As we head into a month dominated by the Olympics, retailers are hoping the event will cheer up the nation and put us all in the mood to spend. In London temperatures are reaching 30 degrees Celsius; the torch is appearing on every high street it seems; a Brit won the Tour de France; and John Lewis is wrapping its stores in the UK flag – it certainly cheers the spirit. Let’s hope this weather and mood continue and infect the nation with the goodwill and optimism we have been lacking; retailers could certainly do with both in a very difficult year so far.
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Retail Freeview - Are we paying a fair price for milk? A farm to fork perspective
1. July 26, 2012
Verdict Retail FreeView
A synopsis of retail news and opinion About us
Verdict is a retail information
As we head into a month dominated by the Olympics, retailers are hoping the event will cheer up specialist within the Informa Group.
the nation and put us all in the mood to spend. In London temperatures are reaching 30 degrees With almost 30 years' experience,
Celsius; the torch is appearing on every high street it seems; a Brit won the Tour de France; and Verdict publishes unrivaled
John Lewis is wrapping its stores in the UK flag – it certainly cheers the spirit. Let’s hope this weather independent analysis. We provide a
complete picture of the UK and
and mood continue and infect the nation with the goodwill and optimism we have been lacking;
increasingly the international retail
retailers could certainly do with both in a very difficult year so far.
arena, helping retailers,
Maureen Hinton, Verdict Practice Leader manufacturers, service suppliers,
analysts, and consultants to fully
exploit opportunities within the
"Sportswear specialists should perform well and benefit from the industry.
Olympics. The main players are JD Sports and Sports Direct – [they]
will grow market share during 2012."
Latest analysis
Honor Westnedge, Verdict Analyst, just-style.com, July 18
Victoria’s Secret | Verdict Company
Briefing
Trends and Innovations in European
Convenience Retailing | Verdict Strategic
On Primark’s most successful store opening to date, in Berlin:
Report
“It’s difficult to find any European retailer that has the same clout and
impact as Primark. You can say it’s in a class of its own.” Pharmacy Retailing in the UK | Verdict
Maureen Hinton, Verdict Practice Leader, Bloomberg, July 18 Market Report
Global Department Store Retailing |
Verdict Channel Report
Footwear Retailing in the UK | Verdict
Market Report
Web: www.verdict.co.uk | Tel: +44 (0)20 7551 9664 | Email: enquiries@verdict.co.uk
2. July 26, 2012
Verdict View
Are we paying a fair price for milk? A farm to fork perspective
By Cliona Lynch, Verdict Analyst; Chris Horseman, Agra Informa Editorial Director; and David Bird, Datamonitor
Consumer Analyst
The dairy farmers’ summit opened up debate on why At such a sensitive time for milk pricing, Asda has All the indicators suggest that by the end of 2012,
milk costs less than water on our supermarket shelves. chosen to push its low price position, with an advert in commodity prices will be back on the rise, and this will
On July 20, hundreds of farmers blockaded processing the Metro newspaper on July 20 highlighting round filter back through to farmers’ milk cheques –
plants in Somerset, Leicestershire, and Yorkshire in pound pricing that undercuts competitors. eventually.
protest at cuts of up to 2p per liter, and the National
Farmers Union (NFU) has called for strike action from all While the price drop may be absorbed by the retailer David Bird
dairy farmers from August 1, unless planned price cuts and not passed on to farmers, the wider issue of Milk is a commodity market; there are very few
are binned. creating an expectation of a low price point for milk differentiators to distinguish between one product and
remains. Asda may have hit a top-of-mind topic, but it the next, and the consumer cannot determine why
Informa’s expert analysts from Agra Informa, will also have hit a nerve with farming communities they should pay more for one product over another.
Datamonitor and Verdict Research give their insight and the portion of its own shoppers that are involved in
into the entire supply chain, from farmer to processor to the #sosdairy Twitter campaign. At the point of sale, all the products look similar – often
retailer. the only differentiator is whether the milk is skimmed,
Chris Horseman semi skimmed, or full fat, with the color of the bottle
Cliona Lynch What has not been widely recognized until now is that top distinguishing this. Most milk sold is own label (there
Price sensitivity is high in food retail, and despite milk as a commodity has become locked into a is very little brand value), and even then, there is not
shoppers claiming that they are willing to pay more for production cycle, with prices rising and falling as even a good/better/best tiering. Indeed, the milk aisle
milk, retailers are right to recognize that intention and producers adapt their output to these changing price is a “wall of white” – all the SKUs look the same and are
behavior do not always align. Where in practice indicators. This is relatively new for the European milk marketed instore in perhaps the most uninspiring way
shoppers may aim to shop at a more ethical price, industry, as in years gone by milk quotas and EU imaginable, usually in warehouse-style crates for ease
how many of them can and will pay more to do so in market support kept prices stable and predictable. of (re)stocking.
practice when household budgets are tight?
