You’ll be able to get up the shops on a Sunday for longer, thanks to George Osborne’s Budget this week. Jesus and his friends may well be very, very unhappy about this, but at least they’ll be able to get a latte and some trainers after they’ve finished at church.
Sunday trading laws currently hamstring businesses, which says that they can’t trade for more than six hours. Seems preposterous, now that the internet is always open, and that seeing as most people only have two days off a week, one of the days wouldn’t have shops open all the time.
Only small shops (so, corner shops and the like) can open for more than six hours, but that’s all about to change under the new plans.
Basically, the Budget is going to allow Sunday trading hours to become a devolved issue, which means that your local council will decide who long the shops can open for. Seeing as there’s potentially a lot of money to be made from all this, they’ll all be rather keen to give the retailers a free rein.
This also opens up a lot of jobs for people too, which is always a good thing.
“Even two decades on from the introduction of the Sunday Trading Act, it is clear that that there is still a growing appetite for shopping on a Sunday,” George Osborne said. “There is some evidence that transactions for Sunday shopping are actually growing faster than those for Saturday.”
“The rise of online shopping, which people can do round the clock, also means more retailers want to be able to compete by opening for longer at the weekend. But this won’t be right for every area, so I want to devolve the power to make this decision to mayors and local authorities. This will be another part of my plan to ensure a truly national recovery, with our great towns and cities able to determine their own futures.”
Everyone loves to hate Black Friday, and not only because it’s (in this country) largely an Amazon thing- after all, we in the UK seem to only know the date of Thanksgiving as it’s the day before Black Friday, which seems to be the wrong way round. And why have Christmas in November as well as December anyway? In any case, if Black Friday deals didn’t excite you enough, Amazon are planning to blow your proverbial socks off with a new discount day hitting your browsers on Wednesday 15th July. The catch? You have to be a Prime member to participate.
The shopping extravaganza will be on the eve of Amazon’s 20th birthday, and the day, catchily named ‘Prime Day’, promises even more deals than Black Friday. As with its predecessor, Prime Day will see ‘lightning deals’ on products including electronics, toys, video games, clothing, and health and beauty items, with new deals starting every 10 minutes. However, surely the success or failure of Prime Day will depend on the quality of deals, not just the quantity- one million deals saving 40p on a toilet brush are not comparable to 10,000 discounted Xboxes, perhaps.
But if you fancy a piece of the action, what can you do? If you are already a Prime member (which includes Amazon Student and Amazon Family Prime members) you don’t need to do anything- just sit back and relax and, assuming you are signed in, once you visit the website on 15 July, you will be able to access the deals. If you are not already a member, the criteria for joining in on crazy impulse purchasing next week includes those on a free trial of Prime- meaning that if you are eligible for one, you can take part for nothing. Just remember that Amazon will start charging you £79 per year after the free trial ends (which is kind of the point of it) , so make sure you know how to cancel it, and the date by which you must do so to avoid being charged. If you think you’d like to sign up for Prime anyway, perhaps to benefit from the free Prime streaming movies or the Kindle lending library that come with the free delivery and cloud storage, provided you do so before midnight on July 8th you can get £20 off the annual fee for the first year, meaning you only have to cough up £59.
“We’re offering Prime members thousands of deals on Prime Day. In fact, in the UK we are offering more than double the number of deals that we offered last Black Friday,” said Christopher North, managing director at Amazon UK, boasting that “Prime Day is the latest benefit for Prime members and you can expect us to add further benefits and features to this great service over time.”
Without knowing precisely how great the Prime Day deals are likely to be, it is impossible to tell whether it is worth the hassle of a free trial. Whether it’s worth paying the £79 (£59) to join if you weren’t going to anyway is probably easier to judge- to recoup that cost would take an awful lot of toilet brushes…
But we’ll watch and see about Prime Day next week before passing judgment.
You may recall that Dixons and Carphone Warehouse became one, a while ago. Together, they’re going to start throwing their considerable weight around and, now, they’re going to America like they’re Eddie Murphy’s Prince Akeem or something.
