14 minute read
NEWS
from FFD June 2022
NEWS Supermarket price cuts and wage increases making life tougher for indies
By Greg Pitcher
Supermarkets are piling pressure on independent retailers by cutting prices and raising wages despite the economic storm.
A number of the large chain retailers have announced price cuts or wage increases this year as they battle for market share and positive industrial relations amid the cost-ofliving crisis.
This is leaving many ne food purveyors in a di cult position trying to retain and attract customers and sta while costs soar.
Daniel Williams, project manager at Godfrey C Williams & Son, said the Cheshire business had noticed a direct impact from a local supermarket.
“We advertised for a cheesemonger for our counter and it wasn’t lled because the local Waitrose was also looking for people and paying more,” he said. “Meanwhile they might
The cost-of-living-crisis has prompted supermarkets to cut prices
have o ers on products that we can’t compete with.”
To allow it to raise wages further, the cheese specialist has tweaked its product range to generate more income.
“We have gone into English wine, which gives fewer storage issues than cheese and o ers a greater pro t margin.”
“Our initial strategy was for most of our wines to be in the £15-£25 range,” explained Williams. “But with the cost-of-living crisis we’ve adapted to o er more wine at under £15 with in-store tastings to show their value.”
Emma Mosey, co-owner of Yolk Farm & Minskip Farm Shop said the North Yorkshire business has been working hard to nd ways to keep employees happy.
On top of a “signi cant” wage increase this year, the retailer has increased the sta discount in its shop and restaurant and organised more team events. Taking a long-term view remained critical, Mosey said.
“In the short term, what the supermarkets are strategising is e ective, but if in ation continues to rise, increased costs and wages across the board on businesses of that size are not sustainable.”
Andrew Goodacre, chief executive of the British Independent Retailers Association, warned the pressure from supermarkets could intensify.
“There is a real danger that large companies will exert even more buying power – whether it is for stock or for labour,” he said.
“The cost-of-living crisis is making it harder to retain and recruit people into indie retailing. There is also signi cant pressure from large companies to keep prices of known-value items low. Once again this will place pressure on the smaller retailer who simply does not have the same power with suppliers.”
Waitrose adds to delis and boosts support for pig farming
Waitrose has added a number of lines to its deli counters, as well as reintroducing its Wine Tasting at Home service and providing a support package to British pig farmers.
The upmarket chain has listed lines from British charcuterie producer Capreolus, biscuit-maker The Drinks Bakery and smoked salmon brand Pished Fish.
It has also bolstered its own-label o er with new Continental charcuterie products and, according to a report in The Grocer, it will be making physical improvements to a number of its in-store counters.
At the end of April, Waitrose announced the relaunch of its Wine Tasting at Home service, which can now be carried out in-person having been o ered virtually over the past two years due to social distancing measures.
The retailer also unveiled a support package for its British pig farmers, which could amount to £16m, a er pork prices dropped due a fall in exports and an oversupply in the UK market.
Most multiples are adjusting to cost-of-living crsis
Asda and Morrisons both lost market share during the first 12 weeks of this year after becoming “progressively less price-competitive” in 2021, according to Dominic Miles, global head of consumer at advisory firm L.E.K. Consulting.
Both retailers had since responded with “major initiatives to re-establish their price competitiveness,” he added, while other supermarkets remained “extremely focused on keeping pricing in check”.
At the same time, Tesco, Sainsbury’s and Morrisons are among the big names to pledge wages of at least £10 per hour to shop staff – well above legal minimums.
German discount chains Lidl and Aldi have also upped pay for staff to more than £10.
Iceland is now offering over-60s shoppers money off their groceries every Tuesday.
Research by the Office for National Statistics showed householders were thinking more carefully about spending on groceries, said Miles.
This could result in fewer trips to independent stores, he warned, “potentially amplified by a heightened perception of [them] being expensive as a result of the major grocer price initiatives”.
WHAT THEY ARE SAYING ABOUT... COUNTERACTING THE SUPERMARKETS
DANIEL WILLIAMS, GODFREY C WILLIAMS & SON, CHESHIRE
“I would consider looking at products that provide a worthwhile profit margin and dumping those items that aren’t. We used to have a Chinese and Indian sauce range but if they just sit on the shelves, you have to cut them loose. It comes down to maintaining your unique selling points and adapting what takes priority.”
“The key goal must be to maintain the level of relevance and consumer interest in the store – for example, by emphasising the product quality at a farm shop, or the service level at a high street deli. Alongside this, there may be a need to adjust the range and price architecture to help consumers through the squeeze.”
“Ultimately the smaller retailer will need to continue to focus on local – for people and products. Provenance is still a strong marketing tool, as is sustainability, and I would urge the indie retailer to take a lead in these two areas to compete.”
