insight Director at Kantar. The forum focused on building a two-way dialogue with retailers, while shedding light on recent changes to KP Snacks’ own offering and putting this in the context of broader developments in the sector. Discussions from key figures at KP Snacks covered the acquisition of Popchips and Tyrrells, product performance by channel and guidance around maximising on-the-go sales. The SnacKPartners forum is designed to champion retailers by giving them a voice on the KP product pipeline and merchandising. Ambassadors receive an exclusive look at upcoming NPD, fresh insights from the KP business and impartial category advice on the snacking market.

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

SLR | OCTOBER 2018

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News WHOLESALERS Keeping a lid on costs helps JW Filshill deliver a year of growth

Sale of hundreds of Asda and Sainsbury’s stores on cards to satisfy watchdog Asda and Sainsbury’s could be forced to sell over 460 stores before a merger between the two grocery giants can go ahead. The Competition and Markets Authority said there was a “realistic prospect of a significant lessening of competition” in 463 areas of the UK where stores’ catchment areas overlapped. The statement formed part of the competition watchdog’s decision to fast-track the proposed merger for an in-depth Phase 2 investigation, which both companies had requested.

Filshill grows margin and turnover in ‘challenging’ convenience marketplace JW Filshill has attributed strong cost controls, a targeted strategy to offset the decline in tobacco sales and the impact made by its international craft beer and spirits business for an increase in both margin and turnover in its latest financial year. The wholesaler saw turnover increase 1.9% to £145m in the year ending January 31, 2018, up from £142m the previous year. Trading in an independent retail sector that remains “highly competitive” and despite Filshill’s strong performance in its food and

drink business, operating profit dipped as the firm incurred higher overheads as it diversified its product mix to offset the continuing decline in the tobacco market. Filshill boss Simon Hannah said the group had delivered constant growth throughout the year in a market that remains challenging. “Consolidation in the sector is fast,” he said. “However, we are well positioned to continue to take advantage of the opportunities we are creating and deliver growth. “Turnover, when compared to the

The final number of stores that have to be sold may be greatly reduced; the CMA initially flagged up 369 areas of concern over Tesco’s merger with Booker, but in the end no stores were offloaded before that deal went ahead.

Scotmid pets its money where its mouth is Scotmid Co-operative has named

previous year after adjusting for the continuing market-wide decline in tobacco revenue, showed adjusted growth of 6.7%,” Hannah continued. “The strong performance in nontobacco categories – including soft drinks, grocery, food-to-go and fresh and chilled foods – and this change in the mix of business, helped to drive up gross margin, with the uplift during the year 6.6%.” Pointing to cost control as a key focus of the business, he said: “Recent changes to the living wage, pension regulation and fuel prices continue to drive up our cost base but we continue to focus on off-setting these increases through a constant drive in improving operational efficiency and maximising our use of technology and data.” He concluded: “The independent retail trade remains highly competitive and challenging and we seek to manage the principal risk of losing customers by aiming to deliver best-in-class customer service.”

the Scottish SPCA as its 2018/19 Charity of the Year. The partnership between Scotland’s animal welfare charity and the community retailer aims to not only raise £300,000 but also increase awareness of the work the charity carries out in local communities across Scotland, with a particular focus on educating primary schoolchildren and adults on animal welfare. It’s highly likely the target will be reached: the community retailer raised £315,000 for its current charity partner Samaritans during a year-long fundraising drive.

Kent spent prize on refit A first-time store owner from Leicester won £5,000 after taking part in Lucozade Ribena Suntory’s £60,000 independentsonly giveaway. Richard Kent’s Nisa Local opened its doors in January. “This money meant we could do a store refit and revamp our

HEALTH Symbol group includes Healthier Scotland logo in leaflets

Nisa backs SGF’s healthy living initiative Nisa has teamed up with the Scottish Grocers’ Federation Healthy Living Programme to help promote healthier eating among shoppers. The delivered wholesaler and convenience retailer is the first symbol group to support the initiative in its consumer leaflets with the inclusion of the Healthier Scotland logo being used to identify those products which are healthier options. Nisa retailers have been championing the scheme for some time, many using Healthy Living Programme shelf edge labelling, shelf talkers and other point of sale material to highlight fresh produce and other healthier products as well as displaying fresh produce on branded healthy living stands. John Drummond, from the Healthy Living Programme, said: “We are really delighted with how well we

have worked together with Nisa on the consumer leaflets and that they are supporting the scheme. “Each of our development managers work with Nisa retailers and have very strong relationships with them. They are involved in events held in store and the participation is good.” Nisa partner and SLR Reward winner Harris Aslam supports the Healthy Living Programme across his stores and has been involved in previous Healthy Living Days and Big Breakfast events. He said: “We work with our retail development manager and the Scottish Grocers Federation to support the Healthy Living Programme wherever we can. It’s a great way to get our customers involved and events involving schoolchildren are especially well received.”

CHARITY

Record-breaking gingerbread man helps GroceryAid A new Guinness World Record was set at the Great North Run last month by Ian Pickett, Senior Partner at Drayton Partners. He set the fastest time for completing a half marathon in a gingerbread man costume. His time of one hour and 29 minutes smashed the previous record by 72 seconds. Pickett’s lung-bursting effort raised over £1,500 for industry charity GroceryAid. He said: “It was certainly a challenge in the heat and keeping the costume in one piece, but it was worth it.”

shop,” he said. KEEP UP WITH THE LATEST NEWS AS IT HAPPENS – FOLLOW US ON TWITTER @SLRMAG

SLR | OCTOBER 2018

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News Extra

Shop prices | Inflation Returns

NewsExtra SNEAK A PEEK AT PREMIER’S STORE OF THE FUTURE – P30 SHOP PRICES BRC-Neilsen Index records second month of price growth

Convenience Matters with the SGF The Scottish government has just launched the latest proposals in its never-ending assault on the convenience store sector and the way we do business. The new threat is to heavily restrict the in-store promotion of foods deemed to be high in fat, salt and sugar. An additional menace – which is rearing its head yet again – is to ban the display of confectionery and similar products at till points. The overarching context is the war on snacks. Bizarrely, the proposals at one point threatened to put an end to free poppadoms and prawn crackers given away as part of a takeaway or in a restaurant. The Scottish government then made a swift u-turn in response to a barrage of criticism over that particular point. Little evidence is offered to justify any of this and the proposals totally ignore key issues such as the importance that things like lifestyle change, education and physical exercise exert on people’s food and nutrition. choices. But the direction of travel has been clearly set out. Unfortunately, we have to face the fact that, in terms of policy and regulation coming from the Scottish government, we are now firmly in a ‘posttruth’ environment where the facts and the evidence have little or no value or relevance. How should we respond? We have always based our ‘pushback’ on evidence and rational argument. Maybe the time has come to humanise our response. What hurts a convenience store hurts the local economy, hurts our communities and hurts the social environment. We need to find a way of hammering home the impact on real people, real jobs and real local businesses.

SLR | OCTOBER 2018

INCREASING SHOP PRICES SET TO WEAKEN CONSUMER DEMAND?

After five years of deflation, shop prices have begun to creep up at a time when shoppers’ budgets are tighter than ever.

After five solid years of deflation, the retail industry’s latest BRC-Nielsen Shop Price Index of the 500 most commonly bought products shows that prices at tills nudged up again last month, the second consecutive month of price growth. In September, inflation inched up to 0.2% from 0.1% in August, while food-specific inflation was steady in September at 1.9%. Fresh food inflation accelerated to 1.6% in September from 1.5% in August, while ambient food inflation slowed to 2.4% in September from 2.5% in August. The report puts the inflation down to unusual weather patterns in the first half of the year, higher global food costs and fears that inflation will soften consumer demand. David Lonsdale, Director of the Scottish Retail Consortium, said: “The industry is working hard to keep prices down, but with higher global food commodity prices and other costs, retailers are regrettably now being forced to pass some of this on to customers. “Consumer demand has proven a reliable source of economic growth but this will be tested as price inflation, higher interest rates, and the planned further rise in statutory minimum pension contributions next spring take a bite out of shoppers’ purses. “That’s why support for consumers ought to be at the heart of the devolved government’s Budget, with income tax rises ruled out and the introduction of a zero-rate income tax band accelerated. With half of VAT receipts being assigned to Holyrood from next year, MSPs have a direct stake in improving

consumer sentiment and a flourishing retail industry.” Helen Dickinson, Chief Executive of the British Retail Consortium, said: “Global commodity conditions, in particular oil prices, would indicate that there are likely to be further inflationary pressures in the short to medium term which could lead to further price rises. “This would be worrying enough for hard-pressed British consumers if we weren’t staring down the barrel of a ‘no-deal’ Brexit. Food prices alone have now been inflationary for more than a year and the BRC estimates that consumers could face up to a 29% increase in prices of products such as beef in the event of a ‘no-deal’. “Time is running out for the Government to deliver a Brexit deal with a workable backstop arrangement and a clear transition period. This is not good news for UK shoppers who, out of all the stakeholders in the Brexit process, ultimately have the most to lose.” Mike Watkins, Head of Retailer and Business Insight at Nielsen, added: “Despite the return of wage growth across the economy, there continues to be pressure on the consumer wallet in particular from higher energy and travel costs. “The good news for shoppers is that Shop Price inflation continues to lag the Consumer Price Index and, with the start of the Golden Quarter and uncertainty around the underlying demand on the high street, retailers have been absorbing supply chain increases. Looking ahead we expect shoppers to maintain their grocery spend by making savings elsewhere in their overall household expenditure.” www.slrmag.co.uk

Comment

CBD – WHAT’S IT ALL ABOUT? EDITORIAL

Our cover story this month is an interesting one. Granted, we try to make all our cover stories interesting, but this one is special because it highlights an opportunity that as far as I can make out is going largely unnoticed by local retailers in Scotland. Talk to most retailers about CBD and the response is either ‘What?’ or ‘Is that the legalised cannabis stuff?’ Or words to that effect. Which is strange, given that in the United States it’s becoming a gargantuan category and even down south there is some real momentum building. First, the basic facts. CBD is an acronym of sorts for cannabidiol, one of the very many cannabinoids found in the marijuana plant. Of these cannabinoids, only two are worth talking about here. The second one, and that one that may be more familiar, is tetrahydrocannabinol – or THC as it’s better known. As any good stoner will tell you, THC is the stuff that gets you high. By law, CBD products on sale in the UK are not allowed to contain THC or, to be more precise, they must contain no more than 0.2% TCH. In other words, and to answer the most frequently asked question: no, CBD won’t get you high. But this fact is far from common knowledge and perhaps underpins the reluctance of the local retailing sector to embrace the category. In fact, if you talk to CBD brands like Hamilton-based Hope CBD (who happen to sponsor the stadium of my beloved Hamilton Accies), they tell you that the vast majority of their customers are people with inflammation-based pain such as fibromyalgia, arthritis and multiple sclerosis. Indeed, Hamilton Accies Chief Executive Colin McGowan, a director of Hope, has taken a lot of ill-informed flak over the renaming of the stadium from people concerned that the club is promoting drug abuse. McGowan’s wife happens to suffer from fibromyalgia and saw her life transformed after starting to treat it with CBD, hence his bold decision to brave the public ordeal in order to get the CBD message out. Don’t forget too that Holland & Barratt was the first major retailer to start selling CBD over the counter, and they did that over a year ago. While CBD producers are prohibited from claiming that CBD will help treat inflammationbased ailments, a quick internet search will tell you all you need to know about how effective many people find CBD to be in managing chronic pain. Anecdotally, there also appears to be a growing use of CBD to treat anxiety and depression, as well as epilepsy. Now that we’ve got all that straight, it’s time to get down to business. And there is a very good chance that CBD will be big business over the next few years. CBD lines typically retail at anything from £30 to over £100 and the margins are exceptional. They also tend to benefit from extreme customer loyalty. Over 600 companies with ‘CBD’ in the title have been registered at Companies House this year alone. This market is not going away any time soon. The time to embrace it is now.

ANTONY BEGLEY, PUBLISHING DIRECTOR

SLR | OCTOBER 2018

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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•The Craft Beer category is worth £7.4m and is growing value at +24% year-on-year.* •Brooklyn Beer is growing value at +36% year-on-year.** •Brooklyn 355ml bottle sales are +29%*** and are one of the top 10 best-selling Craft SKUs in Impulse.**

ADD BROOKLYN TO YOUR RANGE AND TAKE ADVANTAGE OF THIS GROWING BRAND! STOCK UP NOW *Nielsen ScanTrack data, MAT to 16/6/18, Total Impulse. **Value Sales. Nielsen scan track data, MAT to 16/6/18, Total Impuls. ***Volume Sales. Nielsen Scan Track data, MAT to 16/6/18, Total Impulse.

Cover Story

CBD

CBD:

THE NEXT BIG OPPORTUNITY? With global giants like Coca-Cola and Molson Coors embracing CBD and an increasing number of suppliers entering the fray, is it time local retailers in Scotland got in on the ground floor? BY ANTONY BEGLEY

Matthew Moden

SLR | OCTOBER 2018

C Craig Johnston

annabis. The very word is enough to provoke a strong reaction in most retailers, either a positive one or a negative one, depending upon their views and life experiences. No one is ambivalent when it comes to cannabis, so you can expect a fair amount of forthright reaction to the potential introduction of a new product category that is heavily linked to it. Welcome to the challenge of bringing the CBD category to local retailing stores in Scotland. But if it’s such a controversial area, why are global giants like Coca Cola and Molson Coors showing lots of interest in CBD? Molson Coors has recently gone as far as forming a joint venture with HEXO, a recreational cannabis brand from Quebec to make nonalcoholic, cannabis-infused drinks for the Canadian market. Do Coca Cola and Molson Coors know something we don’t? Probably. But there’s a long way to go in the UK before CBD becomes mainstream. Ask a load of retailers what they think of CBD as a potential growth area in local retailing in Scotland, as I have done, and you generally get one of two responses:

1 What’s CBD? 2 Cannabis? I don’t want a load of stoners coming to my shop So, first things first. What is CBD? Well, CBD is an acronym for cannabidiol, one of over 100 different ‘cannabinoids’ found in the cannabis plant. The other famous cannabinoid found in cannabis is tetrahydrocannabinol, or THC as any good stoner will be able to tell you. THC is the psychoactive chemical that gets you high. To answer the obvious question, no, CBD won’t get you high. By law, CBD products sold in the UK must contain no more than 0.2% THC. That’s the first myth dispelled, as Craig Johnston, co-founder of Hamilton-based Hope CBD comments: “I think lots of retailers are worried that selling CBD is going to attract a lot of stoners to their store when in fact it’s far more likely to attract people with a range of ailments both minor and serious.” It’s also no coincidence that Holland & Barratt was the first major retailer in the UK to start selling CBD lines over the counter – and that was more than a year ago. The health food retailers is hardly the sort of business to court controversy and, indeed, CBD lines are officially classified as food supplements. Hope CBD recently took over the www.slrmag.co.uk