Dixons Carphone will be tagteaming with American network Sprint, where they’ll open 20 retail stores (or, if you prefer, ‘shops’). This is the first stage of the plan, which could see them opening 500 places. Sprint have a big sway in the USA, with 57 million mobile customers.
“This is a very exciting venture for us, and is a significant step in growing our CWS business in the US,” said Andrew Harrison, deputy chief of Dixons Carphone and chief executive of CWS. “We bring specialist knowledge and skills to this partnership and will be looking to deliver innovation and outstanding customer service under the Sprint brand.”
The love-in continued with Marcelo Claure, Sprint’s chief executive, who cooed: “We are excited to partner with Dixons Carphone and to leverage all their know-how as one of the world’s leading wireless retailers to benefit Sprint and its customers. We are committed to offering the best customer experience when buying wireless products and services.”
So there you go Americans! Isn’t this the most exciting thing to happen to you since Michael Jackson did the moonwalk at the 25th anniversary of Motown show?
Currently, you’re allowed to order items from the John Lewis website and have it delivered to their nearest John Lewis or Waitrose store for free.
That’s not to say you won’t be able to get smaller items through this system; only now, you’ll have to pay a £2 charge for these small orders. The retailer says that this should only affect around 20% of the orders they get in, but there’s sure to be disappointment from some quarters.
In a speech declaring company’s new plans for click and collect, and the desire to “take a leadership position” in the future of the service (whatever the hell that means), John Lewis managing director Andy Street, said the company “is sure customers will understand why we are doing this.”
“It’s illogical that this can be produced at no cost.”
While we’ve all been looking at Aldi and Lidl’s growth, and how it has chipped away at Tesco, one of the retailers that has been faring most badly is Asda, with their market share on a drastic slide. The supermarket’s sales slid 3.5% in the 12 weeks to 21 June.
They’re not alone of course – Tesco and Sainsbury’s saw their sales falling by 1.3%.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, had this to say: ”The two discounters increased their sales by 15.4% and 9.1% respectively. Aldi reached a new high with a 5.5% share of the market while Lidl, also showing continued growth, rose to 3.9%.”
“Waitrose also grew ahead of the market, with sales increasing by 1.2%, moving to a 5.1% share.”
As previously reported numerous times, the cheaper end of the market is faring well, as is the more middle-class end of the sector. Asda reported their first full-year decline in underlying sales in February, and things don’t appear to be correcting themselves.
And it looks like the supermarkets that are treating their suppliers the best, are the ones who are performing the strongest on the high street. Consumers are still shopping, but can the big guns turn everyone back into their aisles?
While out-of-town supermarkets have been ailing, Ikea have been doing just fine, with people travelling to get their throws and furniture. That said, soon, you might not have to travel very far if you’re after some meatballs, as Ikea have decided to start opening smaller, high street stores.
Of course, thanks to these shops being smaller, there’ll be less furniture on offer, but there’ll be click-and-collect facilities, and their famous Scandinavian cafes.
The first of these small stores will open in Norwich, and it could well be a success, as people who don’t drive might be more inclined to buy Ikea stuff, if they’ve got a little, local shop to go in. The retailer has been struggling to find land that was large enough to accommodate their enormo-shops, so this is the next best thing.
Gillian Drakeford, UK country manager, said: “We know that consumers in the UK like to shop across many channels and are using multiple devices.”
“Our customers are also telling us that with 18 stores in the UK, we are often too far away. Order and Collection Points give us the opportunity to trial new ways of being more accessible.”
According to a watchdog, up to 1-in-5 of suppliers to the biggest supermarkets in the UK, are too scared to complain about late payments, money disputes and high charges for packaging, because they think there’ll be retribution from those they provide to.
This is coupled with a spike in poor treatment to suppliers, and a high level of disputes.
The Groceries Code Adjudicator carried out a poll of 1,000 suppliers, to look at the treatment they’re facing from supermarkets, and to find out whether or not there had been improvements since they were set up two years ago.
The survey found that, in the past year alone, 70% of suppliers felt they’d been treated in ways that breach the industry’s new code by the UK’s ten biggest retailers. 18% of those said they would not be willing to raise complaints to the regulator. Some felt that this was ‘normal’ behaviour, while others stated that they felt the GCA wouldn’t do anything.