DOMINIC
MILES, L.E.K
CONSULTING
ANDREW
GOODACRE,
BRITISH
INDEPENDENT
RETAILERS ASSOCIATION
NEWS HFSS display laws are another “burden” for farm shops
By Greg Pitcher
New laws limiting the way retailers can display “less healthy” products are causing a fresh challenge for independents during an increasingly difficult trading period.
Farm shops warned that the Food (Promotion and Placement) (England) Regulations 2021 would add to their “burden” amid soaring bills and disrupted supply in the wake of the pandemic and the war in Ukraine.
The law, due to come into force on 1st October, places strict limits on where larger stores can place goods classed as being high in fat, salt or sugar (HFSS) – ruling out displays near tills, queues and entrances.
The enforcement of a second part of the regulations, concerning restrictions on promotions of higher volume HFSS purchases (such as multibuy deals), has recently been deferred by the Government for a further year until October 2023.
The detail of exactly which retailers, products and promotions are affected is complex but many in the sector will need to address it. Farm shops are particularly in the spotlight as many meet the criteria of employing more than 50 people and having a retail area of more than 2,000sq ft.
Farm Retail Association chairman Rupert Evans said his members “intrinsically promote heathy food” yet “find themselves caught up in the new legislation”.
He added that communication of the
regulations had been “poor” and voiced concern over the timing of implementation. “The horrific humanitarian crisis in Ukraine has knock-on effects to the global food chain, coupled with the lockdown in Shanghai,” said Evans. “This is another administrative burden that will have to be faced – and the timing is far from ideal.”
Rob Copley, owner of Yorkshire-based shop, café and events venue Farmer Copleys, said the law could have major implications for the business.
“We are still getting our heads around what it means,” he said. “We put in a 10m deli counter last year with an integrated ice cream counter that is within 2m of a till – I spent £125,000 putting it in and now we may have to move it to be within the law.”
Copley compared the administrative task of understanding and complying with the unhealthy food rules with that related to Natasha’s Law, which came into effect last October requiring full ingredients lists on all food pre-packed directly for sale.
While he understood the importance of that legislation – which was introduced after the death of Natasha EdnanLaperouse, who suffered an allergic reaction to a sandwich – Copley said the HFSS changes “just seem a bit pointless”. “Is this the way to beat obesity, by moving things round in a shop?” he asked. “It won’t make any difference to how much we sell or buy of anything – it just gives us a headache.”
IN BRIEF
The Source Roadshow, a spinoff of the wellknown West Country trade show, will be bringing 150 exhibitors to Bristol’s Ashton Gate Stadium, on Thursday 16th June.
bristol. thesourcetradeshow. co.uk
Soil Association Certification has appointed Dominic Robinson to replace Martin Sawyer as its new CEO. Robinson joins from Severn Trent Water where he was Head of Visitor Experience.
Fairtrade spice specialist Steenbergs is the latest producer to become certified as a B Corp. This covers both the North Yorkshire business’s Steenbergs and Old Hamlet Wine & Spice brands.
Early adaptation: how Belvoir Farms has prepared for HFSS changes
Independent producers of food and drink products are wrestling with the implications of the incoming “less healthy” food laws.
Pev Manners, managing director at Belvoir Farm Drinks, said the Leicestershire firm had been working on the issue for 18 months.
“It has been coming down the track at us,” he said. “We make indulgent sparkling drinks and people buying premium products want sugar.
“HFSS legislation is going to hit our sparkling drinks big time because we can’t promote them on retailers’ secondary space such as gondola ends.”
The drinks-maker has tweaked its range to offer more low-sugar products.
“We’ve launched a range of botanical sodas, which are made from a little bit of fruit and a little bit of sugar. They are HFSS-exempt and they’re going quite well.
“We are shaping our range partly in response to this regulation – and because we think it is a big market. The amount of sugar in drinks is going down. Consumer tastes are slowly changing.”
Manners said that while supermarket sales remained a big part of the company’s strategy, it would also consider boosting its deliveries to smaller retailers who don’t have to comply with the latest regulations.
“We still sell a lot to the specialists, it is very important to us, a vital part of our business,” he said.
“Because we make our products with enormous care and very high quantities of delicious ingredients, they do carry the higher prices in some speciality stores.
“There is an opportunity for independents, they have to work with suppliers and pass discounts on to consumers.”
Get your head around the new legislation
Recently published Government guidance on the Food (Promotion and Placement) (England) Regulations 2021 runs to 18,500 words. And this includes a disclaimer that the document should be read in conjunction with the regulations themselves and not be taken as an authoritative interpretation.
The Association of Convenience Stores (ACS) has published its own, pared-down guidance.
This summarises that retailers with more than 50 employees must not offer volume promotions on HFSS products – although this portion of the law has now been deferred by the Government until October 2023.
It adds that businesses meeting the above test and also offering relevant internal floor area of more than 2,000 square feet (185.8 sq m) cannot display HFSS products within certain distances of checkouts and designated queuing areas, end-of-aisle units and store entrances. These regulations will still come into force on 1st October 2022.
