Welcome to our 'weekly news in brief', covering the latest from UK retailers and manufacturers.
RETAIL NEWS
Asda trials ‘virtual queuing’ as it focuses on ‘feeding the nation’
Asda is trialling “virtual queuing” in a bid to find longer term solutions to support social distancing across its stores. The trial, which is taking place at the supermarket’s store in Middleton, Leeds, allows customers to log into the queue remotely and wait in their car to enter the store. The new measures come as Asda reports that two-thirds of customers are still concerned about safety in supermarkets amid the Covid-19 pandemic.
The supermarket has also extended the capacity of its Food Box delivery service for vulnerable customers to 10,000 boxes per day and is offering regular home delivery slots to over 150,000 people who are without a support network. In addition, Asda has expanded its delivery slots from 450,000 a week to more than 725,000. Alongside these measures, the supermarket has recruited 22,000 temporary workers to support in its efforts to “feed the nation”.
“While safety is still a major focus for customers, three quarters tell us they are also increasingly concerned about the price of groceries and are looking for value – and we can reassure them that Asda will meet their needs on both,” says Asda CEO Roger Burnley. “However long Covid-19 is with us, we will continue to offer great value to customers, as well as investing in doing the right things to protect our customers, our colleagues and our communities – and fulfil our vital role in feeding the nation.”
The supermarket reports like-for-like sales, excluding petrol, increased by 3.5% from 1 January to 31 March, compared to the same period in 2019. Asda experienced a surge in demand for delivery, with its website receiving more than 3,500 visits a minute during the week commencing 18 March, while there was a “significant decline in demand” for non-essential items, such as fashion, fuel and general merchandise. The retailer’s smaller stores benefitted from the early weeks of lockdown, as customers preferred to shop locally.
Source: Marketing Week 20th May 2020
Waitrose joins campaign to recruit 70,000 pickers for British farms
Amid concerns tons of fresh produce could rot in fields around the UK this season due to a lack of pickers, Waitrose and ITV have come together for a major recruitment campaign. The partnership, which includes a primetime TV advert that aired last night, will urge the British public to get involved and drive potential applicants to the pickforbritain.org.uk website, where people can search for vacancies on local farms.
The coronavirus pandemic and subsequent travel restrictions have left British fruit and vegetable farms with significant workforce shortages. Seasonal pickers are usually mostly made up of migrant labourers, many of which come from Eastern Europe. The campaign aims to recruit 70,000 new pickers with Waitrose supporting the TV campaign by placing ads across national print and digital outlets. Content is also being created for key social media platforms to raise awareness amongst students, graduates and younger people looking for long term contracts over the summer and beyond.
Pick for Britain was launched by the Department for Environment, Food and Rural Affairs, supported by organisations such as the National Farmers Union (NFU). Rupert Thomas, Director of Trading at Waitrose, said: “We source so much homegrown produce during the UK season, that we absolutely need to ensure it’s picked, but it’s also vital for the livelihoods of UK farmers and growers across the industry that the country’s fruit and vegetables aren’t left to rot. While the ad will leave viewers with no illusion that the job of a picker is easy – we hope it will capture the imagination and encourage people to do something extraordinary that’s for the good of the nation.”
NFU Vice President Tom Bradshaw added: “This year there will be thousands of vacancies opening up on farms across the country to help farmers get iconic British produce from field to plate. From British strawberries being picked in early June all the way through to apples being harvested in the Autumn, the importance of workers to pick, pack and grade fruit and veg cannot be understated. We have been working closely with the government who have launched the Pick for Britain website and I would encourage anyone who is
interested in helping pick for Britain throughout this summer to visit the site and see what jobs are out there.”
Source: NamNews 20th May 2020
Facebook squares up to Amazon with online shopping rollout
Facebook has accelerated and extended the launch of its shopping platform because of coronavirus. The social media conglomerate will allow businesses to set up online stores and sell products across Facebook and Instagram on a no-fee basis. These stores will appear on business pages, Instagram pages and through targeted ads across both platforms.
Shoppers will be able to browse products, message sellers directly through WhatsApp, Facebook Messenger or Instagram to arrange a purchase or get more information, and in some cases buy items in-app using the recently launched checkout feature in the US.