CBD

Cover Story

CBD: THE LOWDOWN WHAT IS CBD? CBD, or cannabidiol, is a chemical found in the cannabis plant that is part of a group of chemicals called cannabinoids. The cannabis plant contains over 100 cannabinoids with the two best known being CBD and tetrahydrocannabinol (THC). It’s THC that gets you high. SO CBD WON’T GET ME HIGH? No, CBD is non-psychoactive so does not cause users to feel high or ‘stoned’. IS IT LEGAL? Yes, CBD products are legal as long as they contain no THC. Or, to be more precise, as long as they contain no more than 0.2% THC. WHAT IS CBD USED FOR? CBD is a significant research topic in the scientific community and has been linked to a number of effects such as reducing inflammation, pain and anxiety.

sponsorship of the stadium of Scottish Premier League team Hamilton Accies whose Chief Executive Colin McGowan – Johnston’s co-founder in Hope – became a convert to the CBD cause a few years back when his wife successfully used CBD products to treat her fibromyalgia. “If you visited the Hope CBD shop in the stadium on a match day, you’d see that we get a lot of customers but probably not the type you’re expecting,” says Johnston. “People use it to treat a whole range of conditions and while we are unable to make any health claims for CBD products, we know that CBD is non-psychoactive and non-addictive and has been shown to provide many benefits. We always advise our customers to do their own research on the benefits.” That research will throw up endless examples of people successfully using CBD to treat a whole array of serious ailments and conditions including fibromyalgia, arthritis, epilepsy and anxiety. Another company embracing CBD is Liberty Flights, the vaping specialists who have recently formed Eden CBD, a separate company specialising in the area. Liberty Flights Managing Director Matt Moden told SLR: “We believe that the CBD market will potentially have an even greater www.slrmag.co.uk

ARE THERE ANY SIDE EFFECTS? Side effects of CBD use have been studied and reported side effects have included drowsiness, low blood pressure and light-headedness but it is widely believed that at low doses CBD is tolerated well by the body. IS IT ADDICTIVE? No. WHICH FORMATS IS CBD AVAILABLE IN? You name it, you can find a CBD version these days. Soft drinks, lollipops, teas, beers and vaping liquids, to name but a few. HOW DO SHOPPERS USE CBD E-LIQUIDS? CBD e-liquids are for use exclusively in vape devices. As with nicotine containing e-liquids, the amount or frequency of use is completely up to personal choice. Most suppliers advise to start slow with a low dose then grow from there. CAN THEY MIX IT WITH OTHER E-LIQUIDS? No. Products should always be used in the clean tank with a new coil. It should not be mixed with other e-liquids. CBD e-liquids are best suited to lower powered devices with cotton wicks.

OCTOBER 2018 | SLR

Cover Story

CBD

“We believe that the CBD market will potentially have an even greater disruptive impact than vaping did.” MATT MODEN, MD, EDEN CBD

disruptive impact than vaping did when it arrived nine or 10 years ago.” Moden draws a number of parallels between the CBD and vaping categories to justify that belief. He explains: “In its embryonic phase, vaping’s growth was held back by misinformation – “it’s worse for you than cigarettes” – which is something we’re seeing with CBD, such as the misconception that it is the same as cannabis. Both require an educational approach in order to convey the correct messaging. Similarly, both sectors are

prohibited from making medicinal claims, yet many people who engage with both products have benefitted from doing so.” Indeed, the scientific evidence for both categories increasingly looks overwhelming and it may only be a matter of time before this is accepted by the regulatory authorities in the UK. Liberty Flights has been among the first recognised vaping brands to get to launch stage with a market-ready set of CBD products. “It takes a long time to jump through the

CBD IS GOING GLOBAL WE MAY BE SLOW TO ADOPT CBD IN THE UK, BUT MANY GLOBAL BRANDS ARE ALREADY AHEAD EMBRACING CANNABIS:

Molson Coors has formed a joint venture with recreational cannabis brand HEXO to make non-alcoholic, cannabis-infused drinks for the Canadian market.

Coca-Cola is reportedly in talks with Canadian company Aurora Cannabis to produce drinks enhanced with CBD.

Constellation Brands has acquired a stake in Canopy Growth, a Canadian medical marijuana company.

Heineken-owned Lagunitas Brewing has unveiled a THC-infused sparkling water for sale at California dispensaries.

SLR | OCTOBER 2018

various hoops to bring a CBD product to market,” says Moden. Under its Eden CBD arm, Liberty Flights offers a range of CBD vaping liquids and Moden says the company is actively looking into launching a range of other formats including edible, topical and beverage options. Another interesting point that Moden makes is that Google searches for the term ‘CBD’ now dwarf those for nicotine-based e-liquids. He comments: “The CBD market in the US is immense, around $10bn, and the European market is somewhere around the €5-6 bn mark. We are very confident that demand will rise dramatically in the UK and it’s up to local retailers to be ready when it does.” While it is difficult to get hold of reliable figures for the UK market, one estimate is that the category is currently worth around £50m a year but virtually all estimates rate the size of the market by the end of this decade in the billions of pounds. Bearing in mind the local retailing sector’s frankly abysmal attempts in the vaping category – only securing about 15% of the £1bn market – does this new opportunity offer a fresh chance to steal a march on our competitors in a category that’s potentially even bigger? www.slrmag.co.uk

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News

Products

Ginsters gets makeover Ginsters of Cornwall has unveiled its new-look sandwich

ProductNews

range, which features a contemporary design inspired by the latest food-to-go trends. The design roll-out is spearheaded by new product launches, including Ginsters Chicken, Bacon & Stuffing sandwich, Ginsters Just Ham sandwich and Ginsters Just Cheese sandwich. For

BREW UP DECENT PROFITS WITH YOUR HOT DRINKS OFFER – P48 MEAT SUBSTITUTES 12 new products from Quorn

Quorn launches NPD blitz and new TV ad

consumers seeking a bigger eat, Ginsters has added two new sub rolls to its range – available in Chicken & Bacon and Ham & Cheese flavours.

Urban Eat launches two new seasonal sandwiches Sandwich brand Urban Eat has unveiled two limited-edition autumn seasonal specials as part of its expanded collection. These are Squash’d – roasted butternut squash with caramelised onion chutney and rosemary mascarpone – and Herby Chicken – roast chicken

Quorn has unveiled a raft of new product development ahead of the airing of a new national TV commercial. The brand is introducing 12 new frozen and chilled products this autumn, covering a wide range of meal and snacking occasions. In addition to launching new versions of its ready meals, including dishes such as Love It Lasagne,

Tantalising Tikka Masala and Comforting Cottage Pie, Quorn is introducing flavours from around the world with new products such as Moroccan Pieces & Cous Cous, Creamy Laksa Curry and Kicking Cajun Fillets. The 12-strong line-up also includes new Mixed Grill, seasonal Cracking Cranberry Balls, a Texan Ranch Chilli and a Bratwurst. The NPD drive will be backed by a new Tikka Masala Ready Meal TV commercial (pictured) which runs throughout November. It forms part of a £14m investment in the brand this year. Quorn said it was giving consumers “the chance to take their taste buds on a memorable journey around the world”.

breast with herby houmous, tomatoes, Regato cheese, mayonnaise and salad leaves Both are available now until November 4 from RSP £2.79. Isla Owen, Head of Brand at Adelie Foods, said: “With both products on a limited-edition run, we think that their comforting flavours will prove a hit with shoppers.”

Baxters soups up charity donations Baxters is donating a proportion of sales from its Favourites soups to charity partner Macmillan Cancer Support, to mark the food brand’s 150th anniversary. A donation of over a penny will be made to Macmillan for every tin purchased from a range of 14 Baxters Favourites soups, including Cream of Tomato, Chicken Broth, Scotch Broth, Cock-A-Leekie, Chicken and Vegetable, and Minestrone. The limited-edition Baxters Favourites soups are available

CONFECTIONERY

Cadbury launches Dairy Milk Remembrance Bar Cadbury is marking 100 years since the end of the First World War by releasing a limited-edition Dairy Milk Remembrance Bar in partnership with the Royal British Legion. The 360g bar (RSP £4.23) bears the same wrapper design as Cadbury Dairy Milk sold during the war but adorned with poppies, the symbol of remembrance. From every bar sold, 30p will be donated to the Legion, supporting the British Armed Forces, veterans and their families. In addition to this financial contribution, Cadbury is supporting the Legion through a year-round calendar of fundraising events and activities. Cadbury is also supporting the Legion’s Thank You movement, which aims to thank all who served and sacrificed during the First World War. The brand will be sharing the stories of its workforce who supported the war effort on the battlefield and the home front. These include the ‘Cadbury Angels’, women who took up roles within the business during war time and sent almost 30,000 care packages to men serving on the frontline. Beth Cameron, Brand Manager for Cadbury said: “The remarkable stories of the Cadbury workforce 100 years ago have shaped the business we are today and are particularly important for us to remember at the centenary of the end of WWI.”

SOFT DRINKS

Britvic offers two cans for £1 Britvic has launched a new mix and match promotion that offers two 330ml cans for £1. The promotion runs across the Britvic and PepsiCo portfolio including Pepsi Max, Pepsi Max Cherry, Diet Pepsi, Pepsi Max Ginger, 7Up Free, Apple and Orange Tango cans, which are all price marked at 59p or 2 for £1. The promo gives retailers a 40% POR and follows a similar £1.70 multi-buy PMP deal for two PET bottles. Trystan Farnworth, Commercial Director, Convenience & Impulse at Britvic, saide “The promotion on bottles has been really successful, eight million bottles sold in symbols and independents this year – that equals fifteen sold every minute! “To support the promotion, we have a range of POS toolkits available which feature our can range, PMP and the mix and match messaging.”

from wholesalers with an RSP from £1.10. KEEP UP WITH THE LATEST NEWS AS IT HAPPENS – FOLLOW US ON TWITTER @SLRMAG

SLR | OCTOBER 2018

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Products

News

Happy Egg Co brings ray of sunshine to Free Range The Happy Egg Co. has transformed its entire range to offer eggs much richer in Vitamin D as part of a brand refresh.

CONFECTIONERY Retro sweet maker launches festive line-up

Tangerine in your stocking this Christmas? Tangerine Confectionery has unveiled its Christmas confectionery offering, which this year includes festive sharing tubs and new formats of its most iconic brands. The seasonal resealable 750g Barratt Tub has an RSP of £4 and contains classic consumer favourites including Dip Dab, Refreshers, Fruit Salad, Black Jacks, and mini bags of Milk Bottles, Shrimps and Bananas. The tub also includes newer sweet formats, including Fruit Salad Softies, a soft gum variation on the original chew. The new tub is an upgraded format from last year’s carton, and Tangerine expects it to sell in droves. The Barratt Retro Tub (RSP £3, 630g) offers an alternative option at a lower price point for shoppers and includes only the most iconic retro brands in the Barratt portfolio. Wham and Fruit Salad are launched in a new tube format (RSP £1, 105g) designed to drive impulse

sales and appeal to consumers on the hunt for stocking fillers. The Liquorice Novelties box (RSP £3.49, 270g) was Tangerine’s second bestselling sharing product in 2017 and returns by popular demand, after growing at 66% year-on-year. Russell Tanner, Marketing and Category Director at Tangerine Confectionery, said: “Barratt is at the forefront of the market and the upgraded seasonal range offers a host of family favourites, with options perfect for all occasions, including sharing, gifting and stocking fillers. We expect the Barratt tubs to fly off shelves this year, offering a great selection of retro classics, suitable for confectionery lovers of all ages.”

SOFT DRINKS Coca-Cola GB signs its first multi-brand sponsorship deal

Coke unveils Premier League partnership

The range now contains 28% more Vitamin D, also known as the sunshine vitamin, per 100g than standard eggs and is available now. An updated packaging design showcases the new Vitamin D credentials, as well as a new ‘full of natural tasty goodness’ proposition. The refresh is supported by major marketing investment.

Chiquita turns pink again Building on the success of last year’s campaign, Chiquita is once more turning the blue stickers on its bananas pink in a bid to raise awareness for breast cancer. Commencing in October to coincide with the annual international Breast Cancer Awareness month, more than one million bananas will receive the new stickers, which feature a pink ribbon added to the brand’s Miss Chiquita logo.

Kingsmill gives 50/50 loaves a vitamin boost Kingsmill has extended its 50/50 range with the launch of Kingsmill 50/50 Vitamin Boost. The 750g loaf (RSP £1.15) contains iron, calcium, niacin and vitamins B1, B6 and D. The launch is supported as part of a national marketing campaign for the whole Kingsmill brand with Heart radio. A seven-month partnership sees Kingsmill featured on the station in a multi-format approach.

Glasgow bakery shakes up Cakes category Cake, the Glasgow-based bakery owned by wholesaler Lomond, Coca-Cola Great Britain (CCGB) has announced

The company has plans for a number of physical

a new three-and-a-half-year partnership with the

and digital activations including a nationwide

Premier League, starting in January 2019.

Premier League trophy tour.

has launched a range of triplelayer cocktail-themed cakes. The alcohol-free handmade

It is the first sponsorship CCGB will activate

CCGB’s General Manager Jon Wood said: “The

cakes use free-range eggs and

across multiple brands, showcasing a range of

partnership gives us an opportunity to showcase

are come in 100% recyclable

drinks including sparkling soft drinks, water and

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packaging. The range includes

fruit-based drinks, with low and no-sugar options.

awareness of our no sugar drinks.”

Strawberry Bellini, White Russian, Blueberry Mojoto and Gin, Lemon & Lime.

www.slrmag.co.uk

OCTOBE 2018 | SLR

News

Off-Trade

Off-TradeNews TURN SNIFFS INTO SALES WITH MEDICATED CONFECTIONERY – P46 SPIRITS Isle of Harris Distillers triumphs at awards ceremony

Top Scottish gins revealed Q: I’ve received a letter from the licensing board asking for my views on its new policy statement and overprovision assessment. Should I respond? A: Yes – it is very important, as the policy will govern how the licensing board deals with applications for at least the next four years. You may wish to pay particular attention to a board’s proposed 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, i.e. it might curtail your ability to refurbish an existing store to have an enhanced alcohol offer or open a new licensed store. If the boards do not get responses from retailers their policy may not reflect your needs. It is critical to have your say now. If you are unsure how to do a response contact a licensing solicitor well in advance of the response deadline. Q: I’ve heard that there should be a personal licence holder on duty in the store at all times when I’m selling alcohol. Is this true? A: No, there is no legal requirement for a personal licence holder to be on duty at all times. A personal licence holder (i.e. your designated premises manager who must have a personal licence) is required to authorise the sale of alcohol. Importantly the law allows for a general authorisation, i.e. each sale does not need to be authorised but training and sign off for all staff must be provided. To put the matter beyond doubt you may wish to have the premises manager sign a declaration for each staff member confirming that they are authorised to sell alcohol. This can be held with the records of the two hours mandatory training.

