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Stuart O'Brien

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Supermarkets could introduce e-pricing model

Retail experts have predicted that fixed retail prices could disappear within five years, as supermarkets adopt an e-pricing structure that changes based on demand.

The new ‘surge-pricing’ model, similar to that of taxi firm Uber, is a system which is already common in the US and across parts of Europe, and could see the prices of goods change depending on demand and the time of day.

Electronic price changes were tested in a selection of Marks & Spencers food stores last year in a bid to help the lunchtime rush in their stores, with discounts offered before 11am.

Experts have suggested that similar systems could also be used at petrol pumps.

Andrew Dark, from electronic pricing company Displaydata, said: “Paper tags often show the wrong prices as they have to be manually replaced by staff when prices move, but electronic labels can be updated in just 20 seconds.”

A Sainsbury’s spokesman said: “We always look at ways that technology can help us improve the shopping experience for our customers.”

Retail Shopfitting & Display Summit

Register today for the Retail Shopfitting & Display Summit

The Retail Shopfitting & Display Summit is a unique event that gives senior retail professionals the opportunity to meet with suppliers, network with peers and learn via a series of insightful seminar sessions.

For the delegates attending, it’s proven to be an invaluable event – two days out of the office that have a hugely positive impact on their businesses.

We’d love to see you at our next Summit on February 5th & 6th 2018 – for more information and to register as a delegate, contact Victoria Petch on 01992 374082 or email v.petch@forumevents.co.uk.

Alternatively, if you’re an industry supplier and would like to showcase your products and services at the Retail Shopfitting & Display Summit, contact Courtney Saggers on 01992 374 088 or email c.saggers@forumevents.co.uk.

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Sainsbury’s poised for Nisa purchase

Supermarket giant Sainsbury’s is set to acquire convince store chain Nisa in an exclusivity deal thought to be worth in the region of £130 million, preventing

Nisa from speaking with other rivals companies, such as The Co-operative Group.
However, before the deal can go ahead the agreement needs to be put in front of Nisa’s 1,400 members, with a 50% plus majority needed for it to be finally approved. Nisa currently buys and distributes on behalf of more than 2,500 independently owned stores around the UK.

Nisa has been under pressure in recent years from budget brands such as Poundland. Sainsbury’s, on the other hand, has deployed an ambitious strategy to regain ground lost to budget supermarkets Aldi and Lidl, with the £1.4 billion acquisition of Argos parent company Home Retail Group proving to be a success.

The Telegraph reports that Nisa has been working with bankers at Lazard and has narrowed the list of potential buyers to Sainsbury’s and the Co-op.

Sainsbury’s bid is thought to be more attractive than its competitor Co-Op, and is now asking Nisa to sign an exclusivity deal that will prevent them from entering into further conversations with other bidders.

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Rising inflation troubles retail

A survey by London-based information and analysis company IHS Markit has found that the firm’s index measuring sentiment of UK households’ personal finances dropped from 47.1 to 45.8 between May and June, marking one of the lowest readings since 2013 and the lowest for three months.
“June’s survey reveals that UK household finances remain under intense pressure from rising living costs,” said IHS Markit senior economist Tim Moore.
“While the squeeze moderated slightly since last month, worries about the outlook have deepened.”
58% or respondents also expected interest rates to rise over the next 12 months, more than double the figure post Brexit referendum.
As the pound dropped further following the General Election, the Bank of England (BoE) kept rates to 0.25% in a bid to steady the financial ship. However, three of the right members of the Monetary Policy Committee voted for an increase, with widespread speculation of an imminent hike in rates.
This, along with inflation hitting a four-year high and outpacing BoE predictions, has caused concern within retail.
“Core inflation, which excludes food and energy, also unexpectedly picked up in May, reaching 2.6 per cent, the fastest since November 2012,” commented eCommera’s head of insight Alex Hamilton.
“The concern for retailers is that weak consumer confidence, amid political uncertainty and falling real wages, will make shoppers more price conscious, at a time when many brands are looking to pass on cost rises to their customers in a bid to protect margins.”

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Contactless payments account for 51% of card sales

New data from Barclaycard’s Contactless Spending Index has revealed that 51 per cent of in-store transactions are made using ‘touch and go’ technology, up more than a third (34%) since the beginning of the year.
Industry body UK Cards Association (UKCA) has also revealed that credit and debit payments have doubled in the past 10 years, with the increased use of contactless driving the surge.
“Our data shows that growth in contactless spending has been surging for several years, but this latest insight is particularly significant as it shows shoppers now prefer to pay with ‘touch and go’, with more than half of eligible transactions made this way,” commented Adam Herson, mobile payments director, Barclaycard.
“September will mark the tenth anniversary of Barclaycard introducing contactless to the UK and during this time we’ve seen the technology evolve at a rapid pace – from mobile and wearable devices – to invisible payments such as our newly launched ‘Grab+Go’ concept, which allows consumers to scan and pay for their shopping with a smartphone.
“And with more innovation in the pipeline and a continued rise in consumer and merchant adoption, 2017 is on track to be another record-breaking year for contactless spending.”
Use of contactless has increased in the Midlands and the North of England more than anywhere else in the UK, with the biggest jumps in spending seen in Derby (up 45%), Chester (44%), Newcastle Upon Tyne (42%), Coventry (42%) and Stoke-on-Trent (41%).

