sainsburys mission trial

Sainsbury’s are on a mission

Sainsbury’s is trialling a new “mission-based” store layout in six stores in England in an attempt to keep pace with customer shopping trends. Retail Remedy went along to see how far Sainsbury’s would push the boundaries.

The new layout is described as radically different, helping customers that are now shopping more often with a specific mission in mind.

Headline features of the trial stores include:

  • A food-to-go section and bakery positioned near the checkouts
  • Non-food space increased by around 30%
  • Clothing, lifestyle and tech positioned around the periphery of the shop
  • More till options like self checkout and manned tills, for baskets and for trolleys
  • New SmartShop App which takes the customers shopping list, guides them round the store and offers easy checkout.

The overall impression for Retail Remedy was largely positive. The speed at which the trial has come to fruition from its concept only 4 months ago is leaps and bounds ahead of where Sainsbury’s has been in the past. The pace of growth of Sainsbury’s core supermarkets has been out of pace with its convenience stores and either presented a risk or an opportunity.

Sainsbury’s have taken it as an opportunity and have effectively created a shop in shop, a convenience shop within a core supermarket. The impact is a few adjacencies that feel weird, e.g. tech next to household cleaning or frozen goods mid store, but for the top up shopper, or the food-to-go shopper it works.

sainsburys mission trial

The fresh produce area at front of store does feel very much like Market Street in Morrison’s and therefore hardly what we would call radical, but it does fit with that shopping mission well and allows customers to come in and only shop ¼ of the store without having to walk further into the store than their busy schedules permit.

The “SmartShop” app under trial has already seen some early adopters. The customer creates their shopping list at home on a mobile or tablet, and in store is converted into an aisle by aisle map to guide the shopper through the store quickly. Items are scanned as they go making for a quick checkout at the till. The adoption rate is very encouraging for this stage in the trial so it will be fascinating to see how it continues to be used.

Grocery ranges have been rationalised to create additional space for general merchandise, taking lessons from its convenience stores and nectar data; we expect a minimum impact on sales in these categories and definite growth within General Merchandise.

sainsburys mission format clothing

Despite delivering a more comprehensive offer within Clothing the same old poor operational execution was apparent in the trial store we visited. The space is still compromised for the customer with narrow aisles and size availability poor. A problem that despite speed in other areas, is very slow to be addressed.

Categories that are purchased infrequently are situated at the furthest corner of the store which makes sense in terms of the shopping mission but it will make shopping trolley organisation tricky with heavy items sitting on top of fresh produce. Equally a frozen foods aisle mid shop for a weekly shopping mission presents defrosting challenges by the time the product gets to the checkout.

sainsburys mission check out

The new trial is only 2 weeks in, but we think we can predict a couple of issues. The format feels like it has shifted too far over to the “top-up shop” mission and may have a negative impact for “big-shops.”. However, a dilution of the “top-up shop” mission would make the format a tweak rather than a radical shift towards meeting customer needs.

Sainsbury’s are on a mission to adapt to the customer and this is applauded. More risk, more agility, more trials, more innovation is needed and they are delivering. Some things will work and some won’t but it is a learning curve that they will benefit from.


We are seasoned grocers and would only be too happy to talk to you about your grocery business. Please get in touch with the retail consultants that have been there and get it.

retail trends 2016

Retail Industry Trends 2016

Within our consulting team at Retail Remedy we have far more years senior experience than we readily admit to which is why we are often called upon to share our thoughts on the state of the nation (in retail terms).

Paul Thomas retail consultantPaul Thomas, one of our senior consultants, was interviewed by Nick Cotter for cpcstrategy.com who wanted the inside story on what retail trends to expect over the next 12 months.

 

 

 

 

What types of challenges do we see retailers facing in 2016?

“We believe the challenges for next year will be in; People, Space and Technology.