Isle of Harris Distillers claimed the Scottish Gin Distillery of the Year crown at the second annual Scottish Gin Awards, held in Glasgow on September 20. It was also a good night for Eden Mill, which won five awards. Its Original Gin was victorious in the London Dry gin category before taking the top taste award of Gin of the Year. The St Andrews-based distiller also won business awards for Excellence in Marketing and Export and a bronze medal for its Oak Gin in the Cask/Aged Gin of the Year. Other winners were Edinburgh Gin, which took the title for Growth Business and Innovation of the Year for Edinburgh Gin 1670, a collaboration with the Royal Botanic Gardens in Edinburgh. It won

silver and bronze taste medals for its Cannonball Navy Strength gin and its Pomegranate and Rose liqueur. Alloa-based Boe Gin won gold, silver and bronze medals for its Boe Scottish Bramble Liqueur, Boe Scottish Gin and its Peach & Hibiscus liqueur respectively. McQueen Gin from Callander also enjoyed success for its flavoured gins, winning gold for its Mocha Gin in the speciality category and bronze for its Spiced Chocolate Orange gin. The awards also raised funds for Edinburgh-based charity, It’s Good 2 Give, which last year opened a respite home in the Trossachs for families who have children with cancer. RTDs Portman Group not impressed

IRISH WHISKEY

Jameson returns to TV with Jo’burg heist ad

Pernod Ricard’s Irish Whiskey brand Jameson has made its return to TV for the first time in seven years with a £1.2m campaign. The 40 second advert is aimed at the brand’s target 25-34-year-old male audience and is based on a true story. It reconstructs a warehouse robbery in Johannesburg, in which valuable goods were left behind and only crates of Jameson stolen. The campaign follows Pernod Ricard’s pledge to spend 50% more on its key brands in the run-up to Christmas. Jameson has experienced strong growth over the last year increasing in value (+14.3%) across the off- and on-trades. Adam Boita, Head of Marketing Pernod Ricard UK, commented: “We want to drive further awareness of the Jameson brand identity plus its great taste, and we believe the true story element and cinematic style will engage our target audience.”

Slingshots faces name change after complaint The Portman Group’s Independent Complaints Panel has upheld a complaint concerning Global Beverage Brand’s dual-flavoured Slingshots RTD. The complaint was upheld under Code rule 3.2(g), which states that a drink or its packaging should not in any direct or indirect way urge the consumer to ‘down’ a product in one go. Given the product’s shot-style packaging, the Panel found the name ‘Slingshots’ had strong connotations with a ‘slinging it down’ style of consumption. A complaint that the product was aimed at an under-18’s audience was rejected because the packaging contained nothing that the Panel judged would overtly appeal to children. The Panel also noted that while advice had been sought from the Portman Group’s Advisory Service by the producer, not all of it had been followed.

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

SLR | OCTOBER 2018

www.slrmag.co.uk

Off-Trade

News

Snap’s the way to do it Carlsberg has unveiled a new packaging solution that replaces the plastic rings that hold sixpacks together with a series of glue dots that can be snapped apart but are robust enough to

WINE Festive fizz from Echo Falls

Accolade prepares for party season with Prosecho Falls

withstand transportation to and

Accolade Wines has responded to the continuing growth of the market for fizz with the introduction of a prosecco to its Echo Falls range. Echo Falls, Accolade’s second-largest brand, will launch ProsEcho Falls (75cl, ABV 11%) at an RSP of £10 in late October to meet Christmas demand. A 20cl mini format will also be available. “The prosecco market is now worth £617m annually to the UK offtrade, with 4.5% growth year-on-year and 81.6% of this growth has been incremental to the wine category”, said Laurence Hinton, Brand Manager for Echo Falls.

Glengoyne Highland Single Malt

“Prosecco has been successful at attracting new shoppers to the category but with prosecco penetration at only 32.8% of the population, there’s still plenty of room for growth.” According to Accolade Wines, the average Echo Falls shopper spends £49.18 on prosecco annually, buying it six times a year. The last 12 months has seen a raft of activity for the brand, with the launch of Echo Falls Summer Berries flavoured Vodka, Festi Falls wine on tap and the sponsorship of ITV2’s most successful TV show, Love Island.

from stores. The ‘Snap Packs’, exclusive to Tesco until March, should cut plastic waste by around 1,200 tonnes annually.

Gongs galore for Glengoyne Scotch Whisky picked up a total of four awards at two recent industry events, The Spirits Business Luxury Masters and the Scotch Whisky Masters.

Michelob Ultra returns AG InBev has relaunched Michelob Ultra in the UK in 355ml cans. The 3.5% ABV beer proved a flop with consumers in 2003, but has been brought back in response to growing demand for no- and low-alcohol brews.

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

www.slrmag.co.uk

OCTOBER 2018 | SLR

News

Newstrade

McCloskey leaves NFRN Margaret McCloskey, the Head of Operations at the NFRN, has left

News& Magazines

the organisation after 21 years to join business-led organisation Business in the Community as a Director.

THE BEST OF SCOTTISH BRANDS – P54 NEWSPAPERS Profits plunge for Newsquest

Herald publisher posts £7m loss Leading Scottish news publisher reports £7m pre-tax loss as a result of poor print advertising and falls in circulation.

In 2012 McCloskey was promoted to Head of Operations and has led a team of retail development managers and retail support managers and was instrumental in creating a range of new benefits and services for NFRN members.

DC Thomson adds 50 titles

Newsquest (Herald and Times), one of Scotland’s main news publishers, has reported a £7m pre-tax loss for last year, a sharp drop in financial performance over the £4.8m profit made the previous year. The company, which controls the Herald and Evening Times in Glasgow, saw revenues fall 4% to £42.9m, driven by slow sales in print advertising and falling circulations.

Staff numbers fell from a monthly average of 392 in 2016 to 364 last year and the Sunday Herald was recently closed after 19 years, replaced with the Herald on Sunday and the Sunday National, a Sunday version of its pro-independence title. Official circulation figures showed a fall of 10% in average daily sales for The Herald to 25,900, while the Sunday Herald was down 13% to 18,400.

Similarly, The National saw a 9% fall in daily sales to 7,800. ABC daily circulation figures Q The Herald – down 10% to 25,900 Q Sunday Herald – down 13% to 18,400 Q The National – down 9% to 7,800

Dundee-based publisher DC Thomson, which owns the

NEWSPAPERS

Courier and Press & Journal

Scottish Sun launches £1m Books for Schools initiative

newspapers as well as 24 magazines including the Beano and My Weekly, acquired rival firm Aceville and its 50 magazine titles ranging across crafts, food, health and gardening. The deal puts the family firm in Britain’s top five magazine publishers.

NFRN President calls out Home Secretary on crime NFRN National President Mike Mitchelson has challenged Home Secretary Sajid Javid on police response and the performance of Police and Crime Commissioners. The pair met at the Conservative Party Conference, where Mitchelson explained how retailers feel unprotected by the lack of police response to shop crimes and also raised concerns about increasing incidents of physical and verbal abuse on retailers and their staff. Javid acknowledged the issues and agreed to meet an NFRN delegation at the Home

Schools across Scotland will be able to claim more than £1m worth of new books for free under a new initiative from The Scottish Sun and publisher HarperCollins. The deal sees thousands of reading packs offered to Scottish primary schools. Each pack contains over 100 books. Primary schools can take advantage of the offer by collecting tokens printed in The Scottish Sun and The Scottish Sun on Sunday during an eight-week period until Sunday 18th November. More than 2,000 primary schools in Scotland are eligible to claim the pack, worth over £550 and selected from the Collins ‘Big Cat’ range. Julia Donaldson, Michael Rosen, Michelle Robinson, Sir Michael Morpurgo, Benjamin Zephaniah and Nick Butterworth are among the award-winning authors and illustrators whose works are included. Alan Muir, Editor of The Scottish Sun, said: “Books and stories play a vital role in developing language and vocabulary, firing the imagination, and encouraging an intelligent curiosity about the world around us. They are also a fantastic source of entertainment, so there is a lot we can relate to at The Scottish Sun and we’re very proud to be launching this new campaign.”

NEWSPAPERS

Johnston Press revenues fall Publisher Johnston Press saw revenue fall by 10% in the first half of 2018 as digital advertising was hit after changes to Google’s online search algorithm and Facebook’s news feed. The Scotsman publisher saw revenue fall to £93m in the six months to July, from £103.3m a year before, although the firm reported a pre-tax profit of £6.2m compared with a loss of £10.2m a year earlier, benefiting from strong sales of the “i” national paper. The group, which owns about 200 titles across the UK, said underlying advertising revenues fell by 15% while classified ad sales plunged 28.5% year-on-year. Digital advertising revenues, which have previously helped offset a decline in traditional advertising sales, were down by 7.4%.

Office as soon as possible to discuss mattters in greater detail. KEEP UP WITH THE LATEST NEWS AS IT HAPPENS – FOLLOW US ON TWITTER @SLRMAG

SLR | OCTOBER 2018

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Research Digest

WASTE AND RECYCLING TO BE ‘A BIGGER ISSUE FOR SHOPPERS THAN PRICE’ A new survey has discovered that many shoppers are increasingly more concerned about the environmental impact of their purchases at stores than they are about price, and that the supermarket ‘may no longer exist by 2030’.

ew research carried out by YouGov for software company ThoughtWorks suggests that recycling, food waste, scarcity of supply and ethics will become big issues for consumers in the future – with almost half (44%) seeing a point when they will no longer even use a supermarket. The new research of over 2,000 UK shoppers shows British adults are already wide awake to how their relationship with food will change. The company believes many will shop differently and the supermarket may even no longer exist by 2030. ThoughtWorks says the new research suggests the traditional supermarket may soon be out of step with fast-changing consumer attitudes to food and has identified three key issues that will change the way shoppers buy food in the future: 1. Environmental awareness – the number one issue for British food shoppers in the next decade will be to reduce packaging and to use more

recyclable materials (62%). Already in Britain today, shoppers name this as a bigger issue for the future than the price of food (57%). Beyond recycling, 48% of adults said reducing food waste would be a top issue for the future. Linked to food supply, 24% of people said they will be more mindful of the amount of energy used for food production. 2. Ethics – 36% of survey respondents said they will place much more importance on where the food they buy is grown, fished or reared. An additional 32% said they would seek assurance that food has been ethically sourced. A remarkable 18% of 18 to 24-year-olds said in the future people will not be eating meat. 3. Health and well-being – overall, 38% of adults polled said the nutritional value of food will shape their decisions on food buying in the future, with 30% saying there will be a far greater interest in food as an intrinsic part of health and well-being.

81% OF SCOTS REGULARLY REPEAT SAME MEALS Quality Meat Scotland poll finds nation ‘stuck in a rut’ when it comes to menu planning, with over one-third of adults never eating lamb midweek.

onvenience is the reason why over threequarters (81%) of Scots are ‘regularly’ repeating the same meals for dinner week in, week out, according to new research among over 1,000 Scots, carried out by YouGov on behalf of Quality Meat Scotland (QMS). The findings offer fresh insight for local retailers seeking to ensure their offer meets current demand. Over half (54%) of respondents consider themselves ‘stuck in a rut’ when it comes to dinner, with the majority (56%) of those who always have the same meals for dinner putting it down to simply not knowing what to cook. Scotland’s national chef Gary Maclean is now backing a move to encourage people across the country to enjoy Scotch Lamb, following the discovery that the average consumption of lamb in Scotland is only half of the UK as a whole and over a third (38%) of Scottish adults never eating lamb for dinner midweek. Carol McLaren, Director of Marketing and Communications at QMS said: “The research has highlighted that people are missing a great

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opportunity to discover loads of simple, tasty dishes when it comes to their mealtime choices. This is largely down to simply not knowing what else to cook. We want to make Scotch Lamb the natural choice for midweek dinner plates, encouraging consumers to visit our online resource dedicated to fresh, delicious recipes created with convenience at the core. “We have a great message to take to consumers. We have a delicious, nutritious quality assured food produced naturally right on our doorstep and there are endless tasty, midweek lamb meals which take 30 minutes or less to cook.” National chef Gary Maclean with his children.

Inside Business

GROWTH IN ORGANIC MEANS BIG OPPORTUNITY Organic market keeps flourishing, driven by a growing adoption of healthier lifestyles. The Soil Association has announced new sales figures that show the organic market has grown for the seventh consecutive year. This is supported by the latest Nielsen Scantrack data sales figures that show an overall sales growth of 4% for the 52 weeks to June 30, 2018. The Soil Association also carried out research that found several key factors have bolstered continued growth in the organic market, with ‘healthiness’ and ‘taste & inspiration’ growing in importance to consumers. Dramatic growth in sales include: Q Organic delicatessen up 27.8% YOY, while organic beer, wine and spirits are up 8.7% Q Organic canned and packaged goods up 6.6%, with organic meat, fish and poultry sales also rising, with an increase of 5.6% Q Overall, sales of organic produce (+5.3%) and organic dairy (+3.5%) continue to grow ahead of non-organic The Association believes the findings show that consumers are increasingly looking to organic as a signifier of health, particularly among younger demographics. To meet growing demand for organic, a raft of new products has come to market in recent months. Over 3,000 new organic products and producers received Soil Association Certification last year. Organic has also seen big brands entering the market, including Red Bull’s Organics range, Babybel introducing organic cheese, and the launch of Honest’s Kids Organic Juice range, owned by Coca-Cola. OCTOBER 2018 | SLR

Date:

WED 28 NOVEMBER 2018, 10AM – 3PM Venue:

200 SVS, 200 ST VINCENT ST, GLASGOW G2 5RQ (www.200svs.com)

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.

TBC blu

A senior spokesperson from vaping giants blu will offer a big picture overview of the development of the UK vaping market. They will also offer category advice, merchandising support and an update on legislation.

Inside Business

2 Minutes | Nick Brown

Nick Brown Coca-Cola European Partners launched a hugely ambitious sustainability strategy last year, aiming to ensure ultimately that none of its packaging ends up as litter. Head of Sustainability Nick Brown discusses how the company is progressing towards that goal. CCEP UNVEILED ITS NEW SUSTAINABLE STRATEGY LAST SUMMER. WHAT WERE YOUR KEY AMBITIONS?

FACTFILE Nick Brown is Head of Sustainability for Coca-Cola European Partners in the UK, leading the company’s work on Sustainable Packaging, Community Programmes, Water stewardship, Energy & Climate Change and Sustainable Agriculture. Nick has had a number of roles in Operational & Commercial functions at CCEP, driving change and innovation through the organisation. Outside of work Nick is a father of three young boys, a Scout Leader and keen club cyclist when time allows.

Our current strategy looks to ensure all our packaging is recovered and none of it ends up as litter or in the oceans. We believe it will be achieved by acting in three key areas: Firstly, we will ensure our packaging is as sustainable as possible. All our cans and bottles are 100% recyclable and our plastic bottles contain 25% recycled material (rPET). We have also been reducing the amount of material used in our bottles, as well as using more recycled or renewable materials, such as PlantBottle. Secondly, the strength of our brands means we play an important role when it comes to encouraging consumers to recycle their bottles through our marketing, on-pack messaging and third-party collaborations. Thirdly, we’re continuing our work with other industry leaders and Government bodies to support the growth of the circular economy.