Facebook chief executive Mark Zuckerberg told the Financial Times it had accelerated the launch of its shopping capabilities, which have been in developed for the last six months, in order to help businesses that were struggling during the coronavirus pandemic and subsequent lockdown. The social media platform will also use data gathered from users
browsing and purchases to tweak its recommendations.
“If you browse a shop inside of our app or if you buy something, we will see that and we’ll be able to hopefully use that to show you better recommendations for other things that you’d be interested in in the future said Zuckerberg.
Facebook will also add functionalities that allow businesses to create loyalty programmes for users that buy products they find on Facebook or Instagram. Facebook’s shopping capabilities will also integrate with other e-commerce platforms such as Shopify and ChannelAdvisor.
Source: Retail Week 20th May 2020
Aldi starts trialling grocery delivery service with Deliveroo
Aldi UK has made another tentative step into the grocery delivery market via a new partnership with Deliveroo. Trials of its first on-demand delivery service began today from its Daleside Road store in Nottingham. This will be followed by a further seven stores across the East Midlands in June.
Customers are able to order from over 150 everyday items in the discounter’s range, such as bread, milk and fresh produce, through the Deliveroo app. These will be picked by Aldi staff in-store for delivery in as little as 30 minutes via Deliveroo’s network of riders. If it proves successful, Aldi stated that the service could be rolled out to more of its 875 stores by the end of this year.
The trial follows the discounter’s recent move into online food parcels, which were introduced in April to help self-isolating and vulnerable people during the coronavirus outbreak. However, these were filled with a set selection of 22 essential food and household products, and cost £23.99 inclusive of delivery. All the big four supermarket chains in the UK have been ramping-up their delivery operations to serve increased demand during the pandemic. However, up until last month, Aldi only sold wine & spirits and its ‘Special buys’ range of non-food items online.
Giles Hurley, Chief Executive Officer of Aldi UK & Ireland, said: “We hope the new trial with Deliveroo will provide more customers with access to great quality, affordable food at Aldi. This is a new and exciting venture for Aldi and we will be constantly reviewing how we can best serve our customers and continue to provide them with the high quality products they are used to in store.”
Ajay Lakhwani, VP of New Business at Deliveroo added: “At Deliveroo, we are doing everything we can to make sure that people get the food they need and want during this uprecedented time. We are pleased to partner with Aldi and deliver even more choice to our customers as they continue to keep safe at home.”
The discounters have so far steered clear of offering a grocery delivery service in the UK due to the high costs of servicing orders. However, the recent rise in third-party delivery services could help Aldi and Lidl meet the growing demand for online grocery without the hefty investment in infrastructure or systems.
Aldi currently works with Instacart to offer deliveries in the US. Meanwhile, Lidl runs limited e-commerce operations in other markets and it has also introduced a rapid grocery delivery service in Ireland via a partnership with Buymie, a third-party courier operation.
Source: NamNews 18th May 2020
MANUFACTURING NEWS
Kellogg’s pulls Joe Wicks YouTube ads amid growing criticism
The Advertising Standards Authority has criticised Kellogg’s for advertising its Pringles snack products on Joe Wicks’ Body Coach YouTube channel. Now both Action on Salt & Sugar and Children’s Food Campaign are calling on all food and drink companies to refrain from advertising any food or drink high in fat, salt or sugar (HFSS) before 9pm across all media platforms during the COVID-19 pandemic.
The two groups want the ban to remain in place until the government is able to resume its previously planned work to introduce a 9pm TV and online watershed on junk food advertising, as part of current Childhood Obesity Plan measures. Under current government rules, Kellogg’s (like other food and drink brands) is not allowed to promote its “less healthy” products on
children’s TV, or any media channel, with an audience of more than 25% under-16s.
Barbara Crowther, Children’s Food Campaign spokesperson Barbara Crowther said: “Placing this ad directly before Joe’s hugely popular children’s daily PE class is a total betrayal of his work, and highly insensitive, irresponsible marketing. Children don’t need more salt, more saturated fat, more sugar, more excess calories being pushed to them during a pandemic; or indeed at any time.
“Children are even more of a captive audience during this lockdown, and we are hugely concerned they are still being subjected to unhealthy food advertising like this. The food industry and Government’s focus should be on building up people’s health and resilience; not undermining it.
“The Advertising Standards Authority also has an important role to play in enforcing the rules, yet they have allowed Kellogg’s, a known repeat offender, to just ‘settle out of court.”
