Posts Tagged ‘retail’
Morrisons are going to create 5,000 new jobs in stores in a bid to boost their customer service. If they get people on the tills and avoid trying to make everyone use self-service machines, they might be on to something.
Anyway, this is all part of new chief executive David Potts plans, after his predecessor Dalton Philips got the chop for having a name that sounds like an early ’80s TV show about a handsome antique dealer. Not to mention the fact he oversaw a hugely weak trade over Christmas.
Its statement said: “Morrisons is reshaping the way that its business is staffed, investing in new store jobs to deliver better customer service, while also proposing a reduction in head office jobs.”
Potts added: “We are focusing on the things that matter to our customers. That means having more of our staff in our stores, improving product availability and helping customers at our checkouts. We believe our customers and our staff will appreciate the improvements.”
So there you have it! More check-outs? Go on then! The next stop is to start filling their supermarkets with things we all actually want to buy. Then we’ll start talking.
In terms of profit, pre-tax, that’s £44m to play with if the forecasts are correct. Who would have ever guessed there was so much cash to be made from cheap tights, weird plant pots and foreign sweets?
On top of the hundreds of shops they’ve had for a while, Poundland said they’d opened 60 new stores in the UK and Ireland in its last year and, of course, they’re looking at taking over the 99p Stores if regulators allow it.
The Competition and Markets Authority (CMA) said the deal, which is going to add another 251 shops to their portfolio could see a cut to competition. Poundland said they’ll be making an announcement about all this in due course.
Along with Aldi and Lidl, these bargainous businesses are really hammering the bigger supermarkets like Tesco and Morrisons.
Commenting on the results, chief executive Jim McCarthy, said: “After a solid quarter of sales growth, Poundland’s revenue for the 2015 financial year was over £1bn for the first time. Despite tough trading conditions, Poundland continues to perform well and we served an average of 5.3 million shoppers a week during the quarter.”
“We have managed our costs and cash well, and we expect underlying pre-tax profits to be in line with market expectations for the year as a whole. We achieved our target of 60 net new stores in the UK and Ireland and have a very strong pipeline of store openings for the current financial year.”
“We expect to continue to deliver our growth strategy in the new financial year, notwithstanding some headwinds from a weaker Euro and a tough comparable in the first half.”
The big supermarkets have all been soiling themselves with fear over the German invasion of budget vendors… and with good cause, as Aldi have overtaken Waitrose to become the UK’s sixth biggest supermarket.
This is according to Kantar Worldpanel, who noted that Aldi have seen double-digit sales growth for the past four years. It now has 5.3% of the UK’s money that is spent on groceries. That said, it isn’t all gloom for Waitrose, as they’re still growing themselves and were one of just three supermarkets to see sales going up ahead of the market.
The other supermarket doing well, of course, was Lidl, who shot up by 12.1%.
With Co-Operative’s sales dipping consistently, the Aldi, Lidl and Waitrose will all be eyeing up their spot in the rankings.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Growth has been fuelled by over half a million new shoppers choosing to visit Aldi this year and average basket sizes increasing by 7%. The German discounter’s sales have increased by 16.8% in the latest period, still high compared to other retailers but slower relative to its recent performance.”
“The changing structure of Britain’s supermarket landscape is illustrated by two facts. Firstly, the so called discounters Aldi and Lidl now command a combined nine per cent share of the market. In 2012 the same two retailers only accounted for 5.4% of grocery sales.”
“Secondly, the 72.8 per cent share taken by the biggest four retailers is now at the lowest level in a decade.”
Fashion-flingers, ASOS, are in a spot of financial bother with the company reporting a 10% drop in pre-tax profit in the six months to the end of February. This is down from the same period last year, but you have to remember that they were hammered by the huge warehouse fire they suffered last year.
They said that their balance sheet included “business interruption reimbursements of £6.3m in respect of a warehouse fire in the prior financial year”.
You may recall that the fire at their Barnsley warehouse damaged 20% of the stock it held.
Remarkably at the time, ASOS managed to start taking and shipping orders a mere 48 hours after the fire had happened and then kicked off a sale which 50% discounts and the like.
Despite the drop in profits, the fashion retailer has seen a 14% rise in overall retail sales for the six-month period compared to the previous year.
Chief executive Nick Robertson says: “Our customer engagement remains high, with growth in visits, average order frequency, average basket size and conversion all improving. Our active customers grew by 13%, exceeding the nine million mark for the first time.”