A YEAR DOWN THE LINE, ARE YOU HAPPY WITH THE PROGRESS MADE SO FAR? We are pleased with our progress overall, but we recognise we have more to do. We are focussing on the areas in which we can make the biggest impact. For example, we’re starting to move all our large PET bottles to 40% rPET this year. As well as this, we recently started putting ‘please recycle this bottle’ messaging on bottle closures.

WHAT IS PLANTBOTTLE? SOUNDS INTRIGUING. PlantBottle is a fully recyclable strong plastic made partially from plants. It’s produced using sugar cane residue instead of petroleum, and accounts for 30% of the plastic used in all Glacéau smartwater and AdeZ bottles.

YOU HAVE ALSO STARTED THE ROLLOUT OF LIVE DRS (DEPOSIT RETURN SCHEME) MACHINES. HOW IS THAT GOING? We launched a partnership with Merlin Entertainments to offer discounts to some of its attractions in exchange for

SLR | OCTOBER 2018

empty plastic bottles. The machines accept any bottle, not just our brands. So far the initiative has been well received by consumers and uptake has been high.

HOW DOES CCEP SEE DRS DEVELOPING IN CONVENIENCE IN SCOTLAND? We believe that independent retailers are uniquely positioned to support DRS and can help with local recycling solutions as long as the proposed scheme works well for all parties involved.

HOW HAVE YOU BEEN COMMUNICATING THESE DEVELOPMENTS TO CONSUMERS? We’re using our marketing reach and the power of our brands to deliver recycling messaging directly to mainstream audiences. Last year we reached 27 million consumers with a recycling advert. Around half a billion packs a year now feature recycling messaging. For Recycle Week, we launched a new campaign called ‘#Coke Dunks’ and TV advert entitled ‘Across the Tracks’ to encourage more consumers to recycle.

AND YOU SUPPORT A NUMBER OF COMMUNITY INITIATIVES AS PART OF THIS? We have always supported local initiatives and aim to make a positive contribution in the communities where we operate in. We have also been working with a variety of partners that run community initiatives including Keep Scotland Beautiful. Most recently CCEP celebrated its 40th anniversary of sponsoring Special Olympics GB.

THAT’S A LOT OF WORK COMPLETED SO FAR. WHAT LIES AHEAD AS PART OF THE STRATEGY? We’ll continue to work towards achieving all our goals, including the move to 50% rPET by 2020. We’re also supporting the Zero Waste Scotland DRS consultation to see how we can use this once-in-a-lifetime chance to design a scheme that will work for many years to come. www.slrmag.co.uk

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Inside Business

Store Profile | Premier Hull

A LOOK INSIDE PREMIER’S STORE OF THE FUTURE

Premier, the UK’s biggest symbol group, recently opened its first ‘Store of the Future’, a concept store that offers an invaluable insight into how Premier views the future of independent retail. SLR visited Hull to find out what that future looks like. BY ANTONY BEGLEY

SLR | OCTOBER 2018

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Premier Hull | Store Profile

here have been lots of concept stores over the years. They can be interesting and informative but often they are little more than exercises in leftfield future-gazing, packed with the latest cool tech and next-gen ideas, 95% of which are destined never to make it into a real store. This is not an accusation that can be levelled at Premier’s new ‘Store of the Future’ in Hull. Premier got to be the biggest symbol group in the UK not by leftfield future-gazing but by having an obsessive focus on the basics of retail. Under the stewardship of the uniquely gifted Charles Wilson, Booker’s mantra of ‘choice, price, service’ was what guided every decision the group made. And it was those three little words that took Booker from the edge of bankruptcy – with crippling debt in 2007 when Wilson took over – to a £3.7bn merger with Tesco in little over a decade. It’s one of the most remarkable stories ever to unfold in retail. That focus on getting the basics right time and again also sits at the heart of Premier’s 2,200sq ft Store of the Future at Victoria Dock in Hull. In essence, creating the store was an opportunity for Premier to bring together all of its learnings, experience and expertise in a single store. This is store-wide best practice brought to life. Creating a store like this required the not insignificant support of an independent retailer who was willing to effectively hand over the keys of his store to Premier. In Jatinder Singh Punian they found just the man. Jatinder and his wife Kuldeep bought the store in October 2017

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Inside Business

and had been planning a full refit of what had been a derelict building. He was understandably intrigued when Premier got in touch to propose using his store to turn their vision for the future into reality. “I spoke to Premier over a period of time and the more I heard about the idea, the more I liked it,” says Jatinder. But wasn’t he nervous about giving full control of the refit to some-one else? “No, not really,” he says. “We talked through what we were going to do and why, and I was completely comfortable with all of it. And it turned out amazing!” It did indeed. The store officially opened in February after what was more of a rebuild than a refit. It takes all of Premier’s best practice advice and executes it to a very high standard, but in a way that Premier believes other members of the symbol group can learn from and replicate. It is a practical blueprint for the next evolution of the Premier brand. For a concept store, the overall layout will be familiar to most retailers. It is clear however that Premier Victoria Dock is a turbocharged version of the modern convenience store. The flow of the store has been planned carefully. The first thing greeting shoppers is a seated breakfast bar area complete with free charging points and wi-fi. Shoppers progress into a comprehensive breakfast and lunch food-to-go zone that includes a ‘goalpost’ style foodto-go station complete with a self-serve Douwe Egberts coffee machine and a hot cabinet. Within weeks of opening the store was already selling 600 cups of coffee a week. Soups and noodle pots can be prepared with the coffee OCTOBER 2018 | SLR

Inside Business

Store Profile | Premier Hull

machine’s hot water, while cakes and sweet treats drive impulse sales. Across the aisle is a dedicated chiller for Premier’s Meal For Tonight Meal Deal, while a breakfast and lunch food-to-go chiller offers a strong range of freshly-made rolls, Snax To Go sandwiches, wraps and salads, as well as soft drinks, yoghurts and confectionery. A lunch time Meal Deal also helps drive basket spend from this chiller. The entire store is split into dedicated shopping mission zones, and the food-to-go chilled lines are sited in the food-to-go zone – not, as in many stores, in the main chilled section. ‘Less is more’ is a clear guiding principle in the store. The grocery fixture has been trimmed to just six metres and includes only core lines identified by Booker as must-stocks in every store. Similarly, the main confectionery fixture carries only a very tight range of countlines, with the emphasis on the larger format packs and multipacks currently driving growth. A new five metre kids confectionery section with self-serve slush machine adds appeal for younger shoppers while an American candy bay has been a huge hit. Even soft drinks has been approached differently, with a reduced range of flavoured carbonates and a greater focus on waters and low and no sugar lines. This trend towards healthier products explains dedicated ‘freefrom’ and protein aisle ends, popular with local gym users. This section includes bulk 2kg tubs of whey protein and specialist high protein shakes. Another noticeable strand of the store’s strategy is a focus on 32

SLR | OCTOBER 2018

local produce with everything from craft beers to cakes sourced from Yorkshire producers. An eye-catching vape station behind the counter offers a full range of e-liquids and accessories, including the high end ‘mods’ popular with experienced vapers. However shoppers won’t see a tobacco gantry behind the till. Tobacco is stocked in drawers under the counter, freeing up the tillpoint for a range of high value spirits including 34 gins and an extensive range of fractionals. The off-licence section has distinct flooring and feature lighting solutions. It offers an extensive range of national and regional craft ales as well as a large selection of wines. Another great idea in the store is a dedicated section for seasonal activities and events. The frozen section combines a pared-down range of fastmoving lines and features the Premier Frozen Meal Deals while a standalone Gourmade chest freezer carries a range of premium ready meals and desserts. An active Facebook presence and loyalty club help keep shoppers engaged, while the store is also trialling a new Premier app with the learnings helping to inform Premier’s future strategies. All in all, Jatinder has had the courage to take all of Premier’s advice then ruthlessly distil the offer down to a range of products that will enjoy very high rates of sale and tap into the latest consumer trends. Victoria Dock is a store that aims to set new standards in modern day, real world independent retailing and will provide great lessons for Premier and its retailers – but there’s a lot the rest of us can learn from it too. www.slrmag.co.uk

Inside Business

Interview | Pete Cheema, Chief Executive, SGF

SGF ‘MORE INFLUENTIAL THAN EVER’ IN CHALLENGING TIMES

The Scottish Grocers’ Federation has been revolutionised under boss Pete Cheema and now in its centenary year enjoys ‘more influence than ever’ – which is just as well as the challenges to the industry are coming thick and fast. BY ANTONY BEGLEY

here has probably never been a tougher time to be Chief Executive of the Scottish Grocers’ Federation with the local retailing sector arguably facing the sternest challenges in its long existence – but when former Spar retailer Pete Cheema took the helm in 2015 he told everyone who would listen that he intended to reform the Federation from the ground up to build an organisation ready for the daunting challenges ahead. Granted, in 2015 there was no way of knowing that the two or three years that lay ahead would see a wholesale restructuring of the industry with a glut of mega mergers and takeovers, new and damaging legislation, rocketing costs and massive shifts in consumer buying habits. Despite all that however, Cheema has undoubtedly made good on his promise and in many aspects the Federation has literally never been stronger. Financially the organisation is fully robust for the first time in many a long year, membership numbers are climbing every month, the annual calendar of events has never been busier and, possibly most importantly, SGF has now established itself as a major lobbying organisation both at Holyrood and Westminster. There is absolutely no doubt that SGF has the ear of many extremely important politicians and influencers at Holyrood these days, to an extent that was unthinkable before. The fact that First Minister Nicola Sturgeon is now established as a regular headline speaker at the annual SGF Conference is a case in point. “Our increasingly strong relationships with a growing number of senior politicians in both Edinburgh and

SLR | OCTOBER 2018

London is the result of a lot of very hard work by the team at SGF and those relationships are bearing fruit for the whole convenience retailing industry in Scotland,” says Cheema. The importance of this achievement cannot be overstated. For too long the local retailing sector’s voice was absent from the corridors of power, a function of the fact that, despite being a massive industry, it is composed of a plethora of very small businesses. Speaking with a united voice and having our opinions and input heard on a regular basis required us to come together in an organised and formal way, something the industry never quite managed to achieve. The establishment of the Scottish Parliament CrossParty Group (CPG) on Independent Convenience Stores, however, created the platform the industry had long craved and is a legacy that Cheema and his right-hand man, Head of Policy and Public Affairs John Lee, will always be able to look back on with pride. “The establishment of the CPG was a real watershed moment for the SGF and for the industry,” believes Cheema. “For the first time ever we had regular and extended access to many of Scotland’s leading politicians from every major political party. Since that historic inaugural launch event, the CPG meetings have continued to attract very significant numbers of retailers, wholesalers, suppliers and academics which reflects the passion that this industry has for engaging with the decision-makers. Equally importantly, the CPG has also attracted 10 or 12 MSPs each time, all of them keen to hear from us and keen to understand our concerns and use those learnings www.slrmag.co.uk

Inside Business

Pete Cheema, Chief Executive, SGF | Interview

to help shape policy-making in the future.” The new bonds created with politicians of all parties have become increasingly vital over the last year or so as the industry has been beset by wave upon wave of challenges. “I don’t think I’m over-stating the case when I say that the last year or two have been among the most tumultuous in the Federation’s 100-year history,” says Cheema. “Thanks to this, the convenience retailing industry is facing an unprecedented level of pressure from all sides and is facing massive hikes in the cost of business coupled with a barrage of legislation. My message to the Scottish Government is that the cumulative cost burden to retailers is becoming dangerously high and the Government needs to be careful not to destroy the largest private sector employer in Scotland.” Indeed, work that SGF has been doing with Stirling University around the effects of the living wage and the ‘multiplier effect’ has shown that the ‘real’ cost of living wage increases are far higher than the headline published increase. Cheema explains: “In real terms the increase in costs to retailers is more than double the official increase. In other words, an anticipated rise of 30p per hour or so actually costs retailers around 67p an hour, once you factor in all the other related costs.” www.slrmag.co.uk

Above: SGF Chief Executive, Pete Cheema

Left: The historic inaugural meeting of the CPG.

OCTOBER 2018 | SLR

Inside Business

Interview | Pete Cheema, Chief Executive, SGF

The consequences of a constantly rising wage in tandem with flat or falling sales can be seen all around us, he says: “What’s happening in the real world is that the number of people employed in our sector is falling and middle management getting stripped out. Even the top management is being stripped out and replaced by owners who are working more and more hours to make ends meet.” On top of this is a constant deluge of legislation. In the last six or seven months alone we have seen the introduction of the soft drinks industry levy and minimum unit pricing, once more creating mass confusion among shoppers that retailers are left to deal with at the counter. Yet more challenges of this type lie ahead including the impending Deposit Return Scheme (DRS), a complex and nuanced challenge that Cheema feels the Scottish Government must get absolutely right if it is not to seriously damage the local retailing industry. “At SGF we’ve spent a lot of time understanding DRS, examining how it works in other countries, engaging with experts in the field and having input into how a DRS scheme should work in Scotland,” he says. “A delegation from SGF visited Sweden, Lithuania and Norway to study DRS in detail and those learnings have been vital in allowing us to provide informed, high quality input into the establishment of an efficient, workable scheme” Cheema expects DRS to be managed by a Scottish operator and believes that SGF should be part of the operating group. He adds: “We also feel strongly that the Scottish Government and Zero Waste Scotland should not be involved because we don’t want damaging ‘leakage’ in the system. Models in other countries that run successful DRS systems usually feature system operator groups that include the national trade federation plus the manufacturers who are central to the commercial infrastructure of the system. It’s vital that the scheme is managed and run by people who understand it at a practical level.” SGF has also taken a very pragmatic and practical approach to tackling another issue that frequently causes retailers problems: licensing. Cheema recently took the decision to set up a professional licensing training arm of the Federation, managed by Scottish licensing stalwart Janet Hood. “The training will be carried out at Federation House and will allow local retailers to carry out all of their required licensing training here in Edinburgh,” explains Cheema. “In an increasingly regulated environment, training is going to become key in the future. That’s why we have also embarked on a partnership with Love Learning which means that over 16s earning under £22,000 a year will be entitled to a £200 grant to cover the costs of their licensing training. We can also help with access to funding for food hygiene training and under-age sales training which makes the training effectively free.” There’s no doubt that Cheema’s direct approach to making things happen has transformed the SGF into a very different Federation from the one he inherited. Some feathers had been ruffled along the way but when major change is long overdue, tough decisions have to be made 36

SLR | OCTOBER 2018

– and Cheema, recently made an OBE, hasn’t been afraid to make them. “I run the SGF like it’s my own business,” he says. “I take it very personally, I work very long hours and I am utterly committed to the representing the convenience retailing sector to the very best of my abilities. I like to think that the SGF in 2018 is a highly professional organisation doing exactly what a strong industry body should be doing. We are evolving in line with the needs of our Members and they have never been better represented. “But – and it’s a big but – there’s still a lot more work to do so I would encourage everyone – retailers, wholesalers and suppliers – to get behind SGF and make it work even harder for them. In particular I would encourage our retailer Members, and that includes all symbol group retailers, to get involved with us by coming along to events, giving us feedback and participating in important dialogues. This is your Federation and only by working with us can you maximise the benefit we can bring to your businesses.”