Source: Marketing Week 22nd May 2020
Pladis expands McVitie’s range with new Loaf Cakes
Pladis is expanding its range of McVitie’s cakes, with the introduction of two new larger-format loaf options. McVitie’s Loaf Cakes will initially be available in Zingy Lemon and Sticky Toffee variants, with an additional Rich Chocolate flavour set to join the range later this year.
Pladis says that the ‘soft and moreish’ cakes can be enjoyed with a cup of tea, or when turned into a cost-effective dessert, and each variant features a serving suggestion on the pack to provide consumers with inspiration.
According to figures provided by Pladis, the sharing cakes category is growing at a rate of 8.2% and is currently worth £259 million. The new Loaf Cakes will join other sharing options in McVitie’s cake line-up, including Jamaica Ginger Cake and Lyle’s Golden Syrup Cake.
“The current circumstances mean shoppers have been spending far more time than usual in their own homes,” said Claire Hooper, head of marketing at McVitie’s Cake Company, Pladis UK&I.
“This has led to households of all shapes and sizes making more of mealtimes – whether that’s swapping a pre-made sandwich for beans on toast, cooking the evening meal from scratch, or indulging in a post-meal pudding. McVitie’s sharing cakes provide an opportunity for families or households to sit down, either with a cup of tea or as part of an extended mealtime occasion and enjoy time together – and the recent surge in popularity for McVitie’s wholecakes…suggests shoppers are doing exactly that. We’re confident the latest great-value additions to our range will prove a hit with shoppers now and in the months to come.”
McVitie’s new Loaf Cakes are rolling out to retailers in the UK this month and will have an RRP of £1.
Source: FoodBev Media 20th May 2020
SheaMoisture UK announces £40,000 fund to help minority-owned salons during Covid-19
SheaMoisture UK has announced a £40,000 fund to help support minority-owned salons survive the coronavirus pandemic. Named the 'Community Commerce Salon Relief Fund' and developed as part of its global Community Commerce business model, the company will give three grants of £10,000 to three separate salon owners, and five grants of £2,000 to five different salon owners.
The grants will be given to owners that can prove their salons support the community and that the funds will help support staff and develop their business goals. SheaMoisture UK has also teamed up with WCAN, a social enterprise that aims to help the personal and professional development of black women, which will help with “longer term business mentoring, business webinars to enhance acumen, Black Girl Magic online community support, business spotlight on partner websites, and general hands on support to help their business flourish through COVID-19 and beyond.”
Winners of the fund will be announced on 5th June, 2020.
Following on from the company’s 1 Million Dollar Community Commerce Fund, which was launched in April to support minority businesses in the U.S., the new fund aims to give back to salons that are active and prominent in their communities, with winners also selected for being able to showcase how they have positively adapted their business during COVID-19.
Source: Global Cosmetic News 21st May 2020
Coca-Cola reduces prices to increase appeal to budge-conscious shoppers.
With some consumers facing a squeeze on their income during the coronavirus outbreak, Coca-Cola European Partners (CCEP) has reduced the recommended price points for its range of price-marked packs (PMPs) across its colas portfolio. The soft drinks group is also focusing on larger formats amid the current drop off in on-the-go consumption.
1.75l bottles of Coca-Cola Zero Sugar – including the cherry and vanilla-flavoured variants – and Diet Coke are now available in a £1.75 PMP, and 1.5l bottles of Coca-Cola Original Taste and Coca-Cola Cherry are now available in a £1.95 PMP. The company stated that the focus on larger formats is helping retailers to take advantage of increased consumption of soft drinks within the home during the lockdown. Sales of Coca-Cola’s larger pack formats have increased in recent weeks, with consumers said to want volume and value for money when buying soft drinks.
Alison Adderley, Field Sales Director at CCEP, said: “Since the country went into lockdown, consumer behaviour has been evolving. Whilst we all hope things go back to normal as soon and as safely as possible, we can be pretty certain of some long-term changes in the way people shop, which suppliers and retailers must adapt to. By making these much-loved drinks available in an even more appealing PMP, we’re helping retailers respond to a number of key shopper demands.”
She highlighted research that showed shoppers are currently buying into snacking and treating categories more often, and growing numbers of people are looking to save money in the months ahead. “PMPs offer visible value, reassuring shoppers that they can get the products they want, without being overcharged. In fact, PMPs account for over 60% of total soft drink sales in independent and symbol convenience stores,” said Adderley.