Available via the ACS website, the briefing also contains diagrams and explanations covering floorspace calculations, which products count as HFSS, exemptions, and many other finer details of the law.
acs.org.uk/advice/hfssregulations
NEWS World Cheese Awards 2022 relocates to Wales…
By Michael Lane
With the war in Ukraine having impacted plans to host the World Cheese Awards in Kyiv, the Guild of Fine Food will now be taking the 2022 event to Wales.
Supported by the Welsh Government, the awards will be held at the International Conference Centre Wales near Newport on 2nd November.
Guild of Fine Food MD John Farrand thanked the Welsh Government for “their quick thinking” and assisting the organisers nd a Plan B for the one-day event, which plays host to thousands of cheeses and expert judges from all over the globe.
“As you will almost certainly be aware, we should be in Kyiv in November this year,” he said. “We will be working hard to ensure that our support for the cheesemakers of Ukraine is continued this year and beyond. It is a postponement, rather than a cancellation.”
Cheesemakers will be able to enter their cheeses from 25th July, with entry closing on 20th September. Invites will go out to judges during the summer.
Cheeses will be staged in the judging area on 1st November and judges will also arrive in Wales on the same day.
The main event on 2nd November will see hundreds of judges –including technical experts, buyers, retailers and food writers – work their way through the cheese to identify any worthy of a Super Gold, Gold, Silver or Bronze award. Further rounds of judging then determine the World Champion.
The following day, a number of cheese, food and drink tours will be held extolling Welsh food & drink culture.
Full results will be published on 4th November.
The awards will take place on 2nd November and the ICC Wales
… as Ukraine’s cheesemakers forge on in the face of war
In spite of the war raging in the country, Ukraine’s cheese industry has continued to trade, according to one of the Guild of Fine Food’s partners for organising the World Cheese Awards in Kyiv.
Oksana Chernova of importer-producer Ardis Group and a leader of the ProCheese Academy, has been in contact with the Guild and recently updated it on how the nation’s producers were faring as the Russian invasion continues.
While many production premises, dairy farms and packaging suppliers have been destroyed by missile re – including Ardis’s own warehouse (pictured) – and distribution networks have been lost, cheesemakers are nding ways to carry on.
“Despite the di cult situation, cheesemakers are actively providing assistance to the defense, migrants, and the Armed Forces in their regions,” said Chernova. “The farmers who faced the problem of selling milk in the rst weeks of the war travelled to villages and towns and distributed milk to people in need.”
She said that some cheesemakers had switched to fresh cheese production during the war, while others had learned to become cheesemongers and were selling direct to the public.
“We hope that the World Cheese Awards will still come to Ukraine,” added Chernova. “All cheesemakers in Ukraine have been waiting for this event. Because no matter the outcome, not many people around the world know what kind of cheeses are in Ukraine.
ardis.ua/en/
Kent food producers crowned
The Taste of Kent Awards 2022 winners were announced in May with a host of the county’s small producers collecting gongs.
Provenance Potatoes was named Kent Food or Drink Business of the Year while Detling Community Store took home the title of Food Retailer of the Year.
New Food & Drink Product of the Year went to Curd & Cure for its Rescue Range Broccoli & Stilton Soup.
Among the other winners were honey producer Bray’s Bees, cheesemaker Kingcott Dairy and Copper Rivet Distillery. Full results at
tasteofkentawards.co.uk
DOWN ON THE FARM The latest from farm shops across the country
Rumwell Farm Shop, on the A38 between Taunton and Wellington in Somerset, is celebrating after scooping nine Taste of the West Awards for its own-made products including seven golds. Winning items include its traditional pork sausage, unsmoked back bacon, homemade faggots, runner bean chutney, and jam doughnut.
rumwellfarmshop.com
26 years after Bath City Farm’s founders had the vision for a community café on its Whiteway site, a new single-storey, timber-clad building with views over Bath is open to the public (Tues to Fri from 9am to 4.30pm). The inside of the café has space for up to 40 customers while there is more seating outside on two terraces.
bathcityfarm.org.uk
A brand-new farm shop has opened in Northamptonshire at Moorgate Farm, home of the KellyBronze turkey. The shop will be stocking locally grown vegetables, free range chickens, freshly baked sausage rolls, smoked fish and turkey pies and be open Fridays and Saturdays.
moorgatefarm.co.uk
Craggies Farm Shop
in West Yorkshire has been working hard on expanding and refitting their current café and farm shop. The café will be twice its current size. Both will be re-opened by 14th May.
craggiesfarmshop.uk
A state-of-the-art, self-service farm shop has opened in Gloucestershire near Tetbury. Bennetts Farm Shop has become the first in the area to offer this new experience for customers to shop at their convenience anytime daily from 8am until 7pm. Home reared beef burgers, kebabs, BBQ packs, cakes, milk and coffee are all available.