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Co-Op’s membership soars

Supermarket chain Co-Op continues to enjoy a renaissance as young people flock to sign up, with a membership increase of over 700,000 in the past 12 months – taking the overall membership to over 13.6 million.

The grocer, which focuses on ethical practices, now operates more than 6,800 independent co-operatives, with membership driven by the Co-Op Group along with community-owned businesses and credit unions.

Co-Op’s directors have attributed their success to ‘political shocks’ as consumer confidence and spend decreases and shoppers look out for discounts.

“Underlying the political shocks the country has experienced over the last year is a call from many parts of the UK population for an economy over which they have more of a say, and from which they get a fair share,” said Co-Op’s UK secretary-general Ed Mayo.

“As organisations owned by 13.6 million people, the UK’s 7,000 Co-Ops give people a say in what they do and how their profits are used.

“They offer a practical way to re-imagine an economy in which people have more control over their homes, work and local areas.

“It’s no surprise we’re seeing a spike in interest in co-ops, whether it’s social care providers finding that a co-operative approach can give its users and workers a voice, or young designers and web developers seeing co-ops as a natural way to collaborate at work.”

Co-Op reintroduced their loyalty programme last year in an effort to draw back customers. Members receive a five per cent reward on every brand purchase, with a further one per cent going to charity.

www.coop.co.uk

Parliament

UK hung parliament ‘spells trouble for retail’

Analysts have warned that the retail sector could suffer as consumers pull back on spending in the aftermath of a hung parliament.

With inflation already on the increase post-Brexit, consumers are continuing to feel the pinch, while a falling Sterling and shares in Sainsbury’s and Marks & Spencer dropping are further causes for concern.

Britain faces a hung Parliament for just the sixth time in its political history, the most recent being in 2010.

However, luxury fashion retailers such as Burberry and Ted Baker saw a rise of two per cent as investors made the most of favourable exchange rates and invested in the international businesses.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Housebuilders are down across the board, but they’re joined by restaurants, high street banks, fashion retailers and media outlets.

“The implication is clear, consumers’ disposable incomes are expected to be stretched, and big ticket items, like property upgrades, as well as little luxuries, like regular meals out, are expected to be among the first to go.”

“Sinking share prices at the likes of Next, Restaurant Group, easyJet and Dixons Carphone are all a reflection of the fact that lower Sterling and political uncertainty mean the pounds in Britons’ pockets seem set to be lighter going forwards.

“There’s good news for UK investors who are invested in more international businesses though. The combination of international earnings and a wealthier customer base is supporting retailers such as Burberry and Ted Baker.”

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UK retail sales slump in May

A rise of 2.7% in inflation, the highest level in nearly four years, has had a dramatic effect on retail with sales suffering a 0.4% drop through the month of May.

The figures released by the British Retail Consortium (BRC) show that sales rose 0.2% in May, against a 1.4% in May 2016, the lowest since January, excluding Easter Bank Holiday distortions.

The report also details how Food sales increased 3.2% on a like-for-like basis over the three months to May, 4.3% on a total basis – the highest three-month growth since 2012 rising 3.2% in the quarter to May.

Over the same period, Non-Food retail sales in the UK decreased 0.3% on a like-for-like basis and increased 0.1% on a total basis, making it the worst performance recorded since may 2011.

Online sales of Non-Food products grew 7.0%, while in-store sales declined 1.8% on a Total basis and 2.3% on a like-for-like basis, below the like-for-like 12 month average decline of 2.0%.

Commenting on the figures, Helen Dickinson OBE, chief executive British Retail Consortium, said: “After the pick-up in sales over Easter, consumer spending slowed again in May resulting in almost flat growth on the previous year. Underneath the headlines, there’s continued variation in the performance of food versus non-food products, as sales performance of the two become increasingly polarised.

“Food sales, albeit positively distorted by inflation, continue to see annual growth, while in non-food categories which are predominantly capturing discretionary spending, retailers find themselves having to compete even harder.
“Overall, May’s sales slowdown is indicative of a longer term trend of a decline in consumer spending power. As household budgets become increasingly squeezed by inflation, predominantly in the non-retail part of the consumer basket, it’s vital that the next Government helps retailers keep prices low for ordinary shoppers. This means, as well as securing a tariff-free trade deal with the EU, negotiating frictionless customs arrangements; providing certainty for EU colleagues working in the UK; and ensuring the continuity of existing EU legislation as it transfers into UK law.”