As lockdown measures begin to ease in the coming weeks, footfall to local stores is expected to increase. CCEP stated that this will bring increased demand for smaller formats as people return to consuming soft drinks on-the-go. To help retailers capitalise, the company has introduced 500ml bottles of Coca-Cola Zero Sugar and Diet Cole in a £1 PMP. The Coca-Cola Company recently revealed that it had seen its overall sales volumes plummet 25% in April as the coronavirus-related shutdowns of bars, restaurants, sports stadiums and other venues impacted the consumption of its soft drinks.
Source: NamNews 19th May 2020
WIDER MARKET NEWS
Brexit: Government confirms new checks on goods entering NI from GB
The government has confirmed there will be new checks on some goods entering Northern Ireland from the rest of the UK as part of the Brexit deal. It will expand infrastructure at Northern Ireland's ports to carry out checks on animals and food products. The details are contained in UK proposals for implementing the NI part of the Brexit deal.
Northern Ireland will continue to follow some EU rules on agricultural and manufactured goods. The Northern Ireland protocol is supposed to be operational by January and has to be applied even if the UK and EU do not reach a trade deal. The government said the protocol could "be implemented in a pragmatic, proportionate way".
"Implementing the protocol in this way will ensure we can support businesses and citizens, and protect Northern Ireland's place in the UK's customs territory while upholding our commitments to the EU's Single Market," said Cabinet Office Minister Michael Gove. "Northern Ireland will benefit fully from its access to the UK and EU markets."
Under the deal, reached in October, NI will continue to follow some EU rules on agricultural and manufactured goods. Speaking in the House of Commons, Mr Gove emphasised that trade from NI to GB would remain "unfettered". The government said there would not need to be any new paperwork for almost all GB-NI trade, including what are known exit summary declarations. The EU has previously suggested these declarations will be needed so this could be a point of dispute.
The deal also means the whole of the UK will leave the EU's customs union, but Northern Ireland will continue to enforce the EU's customs code at its ports. The EU has strict rules on the entry of animals and food products into the single market. These products must always enter the single market through designed BCPs. Live animals entering Northern Ireland from Great Britain are already subject to checks, but food products are not.
Source: BBC News 20th May 2020
Sunak warns UK economy could suffer permanent ‘scarring’
Rishi Sunak has warned that the economy may not “immediately bounce back” from the coronavirus crisis and could suffer permanent scarring, as jobless claims soared at a record rate to more than 2m. The chancellor struck a sombre note on a day that saw the biggest month-on-month increase in out of work benefits claims since records began in 1971. A further 10m are now precariously relying on the state to pay their wages.
“We are likely to face a severe recession, the likes of which we haven’t seen, and, of course, that will have an impact on employment,” Mr Sunak said. “It’s not obvious there will be an immediate bounce back.”
The chancellor’s words reflect a Treasury view that early hopes of a “V-shaped” recession — an optimistic outlook shared by the Bank of England — were misplaced, and Britain is heading for a period of mass unemployment.
George Eustice, the environment secretary, suggested British people should apply for jobs as fruit or vegetable pickers, replacing the eastern European workers who are
unable to come to the UK because of travel restrictions.
“One thing is clear and that is that this year we will need to rely on British workers to lend a hand to help bring that harvest home,” he said. The government’s “Pick for Britain” recruitment website crashed after his comments.
Officials said it crashed because of a surge in demand. At 4pm the number of visitors to the website was about 2,291; when Mr Eustice spoke at 5pm it was 161,000. The number of people in the UK claiming unemployment benefits jumped at the highest rate on record in the early weeks of the coronavirus lockdown, while average pay fell and hiring ground to a halt.
Those claiming unemployment-related benefits jumped 69% to 2.1m between March and April, according to data from the UK’s ONS The rise of 856,500 in jobless claims was an early indication of the scale of outright job losses resulting from the lockdown; the sharpest increases in claimants were seen in the South West and South East of England.
The number of workers receiving state wage subsidies has reached 10m, according to new Treasury figures, masking what is likely to be a much worse jobs crisis as state support is wound down. Some 8m people have received £11.1bn so far through the employee furlough scheme, according to officials. Another 2m claims have been made through the self-employed scheme, worth £6.1bn. Officials indicated that work was going on potentially to extend the self-employed scheme, which is set to finish at the end of June. Mr Sunak told the committee: “I will continue to review it as I do all other schemes.”