“With our continued investment in our international rice competitiveness gaining traction, momentum in the business is building. This gives us confidence in the outlook for the second half and that full year profit and margin will be in line with expectations.”
This little device allows you to order things at the touch of a button, as it is a WiFi enabled controller which is connected to your phone through the Amazon app.
You stick the buttons around your house, on things that you use regularly. So you can pop one on your washing machine and when you start running low on washing powder, you tap the button and it automatically puts an order through to Amazon for you.
A load of brands have signed-up with the Dash Button and are available to order through the Dash Button program, provided you’re a Prime customer.
If you’re a button basher, you are given a half-hour window to cancel any orders, which is something.
Amazon spokesperson Kinley Pearsall confirmed to the LA Times that the Dash Button is absolutely real, and available to Amazon Prime customers by invitation only.
Watch the video below and reluctantly applaud Amazon for launching this product on April Fools Day, which leaves more people talking about it than normal, as everyone ponders about whether or not it is a prank.
Lidl’s marketing team are on fire lately.
Last week, they offered money off One Direction Easter eggs when Zayn left, and you’ll remember that they also expertly mocked Morrisons and completely took the Michael out of the Sainsbury’s ’50p challenge’.
Well, our Lidl friends are at it again for April Fools Day, offering vouchers for ‘money on’ a host of products.
Lidl have taken whole pages out in newspapers, filled with these April Fool vouchers. While being reasonably funny, they’re also throwing shade at the competitors. They might as well be saying “We could actually put these vouchers out and still be cheaper than most of our rivals, know worramean?”
In the advert, you’ll see that Lidl say that they’ll make their products more expensive “if you really do believe that higher prices mean higher quality.”
We all know that Sports Direct is run like a ‘backstreet operation’, thanks to a dressing down offered to the company. Well, in news that will surprise precisely no-one, there’s more.
Sports Direct is responsible for a fifth of all zero hour contracts in retail.
After a number of revelations about the company, chairman Keith Hellawell said that they used zero hour contracts no more than any other retailer, however, the figures from the Office for National Statistics (ONS) suggest something rather different.
Hellawell said: “I suspect that, in percentage terms, we are probably not much different from other people in the retail business. It is just that we are so big, so the numbers are quite substantial.” ONS stats show that from October to December 2014, just 1.8% of people working in retail and wholesale were on zero-hour contracts. If this is right, then around 72,000 have jobs on these controversial contracts, with one in five of them working for Sports Direct.
With Sports Direct only giving staff at USC (who they own) 15 minutes notice of the business going into administration, it turns out that everyone sacked might be able to take Sports Direct to a tribunal.
Mike Ashley, if he’s got any sense, will be smelling the warm pants of trouble. He’d be wise to act, sharply.
MPs aren’t impressed with Sports Direct, saying that they’re being run like a “backstreet outfit”, complete with deals being made behind the board’s back, withholding payments from suppliers, nonsense with the USC fashion chain, and a whole load more.
Keith Hellawell, chairman of Sports Direct, is looking at a barrage of accusations from the Scottish Affairs Select Committee, who say that the way his company dealt with the collapse of USC was so poor, that his past is in danger of being tarnished. Retroactive tarnishing! Nice.
You might know that USC went under in January and was bought back by Sports Direct, debt-free. This left staff redundant and £15.3m in money owed to landlords and suppliers, unpaid and wiped off the record. Also erased from history was the £700,000 owed to HMRC, who are now picking up the tab for the redundancy payments too.
Not only that, the company is being hammered over their reliance on zero-hours contracts – they currently have 75% of their staff on these controversial deals.
Hellawell is pleading innocence, saying that he had no idea that USC was about to go under and that, in fact, chief executive Dave Forsey, and deputy executive chairman, Mike Ashley, had met administrators without his knowledge a whole two months before USC went kaput. The committee also found that USC went under after bosses held back payment to Diesel, because they thought the fashion brand might stop supplying USC, which would have made other suppliers stop.
Thanks to being completely backed into a corner, Hellawell admitted that this withheld money was tantamount to holding Diesel “to ransom”. He added, dimly, that he had no idea how widespread the practice was in the company, adding: “We are in negotiations with a large number of landlords to reduce the cost of property at the moment… clearly I am going to ask some searching questions of the board.”
