The Week In Retail Issue 8

RETAIL

THE WEEK IN

RETAILER INTERVIEW

BLURRED LINES

LONDON CHAIN EAT17 BLURS RETAIL/ FOODSERVICE BOUNDARY POST-CORONAVIRUS WORLD

CHINA CRISIS

WHAT CAN WE LEARN FROM CHINA?

+

CO-OP TARGETING COMMUTERS SUNDAY DEREGULATION STRAMASH ‘SAFE TO ENTER’ TECH

TWC HOME DELIVERY REPORT IN FULL Commercial Partner:

Brought to you by:

Issue 8 Wednesday 10th June 2020

Symbol Partner:

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THE WEEK IN RETAIL

EDITOR’S COMMENT SHARE YOUR NEWS AND VIEWS WITH ME AT ABEGLEY@55NORTH.COM

OLD RULES GONE WHEN EVERYBODY IS DOING EVERYTHING One of the more interesting debates of the last 12 months has been the slow but steady convergence of retail and foodservice. That convergence has been forcefully slammed into top gear thanks to coronavirus to the point that the old definitions are rapidly becoming redundant. How can we meaningfully distinguish retail from foodservice when everybody is doing everything?

We’ve got pubs selling groceries, we’ve got coffee shops delivering to homes, we’ve got restaurants doing takeaway, we’ve got suppliers selling direct to consumers and we’ve got lots and lots of convenience stores providing an ever larger range of food-to-go. Yes, Covid-19 is well on the way to ensuring that the old days of ‘we do this’ and ‘you do that’ are drawing to a close – and probably for ever.

This week’s cover story is a case in point. The Eat 17 group always set out to ‘intermingle’ retail and foodservice and have been doing it successfully since 2006. Under coronavirus, however, the owners have been quick to adapt to the new world order, knocking down a wall between one

of their stores and their restaurant next door to make better use of essentially vacant space. They put in an artisan bakery to drive footfall and produce more high quality, handmade products to sell through all their four stores. They have also rounded the offer out with a delivery service.

There are lots of lessons to be learned from Eat 17 but the key one for me is that the capacity to adapt quickly in fast-moving times is what will set the ultimate winners and losers apart. Coronavirus has forced consumers to view how they shop in a completely fresh light, and that means in both retail and foodservice.

Understanding how shoppers have changed and what they will want under the new normal is what will drive success for many retailers. Trying to force shoppers back into the old highly delineated retail and foodservice model is unlikely to be the way to go. There will be plenty of people like Eat 17 ready to snap up business by delivering a blended model that gives shoppers everything they want with a maximum of convenience and a minimum of fuss.

ANTONYBEGLEY ANTONYBEGLEY ANTONYBEGLEY

ANTONY BEGLEY, EDITOR

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 3

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CONTENTS

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 WWW.SLRMAG.COM

6

10 THIS WEEK’S NEWS IN BRIEF

HOW’S YOUR WEEK BEEN… JAMES BRUNDLE?

Foodservice delivery hits a record high while wearing a facemask in Scottish stores ‘looks inevitable’.

8 COVID-19 UPDATE

A ROUND-UP OF THE LATEST

Eat17 is fast blurring the boundary between retail and foodservice.

15 PICKS OF THE WEEK

INSIGHT The impact of coronavirus on Chinese companies provides some valuable lessons for UK retailers, suppliers and wholesalers.

16 RESEARCH

28 FASCIA UPDATE: NISA

CORONAVIRUS-RELATED NEWS FROM THE LAST SEVEN DAYS.

22

A NEW STUDY EXAMINES HOW SHOPPERS

WHILE COVID-19 MAY STILL BE GRABBING

VIEW HOME DELIVERY SERVICES.

ALL THE ATTENTION, NISA IS WORKING

25 OUT THE BOX: COMMUTER SERVICES

CLOSELY WITH RETAILERS TO ENSURE

WILL THE OFFER OF FREE WATER AND

THAT MAJOR FUTURE EVENTS ARE NOT

A LOOK AT THE LATEST NEW PRODUCTS

CYCLE REPAIR KITS ATTRACT COMMUTERS

OVERLOOKED AND SALES AND PROFIT

AND MARKETING CAMPAIGNS.

HEADING BACK TO WORK BY BIKE?

OPPORTUNITIES MISSED.

TWITTER.COM/SLRMAG

WWW.FACEBOOK.COM/SLRMAG

WWW.SLRMAG.CO.UK

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 5

NEWS DIGEST

THIS WEEK’S NEWS FOR ALL THE LATEST NEWS, HEAD TO WWW.SLRMAG.CO.UK/CATEGORY/NEWS/

REACH TERMS CUT The NFRN has renewed calls for a review into fairness in the news supply chain after Reach increased cover prices on the Sunday Mirror and Sunday People and cut retail terms.

HOME DELIVERY

FOODSERVICE DELIVERY HITS LANDMARK FIGURE

From last weekend the price of

HOME DELIVERIES FROM RESTAURANTS AND FAST FOOD OUTLETS

the two titles rose 10p to £1.80

TOPPED 10% OF ALL DINNERS, SAYS NEW HIM / MCA INSIGHT DATA.

with the percentage terms that retailers receive adjusted down from 20.5% to 20%.

PAYPOINT HOUSING TIE-UP PayPoint has partnered with the Housing Quality Network, an adviser to housing associations and councils across the UK. PayPoint will offer its digital payment

Deliveries made directly to customers’ homes from restaurants and fast food outlets reached a landmark new market share of more than 10% of all dinners in the last week in May, according to a new Channel Pulse data report from convenience research specialists HIM and MCA Insight.

