Jack’s – Inspired or Insipid?

My first visit to Jack’s, Tesco’s alternative discount grocer, was the day after the new store in Middlewich opened. Here is the blow by blow account of my views.

Let’s start with the car park and entrance. I must say that there was ample parking, more than I would expect to get in a similar sized Aldi or Lidl, I liked the midi sized trollies too and although as a customer I am not keen on £1 deposit trollies, especially when there is only one return to position by the store, I was okay with this.

Jack's our story

The opening sampling offer in Jack’s was welcome, although as a vegetarian a little limited, but unlikely to be around for long so not too worried. I liked the “Jack’s, Our story”, a lot of the marketing has been driven towards a British first feel, it seems this is exemplified the battle faced with the discounters.

Jack’s Bakery

The Bakery at the front was well stocked and quality very good on tasting the products. The Jack’s lines were equitable to Tesco main-store scratch offer, the croissants (I had 3 !) were very good!

Jack's Bakery

The range was limited of course, but again nothing most of the customers seemed to be missing. Really simple operation, although slightly surprised the siting is a long way from any of the freezer back-ups. I think the counter offer was also not required, I’d be surprised if this survives iterations, take the cost out in capital and revenue for labour.

Produce, not a point of difference

Produce range was nicely positioned traditionally at the first real dept (after Bakery!) and was easy to shop and easy to replenish. I would say the quality was on par with the discounters and similarly priced. I doubt anybody would change shopping to Jacks or the discounters due to the produce offer either way.

The chilled offer was highly condensed and boiled down the most useful sku’s and the effort to edit the range here looks like time well spent. Again good pricing and a decent enough range not to have to shop elsewhere. Quality wise I had a stone-baked buffalo mozzarella pizza at £2.89, it was good, and no complaints from the family, they did not even notice.

The frozen offer was similarly conceived, whittled down to the core and the brand presentation through the packaging very clean, very simple, spot on.

Jack's own label

Jack’s own label needs to reflect the core of the retailer, I think that Jack’s has it about right on this across the store.

WIGIGs are the opportunity

It’s all been terribly positive so far, and then I turned into the seasonal section and the non-foods WIGIG deal area. I have always liked a true WIGIG, it makes customers feel they are getting a deal and speeds purchase decisions, the execution was also pretty good. The problem is the range selection for these areas are not great, fine with the Halloween stuff but the non-foods just did not add anything apart from some profit hikers.

The German discounters do this better in range selection, but poorer in execution. Jack’s needs to make this area a point of difference from the discounters rather than a meek “us too” offer. With so few stores the opportunity to do an amazing deal on food-related non-foods is there, just seems undercooked from the buying teams.

Productivity could work harder

Ambient grocery was much as expected, well-built range with good prices on both branded (very few) and own label product. I liked the slight nod to productivity in the pallet displays in run of beans and tomatoes, although the message is perhaps a little lost when you have more agency staff (RMS) replenishing than your own colleagues. This must change and I will revisit in 6 weeks and see where they are at with this then.

Checkout service was good and proper tills with customer space is a huge difference most customers will see from the discounters. Overall it is neither inspired (unless by the discounters) nor insipid, but providing they can make the productivity model work harder for them this could be a great move for Tesco and will catch on.

tesco trolleys

Combating Grocery Discounters

So the great and the good of the big 4 have all had a little look at what they can do about the grocery discounters and come up with surprisingly different solutions to the same problem.

The discounters you see do not merely offer cheap goods at cheap prices, nor is it all own label. They have adapted their offer, appealing to a broader spectrum of customers and have marketed that offer well, better in truth than the big 4. The dismissive concern seen 5 years ago has become one of more considered response, yet it has to be said, nobody seems to have got it quite right just yet. Let’s work our way up the market share league table and see what has happened.

Morrisons

Having improved the retail operation significantly over the last two years, Potts has invested in price to combat the threat in those areas where Aldi and Lidl were advertising strongly, namely fruit and veg and basic meal items. Having said that, the marketing has been a little muted and a visit yesterday suggested that the in-store manifestation of this was limited. You do not come away with the sense that there is a battle in play. The strategy seems to be get the operation sorted, emphasise the range and not to be out-done on basic prices, but do not compete across the board with the discounters.

Asda

Asda had the most to lose, and boy have they lost it. The first thing they did was react on price, numerous roll-backs across the range in all areas and shout loudly about it. They have some of the biggest stores and largest ranges in UK mainstream grocery and yet seem to be caught in the price trap, a battle they will lose. They are not set up to compete with discounters and if they try, the inevitable dip in quality will be off-putting. That said, standards in their stores have improved in the last 4 weeks, if strategically they seem limited. Like for like increases are inevitable based on the slump recent years have delivered, sorting availability would give them that.

Sainsbury

The most radical of all the big four in their change strategies, but not all well worked through. The Netto relationship was a little pathetic and although they may have learned a lot, they did not improve their price perception from it at the time or since. Buying Argos however is another bold move and although is causing some teething troubles, is a good idea. Diversification seems strategically the right thing to do against the discounters.

Tesco

Strategically sound at first, in that they took the ball away from Asda three years ago in the price comparison marketing sham. Then they upset the apple-cart by introducing farm branded lines that were at discounter prices and generated a massive volume. They have taken a lot of cost out of the operation by reducing the night filling element but frankly our visits have merely highlighted low levels of fill and gaps. This must be costing them sales no matter what the PR stats on their availability is suggesting. The Booker deal will be a great piece of business for them longer term and suggests they realise that diversification is the key: be more local, be more ever-present in product and / or stores, seems sensible. Then the other defence to discounters may be about to be announced, the opening of their own discount chain, which I would think will be a very difficult option for them to make money out of short term. So a curate’s egg, good in parts.