Simon Reevell MP wasn’t having any of it, saying: “You actively breached a contract with Diesel in order to try to bring them to the negotiating table. You are the chairman of a FTSE 100 company and you are in that role to bring credibility as a [former] senior police officer. At least on one occasion the company tried to renegotiate a deal by withholding …payments it is contractually obliged to pay. That sounds like some sort of backstreet outfit … can you understand that we struggle to understand why reputational matters such as this are completely unknown to you as a chairman?”
Chairman of the committee, Ian Davidson, chipped in: “Some members of the board knew that these discussions were going on, like Mike Ashley and the chief executive. Other members of the board, including you, did not know that. There are two categories of board members – those that are in the know and those that are not. Essentially you were there for decoration, to make a final decision that had already been made to be rubber-stamped.”
Is the culture at Sports Direct going to change? Don’t hold your breath.
Tesco can’t get a thing right at the moment, with legal action being taken against them for that accounting balls-up, and now, they’re being far too literal with their marketing slogans.
Have a look at this lovely scene and see if you can spot it (we didn’t, immediately).
While the Tesco lorry proudly crows: “You shop, we drop”, you can see that the fella in the hi-vis jacket has taken the slogan on as gospel, and dropped his load everywhere.
If advertising slogans are all correct, maybe Gillette is the best a man can get and the men of the world have already peaked, and we should just give up?
Tesco can’t catch a break these days, with their £236m profit mis-statement coming back to bit them on their buttocks all over again. The retailer is looking at more legal action, which is potentially worth billions of pounds.
So what’s happening? Well, there’s a group called Tesco Shareholder Claims Ltd (TSC) who are backed by the American legal firm, Scott & Scott, and they’re wanting compensation under a co-ordinated action after the drastic drop in Tesco’s share price at the end of last year.
A statement from the group said: “A permanent destruction of value has occurred and had the accounting irregularities not taken place the share price, and value of the company, would today be materially higher. TSC expects the claim to be in the region of 50p-70p per share.”
“Tesco Plc has in excess of eight billion shares listed.”
To add to Tesco’s woes, another firm – Stewart’s Law – are also preparing a similar case. If they all manage to claim compensation for the various shareholders, this is going to be catastrophically expensive for the supermarket giant. Chairman of the claims group, John Bradley, said: “Tesco is one of the widest held stocks in the UK and this loss has hit pension funds and investors across the UK and beyond. We look forward to bringing this claim to court.”
And while the supermarket is showing some signs of recovery, the fact is, they’re not likely to salvage their reputation any time soon. It’ll be years before traders trust the company again. In addition to this, Tesco are in the middle of a massive redundancy programme, as they lose staff in a bid to save millions of pounds per year.
With the Serious Fraud Office still sniffing around them, launching a formal criminal investigation, Tesco’s woes aren’t over by a long chalk.
Amazon stepped ever closer to having parcels delivered by flying drone robots, edging us nearer to a life that resembles The Jetsons. They have been given a special certificate which allows them to test drones in America, and if that goes well, they’ll be rolling that out worldwide.
The Federal Aviation Administration have given Amazon an “experimental airworthiness certificate”, which means that those who have a pilot’s licence can test the unmanned craft. Criminals meanwhile, will be practising their aim with catapults, so they can nick all those lovely presents in the sky.
The PrimeAir delivery service has been talked about for a while, but has been held up by a number of laws and red tape.
Amazon pushed on, and with good reason – drones won’t cost as much money, like a delivery man and a van’s fuel and all that. The idea is that it will speed up the delivery process too, and other companies are looking into employing drones as well. How they’ll get around the fact that some people live on main roads and could see drones landing in traffic, is another matter entirely.
Still, it is reasonably exciting, in a novel way, to think of getting your online orders delivered by a flying robot and just think of some of the hilarious accidents they’re going to cause.
Aldi is considering giving all the other supermarkets more grief by not only spoiling things for them on the high street, but also, on the information superhighway. That’s right – Aldi have dusted down their router and are eyeing up the internet!
Internet orders have been helping the big supermarkets while Lidl and Aldi chip away at their in-store sales, but now, they’re all going to have to worry about the discounters having their way with them online too.
A spokesman for Aldi UK said: “It is not an immediate focus for Aldi, which currently has the best performing business model in the grocery sector. However, it is an area we monitor as part of our customer-focused approach.”
They’re right to weigh it up as 5% of all grocery sales in the UK are through the internet, which is ahead of most neighbouring countries. If Aldi are kicking it off anywhere, they’d be wise to do it here.