The new record high has been driven in large part by the re-opening of popular foodservice brands like KFC and McDonalds as well as the

increasingly prevalent trend of fully fledged restaurants launching home delivery services to drive at least some revenues under lockdown.

The figure hit 10.3% of all dinners consumed, a significant increase of 2.7% on the previous week, and the first time that it has entered double figures. The development offers the prospect of new opportunities for local retailers seeking to deliver evening food-to-go products to their shoppers.

solution, MultiPay, to key decision-makers in the housing market and provide guidance and advice about digitalising payments.

COFFEE SALES SPIKE Uber Eats has revealed that its sales of coffee grew by 149% since lockdown started in March. Starbucks and Caffè Nero are exclusive to Uber Eats, while Pret a Manger and Costa Coffee – among others – also use the platform.

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SPAR REMOVES 300 TONNES OF PLASTIC Ahead of last Friday’s World Environment Day, Spar said that it had removed nearly 300 tonnes of virgin plastic from 53 own-label products as well as preventing over 100 tonnes of black plastic going in landfill.

It also added recycling information on over 700 Spar own-label products.

By 2025 Spar is aiming to eliminate single use plastic altogether from

its own-label range, have an average of 30% recycled content in plastic packaging and ensure 100% of plastic packaging is reusable, recyclable or compostable.

NEWS DIGEST

THIS WEEK’S NEWS FOR ALL THE LATEST NEWS, HEAD TO WWW.SLRMAG.CO.UK/CATEGORY/NEWS/

FACE MASKS IN STORES ‘INEVITABLE’

CJ LANG BOARD

SCOTLAND’S FIRST MINISTER SAYS FACE MASKS IN STORES WILL

Operations Director.

CORONAVIRUS

Spar Scotland wholesaler and retailer C J Lang has announced the appointment of Louise Rogers and Sonya Harper to its Executive Board.

Rogers takes over as HR Director from the retiring John Connolly. Harper has been promoted to Central

INEVITABLY BECOME MANDATORY IN SCOTLAND AS ENGLAND ENFORCES THEM ON PUBLIC TRANSPORT.

HIGHLAND FLINGS

Scotland’s First Minister Nicola Sturgeon has announced that she is considering making the wearing of face masks compulsory in enclosed places such as shops and says the decision to enforce this looks “inevitable”.

The announcement was made after further evidence showed that many Scots have disregarded Sturgon’s previous recommendations to wear face masks in enclosed public spaces.

Meanwhile, the UK government made it mandatory last week for

The Highland Food & Drink

people to wear face masks on public transport, although the new rules did not include the enforced wearing of masks in shops.

of virtual panel discussions with industry leaders. The next one happens on Zoom at 2pm tomorrow and features TWC’s Tom Fender, SGF’s Jamie Buchanan and Antony Begley of SLR and the Scottish Retail Food & Drink Awards. Register here.

SCOTTISH NON-ESSENTIAL STORES ‘COULD RE-OPEN NEXT WEEK’ Non-essential stores in Scotland could begin re-opening their doors as early as next week if Scotland moves into the next phase of easing restrictions on 18 June.

The easing could see smaller shops of 80sqm or less reopening and different households allowed to meet indoors,

Club has launched a series

while pubs and restaurants could open outdoor spaces.

Physical distancing and hygiene measures would need to be in place, but the move edged ever closer this week as Scotland announced a second consecutive day of no new coronavirusrelated deaths earlier this week.

HEALTHY LIVING WEEK Spar Scotland is running a Healthy Living Week programme this week with a host of activities taking place online and in stores around the country. The event is supported by the SGF Healthy Living Programme and features promotions and activities taking place to encourage everyone to get involved.

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 7

NEWS SPECIAL

COVID-19 UPDATE FOR ALL THE LATEST CORONAVIRUS NEWS, HEAD TO WWW.SLRMAG.CO.UK/CATEGORY/NEWS/

TELEGRAPH REPAYS FURLOUGH CASH Telegraph Media Group has decided to return all the furlough money it received from the Government after remaining profitable during the worst months of the coronavirus crisis.

The publisher furloughed 90

SCOTTISH BUSINESS GRANT WITHDRAWN SCOTLAND’S FINANCE SECRETARY KATE FORBES ANNOUNCED YESTERDAY THAT THE SMALL BUSINESS GRANT AND RETAIL, HOSPITALITY AND LEISURE GRANT SCHEMES WILL CLOSE FOR NEW APPLICATIONS ON 10 JULY.

T

Sunday.

he Scottish Finance Secretary Kate Forbes MSP confirmed yesterday that the Small Business Grant and Retail, Hospitality and Leisure Grant schemes will close for new applications on 10 July. Up to 2 June, £824.5m had been distributed to 72,622 businesses across Scotland through the schemes.

Forbes commented: “New applications have slowed in recent weeks as large numbers of businesses have already applied. We are

SGF LAUNCHES HARDSHIP FUND

CONVENIENCE ‘GROWS 42.5% IN MAY’

non-editorial workers and put all remaining non-editorial staff on four-day weeks from 1 May and cut salaries by 20%.

ALDI FACE MASKS Aldi has been criticised for starting to sell non-medical grade face masks in twopacks. The lines went on sale last week and were included in the online ‘Specialbuy’ on

The Scottish Grocers’ Federation has established a Covid-19 Hardship Fund to offer assistance to those suffering financially due to the crisis. The fund is being organised through the SGF Benevolent Fund and the organisation is seeking donations. For further information, email Marion Smith at marion@sgfscot. co.uk.