Consumers would not tolerate the sort of fluctuations in An absence of brand value or points of differentiation
While the NFU praised Tesco, Sainsbury’s, Marks & retail milk prices that would be needed to match the means that justifying a product premium for milk is
Spencer, and Waitrose for paying a cost of production changing price of the raw product, and nobody difficult, and producers are at the mercy of the buying
(COP)-linked price for milk, it also berated the Co- accused consumers of “paying too much” when dairy power of retailers.
operative, Asda, and Morrisons for differing from the commodity prices were at record highs this time last
COP-linked model. year.
Web: www.verdict.co.uk | Tel: +44 (0)20 7551 9664 | Email: enquiries@verdict.co.uk
3. July 26, 2012
News Review
Despite being a new entrant to the UK lingerie sector, the retailer is already
Clothing & Accessories
in a strong position due to its widespread brand awareness among UK
By Kate Ormrod
consumers, owing to its extensive US store network and keen marketing
activities.
Very launches festival ordering service
Online fashion retailer Very, part of the Shop Direct Group, has announced The company has been a success in its home market because of its fast
plans to operate a delivery service to V Festival in conjunction with its cycle of product launches, and Verdict expects this to resonate well with UK
Collect+ click and collect service. It will allow festival-goers to order items shoppers. Regular newness of fashion and seasonal designs will drive footfall
online via the company’s mobile-optimized site and have them sent directly and encourage shoppers to buy into the brand. For more information,
to a collection point at the festival’s Chelmsford, Essex site the next day. It please see Verdict’s Victoria’s Secret | Company Briefing.
will also offer a variety of onsite services, including a 50-item collection
specifically designed for the festival, which can be delivered to the site
within an hour, and a dedicated Very tent onsite with personal grooming Food & Grocery
facilities and changing rooms. By Cliona Lynch
Very has chosen its market wisely; the key demographic for the festival is 16–
Ocado launches its latest pop-up shopping wall
24 year-old music fans, who are likely to be more fashion-oriented and will
UK online grocer Ocado has opened its third pop-up shopping wall concept
therefore be more willing to use such a service than those who attend other
this week in Birmingham’s Bullring shopping center. While the wall generates
festivals hosted across the country. First and foremost, the initiative is a
publicity and shopper interest in its mobile app, its static images do not
marketing exercise, with the intention of expanding the brand’s appeal
excite tech-savvy shoppers.
among this age group, as well as promoting its ability to deliver next day
with Collect+.
Ocado would do well to learn from Belgian retailer Delhaize, which has
taken the shopping wall concept one step further by positioning its “cubes”
Victoria’s Secret looking to seduce UK lingerie shoppers in busy train stations across the country and adding click and collect to the
US lingerie retailer Victoria’s Secret opened its first store in the UK in London’s offer. By positioning its cubes in train stations, Delhaize can target
Westfield Stratford on July 24, 2012, shortly followed by a second store on commuters at a key dwell time in their day. Moreover, the retailer’s concept
New Bond Street (due to open on August 6, 2012). While the retailer has not allows shoppers to order products for collection at the other end of their
given any details on future UK store openings after this, Verdict expects its commute. While Ocado’s lack of physical presence restricts its ability to
focus to be on large destination stores in only key cities and shopping provide click and collect groceries, its concept could be adapted to work
hotspots. This will keep the brand exclusive and niche, which shoppers will with a same day delivery model, or collections in conjunction with a partner
find exciting. store. Both retailers would also benefit from innovating in interactive
technology.