People –Employee Engagement will be even more important, and companies wishing to succeed will need to have a clear and effective plan as to how they will ensure their teams are engaged. The Living wage is starting to garner lots or media attention, and as more retailers follow Lidl’s lead, it will bring those yet to commit or move into sharp focus. Obviously money is not the only motivator, and many would argue only a maintenance factor, but it will certainly create a dialogue and some movement.

The Living Wage will come at a cost, so companies will be looking to see how they can absorb and pay for this. Greater productivity across the supply chain and better margins will help fund the increased costs.

A recovering jobs market and a changing culture towards how long people stay in a company will mean companies needing to work hard to attract and retain talent. Learning and Development will be top of the list for prospective employees deciding where they want to work.

Space – The space race has already seen significant changes, with a number of retailers looking to shed the number of stores they operate, whilst some in the discount and convenience sector are pushing ahead with growth plans. How to maximise the space and make every square foot work and pay for itself, will be a key element in the strategy.

Technology – How to stay relevant in the world of technology, offering customers the opportunity to engage and transact digitally has been a factor for some time. This is only going to become more crucial.”

What are some opportunities for growth retailers can take advantage of in next 6-12 months?

“Mobile – The growth in mobile has been fantastic, and continues at a pace. Those who can adapt their strategy or introduce this channel, will be able to enjoy great success and Space as mentioned will be in clear focus, but this also creates an opportunity to use it better, to gain greater returns. There maybe a number of opportunities for brand collaborations such as those seen with Homebase and Argos.

Productivity and Efficiency – With increased cost from wages, and trade not growing as fast as years before, productivity will be an area where retailers will want to turn their attentions.

The opportunity here lies in streamlining head offices and the supply chain to allow for more front end associates, not however at the cost of customer facing associates. “

What are some ways retailers can stay competitive in today’s market?

“Back to basics – We believe there will be a clear drive to review and improve retail standards and the customer journey. The more a retailer can look through the eyes of the customer the better they can be. Greater numbers of customer facing employees will be required, so looking for savings in non customer facing areas will be essential.

Mobile has already been mentioned as a source of growth, but to stay competitive, retailers will need to integrate their channels. Seamless Integration has been a phrase that has been bounded about for some time now, but what does that actually mean, and how can you achieve it?

Putting yourself in the shoes of the customer, how can you ensure the experience online reflects that in store, and reflects that on mobile. Allowing customers to order a product from the back of a taxi on the way to a meeting and then collect from a store later in the day is just one example of where integration will be effective.”


We would love to know what your thoughts are about the future of retail and what trends you are following, their impact on your business and what we can do together to make the most from the opportunities. Get in touch.

tesco brand guarantee

Where next for price matching?

tesco brand guarantee

The grocers are rethinking loyalty cards and re-interpreting it for today’s promiscuous customers who have little or no loyalty to any one supermarket.

Morrison’s has changed “Match and More” to a points loyalty card which harps back to the weekly vouchers model, although that gave more value back to the customer. The Morrison’s model is going backwards and rather than the customer feeling better off shopping with them, they are more likely to feel unvalued unless the spend:points:voucher ratio is drastically improved.

Tesco meanwhile are giving instant discount at the till under its new Brand Guarantee which is set to rock its competitors as they scrabble to respond before Christmas. And Waitrose of course launched a Pick you own Promotions scheme earlier in the summer which is reported to be very successful.

Will Sainsburys be next?

If the main reason that a customer shops elsewhere is because of price then the new Tesco Brand Guarantee will help them with that decision. Branded items will be immediately price matched at the till against Asda, Morrisons and Sainsbury’s, the first grocer to do so. Doing away with the vouchers, in fact a 100% redemption rate, makes for a compelling message in the fog of pricing. As retail consultants we can see that Tesco’s competitiors will feel obliged to emulate in the near future giving Tesco the first mover advantage even if margin is eroded in the short term.

However when all the grocers are price matching each other on brands, the next place to go is own brand and we all know how complicated that can get. Different recipes, supplier provenance and quality are almost impossible to compare and is a slippery slope towards poor quality and/or weaker margins.