8 I SLRMAG.CO.UK / ISSUE 8 / WEDNESDAY 10TH JUNE 2020

Consumer spending contracted 26.7% year-on-year in May, but spend in convenience stores continued to remain extremely buoyant, according to the latest Barclaycard report which combines hundreds of millions of customer transactions with consumer research.

Spending in specialist food and drink outlets such as independent convenience stores grew by 42.5% while supermarket spend grew by 24.5%.

committed to ensuring every penny we receive from the UK Government for business support - and more – will be passed to businesses. It is essential that we do not allow funds to sit for too long in schemes that are attracting few applications, so we have decided to bring these to a close next month. That will mean that any remaining money can be re-routed to help businesses in other ways, as we have already started to do for the Pivotal Enterprise Resilience Fund.”

Eating and drinking out of home saw an overall decline of 70.3% yearon-year, a slightly less dramatic fall than in April. This was thanks largely to more restaurants, pubs and cafés offering delivery and takeaway services.

Some 14% of Brits are now buying food and drinks from a pub, and 10% are purchasing takeaway coffee.

The figures sit in stark contrast to sales of fuel, however. These plummeted by 49.7%.

NEWS SPECIAL

COVID-19 UPDATE FOR ALL THE LATEST CORONAVIRUS NEWS, HEAD TO WWW.SLRMAG.CO.UK/CATEGORY/NEWS/

FURLOUGH DEADLINE TODAY

‘SAFE’ OR ‘NOT SAFE’ TO ENTER SOLUTION

TODAY IS THE LAST DAY THAT EMPLOYERS CAN PUT EMPLOYEES ON

T

FURLOUGH TO ENSURE THAT THEY WILL BE ELIGIBLE FOR THE NEW FLEXIBLE FURLOUGH SCHEME FROM 30 JUNE.

he UK Government’s update of the furlough scheme at the end of last month means that the scheme closes to new entrants from 30 June and will close for good on 31 October. This also means today is the last day that employers can put employees on furlough in time to complete the necessary minimum three weeks on furlough by 1 July 2020 so that they can then go on to flexible furlough from 30 June.

Currently the furlough grant is 80% of salary up to maximum of £2,500 plus tax and national insurance contributions. From 1 August, the support begins to taper down with employers responsible for funding tax and NI contributions themselves.

From 1 September, the grant falls to 70% of wages up to a maximum of £2,187.50 a month and then for the last month, October, the grant is 60% of wages up to £1,875 per month.

A new live alerting solution capable of monitoring the number of people in a store and sending instant alerts to customers on whether it is safe to enter the store has been launched.

Paddy Lillis, General Secretary of shopworkers’ trade union Usdaw, has reacted angrily to reports that the Government is again considering suspension of Sunday trading laws.

Lillis has written to Business Secretary Alok Sharma condemning the Government for not responding to the union’s concerns about Sunday trading deregulation and failing to provide a proper strategy to help the retail industry.

The open letter said “the longstanding compromise around

Sunday trading has worked so well for decades” and stated that deregulation at this stage “would come across as an opportunistic use of the coronavirus crisis and a slap in the face for each and every worker in retail and the food supply chain.”

The letter went on to share the union’s view that “there is no credible economic case in favour of deregulating Sunday trading” and that “these current proposals would not provide any real help to the retail sector as it looks to how to recover from the crisis”.

TECH SOLUTIONS

SUNDAY DEREGULATION A ‘SLAP IN THE FACE’ FOR KEYWORKERS

The solution, called countIT LIVE, uses real time data of how many people are in the building to deliver a simple alert to those outside: Safe or Not Safe.

It is a simple, self-install solution that is fully operational within 30 minutes and delivers straightforward, colourindicated entry alerts via any WiFi enabled device. To find out more, visit www.dtechinternational.com.

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 9

RETAILER INTERVIEW

JAMES BRUNDLE EAT17, LONDON

HOW’S YOUR WEEK BEEN...

JAMES BRUNDLE?

THERE ARE FEW CHAINS BLURRING THE RETAIL/FOODSERVICE BOUNDARIES QUITE AS QUICKLY AND AS DRAMATICALLY AS JAMES BRUNDLE AND CHRIS O’CONNOR’S LONDON-BASED EAT17 BUSINESS.

“We’ve always intertwined foodservice and retail at a deep level and in lots of different ways.”

10 I SLRMAG.CO.UK / ISSUE 8 / WEDNESDAY 10TH JUNE 2020

RETAILER INTERVIEW

JAMES BRUNDLE EAT17, LONDON

AND THIS WILL ALLOW YOU FURTHER SCOPE FOR GROWTH?

HOW’S YOUR WEEK BEEN JAMES? Hectic, as usual. But no two weeks are ever the same. A couple of weeks ago we did some major work in our Walthamstow store, so a lot of last week was dedicated to working on the new format. We have a restaurant next door to the store, which was obviously closed by coronavirus, so we basically knocked the wall through between the two businesses to allow us to build an artisan bakery in part of the restaurant.

AN ARTISAN BAKERY? It allows us to diversify our offer by making the store a destination for bakery products and it allowed us to expand the shop to cope with the increased demand while the restaurant remains closed.

We already bake artisan bread at our Bishop’s Stortford store which we then sell through all of our four stores. That has helped grow footfall and basket spend increase but it has also resulted in us supplying other prominent London-based symbol retailers with artisan bread.