Web: www.verdict.co.uk | Tel: +44 (0)20 7551 9664 | Email: enquiries@verdict.co.uk
4. July 26, 2012
News Review
myCostcutter opens in Scotland The retailer has also planned to take on 500 new part-time employees to
Symbol group retailer Costcutter has opened the first store under its new build on the current recovery trend. While this appears to be good news for
premium fascia, myCostcutter, in Insch, Aberdeenshire, with a second store the electricals retailer, there remains stiff competition up against Currys,
expected to open in Manchester by the end of July. The concept differs which has invested heavily in service and its KNOWHOW brand. Comet will
from its standard Costcutter banner in that it will stock more local produce need to similarly build a reputation for strong customer service as it attempts
and sell more premium items, while the new brand colors of black, green, to re-establish its market reputation after years of market share falls.
and red, along with the improved store layout, are intended to create a
more upmarket feel. Amazon is shifting strategy
One of Amazon’s biggest strategic benefits of being an online pureplay
The premium fascia gives Costcutter scope to tier its store portfolio. Higher retailer has been its ability to locate tax havens, which enable it to maintain
performing stores and those in more affluent areas will be boosted by the low prices. This has consisted of distributing in the UK from tax havens such as
new fascia. As competition in the convenience sector continues to heat up, Jersey, shipping from Ireland, or operating from particular states in the US
enhancing the package offered to retailers is likely to help Costcutter to that do not collect sales tax from retailers without physical stores. However,
retain more profitable members. in the US, the online retailing giant has shifted tack, and has begun opening
numerous distribution centers close to large populace areas in states which
insist on collecting sales tax. The big move is expected to be an attempt to
Electricals & Entertainment
offer same day deliveries; however, it will come at the cost of either being
By Matthew Rubin
less price competitive or reducing profit margins.
Comet on a trajectory to profit Being able to offer products to take home on the day of purchase is where
After being sold by KESA to OpCapita for £2.00 ($3.12), under the guidance the traditional high street retailers have previously maintained a distinct
of a new leadership team with chairman John Clare at the helm, Comet advantage over their online competition, but this latest move could put that
has embarked on a number of cost-cutting measures, reducing staff from at risk. In the UK, this may in fact not lead to higher prices due to differing
8,500 to about 7,000 and cutting many back-office costs to move the regulations; however, if the same attempt is made to offer same day
retailer back towards revenue growth. delivery, it puts the already struggling high street under added pressure. For
Amazon this is a smart move, as its ever broadening product range will find
Clare recently announced that the retailer was moving away from cost further appeal in big ticket and large-sized items if shoppers can receive
cutting and redirecting its attention to growing topline figures. While some them on the same day as well as purchasing without leaving the home.
stores will be downsized, no immediate closures are to be expected,
keeping the store portfolio at around 240. However, up to 60 less profitable
stores have been identified for possible closure over the coming years.
Web: www.verdict.co.uk | Tel: +44 (0)20 7551 9664 | Email: enquiries@verdict.co.uk
5. July 26, 2012
News Review
Health & Beauty
By Carly Syme
SuperGroup looks to leverage brand into cosmetics
Stay in touch
In an effort to maximize value from the Superdry brand, SuperGroup is
planning to offer a range of cosmetic products in time for Christmas 2012. It
has already launched a range of fragrances, and chief executive Julian Contact us to see how we can help
Dunkerton has stated that the retailer intends to take up any new Tel: +44 (0)20 7551 9664
opportunities that will add value, highlighting Ralph Lauren as strategic Email: enquiries@verdict.co.uk
inspiration. The expansion into cosmetics follows a collaboration with tailor
Timothy Everest to develop a range of formal menswear, launching in spring Share your views with our analysts and the Verdict community through our
2013, with a formal womenswear range expected soon after. Any move to social media channels.
expand the retailer’s offering will help to contribute to revenue growth; LinkedIn
however, it risks losing the brand’s “cult” status. The rapid increase in Twitter
product range could draw attention away from its offerings as shoppers
seek a more exclusive label. Sign up to our emails for news from the UK and across the globe.
Verdict FreeView
Asda to stock asthma inhalers over the counter
Asda is set to be the first UK supermarket to stock asthma inhalers this month,
which will be available over the counter without a prescription. The inhalers
would usually cost £7.65 ($11.95) if obtained through a prescription;
however, customers over 16 will now be able to buy two of the blue
“reliever” inhalers for £7.00 ($10.93). Deputy superintendent pharmacist at
Asda, Faisal Tuddy, announced the plans, stating that the service was
designed to be easy and convenient, but would be closely monitored.
Executive director of research and policy at Asthma UK, Dr Samantha
Walker, spoke of the organization's worry that due to the ease of availability,
sufferers may overuse their inhalers, which can result in severe medical
complications. By ensuring that the new program is monitored and
controlled, Asda will benefit from this new initiative; however, as more
supermarkets launch similar plans, the benefits will likely diminish.
Web: www.verdict.co.uk | Tel: +44 (0)20 7551 9664 | Email: enquiries@verdict.co.uk