Below: SGF has been working exceptionally hard to influence how a DRS scheme will operate in Scotland.

SGF EVENTS PANEL A core focus on the SGF’s activity has been to bring retailers, wholesaler and suppliers together more often. JANUARY Wednesday 30th

SGF Cross Party Group Meeting, Scottish Parliament, Edinburgh

FEBRUARY Thursday 7th

SGF Crime Seminar, RBS Business School, Gogarburn

MARCH (TBC)

SGF Study Tour, Dunoon

APRIL Wednesday 30th

SGF Mini Summit, McDonald Inchyra Hotel, Falkirk

MAY Wednesday 22nd

SGF Cross Party Group Meeting, Scottish Parliament, Edinburgh

JUNE (TBC)

SGF Networking Event, RBS Business School, Gogarburn

AUGUST Wednesday 28th:

SGF Cross Party Group Meeting, Scottish Parliament, Edinburgh

SEPTEMBER Wednesday 11th:

SGF Golf Outing, Cameron House, Loch Lomond

NOVEMBER (TBC)

SGF Annual Conference

Wednesday 27th

SGF Cross Party Group Meeting, Scottish Parliament, Edinburgh

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Inside Business

SGF Healthy Living Programme

NEW ERA FOR HEALTHY LIVING PROGRAMME

The SGF Healthy Living Programme helped kick start a fresh and chilled revolution in local retailing – but the hard work is only just beginning, says Programme Director Kathryn Neil. BY ANTONY BEGLEY

THE HEALTHY LIVING PROGRAMME: HISTORY AND GOALS The Scottish Grocers’ Federation (SGF) Healthy Living Programme (HLP) was originally established in 2004 by Robert Wiseman Dairies with the support of the Scottish Government and the five main convenience store operators in Scotland at the time: Aberness, Botterills, CJ Lang & Son, David Sands, and Morning Noon and Night. In its current format, the HLP is funded by the Scottish Government’s Health Directorate, with NHS Health Scotland acting in a performance management role. The aim of the programme is “to improve the accessibility of healthy affordable foods by supporting convenience retailers, particularly those in deprived areas where diet is traditionally poor, to expand and improve their offering of healthier options. It is hoped this will lead to an increase in the sale of healthier options, benefiting both the consumer and the retailer”.

hen the SGF Healthy Living Programme (HLP) first sparked into life in 2004 with the aim of improving the accessibility of healthy affordable foods, particularly in deprived areas, very few people could have predicted the revolution that it helped kick start. Back then, it was a rare convenience store indeed that had a decent range of fresh fruit and veg and the chilled market was similarly in its infancy. Fast-forward to 2018 and there’s hardly a refit takes place in Scotland that doesn’t involve creating more fresh and chilled space and putting it in higher footfall areas of the store. It’s a point not lost on new Programme Director Kathryn Neil, who has been with HLP since 2014: “When the Programme was first launched I think a lot of local retailers, and indeed the wider industry, were a little skeptical about its prospects of success. I think a lot of retailers thought our aim of making healthier, affordable foods available to

SLR | OCTOBER 2018

a wider audience was commendable but they just didn’t believe that stocking fruit and veg would be commercially viable. “But if you look at most stores in Scotland these days the fresh and chilled offering is now a fundamental part of their offer. Fresh and chilled now gets a lot more space in-store and more often than not it’s sited in very prominent positions with high traffic.” Neil is keen to stress that this change isn’t entirely the result of the HLP however: “We appreciate that consumer buying habits have moved towards healthier consumption but I think the Programme can certainly claim to have helped accelerate that shift.” It’s also worth noting that the Programme was first initiated not by the Scottish Government but by suppliers and retailers like Robert Wiseman Dairies, Aberness, Botterills, CJ Lang & Son, David Sands, and Morning Noon and Night. This wasn’t a Programme imposed on the sector; it was an initiative driven by a sector keen to be the agents of positive change in communities right across Scotland. www.slrmag.co.uk

SGF Healthy Living Programme

NEW ERA, NEW CHALLENGES Neil officially took over the management of the HLP in June this year but the fact that she has been on board since the very first day means that she has a comprehensive understanding of the Programme – both its successes and the challenges that lie ahead. “We’re at an important stage in the development of the Programme,” she explains. “In the local retailing arena we’ve been focusing almost exclusively on fresh produce and we’ve been exceptionally successful in working with retailers to ensure that fresh fruit and veg is widely available these days. There are now 2,226 retailers in Scotland who have HLP stands or POS in store and we’re in the midst of a trial in 120 McColl’s stores as we speak. But the next phase of the project is to work with retailers to widen the scope of healthier products they stock, not just fresh produce.” And that is a significant challenge, not least because it’s a fiendishly difficult task to provide a working definition of what constitutes ‘healthier’. With the growth of healthier consumption patterns among consumers and current vegetarian and vegan megatrends there is undoubtedly an appetite among both consumers and retailers for healthier lines. The problem is that defining a healthy product is, at a practical level, extremely challenging. The reality is that many products that most retailers would instinctively believe to be healthier turn out not be when they are measured against the Scottish Government’s complex criteria. The oft-cited example is tinned tuna. Seems healthy enough, doesn’t it? But as most tinned tuna has been heavily processed, most of the omega-3 oils that make tuna nutritionally desirable have been stripped out. The result? Tinned tuna doesn’t make it onto the healthier list. “It’s a real and very serious challenge,” says Neil. “In an ideal world we would provide local retailers with a big list of every SKU that meets the criteria but in practical terms that’s just about impossible to do.” The Scottish Government’s criteria take into account a whole range of factors including things like salt, sugar and saturated fat content but the problems of examining every single product in a store and giving it a tick or a cross are obvious. Neil is currently working hard with the Government to find a solution to this tricky challenge but her years of working with the local retailing trade mean she is very conversant with the practical issues retailers face in-store and is able to help represent those concerns and challenges to Government. www.slrmag.co.uk

This month also sees the launch of a major Scottish Government consultation on the ‘Promotion of High Salt and High Sugar Products’. The headline-grabbing outcome of this consultation is likely to be some form of restrictions on selling confectionery at the tillpoint as well as restrictions on how these types of products can be promoted. “I have no way of knowing what that consultation will lead to, obviously,” admits Neil, “but 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.” Neil is keen however to encourage local retailers to embrace these developments and start making plans for the continuing evolution of the retail environment. “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.” One concrete opportunity that is coming is the migration of the Healthy Start voucher scheme to the new Best Start Food voucher scheme which is being trialled in February. The scheme will offer families below a certain household income vouchers which they can use to buy fresh produce, milk, pulses and both tinned and frozen fruit and veg. Local retailers will be able to sign up to accept them. “This is an important revenue opportunity for retailers,” says Neil. “We expect that a smart card system will be implemented at some point next summer which will mean that retailers will get cash for the vouchers they take straight away. We are currently working with the Scottish Government on the implementation of the scheme and also on training retailers on how to operate the scheme in-store.”

ONWARDS AND UPWARDS It’s been a challenging few months for Neil since she took over, leaving her hardly enough time to draw breath, but she brings fresh enthusiasm and impetus to a Programme that has helped transform Scotland’s approach to its diet, something that she and all local retailers can take pride in. “It’s been a hard few months with lots of challenges – GDPR, recruitment, a shifting focus – but it’s been great fun. My long experience of the Programme means I understand retailers’ concerns and I understand that everything we do has to

Inside Business

THE HLP TEAM Q PROGRAMME DIRECTOR KATHRYN NEIL Q KEY ACCOUNTS MANAGER JOHN DRUMMOND Q DEVELOPMENT MANAGER WEST YVONNE MACDONALD Q DEVELOPMENT MANAGER GLASGOW GILLIAN EDGAR Q DEVELOPMENT MANAGER NORTH CATHERINE STEWART Q DEVELOPMENT MANAGER CENTRAL JEN LUBBERS

take account of their legitimate commercial interests. We have a great track record of working with retailers and I fully intend to build on that in the future.” That will undoubtedly mean more Big Breakfast and Healthy Living Days, two of the more visible projects that have taken hold in local retailing. “We’ve held 23 Big Breakfasts and 32 Healthy Living Days with retailers so far,” she says. “In total that means we’ve been in front of over 10,500 kids and have been able to help them understand the importance of a good breakfast and a good diet. “More and more wholesalers and symbol groups are now encouraging their retailers to do it and that’s fantastic. It’s basically a readymade solution for retailers and we can even provide a step by step guide for them, as well as helping organise the day and liaise with the local school.” Also on Neil’s horizon is a focus on encouraging retailers to embrace ‘impulse fruit’ and heathier meal deals, again reflecting a good understanding of the realities of retail. “The job is only part done,” concludes Neil. “In fact, it will arguably never be completed but we’ve made enormous strides and I can only offer massive thanks to all the retailers across the country who got involved. We couldn’t have done it without them – and there’s more we need to do together in the future.” OCTOBER 2018 | SLR

WOODLANDSlocal

Inside Business

Woodlands Local | Monthly Review

A MONTH TO FORGET…AND A PROFIT TO REMEMBER

There’s no getting away from it, September was a truly challenging month thanks to severe cash flow issues– yet almost unbelievably it ended up profitable. BY ANTONY BEGLEY

here have been many times over the last four and half years when I’ve wondered about the wisdom of buying a shop – but never more intensely than last month. After an outstanding summer we somehow contrived to get ourselves fairly rapidly into some reasonably severe cash flow problems at the store by the beginning of September. The reasons behind that are many and varied but basically come down to over-staffing, over-spending, quite a few substantial unexpected bills the month before and one of those months when revenue for no obvious reason suddenly goes through the floor. The perfect storm. Surprisingly poor months have happened before of course but the euphoria of such an uplifting summer clearly led us to take an overly optimistic approach to the autumn months – and we’ve paid a heavy price for it. We’re severely trying the patience of our main wholesaler, JW Filshill, as well as some of our smaller suppliers but to be fair to them all, they’ve been very understanding of our plight and we can only thank them for that. Most bizarrely of all, however, the store returned a net profit for September. A modest one of a couple of grand, but a profit nonetheless. When the management accounts landed on my desk I automatically assumed that my Accounts Manager who prepared them was either trying to cheer me up or had enjoyed a liquid lunch. Turns out the sharp decrease in buying throughout the month ended up in us making a profit from the shop’s worst month on record – and there, my industry chums, is yet another

SLR | OCTOBER 2018

of those valuable lessons that running a store keeps teaching me.

LESSON LEARNED? Getting ourselves out of this problem is not going to be a quick fix but, looking for an upside as I always do, September taught us some very important lessons about the value of constantly monitoring all spending – be that on staffing or on stock – and how important it is to stay on top of those on a daily basis. The shop is slowly getting back to normal stocking levels but we’ve imposed a ‘hand to mouth’ policy on our Manager Kerry to ensure that she too learns the value of hyper-efficient buying and staffing. Yes, that means we’re having to prioritise our buying and out of stocks are higher than they’ve been for years, but my Board’s belief is that the store has to trade its way out of this position, the same way it traded itself into it. Frustratingly we have so many ideas that we are keen to implement in the nearish future –not least a full refit of the store – but those ideas are going to have to wait until we can finance them comfortably. The proposed refit is a strategy that’s been bubbling away for a little while because we believe that, for us to make maximum use of every square foot of space in the store, it’s more than tinkering we need. We’re toying the idea of introducing a dedicated vapeshop within the store with dedicated, fully trained staff; we’re looking at moving the hot food section to a much larger dedicated area at the back of the store; and we’re also www.slrmag.co.uk

Inside Business

Monthly Review | Woodlands Local

in very early discussions about the possibility of adding a Post Office counter. All of these ideas would help drive footfall, sales and profits but would obviously require some major surgery in the store. In a lot of sense however, it’s increasingly clear that we can’t simply trundle along as we’ve been doing and hope to have a successful business. As costs continue to rocket, sales haven’t rocketed alongside them – so we need to rethink the whole store. It’s a bold strategy we can’t afford to implement right now, but that doesn’t stop us dreaming. And we are edging ever closer to making those dreams come true.

REALITY BITES In the meantime however, we have the not insignificant challenge of simply getting the store back on track and doing the basics well again. We’ve been trying to put the quiet month to good use by investing in some training for our staff. Kerry and I recently re-did our full licensing training from scratch and the entire team of 11 is currently completing an online food hygiene course as we aim to build a better qualified, more knowledgeable and better trained team than we’ve ever had. We’ve also been investing in the store, laying a brand-new floor behind the counter and along the length of the hot food area, as well as a lot of general tidy-up work to fix a lot of www.slrmag.co.uk

News that Falkirk Council intends to grant planning permission for new housing facing the store couldn’t have come at a better time.

small problems around the store like damaged roof tiles, fridges that need re-gassed, worktops that need re-sealed and so on. All small stuff but important in our drive to improve standards right across the store and encourage the staff to hold themselves to higher standards too. The short-term aim is to get the store back in gear in time to fully capitalise on Christmas. How we do that is one of those challenges we’re embracing on a day-to-day basis but we remain optimistic and we remain committed to making use of every hard lesson we’ve learned in our Adventure in Retail.

SILVER CLOUD One unlikely piece of news that we received recently helped to boost our flagging spirits following the hell that was November. Falkirk Council is apparently intending to allow housing to be built on the huge area at the front of the store that was one part of the old Royal Infirmary hospital but which, for the last five or six years, has been a lovely but pretty much pointless and rarely used area of landscaped garden. The plans don’t kick off until 2020 and it would probably be at least a year or two until tenants were in buildings, but news like that is always welcome. I reckon we were due a break – and if that’s as good as it gets, I think I’ll just be grateful for small mercies. OCTOBER 2018 | SLR

WOODLANDSlocal

Inside Business

Woodlands Local | Soft Drinks Remerchandising

NEW BARR’S PLANOGRAM KEEPS DELIVERING GROWTH

The huge success of implementing AG Barr’s innovative new soft drinks planogram continues with the August results showing yet more growth in important parts of the category. BY ANTONY BEGLEY

t was always going to be a tough ask to follow July’s knockout results following our implementation of AG Barr’s creative new planogram – an 85% increase in GP from the category was almost incredible, even to us. But even with the sun disappearing back behind the clouds, the new-look fixture continues to deliver solid growth. Most pleasingly of all, much of that growth is coming in very important sections of the category. It seems clear that the key drivers identified by the soft drinks supremo have struck a chord with our shoppers. To help us dig a bit deeper, we sent our Epos data for August to AG Barr’s number crunchers who have produced a number of comparisons for August. Clearly the numbers were never going to be as spectacular as our July figures when the sun was splitting the trees and our nearest competitor closed for a refit for weeks – but they’re impressive enough. The great news is that we achieved good growth in the two biggest need states – ‘Everyday Enjoyment’ (the backbone of the fixture with the biggest range of great-tasting choices) and ‘On The Go’ (nearly a third of soft drinks sold are energy drinks, so this section must offer the right range of products and flavour choices). Everyday Enjoyment grew by 1.2% while On The Go products increased by almost 7%, with Rockstar (up 41%) and Monster driving the growth. In addition, and highlighting one of the biggest growth potential areas, ‘Tasty Hydration’ was up 19% y-o-y, driven by Rubicon Spring (up 109%), sited next to water as a destination in its own right. Strathmore sales were up six-fold as plain water drinkers opted for higher value Tasty Hydration drinks, increasing category profitability. The addition of future growth categories such as Adult Social, providing indulgent options for people avoiding alcohol, and developing the Tasty

SLR | OCTOBER 2018

AUGUST OVERVIEW: Q Tasty Hydration up 19% y-o-y, driven by Rubicon Spring which grew by 109%, sited next to water as a destination in its own right. Q Strathmore sales up six-fold as plain water drinkers opted for higher value Tasty Hydration drinks, increasing overall category profitability. Q On The Go products increased by almost 7%, with Rockstar (up 41%) and Monster driving the growth. Q Everyday enjoyment, the biggest category, grew by 1.2%. Q Adult Social is new to the Woodlands fixture and its introduction has driven profitability.