Adjudicator Christine Tacon said: “We still have some way to go in important areas but this is a clear sign we are on the right track. Suppliers are more aware of the GCA and its work and fewer now believe the GCA will not be able to do anything if they bring an issue to me.”
So who are the worst offenders, according to suppliers? 35% said that Iceland rarely or never complied with the code, while 32% said the same of Tesco and Morrisons. 22% said the same of Co-op, 16% of Asda, 15% of Lidl, 12% of M&S and Sainsbury’s, 11% of Waitrose and 5% of Aldi.
Notice how those who appear to be treating their suppliers the best, are the ones performing the strongest with consumers?
The supermarket is going to report a fall in like-for-like sales of between 2% and 2.5% for the last quarter, so say besuited City analysts. Tesco will actually release their trading statement at the end of the week, before they have their annual meeting in London, when shareholders will grill the board about the continuing balls-up that is their company.
Remember – pre-tax loss of £6.4bn.
One glimmer of hope, is that this decline in sales will be better than last year’s 3.8% drop, but worth than the 0.3% drop during the Christmas period. We are legally obliged to mention that this is the fault of Aldi and Lidl, and everyone shopping there.
Tesco boss Dave Lewis reckons that Tesco is not likely to make any money in the UK during the next 12 months, as they’re going to try and invest their way out of trouble. They’re also going to sell all some assets, such as their South Korean wing and Dunnhumby, the company who brought us the ClubCard.
James Anstead, analyst at Barclays, said: “The apparent ease with which Tesco delivered an improved UK like-for-like sales performance over the Christmas period set expectations high.”
“Since then sales have dipped somewhat, although if our forecast for 1Q is correct then this would still be an improvement over last year overall. We doubt this quarter will mark a decisive upturn in sales trends for the group, and we do not expect any significant update on asset disposals at this stage.”
Not content with watching you in your home and trying to take over the whole of the internet, Google are now looking at Tesco’s customer loyalty wing, and weighing up a joint takeover bid with one of the biggest buyout firms in the UK.
It has been reported that Google is in talks with Permira, and are thinking about buying Dunnhumby, the people behind Tesco’s ClubCard.
Of course, there’s a lot of data on human beings that Google can hoover-up, if this proves to be a successful takeover. There’s nothing Google like more, than crunching the numbers from the data analysis of human beings. That said, they’re not the only ones sniffing around Dunnhumby.
Alas, the other companies involved aren’t as famous as Google, so we’re not writing about them.
There’s been a lot of interest around Dunjumby, which was originally valued somewhere in the region of £2bn, but it looks like it is actually worth half that amount, as previously reported.
Either way, Tesco have a lot of losses to contend with, with the widely reported £6.4bn annual loss for last year. Google – they’re trying to take over the entire world, aren’t they?
Waitrose have come up with a natty little deal, where they allow you, the customer, choose what they’d like money off.
Through the initiative, you can choose 10 items which you get 20% off. You get to choose from over 900 items and when you have chosen your ten items, they’re locked-in at a lower price for the whole of summer.
Sounds alright doesn’t it?
To get on this, you’ll have to register for a myWaitrose card and all that, but that is to be expected. If this sounds like it just the thing for you, then get yourself over to the offer page at Waitrose.
They’ve estimated that, at the company’s current profitability level, Tesco need to raise more than £5 billion to get their investment grade rating back.
Earlier in the year, Tesco posted a £6.4 billon annual pre-tax loss, which is one of the largest in British corporate history and, in addition to that, they’re also sitting on £22 billion of debts, if you include their pension deficit and rent commitments.
In a report, Sven Reinke who is a senior analyst at Moody’s, said: “It [Tesco] has a relatively high level of debt, also of adjusted debt, such as the pension deficit and operating leases. It is a relatively high-leveraged company. That was acceptable for an investment grade company until now because they had decent profit margins.”
Basically, if Tesco want their credit rating back on track, they need to reduce their adjusted debt to earnings before interest, tax depreciation and a whole load of other stuff, which means that, if their profits stay as they currently are, Tesco will have to raise £5 billion in fresh capital.