We believe so. We knew when the pandemic started that we needed to change the foodservice landscape if we were going to emerge stronger afterwards.

When the restaurants closed, we knew it would be very hard to make a takeout-and-delivery model work profitably.

Eight weeks ago, by using Deliveroo and Snappy Shopper, we started to do some home deliveries.

It’s been relatively successful so far. We’re doing about £8,000 a week through the home delivery channels, but we can’t make a foodservice business out of deliveries alone.

HOW MANY STORES DO YOU HAVE? We have four stores in Walthamstow, Hackney, Hammersmith and Bishop’s Stortford – all with Spar – and the restaurant. The name – Eat17 – comes from the E17 postcode for Walthamstow, where my stepbrother Chris and I opened our first store in 2006.

HAS FOODSERVICE ALWAYS BEEN CORE TO THE BUSINESS? Always. From day one we wanted to do something different and we anticipated the growth of foodservice and food-to-go, but we always wanted to do it with a twist.

We’ve always intertwined foodservice and retail at a deep level and in lots of different ways.

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 11

RETAILER INTERVIEW

JAMES BRUNDLE EAT17, LONDON

Our Bishop’s Stortford store bakes artisan bread to sell in all the stores, our Hackney store has a full-scale kitchen that makes over 200 lines to supply to the other stores, we have street food concessions in the stores, and so on.

You’ve got to keep changing and adapting and offering something exciting for your customers.

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HOW ARE THE STORES DOING UNDER LOCKDOWN? We’re doing really well, as many convenience retailers are, but we’ve always wanted to build a legacy out of the pandemic so that our stores emerge even stronger afterwards. We’re in the middle of an unfortunate disaster. It’s not something anyone would ever wish

RETAILER INTERVIEW

JAMES BRUNDLE EAT17, LONDON

James Brundle and Chris O’Connor

to happen, but what I love about our retail and restaurant community is that they’re not just sitting around waiting for it to end and wishing for it to be over. They are using their time to start something new or solve the problem and we feel there is a great opportunity for retail and restaurants to merge and start a new wave of exciting food and drink concepts.

HOW HAS COVID-19 CHANGED THE WAY YOU LOOK AT YOUR OWN BUSINESS? It has made us look at how we operate the stores.

We’ve always focused on quality from day one.

We have a long history of sourcing high quality products and ingredients locally and making a lot of what we sell ourselves. We employ proper chefs to prepare the food we sell, like our Eat17

homemade range of ready-to-go food for now and food for later lines developed with only the freshest ingredients. Everything from chicken and bacon club sandwiches to vegan Thai curries and lobster bisque.

HOW IMPORTANT IS INNOVATION THESE DAYS? It’s always been important, but the last few months have reinforced how vital is to be able to change, to be looking for ways to evolve and adapt and improve your offer in a really fast-moving marketplace.

I think that foodservice and retail will continue to merge and from our recent success we hope we can see more restaurant businesses think about how they can diversify and work with retail. We’ve seen first-hand how we can supply foodservice

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 13

RETAILER INTERVIEW

JAMES BRUNDLE EAT17, LONDON

“The last few months have reinforced how vital is to be able to change, to be looking for ways to evolve and adapt and improve your offer in a really fastmoving marketplace.”

through our grocery stores and through delivery service.

SO WHAT’S NEXT? The last few months have encouraged us to take a more serious look at an Eat17 franchise. In a way, I wish we could have opened a few franchise sites before the pandemic struck because grocery stores are one of the few businesses that have seen an increase in demand as people spend more time at home. I believe our business model is wellpositioned for the new normal, and people will be craving great food and drink within exciting retail concepts as they come out of lockdown.

HOW DO YOU SEE THE FRANCHISE MODEL ROLLING OUT? It’s something we would need to be very careful

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about. Since 2006 we’ve been absolutely passionate about the business we’ve built and would need to feel confident that retailers we were working with on a franchise basis would share that passion, that drive to create something truly special and exciting. We work to very high standards in terms of both the food we sell and the in-store environment we create and we would want to see those standards maintained in franchise stores. We’ve worked hard to build something we believe is unique and we would want to work with franchise partners who share our values and our commitment to innovation and excellence.

SO THE PANDEMIC MAY COME WITH SOME SILVER LININGS? The challenges we are all facing force us to be creative and quick to respond and we have seen great ideas come out of this — ideas that also help give back to the community and bring us all closer together. There has never been a better time to become your own boss and I don’t think people will forget how local small businesses worked hard to provide essential services during this challenging time.

NPD AND MEDIA

PICKS OF THE WEEK TO GET YOUR PRODUCT LISTED PLEASE CONTACT RAITKEN@55NORTH.COM

SMIRNOFF SELTZERS

MOLSON SELTZERS

LIV RUM

Smirnoff is launching two

Molson Coors is exclusively

Matugga Distillers has a

new Smirnoff Seltzers (4.7%

distributing Bodega Bay

new rum collection, Liv Rum,

ABV) this month: Raspberry

hard seltzers in the UK. The

comprising five handcrafted

& Rhubarb and Orange &

range of 4% ABV low-calorie

variants: two white rums, one

Grapefruit. Made from a mix

sparkling drinks includes

black spiced rum and two

of Smirnoff Vodka, sparkling

two flavours in 250ml cans:

flavoured liqueurs: Raspberry

water and natural fruit flavours

Elderflower, Lemon & Mint and

& Hibiscus and Honey &

and available in 250ml cans.