Mr Sunak has extended the main furlough scheme to the end of October, although employers will be asked to foot some of the bill from August 1 — a potential moment of truth for the jobs market. The chancellor, speaking to the Lords economic affairs committee, said the government’s actions to prop up the economy would “limit scarring and limit the impact on the medium-term public finances”, but he accepted there was likely to be some persistent damage wrought by the crisis.
Separate data, based on real-time figures collected by HM Revenue & Customs, show the number of paid employees in the UK fell by 450,000 — a drop of 1.6% between March and April and a 1.2% fall year on year. These figures are experimental data, where the ONS is still developing its methodology, but they give a sense of the scale of job cuts made on top of the much larger numbers of employees — 7.5m at the Treasury’s last count — who have been furloughed but are still on employers’ payrolls.
Official ONS data, although less timely than the experimental figures, show the sudden stop in hiring that took place as the lockdown brought the labour market to a grinding halt in March and April. The Institute for Fiscal Studies, which has conducted its own analysis of vacancies advertised on the government’s Find a Job website, said the sharpest falls in vacancies had been for low-paid jobs in the sectors directly affected by social-distancing measures. However, the new vacancies for higher paid jobs in legal and managerial professions had also
dropped more than 60% year on year.
Source: Financial Times 19th May 2020
'Rainbow sale': high street gears up for massive post-lockdown discounts
Analysts forecast wall-to-wall sales as retail giants are forced to clear £15bn worth of stock Marks & Spencer has fired the starting gun on what is being billed as the “sale of the century” after the high street lockdown wiped out an entire season for fashion retailers.
Retail analysts believe there could be around £15bn worth of stock up for grabs and there will be “wall-to-wall” sales for the rest of this year after clothing stores were forced to shut just after stocking up with spring and summer fashions. One industry insider told the Guardian that warehouse storage space is more than 90% full and some retailers have been storing container-loads of summer fashion in locations such as railway sidings and on former Ministry of Defence land due to the lack of space and the exploding cost of storage in ports – from about £20 per container a day to more than £100.
M&S has dressed up its price cuts, which start at 50%, as a “rainbow sale” – and is handing 10% of takings to NHS charities. But the retail group has told the City that its clothing and homewares business had been “severely constrained during lockdown”.
Next, one of the high street’s strongest performers, which banked profits of £600m last year, has warned that it could suffer losses of £150m on the back of the shutdown.
Already, Topshop, Miss Selfridge and French Connection are offering discounts of up to 50% online, Debenhams up to 30% while New Look and Moss Bros have discounts of at least 25%. John Lewis is poised to launch another round of fashion discounts in the coming days even though the department store chain has only just finished a 30%-off deal. Heavy discounts on fashion brands such as Joules, Hobbs and Reiss are already available on its website.
One senior fashion insider said some retailers would suffer more than others: “It depends how much stock you bought and we still have June, July and August. But we have missed the best two months of the season and there will be no high season or holiday shop – because there will be no holidays.”
Non-essential stores are expected to start opening next month, but retailers will have to balance managing social distancing with trying to clear the decks. They also fear government-imposed limits on discounting. In Spain, where some non-essential retail outlets were allowed to open earlier this month, the authorities blocked retailers from any discounting activity that might draw a crowd.
Source: The Guardian 16th May 2020
Comparethemarket launches music initiative with Take That reunion
Comparethemarket is hosting a virtual reunion of Take That with former member Robbie Williams as it launches a music platform.
Meerkat Music will see the 90s boy band perform together for the first time since December 2018 in a streamed online show. Comparethemarket’s meerkat mascot Aleksandr will take centre stage on YouTube and Facebook Live to present the show, which kicks off on Friday 29 May at 8pm.
The new Meerkat Music initiative will offer customers content and music performances throughout the coming months. Comparethemarket’s head of rewards, Julie Daniels,
says: “We’ve been rewarding our customers with entertainment through Meerkat Meals and Meerkat Movies for a number of years – and music has been on our radar for a while. Kicking off with Take That, the line-up of headline artists who will perform on the Meerkat Music platform this summer will help lift the nation’s spirits at an incredibly challenging time.”
Source: Marketing Week 19th May 2020
