Thursday 22nd October 2015
In case you missed them, a round-up of interesting retail related stories from the last week or so.
Mintel’s food and drink predictions are worth a look. The trends are really a continuation of what we have seen this year and last. People are keen for alternative, healthier, food stuffs with good provenance. If real wages continue to rise faster than inflation, I think people will spend more on artificial free, home-made, healthier, socially responsible food!
Supermarket ‘land banking’ seems a long time ago all of a sudden. In 2006/7 the now defunct OFT and the Competition Commission (as it was then) were seriously concerned about the practice of supermarkets building up huge land banks and putting restrictive covenants into land they sold to stifle competition. Tesco selling off 14 sites demonstrates that ‘land banking’ has run its course. Land banks are now seen as a large weight around the Big 4’s neck rather than a mechanism to protect market share.
The internet of things is exciting, if not still something from ‘Tomorrow’s World’ to most of the public. But, you have to wonder if the technology/consumer up take will take a decade or, as Parcelhero claim, a few years. It may soon not be good enough to offer an online grocery service. Instead, the ‘internet of things’ may mean that grocery retailers will have to develop the technology that allows them to delivery groceries in response to what a customer’s fridge and freezer says they need.
It has been a busy few days for Tesco. A 55% slump in profits, standardising payment terms by category and value of products ordered, 69 cases of potential breaches of GSCOP referred to the Groceries Code Adjudicator and apology to suppliers for the past. But, it is ok for Dave Lewis, he has done what all new leaders can do…..blame it on previous management and promise change. Project reset, we are told by suppliers, has made some difference, but Tesco has not moved entirely away from its old practices. And, the big test will come towards the end of the trading year, when ‘front margin’ contracts are looked at and next year’s supplier contracts are negotiated. Tesco are still under pressure to improve its financial performance after all.
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