Apple, Ginger & Acai Berry.

Lavender.

RSP: £1.80

RSP: £2.95

RSPs: £23.99-£31.99

RASPBERRY RAYS

SWIZZELS PMPS

MULLER SKYR

Ribena is launching a new

British sweet manufacturer

Muller is shaking up the super-

flavour at the end of this

Swizzels has added £1 price

thick yogurt segment with

month, Raspberry Rays, in a

marked hanging bag variants

Müller Corner Icelandic Style

500ml bottle made from 100%

of Love Hearts and Parma

Skyr, containing 13g of protein

recycled plastic. A group of

Violets. Both are available in

and available as a single pot

leading retailers helped design

142g hanging bag formats

(180g). The launch will be

the in-store POS.

and are both suitable for

supported by a multimillion-

RSP: £1.49 / available as

vegetarians and vegans.

pound marketing campaign.

£1.19 or 2-for-£2.20 PMP

RSP: £1

RSP: £1.50

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 15

RESEARCH

HOME DELIVERY / CLICK & COLLECT FORGING A NEW FUTURE REPORT – TWC / KAM MEDIA / CIRKLE

WHAT DO SHOPPERS WANT FROM A HOME DELIVERY SERVICE?

H

A NEW CONSUMER RESEARCH PROGRAMME HAS TAKEN A DEEP DIVE INTO HOW SHOPPERS VIEW HOME DELIVERY SERVICES AND WHAT MATTERS TO THEM MOST.

ome delivery is rapidly evolving into a game-changer for the convenience retailing sector. It has the potential to be the most important solution available to local retailers to build a permanent legacy from the coronavirus pandemic. Understanding how consumers view home delivery and click & collect services will be vital, then, in building a delivery model that has the potential to have a long-term and very dramatic positive impact on the local retailing sector.

A new study commissioned by data experts TWC and carried out by KAM Media offers some fascinating insight into how home delivery is viewed by shoppers – and highlights some of the key issues retailers need to be aware of as they evolve their home delivery services.

Sponsored by PR agency Cirkle, the study forms part of a wider research programme called Forging a New Future which aims to help retailers navigate their way out of the covid-19 pandemic successfully and profitably.

1 in 4 customers have used home delivery and/or click & collect from a convenience store since lockdown began 12% 6% 8%

Yes – home delivery Yes – click & collect Yes - both

74%

No

Thoughts: • 25% have used home delivery and/or click and collect from a convenience store. This = 13m UK adults.

• Surely there is no turning back now for home delivery in convenience.

• ‘Convenience’ = making life easier for shoppers.

• Now is the time for convenience stores to ensure they have the right digital solutions to ’scale up’ in their communities, with data being used to power the digital infrastructure.

Q. Have you used home delivery or click & collect from a convenience store (for groceries food to go/ready meals, not just news and mags) since the lockdown measures began?

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Source: TWC, Cirkle & KAM Media: Forging a New Future in Convenience Retail May 2020

RESEARCH

HOME DELIVERY / CLICK & COLLECT FORGING A NEW FUTURE REPORT – TWC / KAM MEDIA / CIRKLE

What do customers want from a convenience store delivery service?

38%

No minimum-spend

37%

Better quality of fresh products If I was confident that the prices for products were the same as they are in the store

29% 26%

Trust in the products being available

26%

Reasonable delivery charges Make it easier to place an order

25%

Make it easier to see what product s are in and out of st ock

25% 23%

If I knew that I was supporting local businesses

21%

Faster delivery times (i.e. under 1 hour) Include payment for services online (e.g. gas top-up, etc.)

Thoughts: • People say they want free delivery, but if the service is useful, easy to use and they can trust it, they are likely to pay for the convenience of a delivery service.

• The absolute key is to make the process really really easy/convenient (no surprise!) – this is likely to mean providing a fully integrated digital solution.

• We know home delivery/click and collect order sizes are larger than in-store transaction sizes.

• Think about solutions and meal occasions – bundle up existing products into mission/occasion led solutions.

21%

The store had an app so I can see what deals/products on offer

71% say they want free delivery

• Or could there an opportunity for whole new categories/brands, possibly using a WIGIG promotional strategy?

11%

Q. Which of the following, if any, would make it more desirable to get a grocery delivery from your local convenience store? (select all that apply)

Source: TWC, Cirkle & KAM Media: Forging a New Future in Convenience Retail May 2020

Do convenience stores need to team up with a brand such as Uber Eats or Deliveroo in order to succeed with delivery?

36% 64%

Yes

No

>2-in-3 Generation Z and Millennials say ‘YES’

Thoughts: • We know that 65% of c-store spend comes from shoppers living 400 meters away or less, so do you need a 3rd party partner? Unless your aim is to extend your reach, possibly not.

• Doing delivery yourself enables you to retain control of your brand and customer experience AND customer data.

• These branded apps are particularly popular with GenZ and Millennials, where they have already been using them quite happily for a while.

• More on this in the main report.

Q. Would you be more likely to get home delivery from a convenience store if it was through a tie-in with an app such as Uber Eats or Deliveroo?

Source: TWC, Cirkle & KAM Media: Forging a New Future in Convenience Retail May 2020

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 17

RESEARCH

HOME DELIVERY / CLICK & COLLECT FORGING A NEW FUTURE REPORT – TWC / KAM MEDIA / CIRKLE

Would there be value in convenience stores ‘teaming’ up with local pubs and restaurants to deliver meals?

50%

Yes

50%

No

NB. This is particularly appealing to Gen Z and Millennials.