Paul Martin, UK head of retail added:“After the surge in retail sales last month – the by-product of this year’s relatively late Easter – retailers have been brought back down to earth with a thump. Like-for-like retail sales contracted in May, which is likely to represent a more accurate depiction of the state of UK retail currently.
“The impact of inflationary pressures on the nation’s purse continues to play out in this month’s figures, with shoppers evidently spending more on food and drink than on non-food purchases. With inflation continuing to rise and wage growth stagnating, consumers are starting to feel the pinch – although the highly competitive nature of the UK grocery market continues to play out in the consumer’s favour.

“Many retailers, particularly fashion stores, will be poised and ready to make the most of the upcoming summer, so hopefully the weather will play fair. An increased focus on managing costs will dominate the retail agenda. More imminently though, eyes will be firmly placed on the outcome of the General Election, with close attention being paid to the implications it might have on the industry.”

www.brc.org.uk

Bride & Groom

GUEST BLOG: The Social Wedding – How planning (and selling) the big day is going digital

Rob Kabrovski, VP of Accounts EMEA, Adaptly

The start of summer marks peak wedding season, with July to September the most popular months for couples to celebrate their big days.

Weddings are the culmination of months (even years) of planning and thousands of pounds of expenditure. Figures reveal that each couple spends on average £25,000 on their wedding (guests spend an additional £815) across verticals, meaning that the celebration is also very big business – worth an estimated £10 billion a year.

Long gone are the days of a quick ceremony in front of a few select family and friends followed by a week in rain-soaked Cornwall. They have been replaced by something more lavish. Like most of the important things in our lives (as well as the minutiae), social media plays an increasingly important role.

For instance, 62 per cent of newlyweds update their Facebook relationship status within 24 hours of getting hitched. But then we all know that managing our social profiles to ensure they are relevant has become second nature.

What is more interesting is the way that couples are turning to social media in order to plan their weddings well in advance – and it’s an activity carried out across age groups and not just among Millennials who you might assume are more versed in social media (there were two million wedding-related Internet searches in the UK by 45-54 year-olds in 2016).

Over 40 per cent of husbands and wives-to-be turn to social media to plan their weddings and they use these platforms in different ways – as well as seeking inspiration (which provides an opportunity for advertisers) ahead of their special day, one in four create a hashtag to aggregate posts on the day. It’s not only the wedding couple who turn to social media to plan and mark the celebration, but also the guests, the stag and hen crew, the bridesmaids and ushers, and so on. This means that the targeting spreads to include events and venues being organised beyond the obvious as well as gifts and outfits. Therefore brands need to think broader in terms of their product offering than just the couple.

For those advertisers that are seeking to tap this growing market there are key principles to follow, and it’s best to kick off your activity as early as possible as most engagements in the UK last for an average of 20 months – that’s a long planning period, which will also include other key marital events including engagement parties, hen dos and stag parties.

Pinners use Pinterest as a first stop to discover ideas that pique their interest, with over 40 million people using the platform globally to help guide them through the wedding planning process. As it’s such a powerful tool it should not be underestimated and creative treatments should reflect every part of the wedding planner’s journey. Given that weddings are highly visual affairs, bright and striking ‘thumb-stopping’ creative works the best.

While the summer months are the most popular for weddings, they are also the most expensive and ceremonies are now taking place throughout the year. To exploit this, advertisers should run their Pinterest wedding campaigns well past the key months using specific terms for search targeting, such as ‘wedding dress’, ‘honeymoon’ and so on.

Facebook and Instagram also play an important role in the wedding journey and have the additional benefit of allowing targeting based on relationship status, gender and location. A brand can reach a wide audience by targeting users who are engaged with an entire product range through carousel ads, while shoppable video ads with user-generated content can help bring stories of real couples’ weddings to life.

In addition, Twitter has a crucial role to play, allowing conversations and keyword targeting to tailor messaging to what users are tweeting about. Wedding buzz words such as #wedding and #shesaidyes are likely to be popular topics on Saturdays during the key wedding periods, while video featuring prominent people and branding in the first five seconds will engage viewers.

Snapchat is also increasingly popular, with custom geofilters enhancing the experience. Snap Ads with long-form content can engage users for longer as wedding guests and the happy couple are likely to re-watch the stories the following day and beyond.

Overall, social media has enhanced the wedding experience for brides, grooms, family and guests.

Happily for advertisers, it also allows them to play a new pivotal role in the special day.

Retail Shopfitting & Display Summit

Want to speak at the Retail Shopfitting & Display Summit?

We are looking for industry thought leaders to participate in the seminar programme at the Retail Shopfitting & Display Summit, which takes place on February 5th & 6th 2018 at the Radisson Blu Hotel, London Stansted.

The Summit is a highly-focused event that attracts senior professionals in a variety of retail verticals for unrivalled networking, learning and debate.

So if you have experience in the world of retail display and shopfitting and would like to share those experiences with peers through either a talk or by participating in a panel session, contact Kirsty Groves on 01992 374 087, or email k.groves@forumevents.co.uk.