Meanwhile Aldi and Lidl carry on delivering good quality product at great prices. There is a message there – they don’t have price matching guarantees, or loyalty cards, but they do have loyal customers. The customer is always getting a good deal, so there is no reason to go elsewhere if price is the primary motivator. If range and brand availability is more important then Tesco wins.

This presents the grocers with an invitation to innovate the price matching/promotions/loyalty model, much in the way that Waitrose has. What will the point of difference be when brands are all at the same price everywhere you shop? It will pass to the other factors in the marketing mix, starting with the Brand itself.

So Sainsbury’s could be looking at its price matching model and trying to work out a new way to present it to the customer so they at least feel they are getting as good a deal as they would elsewhere. Or they could divert attention to its quality credentials and values.

We know what we would recommend doing.


We know it is sometimes hard to navigate the marketing mix objectively, so give us a call to see how we can help your stores.

 

tesco extra store square

Tesco Q2 sales show retailer out of intensive care

tesco extra store

Tesco looks like it is ready to move from intensive care into the recovery ward, Let’s be clear, Tesco isn’t cured but it is definitely over the worst, the clearest indicator of this is that the Tesco Q2 sales line only showing a small decline compared to the dismal 4.6% negative of the same quarter last year.

The Big Four grocers are evidently being split in two – Morrisons and Asda sliding down a slippery slope and Tesco and Sainsburys getting a toe-hold. It seems extraordinary that only 12 months after a major accounting scandal Tesco is in the stronger of the two camps and testimony to Dave Lewis’ leadership. With better volumes and more transactions he is in a much stronger position to tackle the problem areas of cost and margin in order to maintain bottom line profit.

There is more to do in the areas of categories, prices and merchandising but the range rationalisation that axed some tertiary brands like Carlsberg, Kingsmill and Ribena can result in clearer merchandising and improved negotiation stances, ultimately building sales and margin.

A clever move for Tesco is unifying the brand more closely across the many facets of its operation, building trust as well as being cost efficient. We will have to wait to see how this translates across all businesses and channels but hopefully not for too long. Marketing is one of Lewis’s fortes and we would like to see evidence of this in a fresh new Christmas marketing campaign.

The store experience is better than it was, cleaner prices and less confusing promotional elements, improved service which we have witnessed and welcomed, and range rationalisation being delivered without undue distraction. This is the Tesco we believe the customer wants and with a little more time will be delivered.

The Dunnhumby sale is now off the table but the sale of the performing South Korea business, although a tough one to make, has given Tesco some time in resolving debt issues and keeping the share price stable. In the long term Tesco will need a rights issue to raise further share value, but it is a confident move and reflects the dynamism that Dave Lewis has in approaching the challenge. We should expect more bold decisions in Tesco’s short-term future but ones that are all bolstering Tesco’s recovery in a disrupted market.


 

Retail Remedy has delivered change in retailers large and small and can help in all aspects of the change process, from conception, identifying opportunities and landing cost savings and growth. Get in touch today.

plastic bag charge

Will plastic bag charges be embraced in England?

Small businesses are not yet legally obliged to charge for a plastic bag, but given the findings in a recent survey there are at least 7 reasons why they should.

The new law enforcing charges for plastic bags in England came into force on October 5th 2015. Retailers with 250 or more employees are now legally required to charge 5p per bag to customers unless their purchases meet a strict set of criteria.

However this law does not apply to retailers with less than 250 employees. While we are sure that many will follow suit and charge for single use plastic bags, many may postpone doing so perhaps believing that customers will be resistant to charges.

Make It Cheaper conducted a survey which assessed consumer opinions and attitudes towards the plastic bag charge if it was adopted by smaller businesses.  This infographic sums up the response.

Seven Reasons why small businesses should embrace the plastic bag charge

We haven’t yet witnessed any chaos at the checkout so we see no reason why all retailers shouldn’t start charging and help England take responsibility for it’s plastic use.

If you need any help in driving the change through your retail organisation please get in touch.