Thoughts: • Most convenience stores don’t have pub or restaurant quality food service, so they’re not on the radar for certain ‘eat in’ occasions.

• Many pubs / restaurants are likely to be functioning on lower capacity for a while. Could there be an opportunity for a partnership? Could a local pub or restaurant become your ‘dark kitchen’?

• Can you package up solutions with your products and local restaurant/pub favourites. Even if it’s just certain nights of the week i.e. Friday night curry from local Indian, + 6 pack, plus ingredients for a fry-up in morning etc.

• Don’t forget opportunities to link with pharmacies and others…

Q. If local pubs/restaurants did a tie up with convenience stores (e.g. pubs/restaurants make meals, sell them through c-stores) would you consider buying them?

Source: TWC, Cirkle & KAM Media: Forging a New Future in Convenience Retail May 2020

How do customers want to be able to place their delivery orders with a convenience store?

84% (35% of them specified ‘an app’) Online

14%

2%

Telephone

Other

Thoughts: • Offering an online ordering solution is obviously key. Many are keen to use an app.

• However, accepting telephone orders could provide a nice point of difference compared with the supermarkets, particularly given many convenience stores attract a slightly older customer base.

Q. How would you prefer to place an order for delivery / click & collect with your local convenience store, if you had the choice?

18 I SLRMAG.CO.UK / ISSUE 8 / WEDNESDAY 10TH JUNE 2020

Source: TWC, Cirkle & KAM Media: Forging a New Future in Convenience Retail May 2020

RESEARCH

HOME DELIVERY / CLICK & COLLECT FORGING A NEW FUTURE REPORT – TWC / KAM MEDIA / CIRKLE

Have customers increased their usage of other online delivery services, in general, during the lockdown period?

22%

Online supermarkets

20%

Amazon

11%

Dairy (e.g. Milk & More)

11%

Meal kit boxes (e.g. Gousto, Hello Fresh, etc.)

Local restaurants

10%

Veg boxes (e.g. Abel & Cole, Riverford, etc.)

10%

Pubs

82% will continue to use these delivery services after lockdown has lifted

6%

Others (i.e. coffee, laundry services, pet food, etc.)

4%

Ocado

4%

BWS (e.g. Laithwaites, Beer52)

4%

Thoughts: • Online delivery is here to stay. People have experimented during lockdown, they will have apps on their phone that they didn’t have before. It may not grow at the same rate but it certainly isn’t going to disappear.

• Could there be an opportunity for meal kit boxes & local veg boxes for Convenience stores?

Q. Have you started using any of the following home delivery services for grocery products since the lockdown has been in force?

Source: TWC, Cirkle & KAM Media: Forging a New Future in Convenience Retail May 2020

What is it about home delivery and subscription services that appeals to customers?

72%

Ease of use

34%

Better prices

26%

Guaranteed products each week/month

23%

Better quality products The unique products that are available

23%

Supporting smaller suppliers

22%

Supporting local businesses

20%

The fun aspect (i.e. it’s a nice surprise)

19%

Can't / couldn't get through my local shops

11%

Thoughts: • It HAS to be easy and convenient, or there’s simply no point. Simple, easy, frictionless, no hassle, ‘two click’ solutions are needed. What does ‘easy’ mean?… images, previous orders, favourites…

• Secondary to that is upselling - suggestions, specific collection times, suggested pairing, what other people normally buy with product X. • Definitely an opportunity to showcase local suppliers and offer something ‘different’.

Q. What appeals to you about these types of delivery services?

Source: TWC, Cirkle & KAM Media: Forging a New Future in Convenience Retail May 2020

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 19

INSIGHT

LEARNING FROM CHINA 30 WAYS CHINESE COMPANIES ARE REIMAGINING THE FUTURE BEYOND COVID-19

HOW CHINESE COMPANIES ARE REIMAGINING THE POSTCORONAVIRUS WORLD A NEW MCKINSEY REPORT EXAMINES HOW COMPANIES IN CHINA THAT ACTED SWIFTLY AND DECISIVELY ARE MORE LIKELY TO EMERGE STRONGER OUT OF THE CORONAVIRUS CRISIS WITH SOME VALUABLE LESSONS FOR UK RETAILERS, SUPPLIERS AND WHOLESALERS.

A

s the first nation to suffer a coronavirus outbreak, China is also further along the recovery curve than most countries. What can the convenience channel in the UK learn from the Chinese experience to help accelerate our own recovery? A new report from management consultancy McKinsey offers some insight into

22 I SLRMAG.CO.UK / ISSUE 8 / WEDNESDAY 10TH JUNE 2020

how Chinese companies have reimagined the future beyond Covid-19 and highlighted 30 specific ways Chinese businesses have responded.

The report argues that companies that responded promptly and decisively during the pandemic could emerge stronger afterwards and far more capable of weathering any further crises that happen down the line.

INSIGHT

LEARNING FROM CHINA 30 WAYS CHINESE COMPANIES ARE REIMAGINING THE FUTURE BEYOND COVID-19

The report notes that the Chinese economy was severely affected by the onset of the pandemic with official statistics declaring first-quarter yearon-year GDP growth at negative 6.8%. However, the report goes on to highlight how “leading companies across sectors responded swiftly with a range of measures aimed at protecting their employees’ health and safety, and engaged in creative ways to protect their business. Well before the outbreak subsided and lockdowns were lifted, they worked hard to find ways to reactivate business activities, identify new platforms for growth, and position themselves to survive the crisis—and thrive beyond it. Some firms doubled sales during the crisis, while others acquired tens of millions of new customers.“ To understand what these companies did, McKinsey conducted a study of more than 200 examples of initiatives taken by companies from across 15 industries in China. The result was a 30-strong list of the key factors in not only surviving the crisis but emerging stronger out the back end.