Hydration offer, offering low calorie drinks with the health benefits of water and the great taste of a carbonate, were a great success. Nick Bentley, Barr’s Category and Shopper Marketing Controller says the radical new approach was ‘opening people’s minds’ to the role that soft drinks can play in meeting their different needs in line with the lifestyle changes that are heavily influencing consumer spend. He says: “We simplified the fixture and really engaged shoppers by siting complementary choices together. For example, we’ve merchandised Tasty Hydration products next to water, enabling people to compare which product type really meets their needs at that particular moment.”

CONSUMER NEED STATES The new planogram is built around six ‘consumer need states’ identified by AG Barr as being the most important sales drivers in soft drinks today. They are as follows: Q Healthy Refreshment – Water and water-plus products perform an important, functional role Q Tasty Hydration – Low calorie products with the health benefits of water and the great taste of a carbonate Q Everyday Enjoyment – The backbone of the fixture needs a good range of greattasting choices Q Adult Social – Indulgent treats and options for those that avoid alcohol Q Connecting Cultures – Vibrant section to tap into growing demand for exotic flavours Q On The Go – Nearly a third of purchases is an energy drink, so this section must offer the right range of products and flavour choices

www.slrmag.co.uk

Helping you to make an extra 3% Gross Profit Ease of use

Simple to use touch screen till software

Backoffice admin software

Cigarette Gantry integration

Indepth reporting and analysis

Touch screen handheld device to control the shop from the shopfloor

Supplier Data links with all major Wholesalers

Credit Card integration

Weekly health check reports to guide you to improve your sales and margin.

Access to background database with over 100,000 products

Benefits of MPos ✓ Built around a retailer, not a computer user ✓ Simple to use till, powerful admin tools ✓ Built from retailers perspective ✓ Reduces labour by downloading products, price changes, invoices and promotions

✓ Reduces labour by allowing one click order generation and one click invoice downloads - easily shave off 10 hours of work per store

✓ Increased control on stock; all stock deliveries downloaded and all stock adjustments emailed to the owner; NO stock is unaccounted for

✓ Emails store performance to the user with real actionable data once a week rather than stats heavy reports that overwhelm the user

✓ Based in Scotland with excellent support and training program

✓ Easy to use Hand Held terminal to control the store from shop floor ✓ Integration with Credit Card terminals, Zapper, Cigarette Gantry, Loyalty Schemes and more ✓ Developed and supported by people that know the retail trade

So How much Could our System make for you? We can demonstrate a 3% uplift in Gross Profit in using our system.

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MHouse, 349 Shields Road, Motherwell, ML1 2LD

Tel: 0800 242 5360 email sales@mhousesolutions.com

Hotlines

Product News & Media Watch

M&M’s Cake Bars Mars Chocolate Drinks and Treats The latest addition to the Mars cake bar range is available now, at an RSP of £1.65. Packs contain five individually-wrapped cake bars. These consist of a soft chocolate sponge, topped with a layer of cream and crispy pieces, coated in milk chocolate. Mars hopes the new product will breathe fresh life into the £29m cake bar category.

McVitie’s Halloween cakes

Fruit Balls Forest Feast This new bite-sized, spherical fruit snack is available now in 100g packs (RSP £3) from wholesalers in three variants: Mango & Coconut; Pineapple, Mango & Lime; and Milk Chocolate, Mango & Coconut. Fruit Balls contains 100% dried fruit and no artificial flavours, concentrates or fillers. The Mango & Coconut and Milk Chocolate, Mango & Coconut variants are also available in smaller 30g packets (RSP £1.25).

Riverstone RYO Imperial Tobacco This new economy rolling tobacco from New Zealand, will be available in the UK from October 3 in both 30g and 50g packs, at RSPs of £10 and £16.50 respectively. Imperial said that it “offers a high quality, easy-to-roll blend at an affordable price, and is cut using an innovative manufacturing technique that we believe makes it one of the easiest RYO on the market to roll.”

SLR | OCTOBER 2017

McVitie’s has launched a range of Halloween-themed cakes to celebrate the forthcoming annual frightfest. The range includes McVitie’s Jaffa Freaky cake bars (5-pack), McVitie’s Jaffa Lemon and Slime cake bars (5-pack), McVitie’s Digestives Beastly Bakes (4pack) and McVitie’s Hobnobs Terrifying Toffee Ap-ple Flapjacks (4-pack). Available now, all four products have an RSP of £1. Claire Hooper, Head of Marketing for McVitie’s Cake Company at pladis UK&I said: “We’re thrilled

Ritz Baked With Tomato & Herbs Mondelez As part of a reformulation to reduce saturated fat content by 70%, Ritz has launched a new Tomato & Herbs variant. Packs (200g, RSP £1.49) are available now in cases of eight. At the same time, the Ritz brand has been given a makoever with a fresher new look, as well as a smaller two-facing shelf-ready pack that is more space efficient. The launch is supported by public relations and in-store activity.

to be launching our McVitie’s Halloween cake range. We know consumers love this season and these four products allow us to hit three occasions – a lunchbox treat, a me-time moment and an individually-wrapped cake for trick or treaters. “We’re confident these products will give great stand out on shelf and be popular with McVitie’s fans, giving retailers a fantastic opportunity to pick up additional impulse purchases by showcasing a great Halloween range.”

Spinach Pides Aryzta The two new products – a Spinach Pide with Gyros Chicken, and a Spinach Pide with Mozzarella, Basil & Tomato (pictured) – are available now at an RSP of £2.75. Both are supplied frozen in case sizes of 18. A pide (pronounced pea-deh) is a Turkish stone-baked pizza style flat bread, characterised by a boat shape and open filling. The new Middle Eastern-inspired products have been developed to cater to growing consumer demand for cuisine inspired by flavours from around the world.

Poligrip Max Seal GSK Consumer Healthcare GSK says its new premium denture fixative is “the first NPD in the Denture category since 2013”. It is available now in a 40g pack size at an RSP of £3. The launch is supported by a digitally-led campaign. GSK hopes Poligrip users will trade up to benefit from Max Seal’s superior seal-forming capability and new precision nozzle which delivers 36% more surface coverage than regular Poligrip.

www.slrmag.co.uk

Product News & Media Watch Bassetts Omega-3 + Multivitamins pastilles Mondelez

Club Orange Cake Crunchies pladis The latest addition to the McVitie’s Cake range is described by pladis as “the best of cake, biscuits and chocolate in one tasty treat” and has a projected RSV of £2m. Available now, it merges Club Orange with sponge cake, topped with chocolate-flavoured cream and crunchy biscuit pieces, and is wrapped in milk chocolate. A fivepack carries an RSP of £1.65.

New Omega-3 + Multivitamins pastilles in orange flavour for 3-6-year-olds is available now, in packs of 30 with a £5.50 RSP. The pastilles bring together essential nutrients and Omega-3 to support normal growth and development. They also contain Vitamin B6 to support normal psychological function, Vitamin B5 to support mental performance and have no added

MEDIAwatch

Hotlines

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No drama from Dolmio The third instalment in Dolmio’s ‘No drama’ campaign sees a massed rank of mums and dads fight in vain to capture the attention of an army of otherwise-occupied children. Unsurprisingly, the tactical deployment of a large bowl of Dolmio spaghetti bolognese brings a swift end to ‘The Battle of Dinnertime’ as everyone sits down to eat.

Thanks for the Roses says Cadbury Penn State multipacks KP Snacks

Birds Eye Veggie Bowls Nomad Foods

This 6 x 22g multipack carries an RSP of £1.70 and can be ordered now. Salted and Sour Cream & Chive flavours are available, containing 86 and 93 calories respectively. The launch comes as KP actively promotes its under 100 calorie snack range with a £500,000 marketing campaign. KP said that it was “meeting rising demand for portioned snacks which fit with a busy lifestyle and can be enjoyed on the go.”

Birds Eye has launched a new range of vegetarian ready meals, aiming to capitalise on the growth of flexitarian diets. The range is available now in 380g packs with an RSP of £2.89. Flavours include Moroccan Tagine with Chickpeas and Grilled Aubergine; Thai Curry with Chickpeas and Sweet Potato; Super Green Italian Risotto with Lentils and Grilled Courgette; and Asian Sweet & Sour Noodles with Edamame beans and Bamboo Shoots.

A new £2.8m campaign celebrates 80 years of Cadbury Roses, and is a fresh take on the ‘Thank you Very Much’ slogan. A TV ad features a little boy, who says ‘Roses’ instead of thank you, after overhearing his teachers discussing how best to say thank you – with Cadbury Roses of course. The campaign also includes digital, PR and experiential activity.

Ready Brek’s glow returns to TV Ready Brek is back on TV for the first time in five years, with its ‘Central Heating for Everyone’ campaign. The ad reintroduces the brand’s ‘glow’. Running throughout October, it is supported with an on-pack promo offering consumers the chance to win £1,200 to cover the cost of heating their home for a year.

Energizer powers onto screens Fridge Raiders Combos Kerry Foods

Food-to-go Pots McIntosh of Strathmore

Kerry Foods has added new BBQ and Chilli variants to its Fridge Raiders Combos range. The 55g packs offer two compartments containing cheese bites, mixed beans and rice puffs, at an RSP of £1.20. Both are high in on-trend protein and contain less than 200 calories. Kerry is advising retailers to offer the Combos range as part of a lunchtime meal deal.

Ready meal brand McIntosh of Strathmore has expanded into the food-to-go with its latest NPD. The new range of food-to-go pots are branded, can withstand any oven, come complete with lids and forks and can hold in hot cabinets for up to four hours. “This is a great opportunity for businesses with a food-to-go area to jump on the success and popularity of the McIntosh of Strathmore brand,” said the company’s John Buttar.

Energizer is debuting the latest addition to its portfolio, Energizer Max Plus alkaline batteries, in a new TV commercial. The fun advert sees the new-look Mr. Energizer take a starring role, demonstrating the new range’s longevity. The ad, part of an integrated campaign, is expected to reach nearly eight and a half million people.

Time for the good life with Président Lactalis McLelland’s latest campaign is part of a £2m marketing investment for its Président brand in 2018. It includes out-of-home, digital activity and sponsorship of Channel 4’s Come Dine With Me show. The campaign’s ‘Time for the good life’ message is expected to reach 12 million target consumers through three different adverts.

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

OCTOBER 2017 | SLR

Feature

Medicated Confectionery

SUCK IT UP THIS WINTER!

Medicated confectionery is a great category for driving winter footfall and basket spend and it’s all about stocking the best sellers.

o-called distress purchases can be vital to local retailers in helping to drive up sales and profits, and one category that falls squarely into that bracket is medicated confectionery. By stocking a good range of the best-selling lines, retailers can help boost footfall and basket spend this winter as customers deal with the minor aches and pains that a good Scottish winter is certain to deliver. Halls, the number one Relief Candy brand in the UK [Nilesen, Jul 2018], unveils an engaging new look and new price-marked packs ahead of the winter season this month, in a bid to help retailers drive medicated confectionery sales. The new designs will champion the different roles of both the Mentholyptus and Soothers products to help educate consumers on the different functions of relief candy. The Halls Soothers design will showcase the texture of the sweets and its real fruit juice centre, to emphasise the gentle ‘soothing’ benefit of Soothers while packs for the Mentholyptus range highlight the ‘clearing menthol action’. The new packs have been developed to achieve a stronger stand-out on shelf, while ensuring better consistency across the Halls and Halls Soothers ranges. Amy Lucas, Brand Manager for Halls, is also keen to highlight the potential benefits of stocking price-marked packs, which offer a number of advantages for both shoppers and retailers. She says: “For shoppers, 46

SLR | OCTOBER 2018

PMPs offer reassurance they are not being overcharged in convenience and contribute to positive perception. Whereas for retailers the Halls PMPs will help to direct retailers to the top-sellers over lower rotating SKUs, generate improved ROS through stand-out on-shelf and customer trust, while having the convenience of clear pricing.” The new range of Halls PMPs is now available to order. All packs carry a prominent 75p price mark and plain packs are also available. The new packs will be featured in a new above the line digital out-of-home advertising campaign in December which will target high footfall locations near stores, in order to raise awareness of relief candy throughout the cold and flu season. The campaign will educate consumers on the range qualities and the fact that they are available at nearby stores. “We know that our new designs will stand out on the counter, and that the consumer will have confidence identifying which Halls subrange will best fit their needs throughout the winter season,” says Lucas. “With total Halls being the number one Relief Candy brand in the UK, and Halls Soothers seeing a double-digit growth (11.6%) during last cold and flu season [Nielsen, Jul 18], we believe that the new look and the PMPs, combined with a nationwide out-ofhome campaign close to stores, will provide a real opportunity to inspire purchases and help retailers drive relief candy sales.”

CASHING IN ON MEDICATED CONFECTIONERY Q Out-of-home advertising by Halls close to convenience stores will help drive awareness and demand in December Q Retailers should take advantage of this investment by stocking up ahead of the cough and cold season on consumer favourites Q If space is limited, stock up on the best sellers: number one SKU Halls Soothers Blackcurrant [Nielsen Jul 2018] and Halls Extra Strong Q Price-marked packs will help maximise sales especially when stocked at the counter Q Consider dual siting on both a main fixture and at the counter Q For further category advice, visit deliciousdisplay.co.uk

www.slrmag.co.uk

*Nielsen value sales MAT 15.07.18

Feature

Tea

TEA UP FRESH SALES

It’s that time of year again when hot drink sales move up a gear as shoppers seek out familiar friends to ward off the colder weather. However, the market is evolving and retailers must evolve alongside it.