Aldi and Lidl are seeing a big growth (not the kind you need to see a doctor for) with Aldi’s sales rising by 19.3% over the three months to the end of February, while their pals Lidl saw theirs going up by 13.6%.
If they get online and start delivering weekly shops, they could clean up.
Sometimes you’ll hear older people whining about things not being as big as they used to be. “Why, when I werra lad, a Wagon Wheel was the size of a small planet and would feed you for 38 years!” You might think ‘oh shut up – your hands and bellies are just bigger than they were when you were little’, but turns out, they might have a point.
See, loads of products have shrunk in size and, surprise surprise, the price hasn’t gone down with them.
Which!!! have been staring at shelves and found that items like Aunt Bessie’s Homestyle Chips have dropped from 750g to 700g, but stayed at £1.65 in price. If you buy Tetley’s Blend of Both bags, you’re five brews short yet charged 20p more. If you buy Philadelphia Light Soft Cheese, you’ll get 10% less, but in many shops, you’ll find the price went up.
Like Hovis Best of Both bread? Well, that isn’t 800g like it used to be, shrinking by 6%, but still costing the same price.
As for washing your clothes, Surf with Essential Oils powder used to be 2kg, but this year, for the same money, you’ll pay 1.61kg. Domestos Spray Bleach Multipurpose and Cif Actifizz Multi-Purpose Lemon Spray both offer less product for the same money.
Dreadful behaviour all round, and not at all surprising.
Which!!! honcho Richard Lloyd said: “Shrinking products can be a sneaky way of putting up costs for consumers because pack sizes shrink but the prices don’t. It’s now time for action on dodgy pricing practices that stops people from easily comparing products to find the cheapest.”
Of course, some of the companies making the products have dropped their RRP, but the supermarkets themselves haven’t passed on the savings to the customers. All in all, this is adding up and giving consumers less bang for their buck.
GAME have been fighting back from the brink rather well after knocking on heaven’s door for a while. Of course, it still has an almighty scrap with Amazon to contend with, but with that, they’ve taken a leaf from their rival’s book.
The video game vendor has just announced ‘Marketplace’ for third-party sellers, which will allow people to sell games, gaming memorabilia, clothes, smartphones and classic old gaming titles through their new online store.
Naturally, GAME will be taking a cut – this is business after all.
For the time being, GAME will be limiting sales to around 30 or 40 merchants, so they can police the whole thing properly. Then, when consumers trust the service and the reputation has built-up, they’ll throw the doors open to everyone who wants to sell stuff.
Can GAME compete with Amazon though? Maybe they’re not thinking that big just yet and are just offering an alternative for anyone who has Amazon fatigue.
More relevant is that this could be bad news for CeX, who have been routinely hammered by disgruntled customers on these pages.
Seems like Sainsbury’s can’t get a thing right at the moment, as they reported a fall in sales for the fifth consecutive quarter. If you’ve been in a Sainsbury’s recently, you’ll know how rubbish they are, so this won’t surprise many.
The supermarket said that like-for-like sales fell by 1.9% in the 10 weeks to March 14th, which in fairness, was better than analysts expected, but it is still a drop on top of four previous drops, which is never a good sign.
As ever, the cause of this is people buying stuff online and going to Aldi and Lidl instead. Not to mention the supermarket mantra about how the high street is now ‘challenging’. Sainsbury’s have dropped the price on over 1,000 products, but alas, so is everyone else and consumers have the air of ‘stop looking so desperate’ at a lot of the shops.
Mike Coupe, the new chief executive last year, said: “The trading environment remains challenging and the decisions we have taken to improve our competitiveness are reflected in our quarterly performance. Since we announced our strategic review in November we have lowered the regular prices of over 1,100 products, ensuring our price position relative to our major competitors has never been stronger. In addition, we have absorbed record levels of food deflation in categories where we trade most strongly – produce, dairy, fresh ready meals, meat, fish and poultry.”
“We expect the market to remain challenging for the foreseeable future. Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue. However, we believe that the great value and quality of our products, combined with a strong focus on developing our multi-channel offer, will enable us to outperform our supermarket peers.”
Sainsbury’s can worry about discounter supermarkets all they want, but they have a bigger problem in the shape of Tesco, who look like they’re powering out of their slump. They’re going to have to work out what they are if they’re going to get motoring again. Not as nice as Waitrose or Marks and Spencers and not as cheap as other supermarkets – they need an angle, and fast.