The report identifies five major macroeconomic trends: digitisation, declining global exposure, rising competitive intensity, maturing consumers, and the stepping up of the role of the private and social sectors.

The research shows that “companies that acted swiftly and decisively are likely to emerge stronger out of the crisis, and will be better prepared to withstand the next major disruption”.

On the other hand, however, the report also notes that companies that were slow to respond or which responded with ineffective measures were more likely to suffer a bigger hit to their business. Examples given include department stores that failed to make the shift to digital channels while their online competitors experienced a rapid expansion on the back of demand for contactless commerce.

Another finding that appears relevant to the convenience retailing channel is the fate of companies that, faced with immense pressure on their business, opted for short-term solutions that backfired (salary cuts without proper communications that destroyed staff morale and were leaked to the public), and price increases aimed at recouping revenue losses, but which ended up disappointing customers and turning them away.

As the report rightly points out, the experience of companies in China could provide a point of reference for companies elsewhere in the world that are grappling with the same disruptions to their business, and thinking through similar challenges to reactivating their operations and planning for the future.

FAST-FORWARD TREND 1: DIGITISATION Digitisation went from being a widely used buzzword in China before coronavirus to become a key survival strategy for many businesses.

Companies pursued a variety of digital-

transformation initiatives, including digitisation of product offerings, customer engagement, and operations, as well as rolling out new digitallyenabled working arrangements such as work-from-home and remote meetings, sharing staff with other organisations, and redeploying talent to keep them employed, productive, and safe.

FAST-FORWARD TREND 2: DECLINING GLOBAL EXPOSURE China’s engagement with the rest of the world has long been undergoing a fundamental shift and its exposure to the rest of the world has declined over the past decade – while the world’s exposure to China has increased on a relative basis. The crisis accelerated this trend with many companies doubling down on their China supply chain while others diversified their risk outside of China.

FAST-FORWARD TREND 3: RISING COMPETITIVE INTENSITY China has long had exceptional levels of industry competition but the substantial decline in demand and the lockdown that gripped the nation between February and April notably increased its intensity. While some companies suffered from the drop in demand and the disruption of supply chains, other companies used this period to reposition themselves as even stronger players both during

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 23

INSIGHT

LEARNING FROM CHINA 30 WAYS CHINESE COMPANIES ARE REIMAGINING THE FUTURE BEYOND COVID-19

the crisis and beyond. Some firms turned the downtime into a platform for renewal and growth through refitting core assets and training employees, while others adopted bold strategic moves aimed at shifting their competitive position, experimenting with new technology, and exploring M&A.

FAST-FORWARD TREND 4: CONSUMERS COME OF AGE China’s gradual shift toward a consumptiondriven economy over the past decade, in tandem with the vast expansion of the middle class and the evolution of consumer behaviour and attitudes, has been accelerated by coronavirus. Companies in China pursued several initiatives to engage and adapt to the consumer during the crisis: some firms doubled-down on serving customers, implementing creative marketing tactics to stimulate demand and acquire new customers while making sure they were retaining their most loyal customers. Others redesigned their product and service offerings and changed their business models to meet the needs of current as well as future customers.

FAST-FORWARD TREND 5: PRIVATE AND SOCIAL SECTORS STEP UP While the state sector continued to play an important role in handling the crisis, the private and social sectors expanded their roles in addressing the crisis. As employers of a large number of people with access to enormous resources, privately-owned firms pursued a range of initiatives that were essential in protecting employees, their customers, and the community at large. The private sector, along with social sector institutions such as non-profit organisations, also worked hand-in-hand with public sector institutions to support initiatives

24 I SLRMAG.CO.UK / ISSUE 8 / WEDNESDAY 10TH JUNE 2020

aimed at protecting public health and maintaining employment.

CONCLUSION The report concludes: “Companies in China have proven remarkably resilient throughout the crisis. In the immediate aftermath of the crisis, scores of companies across sectors have worked hard to recover lost business, while keeping an eye trained on the future. While some firms may never fully recover from the impact of the crisis, several are, surprisingly, emerging stronger than ever. Perhaps, as the rest of the world gradually reopens and resumes work, the experience of companies in China could prove as a useful reference point for companies elsewhere.”

Click here to download Fast forward China: 30 ways companies are reactivating business and reimagining the future beyond COVID-19, the full report on which this article is based.

NOW THAT’S A GOOD IDEA…

OUT THE BOX SUPPORTING LOCKDOWN COMMUTERS

FREE WATER AND BIKE REPAIR KITS FOR COMMUTERS CENTRAL ENGLAND CO-OP IS OFFERING A RANGE OF FREE PRODUCTS AND SERVICES INCLUDING WATER AND BIKE REPAIR KITS TO ATTRACT COMMUTERS HEADING BACK TO WORK ON THEIR BIKE OR ON FOOT.

WHAT’S THE BIG IDEA? Not exactly a big idea, but a nice one nonetheless. Central England Co-op is aiming to attract workers who will be looking to walk or cycle to work as the coronavirus lockdown starts to ease by offering them free water and bike repair kits.