KEEP AN EYE OUT FOR… NEW PACK FORMATS Tetley’s new format pack for its Green teas and Supers range gives greater visibility on shelf from a slimmer carton. This means around 25% more product can be put into the same shelf space. The packaging is also 100% recyclable. COLD INFUSIONS Servings of cold drinks outsold servings of hot in the UK for the first time last year. Tetley’s new and affordable Cold Infusions range of fruit and herbal infusions was developed specially to be brewed in cold water. Raspberry & Cranberry; Passionfruit & Mango; Orange & Peach; and Mint, Lemon & Cucumber variants are available. MULTI VITAMINS Tetley has added two new SKUs to its Supers range: Super Herbal with Turmeric & Camomile, and Super Fruit with Summer Berry. Both have added vitamins C, E, B1, B3 and B7 and are available with an RSP of £1.79 for 20 bags.

ith all the furore over coffee in recent years, retailers could be forgiven for thinking that tea has gone off the boil – but nothing could be further from the truth, as Peter Dries, Director of Customer and Shopper Marketing at Tetley explains: “Tea remains the nation’s favourite hot beverage with 165 million cups drunk every day and buying numbers actually on the increase”. But there’s a catch. Or to be more precise, a shift in tastes. As in many other categories, tea drinkers are increasingly looking for healthier options. Dries comments: “According to a study by Kantar, 31% of consumers select products for their health benefits, naturalness and positive nutritional content. Tea’s good fit with health is benefiting sales, particularly of healthy sectors like decaf, green, fruit and herbal as well as the growing category of functional teas.” He cites Nielsen data from August this year which demonstrates that in Scotland, outside of everyday black, all core sectors of tea are showing value growth. In Total Impulse value growth is coming from everyday black decaf up 4.8%, fruit and herbal up 7.8%, green teas up 11.2% and Redbush up 1.2%. “For local retailers, the tea shopper is a valuable shopper,” continues Dries. “Of all the hot beverages, tea buyers are more likely to buy complementary products with their tea purchase. Common basket companions are milk and bread, as well as cakes and pastries for on-the-go purchases, and biscuits and cakes to enjoy at home.” The key to unlocking those increased basket spends is focusing on big brands. Dries again: “Relative to other categories, own-label is weak in tea and tea brands are a major influence when deciding what to buy, 87% of shoppers say that brands are an important consideration when buying tea.”

Consequently, it will be worthwhile focusing your efforts and shelf space on the brands delivering the goods. Three brands alone deliver the bulk of sales in Scottish convenience by volume, according to the same Nielsen data from August: 1. Tetley 31.5% 2. PG 29.9% 3. Yorkshire 16.6% Everyday black teas still dominate sales (over 93%) but it will pay to balance these with teas from other sectors which deliver higher value sales. Everyday decaf is a must-stock stock as its buyers typically won’t purchase anything else. Green tea is a continually growing opportunity, with Tetley Pure Green 50s the top selling SKU in total market. Redbush tea – naturally free from caffeine – is another interesting option and, once again, Tetley is the top brand in the sub-category. It’s also possible that Functional Teas could be the next big thing, as more and more shoppers seek out nutritionally-enhanced products. Dries comments: “Tetley Supers were the first range of functional teas with added vitamins and EFSA-approved health claims to enter the market. “Spanning Green Tea, Fruit and Herbal and new Super Squash, the Tetley Supers range includes 20 variants with seven different health benefits. It has been a huge success, bringing new customers into both the green and fruit & herbal segments, delivering strong sales and repeat purchase.” It’s also worth noting that demonstrating the offer of value is important. In smaller stores PMPs have an important role to play – but it’s vital to get the mix right and leave room for higher value sales from products that can stand alone without being heavily promoted and discounted.

TEA STILL THE DADDY Q Q Q Q

SLR | OCTOBER 2018

Tea remains a staple of the shopping basket and the nation’s favourite hot beverage 165 million cups are drunk each day Buyer numbers are up 0.3% [Kantar, Aug 2018] Tetley remains the household’s favourite, with more buyers than any other tea brand and the largest household penetration at 34% [Kantar, Aug 2018]

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Coffee

PROFITS BREWING AS COFFEE KEEPS GROWING A good quality coffee offering has gone from being a ‘nice to have’ to an absolute must for all convenience stores in Scotland over the last few years – and that trend looks set to continue.

ho would have thought 10 years ago that coffee would be a major category in the majority of c-stores in Scotland? Who would have predicted CocaCola buying Costa Coffee for £3.9bn, even a year ago? The category has gone from niche to bigger than mainsteam in the last few years and very few stores these days don’t offer at least some sort of coffee offering. The latest shift is seeing retailers migrate up the coffee food chain away from quick and cheap brews to higher quality, artisan coffees that allow them to compete head-on with the array of specialist coffee shops that adorn most of our high streets. “Gone are the days of offering black or white instant coffees,” says Laura Sayer, Head of Directs at Costcutter Supermarkets Group. “Many of our retailers are upgrading their coffee offering to bean-to-cup machines as customers now expect a variety of specialty coffees. Our retailers’ drinks range covers everything from Americanos and Vanilla Lattes to Macchiatos and Espressos.” Costcutter has met the challenge of providing higher quality solutions by forming alliances with a number of the leading coffee houses to ensure their retailers have access to a great quality product at a good price – and Sayer suggests that no local retailing outlet is complete these days without a strong coffee offering. She says: “A hot drinks-to-go machine is a must-stock addition for many independent c-stores. We have developed strong working relationships with several coffee houses including Seattle’s Best, ExpresscoPlus (Lavazza), Selecta and Tchibo. Some of the greatest success stories have been where recognisable brand signage is placed outside of a forecourt attracting shoppers, including local residents and passing trade.” 50

SLR | OCTOBER 2018

Another strong offering is the one from My Coffee Station which offers a range of striking hot drink stations, perfect for the centrepiece of a strong food-to-go area in a store. The unit comes with no capital outlay and free installation, with free exterior and interior marketing and promotional materials thrown in too. Retailing at £1.75, the products offer a strong POR of 31%, or 55p, a cup. There’s little doubt that the power of a big brand is something that many retailers are coming around to these days. The big name offers customers a quality guarantee, and for many of them that’s more important than the price. But, as always, it’s never that simple, as Sayer explains: “However, with the average number of coffees sold per day by the convenience industry estimated at 18, the average rural store selling 7-8 and a forecourt 50-60, retailers need to not only consider the space available – whether that’s a small counter top machine or big self-standing unit – but also the footfall in their store, to ensure the machine suits their needs.” To help Costcutter retailers meet this challenge, the company provides local insights through its Shopper First Programme, so retailers can understand what approach will work best in their store. Sayer says one Costcutter retailer saw his weekly sales exceed £3,000, selling more than 250 cups per day, which equated to around 15% of overall turnover. Coffee also offers a great opportunity to drive basket sales across food-to-go throughout the day. Regardless of the time of day, there is always a demand for hot drinks and food-to-go. To increase the attraction of food-to-go offers, retailers should consider running a range of in-store promotions and meal deal solutions, such as lunch and breakfast bundles including a hot drink, sandwich and packet of crisps for a set price.

SELF-SERVE SEATTLE FROM ARYZTA [PIC INCLUDED] Aryzta Food Solutions’ partnership with Seattle’s Best Coffee offers a range of quality coffees made from only Fairtrade 100% Arabica beans in integrated touch screen devices using fully-automated technology to produce consistently highquality beverages. Paul Whitely, Head of Marketing UK, says: “Coffee is a big footfall driver – almost three-fifths of hot drink-to-go shoppers say it is the main reason they go into store which makes hot drinks an important focus for convenience store retailers. “Convenience retailers across the UK are now recognising the opportunity installing a premium coffee-to-go facility can provide. Our partnership with Seattle’s Best Coffee provides retailers with a range of self-serve solutions that delivers both great-tasting hot drinks and a great customer experience.” Shoppers can enjoy Seattle’s Best Coffee favourites including the choice of a Latte, Americano, Mocha, Cappuccino and brewed filter coffees, as well as hot chocolate. “The Seattle’s Best Coffee units provide highly visible branding creating a destination in-store,” says Whitely. “Retailers have the option to build Aryzta’s bakery brand Cuisine de France and American sweet treat brand Otis into the units to offer day part deals and encourage link sales. Shoppers can pick up a pastry in the morning or a doughnut or cookie in the afternoon whilst they wait for their coffee to pour.”

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Christmas Confectionery Preview

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HAVING A CRACKING CHRISTMAS! It’s almost that time of year again as we all start gearing up for what we hope is a great festive season. To get the ball rolling, SLR caught up with Mondelez International to find out where retailers should be looking for profits this Christmas.

ll the signs are that shoppers are getting more and more excited about Christmas every year, with UK Christmas retail sales topping £44bn in 2017 [Mintel, Dec 2017]. The big question is: how do local retailers in Scotland ensure that they are getting their share of the festive spoils? In a word, confectionery, says Mondelez International, which leads the Christmas chocolate category, with a 23% [IRI, Dec 2017] share of the market, driving £174m value sales [IRI & Kantar,

Dec 2017]. For many people, confectionery is synonymous with the gift-giving traditions of Christmas. As one of the highest penetration categories, Seasonal Chocolate & Gifting presents a fantastic opportunity for retailers to drive sales from October and November through to December. From advent calendars to selection boxes, the Christmas category is versatile, highly incremental, and brings friends and family together across the nation. But how do we go about ensuring they buy it at the local store?

IT’S ALL IN THE TIMING… Seasonal ranges in convenience depend on local needs and, crucially, the size of the convenience store in question. Festive ranges require adaptation throughout the season to make the most of the opportunity. Sales can be optimised by getting the timing right: Q Be prepared early, starting the countdown in October with self-treats (like the Cadbury Dairy Milk Mousse Snowman) Q Continue the countdown into November, with advent calendars and novelty sharing lines. Q In December make it clear that the ‘magic of Christmas’ has arrived in your store, by stocking selection boxes, Christmas-themed gifts, family sharing lines and top-up gifts – these can replace advent products on December 1.

THE CHRISTMAS COUNTDOWN: Mondelez caters to a wide variety of needs and occasions with a portfolio that is split into subcategories to help maximise sales, with ranges ‘for me’, ‘for us’, ‘for them’ and ‘giving & sharing’. For me: The Mondelez self-treat range kick-starts the season with festive novelties that help build excitement. Consider Cadbury Dairy Milk Mousse Snowman (65p RSP) and Cadbury Dairy Milk Snow Bites (60p RSP). For us: The sharing occasion plays a significant role in households at Christmas. The number one gifting novelty is Cadbury Crackers, worth £1m and the number one sharing novelty is Cadbury Snow Bites, worth £2m [IRI, Dec 2017]. New for 2018: Maynards Bassetts Frosted Wine Gums – a new festive take on the classic Wine Gum flavours (£1.32 RSP). Returning for the season: Back again are Cadbury Snow Bites 90g (£1.15 RSP), Cadbury Dairy Milk Winter Edition 100g (£1.42 RSP) and Cadbury Dairy Milk Snow Balls 112g (£2.99 RSP), among others, as well as the number one candy sharing novelty in 2017 [Nielsen, Dec 2017], Maynards Bassetts Jelly Babies Snowmen 165g (£1.32 RSP).

THE MAGIC OF CHRISTMAS For them: Gifting goes hand-in-hand with the festive season. Mondelez has the number one advent calendar, Cadbury Dairy Milk 90g, as well as a host of favourites and NPD. New for 2018: The Cadbury Premier League Advent Calendar aims to excite young adults while with a new Green & Black’s advent calendar will drive excitement in the adult advent category. Maynards Bassetts Mixups incorporate much-loved Sports Mix, Wine Gums and Midget Gems into one festive carton (£3.29 RSP) while the Maynards 52

SLR | OCTOBER 2018

Bassets Wine Gums Frosted Jar is filled with 2018 NPD Frosted Wine Gums (£5.15 RSP). Also new is the Cadbury Christmas Selection Box Plush Toy and the Cadbury Plush Stocking. Returning for the season: A range of favourite advent calendars, selection boxes, tubes, cartons & jars, tree decorations and novelties will be back. The Cadbury Dairy Milk Advent Calendar 90g (£2.19 RSP) is the number one advent calendar [IRI, Dec 2017] and a must stock. The Cadbury tubes range is worth over £3m [IRI, Dec 2017] and includes 72g lines featuring Cadbury Fudge Minis, Cadbury Dairy Milk Freddo Faces and Cadbury Dairy Milk Buttons (all £1.42 RSP). Mondelez is also the number one manufacturer in candy cartons [Nielsen, Dec 2017], which all have a new look for 2018.

GIVING & SHARING From this month tubs and sharing bags play a significant role in households. The Mondelez ‘giving and sharing’ range includes the number one ‘thank you’ brand, Cadbury Roses [IRI, Dec 2017], which turns 80 this year and is available in carton, tub and ‘flower tub’ formats. Also available is Cadbury Heroes, which secured 11% growth last year [IPSOS 2017]. New to 2018: One new line to tempt shoppers with this year is Sweet Shop Pouch with Cadbury and Maynards Bassetts, ideal for the adult sharing occasion (£6.29 RSP). Returning for the season: Christmas wouldn’t be Christmas without the huge range of Cadbury Heroes, Cadbury Roses, Cadbury Milk Tray and Terry’s Chocolate Orange lines, available in a wide selection of pack sizes and formats. www.slrmag.co.uk

* Number one confectionery Supplier - IRI 2017 data to 31st December 2017 **C-store shop project 2016

Feature

Scottish Brands

SCOTTISH BRANDS: WHERE PRIDE AND PROFIT MEET Scotland is blessed with an array of fantastic home-grown brands and products, many of which are staples in every local retailing outlet in the country. SLR looks at some of the best.

he Scots are a breed apart, it’s often pointed out, and that is certainly true when it comes to the products that Scottish shoppers buy in convenience stores. While the differences between Scottish consumers and their southern counterparts have often been exaggerated, there’s no doubt that the Scots take a certain pride in choosing local, regional and national products. Fortunately, Scotland is blessed with a fantastic bounty of home-grown brands and products, many of them category-leaders. According to Kantar Worldpanel’s Scottish Brand Footprint 2018, the top 30 Scottish brands make some 34% of their sales by value in Scotland. The fact that Scotland only represents about one tenth of FMCG sales in GB overall demonstrates how loyal Scottish shoppers are to Scottish brands.

SLR | OCTOBER 2018

We look at some of the brands that are driving footfall, sales and profits in stores across Scotland…

BARR SOFT DRINKS Ask someone to quickly name a Scottish brand and nine times out of 10 the answer will be Irn-Bru. It’s the number one Scottish grocery brand with annual sales of over £85m in Scotland and accounting for almost 60% of flavoured carbonates in convenience [IRI, Aug 2018]. Adrian Troy, Marketing Director at Barr Soft Drinks, says: Scotland’s £897m soft drinks category continues to be one of the most profitable categories for convenience retailers, growing to be the second-highest bought category in Scottish convenience after newspapers [IRI, Aug 2018], with Barr Soft Drinks’ brands playing a key role by offering

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Stock Up Today

With Britain's Favourite Shortbread Brand* If you're not stocking Paterson's yet, why not give us a try? Great Shortbread, Great Value!