Bad news then, that it is expected that Tesco is all set to report another fall in like-for-like sales, which is estimated to be at 3%.
However, the supermarket is looking to sell off their South Korean part of the business, which has been valued at £3.9 billion, so that’s a start. As a result of all this, the retailer’s share price has dropped.
There’s been long grumbles about Amazon’s way of doing business concerning e-books, and this probe will look at certain clauses in Amazon’s contracts with publishers, which are thought to be relating to the protection Amazon get from publishers offering rivals more favourable terms.
Margrethe Vestager, heading up the EU’s competition policy squad, said that she has a duty to make sure that Amazon’s arrangements with publishers were not harmful to consumers, by “preventing other e-book distributors from innovating and competing effectively with Amazon.”
“Our investigation will show if such concerns are justified.”
Of course, the EU is already snooping around Amazon, concerning their tax arrangement in Luxembourg. As we know, some gigantic companies are paying as little as 5% in corporate taxes, while smaller companies are stumping up 30%.
A potential double whammy of fines on the horizon, if Amazon are found guilty of being thoroughly shifty. We await the outcome.
The survey was conducted by Market Force Information through the Grocer mag, who interviewed 6,800 people, talking to them about where they shopped, and whether or not they’d recommend it to someone else.
Coming out on top, was teacher’s pet Waitrose, followed by Marks & Spencer and Aldi. In fourth place was Sainsbury’s, chased by Morrisons, Asda, and the Co-operative. Tesco, as we know, sat in last place.
This study looked at what is considered to be the six aspects of the shopping experience, and Tesco scored badly in all of them. They came last for cashier courtesy and store cleanliness, seventh for the availability of items and the ability to find them and sixth for speciality department service and checkout speed. Apart from checkout speed, which Aldi won, Waitrose came out in first place in all categories.
Tesco’s problem, it seems, is that their stores are badly designed and, you can only assume that widespread poor service means that the staff are unhappy, thanks to woeful management. BW has spoken to staff from most retailers, and Tesco does seem to have a management problem.
Of course, Tesco are in the middle of one of the most difficult periods in their history, so there’s time for it to turn itself around, but will consumers hang around and wait to see what they do? Current trends suggest that they’ll just shop somewhere else.
Sainsbury’s don’t seem to be able to do a thing right at the moment, and again, they’ve seen their sales falling. In the first quarter, they dropped a further 2.1%. It is the second worst performing supermarket, after Asda, in the four weeks to May 24th.
Mike Coupe, Sainsbury chief executive, says: “Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop. These pressures, including the effect of our own targeted price investment, have led to a fall in like-for-like sales for the quarter.”
“Despite the challenging market conditions, we are confident that we are building on strong foundations and making good progress with our strategy.”
Basically, thanks to dropping the prices on their own goods, that has had an unsurprising influence on their profits. However, they’ve still got problems as, well, no-one wants to shop there because it is rubbish. And what with Tesco regrouping, they’ve got to get their arses in gear.
Bryan Roberts, analyst at Kantor Retail, says: “On the face of it, a sixth consecutive quarter of declining like-for-likes is an obvious disappointment, indicative of the fact that Sainsbury’s immunity to the discount menace is well and truly over.”
“With Morrisons back on the front foot and Tesco and Asda continuing to spar on pricing, things certainly won’t be getting any easier.”
Of course, people have cooled a little on convoluted deals and the like, instead, preferring to shop at Lidl and Aldi, where they dispense with all that nonsense in favour of selling things cheaply. There’s definitely consumer malaise when it comes to deals that aren’t straightforward.
However, M&S don’t seem to be deterred by that, and seem to be going for the card-scheme, which will be called ‘Sparks’. There’ll be the usual trial with a small amount of customers, but if that goes well, it’ll be rolled out across all stores.
Some of you will know that M&S already have a points-based loyalty scheme for those who have a M&S Bank credit or debt card, where you get a point for every pound spent.
That said, for all the loyalty malaise, one success story in the field is the MyWaitrose card, and seeing as Marks & Spencer sees itself as an upmarket grocer, they could well be vying with Waitrose.
If M&S go for a similar angle to their swank rivals, we could see gratis coffee and newspapers when money is spent in their stores.