HOW DOES THAT WORK? The retailer, which has over 262 stores across 16 counties, is offering a range of free services that bikers and walkers can access in its shops as they travel to and from work after the government advised people who can return to work to do so via walking and cycling if possible to help maintain social distancing and ease potential pressure on public transport.

WHAT’S ON OFFER?

at some of its new sites, a public use bicycle repair station.

Additionally, staff at the Society can apply to take advantage of the Cycle to Work scheme, which allows people heavily discounted bikes to get to work.

WHAT ARE CENTRAL ENGLAND CO-OP SAYING? Debbie Robinson, Chief Executive, said: “As a co-operative, our communities are always at the heart of all our decisions, especially during these uncertain times. This is why we wanted to make sure we are there for people heading back to work and supporting those choosing to walk or cycle to help continue efforts to defeat the Coronavirus.

“Anyone commuting to or from work can nip into one of our stores and enjoy free access to all different kinds of support from customer toilets and water refills to special charging points and special store bike repair kits.”

Cycling and walking commuters can enjoy free water refills, charging points for their phones, indoor and outdoor seating and customer toilets when they stop off at selected Central England Co-op stores, while free bike repair kits will be available at all stores from this week. Cyclists are also able to leave their bikes safe and secure as all shops have bike racks outside for their use.

THOUGHTFUL. ANYTHING ELSE? The retailer has also started rolling out a specialist feature

WEDNESDAY 10TH JUNE 2020 / ISSUE 8 / SLRMAG.CO.UK / 25

Thank you for makin

You and your team have been through a lot recently. You have faced advers Nisa support centre and DHL teams. You have been patient with us when sup conditions. You have adapted your t

Nisa partners and store colleagues, we thank you for your outs

You’re my favourite local shop, wonderful people who are so community friendly. You’re an asset to the community thank you.

H, Jodie & Amrit Singh, Nisa Local High Heath, Walsall

You’re all doing a fantastic job.

Thank you for everything you’re doing! The village could not cope without you all.

Alan Carr, Newport Village Stores, Saffron Walden

join-nisa.co.uk

You’re doing a grea community. W Thank

Alex Kapadia, Nisa Local Whitehills, Northampton

I am so amazed at how m this crazy time! The big sh by selfish people but th everything. They are hav keeping their shelves sto and still working so only g I want to say a massive t They are w

Barry Patel, Nisa Marsh Farm, Luton

ng a real difference

sity with a smile and an amazing community spirit, backed by our dedicated pply was disrupted and have kept serving our customers in incredibly difficult rading to keep your customers safe.

standing efforts! Together we are Making a Difference Locally.

at job for the local We appreciate it. k you.

much stock is in store at hops have been ransacked his store has had almost ving regular deliveries and ocked. I am a key worker get there at certain times. thank you to all the staff. wonderful.

Amazing effort by Andy, Adam and the team. You have all gone above and beyond and your hard work is very much appreciated and you have done it all with such goodwill. Thank you.

Dike & Son, Stalbridge, Dorset

Well done. I was in today and it was well stocked. I praised the staff as they and your shop are providing us with all we need.

Thank you, take care all.

Emerson’s Supermarket, Armagh

SYMBOL SPECIAL

OCCASIONS & EVENTS NISA RETAIL

FOCUSING ON THE FUTURE FOR SUCCESSFUL EVENTING WHILE COVID-19 MAY STILL BE GRABBING ALL THE ATTENTION, NISA IS WORKING CLOSELY WITH RETAILERS TO ENSURE THAT MAJOR FUTURE EVENTS ARE NOT OVERLOOKED AND SALES AND PROFIT OPPORTUNITIES MISSED.

A

s Covid-19 continues to be the focus of attention for independent retailers, Nisa is stepping in to ensure future events are not forgotten about. Plans for Halloween and Christmas have already been shared with Nisa’s partners, encouraging them to capitalise on the opportunities that will present themselves this year.

While ‘normal’ business is unlikely to return any time soon, key dates in the retail calendar will still be significant for shoppers, enabling retailers to drive sales and retain customers who have been using their local shop more frequently since the coronavirus outbreak.

Nigel Ashton, Business Manager for Grocery, Non-Food and Soft Drinks at Nisa, said: “We believe Halloween, which is on a Saturday this year, and Christmas, which falls on a Friday, will hold particularly significant importance as consumers look for some of life’s little luxuries to indulge in

28 I SLRMAG.CO.UK / ISSUE 8 / WEDNESDAY 10TH JUNE 2020

after missing out on many other occasions earlier in the year due to the pandemic.

“It is anticipated that there will be more eating occasions at home, with less eating out to celebrate, providing an increased opportunity for sales across key categories for retailers.”

With that in mind the presell event for Christmas and Halloween has gone live for Nisa partners this month, enabling them to plan and focus on getting customers what they want for these special occasions.

The team at Nisa will be supporting partners, sharing insights on changing shopper habits and helping them to plan their requirements for later in the year.

“We believe Nisa partners have a really comprehensive seasonal offer that should respond to the changing shopper habits and ensure they are able to stock their stores with everything their customers want and need to make the most of the big celebrations this year,” added Ashton.

NO .1

RED WINE IN THE UK**

NO .1

BEST KNOWN WINE BRAND IN THE UK*

NO .2

FAVOURITE WHITE WINE IN THE UK†

ENJOY RESPONSIBLY

*Source: Prime database, IPSOS fiscal YTD 2020 until end of Dec 2019 **Source: Nielsen Total Coverage, Value share % MAT 21.03.2020 †Source: Nielsen Total Coverage, Value Sales MAT 21.03.2020

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