*Kantar World Panel 52 w/e 17.6.18

Scottish Brands

Feature

choice, quality and innovation.” Troy recommends that retailers merchandise all three variants of IrnBru to attract shoppers to the fixture, as consumers continue to look for a choice of regular, low and zero sugar products. Irn-Bru sugar-free is Scotland’s leading low-calorie flavoured carbonate while Irn-Bru Xtra delivers the same taste as the regular version but with zero sugar. It has already generated over £10m worth of additional sales for Scottish retailers since launch [IRI Marketplace]. Not only that, research has confirmed that drinking Irn-Bru makes 89% of Scots feel proud to be Scottish [LVQ Ad Tracking Research]! The £16m Barr Family range is Scotland’s most popular range of flavours and accounts for 17% of flavoured carbonate sales and is showing strong growth of 20% [IRI, Aug 2018]. Provenance and product benefits are increasingly important to consumers, particularly in relation to water. People are not only looking for water brands they know and trust, they are increasingly conscious about the source of the water, which reinforces the provenance message. Barr’s Strathmore spring water remains a quality, trusted water brand in Scotland, currently growing at 7% [IRI, Aug 2018].

MCINTOSH It may surprise some retailers to learn that Scottish superbrand McIntosh of Strathmore is actually the UK’s number one ready meal brand and Scotland’s favourite Mac & Cheese producer. The brand is part of Strathmore Foods, a business founded in the early 1970s and still owned by the same family over 40

SLR | OCTOBER 2018

years later. In 2003 Strathmore acquired the ailing McIntosh chilled meal brand, which operated in a category that was almost entirely dominated by retailer own-label products. Since its re-launch by Strathmore, the brand has expanded to cover ready meals, pastry products and savoury puddings, and has continued to grow year-on-year, with 2018 being no exception. Julie Nisbet, Managing Director, Strathmore Foods says: “It’s been a great start to the year already for our brand with the launch of our Sausages & Mash in collaboration with Simon Howie and the very popular Spicy Mexicana Macaroni Cheese Pies, but September has been an exciting month for us”. September saw the brand release multiple new products and sub-brands which now stretches McIntosh across four different retail tiers: the core ready meal range, new premium ‘select’ products, new children’s ready meal brand ‘Kidz’ and Food To Go Pots for customers to grab and go. Nisbet explains: “Our Food To Go Pots offer a great opportunity for businesses with a food to go area to jump on the success and popularity of the McIntosh of Strathmore brand. Our Macaroni Cheese is the bestselling ready meal in Scotland so giving people the option to purchase this hot, to take away will certainly please your customers.” The first of the company’s ‘select’ range to hit shelves was a McIntosh Select Hot Roast Scottish Salmon Pasta and the brand is also releasing a range of children’s meals which

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

Feature

Scottish Brands

is the first of its kind for a Scottish ready meal brand. The range includes six different product varieties: Cottage Pie; Macaroni Cheese; Pasta Bolognese; Sausages, Beans & Mash; Scottish Stovies and Tomato & Pulses Pasta. Recent Kantar market data demonstrates that the McIntosh brand is growing at 12% YOY, more than three times the rate of the total chilled ready meal market in Scotland. Nisbet concludes: “I truly believe a lot of this success is down to our ability to understand what our Scottish customers are looking for and provide them with just that. We pride ourselves on our ability to really get to know our customers and I think this is important for all Scottish brands to consider.”

TENNENT’S If it’s not Irn-Bru that shoppers mention when asked to name a Scottish brand then you can be pretty sure it’ll be Tennent’s that comes to mind for them. The iconic Glaswegian brewer has long enjoyed legendary status in the Scottish off- and on-trade sectors, despite the repeated attempts of deep-pocketed global brewing giants to try to muscle their way into the Scottish market. Tennent’s is working hard with retailers to help them attempt to cash in to the opportunities that may exist with Minimum Unit Pricing (MUP) in place. Off Trade Sales

Director Norman Loughery comments: “We commissioned a detailed consumer research ahead of MUP’s implementation. This highlighted a range of opportunities for independent retailers to consider. “Under MUP there is no pricing benefit to purchasing alcohol in supermarkets for shoppers. We therefore expect, over time, a shift in consumer habits that will see drinkers purchasing smaller size packs, as well as purchasing more frequently. With this in mind, independent retailers are likely to see an increase in consideration of alcohol from shoppers, providing them with an opportunity to drive purchase, particularly as our research shows that consumers view a ‘convenient location’ and ‘good range of products’ as the most important considerations for shopping after price.” The research also highlighted that most shoppers are likely to spend the same amount on alcohol, with key price points that retailers should look to hit being £5, £10 & £15. “Packs crossing these thresholds are likely to suffer disproportionate volume losses,” advises Loughery. “No price incentive on large packs will see their removal with small and mid-packs becoming key to category sales. Without the ability to use price to differentiate themselves from market leading products, weaker brands are likely to lose out; we recommend rationalising slow sellers and weaker performers in order to dedicate sufficient space to selling Scotland’s favourite brands – like Tennent’s Lager and Magners Cider.” With no ability to discount below the Minimum Unit Price, an increased focus on what the consumer values, will be crucial for retailers. Over half of beer and cider is consumed (in part) on the day of purchase. By maximising chilled space on best-selling packs, retailers will sell the products Scots are looking for, chilled and ready for (near) immediate consumption. This will improve perceived value and entice consumers to come back time and time again – particularly over the coming festive period.

HAMLYNS OF SCOTLAND The increased focus on healthy eating, and the huge trend for overnight oats has played right into the hands of Scottish favourite brand Hamlyns of Scotland. The trend has led to growth of the category meaning that porridge is no longer just for the colder months, but is enjoyed all year round. The Hamlyns of Scotland brand of porridge oats and oatmeal continues to grow steadily, currently at number 41 in the Kantar Worldpanel list of Top Scottish Food and NonAlcoholic Drink brands.

TOP 30 SCOTTISH BRANDS IN SCOTLAND IRN BRU 10 GRAHAMS 12 MCLELLAND 32 BAXTERS 37 BELLS 38 TUNNOCKS 39 MCINTOSH 44 BARRS 49 MALCOLM ALLAN 60 HALLS 63 SCOTTY 87 MACKIES 97 KETTLE FOODS 98 SIMON HOWIE 103 ROWAN GLEN 118 TENNENTS 134 HIGHLAND SPRING 155 BARTLETT 166 BORDER BISCUITS 168 NAIRNS 172 PATERSONS 205 MAC B 213 WISEMAN 256 FAMOUS GROUSE 262 SCOTTISH BLEND 308 GLENS 336 GENIUS 360 CRAWFORDS 383 SCOTTS 388 MCEWANS 431 Kantar Worldpanel Scottish Brand Footprint 2018

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Scottish Brands

A genuine ‘superfood’, porridge continues to be a star performer in the hot cereals sector and Hamlyns is reporting its best ever sales of both Hamlyns Scottish Porridge Oats and Hamlyns Scottish Oatmeal, the latter of which is the brand leader by a mile in Scotland. Both products should be considered a ‘must-stock’ in every store’s cereal aisle. Hamlyns of Scotland’s Managing Director, Alan Meikle said: “Our main focus continues to be on growing the Hamlyns of Scotland brand within Scotland. Our Scottish Porridge Oats and Scottish Oatmeal are guaranteed to be 100% Scottish from field to mill to finished product, which is important to the growing number of consumers who want to know they are buying a quality Scottish product, and supporting Scottish jobs and Scottish farmers. We already shout about this on our website, and we’re planning to do more about provenance in our winter marketing campaign.” Earlier this year Hamlyns introduced a new 500g pack of Hamlyns Scottish Oatmeal particularly aimed at home bakers. In many stores, this has resulted in Hamlyns Scottish Oatmeal being dual ranged in both the cereal and home baking aisles. John Kerr, Director of The JFK Partnership, who have responsibility for Hamlyns sales, said: “The multiple retailers have enjoyed huge success with dedicated Scottish aisles at the store entrance and also highlighting Scottish products throughout the store. Larger independents should consider something similar where space allows. Alternatively, add a Saltire to the shelf to clearly highlight a products’ Scottish provenance.”

LEES OF SCOTLAND According to Sheevaun Thomas, New Product Development Manager at Lees of Scotland, provenance is critical to the success of the Lees brand: “As consumers we have become increasingly conscious of only buying products when we can be confident

SLR | OCTOBER 2018

that it is coming from either a trustworthy or known source, which is why provenance, now more than ever, has become a huge key trend driving sales and profits across Scottish convenience stores.” Lees is a well-known Scottish brand that has seen its sales continue to increase, driven by consumers who are keen to buy local quality products, believes Thomas. “But it’s not just Scots that retailers should be targeting,” she says. “Tourists from all over the world have an affinity with Scottish brands, which should be a key focus for c-stores when stocking products. Outlets that attract a high number of tourists should be looking to stock home-grown brands, such as Lees Scottish Macaroon or Tablet, when filling their shelves.” For provenance to remain a driving factor, however, it must be backed up by innovation and creativity in product development, adds Thomas. In other words, it not just down to being Scottish but also to delivering high quality, innovative, tasty products that meet the demands of modern consumers. She concludes: “Consumers want to know that we as a brand can not only provide the products that they have grown to love, but offer something new as well. For example, this year we will be launching our 8-pack Snowy Snowballs for the winter and Christmas season, and our 12-pack Lees Mini Snowy Snowballs as a response to changing consumer purchasing trends.” Thomas recommends that retailers tap into this growing market for Scottish brands by ensuring they stock a range of homegrown brands that consumers instantly recognise and trust, and try grouping them together in an eye-catching display that will draw consumers in. Cross-category promotions are also a good idea and are very simple to implement. Retailers can pair up snacking packs of Lees Jam Teacakes with hot drinks packs like teas, coffees and hot chocolates to see a quick return in pick up and purchase, for instance.

PATERSON’S No

Scottish

brands feature would be complete without a mention of the nation’s favourite shortbread, Paterson’s [Kantar, Jun 2018]. The iconic company’s journey from a husband and wife team selling home-baked oatcakes in Rutherglen to becoming one of our country’s best known independent food companies would have been beyond even the wildest dreams of Mr and Mrs Paterson as they started out in 1895. The success is built on a simple formula – high quality food from clean, sustainable ingredients – and, with 48% branded share, Paterson’s Shortbread is the nation’s favourite shortbread brand and a must stock this Christmas. Consumer demand for shortbread is at its highest over Christmas, with over 50% of total category sales taking place in the 12-week festive season. Paterson’s Shortbread’s famous great taste and great value offer makes it perfect for every occasion and use point, from price-marked cello packs for impulse snacking, to cartons and larger assortments for everyday and gifting. Paterson’s is the perfect choice for retailers looking to add great taste, great value and leading brands to their category this Christmas.

SCOTLAND’S PRODUCERS HEAD TO LONDON Nineteen of Scotland’s top food and drink producers headed to London last month to show their wares at the Speciality & Fine Food Fair during Scottish Food & Drink Fortnight. Over 9,000 buyers from retail, catering and wholesale attended the show to discover new Scottish products in one place under the ‘Scotland, a Land of Food and Drink’ pavilion. Lucy Husband, UK Market Development Director at Scotland Food & Drink, said: “Trade exhibitions are an important part of companies’ sales strategy and presenting under the Scotland, a Land of Food and Drink pavilion is highly valued by our exhibitors. The strong regional presence enables companies to showcase their products and businesses to a wide range of UK and international buyers from a number of speciality sectors in one place.”

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PERFECT PORRIDGE IN EVERY WAY

For all sales enquiries please contact THE JFK PARTNERSHIP LTD

Tel: 01343 541496 Email: sales@jfkpartnership.com

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UTC

JUST THE TONIC UTC has been a bit late to the ‘app’

YOU CAN’T RUN AS FAST AS THIS GINGERBREAD MAN

Despite an enthusiastic loathing for joggers, UTC nonetheless doffed his moth-eaten cap last month to one Ian Pickett, Senior Partner at Drayton Partners, who secured a new Guinness World Record by running the fastest time for a half marathon – dressed as a gingerbread man. Ian completed the course in one hour and 29 minutes, which is bloody fast – even without a silly costume on, and he did it all to raise funds for industry charity GroceryAid. Somewhat surprisingly, he was the not the first man to run a half marathon dressed as a gingerbread man, but Ian clipped 72 seconds off the previous record time to put his name in the history books and raise over £1,500 for GroceryAid into the bargain.

STAIRLIFT TO HEAVEN Very few people can take personal offence at a press release presumably circulated to every magazine in the UK, but the auld yin is one of the few. Pretty much anything can get his angina twitching: like a warm pint tumbler at the Rhoddie Dhu, a cold sausage roll from Greggs or, in this instance, an email from Acorn Stairlifts. Presumably assuming that the mass email was directed at him personally, UTC took the hump at the suggestion he might be interested in said stairlift for his home, not least because he lives in a flat. Apparently a survey by the Centre of Ageing found that the 20.4% of the UK’s 65.6m population is over the age of 65 and that many organisations are “unprepared to employ an ageing workforce.” According to the Centre of Ageing, old folk can bring many benefits to a business [Ed – really? Give me a for instance], although they also bring a number of challenges. A robust debate ensued and that conclusion was that the difficulty UTC had getting back up the stairs to the office after another of his infamous liquid lunches had nothing to do with being old – although a stairlift might still come in handy. 62

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party, only recently having traded up from his Nokia 3310 to a phone that can actually run apps. Obviously he’s now an avid downloader of all sorts of random nonsense, so picture his wee face when a colleague alerted him to a brand app he might love called ‘Cru’. The auld yin’s ears pricked up until he learned that it would help him track the performance of his fine wine portfolio in real time and purchase the market’s most exclusive fine wines through a one-click checkout. It was at this point he realised that his colleague was taking the piss but, fair play, he downloaded it anyway. Imagine his disappointment when he couldn’t find Buckfast listed anywhere. He also had a go at punting a bottle of Retsina he bought on holiday in Corfu in 1974 – but no joy there either. Call yourself a wine app and you don’t even do Buckie?

GET A GRIP

Very occasionally the Ed has to commandeer a few column inches for a story that the auld yin has deemed non-newsworthy. This is one such occasion. When the boss read that “82% of denture wearers experience problems with food getting stuck in their dentures” and that Poligrip had a solution, all thoughts turned to UTC. If you’ve ever lunched with the old boy and watched him fish out his falsies then rinse them in a pint of heavy, you’ll know why. Poligrip Max Seal will “help form a superior seal and protect against irritating food particles while providing a firm and long-lasting hold.” Nuff said. The SLR team is now crowdfunding to buy the auld yin a lifetime’s supply [Ed – about six months’ worth, then?] to ensure that team lunches will never be the same again. Cash donations welcomed.

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