Whatever happens in the next 3 years, the discounters will occupy a larger part of the UK grocery landscape, they are here to stay and having reduced the operating margin of every grocer, their impact may yet be even more dynamic in years to come.

Lidl-shopping

UK Grocery Christmas Trading Insight

The UK grocer’s shareholders are breathing a sigh of relief after the industry reported a better than expected Christmas and Q3 trading. There were one or two little surprises nestled in the results last week but overall, food sales were strong only hampered by general merchandise sales.

Looking across the industry a couple of trends were apparent that should inform the industry’s thinking as it moves into 2018: Premium versus Value for Money and Clicks versus Bricks.

Premium versus Value for Money

We all know that the customer likes to push the gravy boat out for Christmas, trading up to more premium foods to treat the family to a Christmas meal to remember. However, rather than foregoing their normal supermarket to go to a more upmarket grocer like Waitrose or M&S, this Christmas the Big 4 and importantly Aldi and Lidl, made it even easier for their regular customers to trade up without shipping out.

Value for money is the key take out for us this Christmas. It is less about the price or the brand, it is more about whether the product offers great value for money. Price comparison websites and savvy shopping means the customer is ever more informed about price and provenance so knows value when they see it. The discounters in particular, have worked very hard on brand perception and have spent hard on quality advertising to convince the shopper that their products are worthy of the Christmas dinner table. And it worked.

Lidl-shopping

Aldi and Lidl total sales continued to soar while M&S food like-for-like sales dropped. Some of the discounter’s growth comes from new space of course, despite that, for M&S to be down year on year, when everything we think we know about the brand says customers trade up to M&S at Christmas, something has shifted.

We are in new territory. Basic veg at rock bottom prices and premium own label in the same store makes for a happy customer. Squeezed into the middle ground is branded and mid-range own label. Range reviews will be focussed on the price, quality and value mix, opportunity to trade up and margin maximising in mid ranges.

Food inflation has slowed a little, giving retailers an opportunity perhaps to recoup some margin through Q4 where they can. It is not only food margins that have been under pressure though, higher margin general merchandise like for like sales are down at Morrisons, Sainsburys and Tesco.

So while the retailers are conducting their range reviews, margins targets will be under heavy scrutiny too.

Clicks versus Bricks

The operating cost of online sales compared to bricks and mortar sales is a tricky one to separate out. Too many costs are shared across both channels, one channel leveraging off the other. However, the cost of delivery to homes is instinctively higher than the cost of a customer transporting themselves to the store, picking their own produce and transporting it back home.

With online sales coming in at double digit growth for some grocers over Christmas, the cost of fulfilment will not be far from the Finance Director’s thoughts. The higher the sales through the channel the better, the more fixed costs can be leveraged. The higher each transaction the better, the better ratio of basket spend to delivery cost. But as the mix of sales moves towards online, the impact on overall profit margin and the business model becomes more significant.

Tesco-Christmas

To operate as a grocer and not have an online offer is almost inconceivable; to not have an online offer through Christmas is almost negligent. While there is always an exception to the rule (Lidl), the grocers with an online offer are quoting strong growth figures year on year as the customer base reaches new audiences who perhaps had been reticent about the service. It is no longer just the territory of Generation Y and younger.

The need to for the online offer to be seamless within the in-store offer is urgent. There is no such thing as an online customer and an in-store customer, they are one in the same. The channel through which they decide to buy is determined by their needs at the time and not through a demographic. Online is nothing more than a channel, and should be seen no differently than a different store format.

For 2018, the grocers that do well will be those that invest in getting close to their customer. The better they know them, their shopping habits and needs, the better the offer both in terms of range and in terms of what range is available in what formats.

Then there is of course the small matter of keeping that range available on shelf when the customer most needs it. Perhaps that will be the lesson for 2019.

asda logo montage

What can we expect from Asda in 2018?

The appointment of Roger Burnley as CEO from January and his subsequent appointment of Thakrar as his Chief Strategy Officer implies we should expect change at Asda over the coming 12 months.

The last 12 months have seen a simplification of the business, reduced cost, fewer promotions, clearer messaging, which is ideal for a business in pursuit of a clear goal. Phase 1, tick. Not very dynamic though. Changing lots of things by a small amount has impact, most certainly, however to have a significant impact on its path, there needs to be step change in strategy, to compel more customers through the till.

Where Asda have been left behind in recent years is store formats. Asda do not have a convenience offer. An Asda customer cannot get a meal for tonight’s dinner in town on the High Street. The rate of growth of sales coming through this format for the other major grocers is significant and presents Asda with an opportunity to grow if they can find a way to that market.

Morrisons tried and failed with their own facias, so they took a different approach, reaching that customer through their deal to supply Amazon. Then there is the opportunity to supply our newsagents and corner shops through a whole sale division. Thinking laterally has borne fruit for Asda’s competitors. Asda need to engage that part of the organisations thinking.

Asda pulled out of Black Friday last year despite the fact that they were the first to launch it in the UK. They took customers at their word, listening when they asked for EDLP. However, with the noise and deals that surround Black Friday, the customer will be drawn away, no matter how loyal. Asda may consider re-joining the Black Friday foray next year and take their chances, or they may consider creating their own unique twist on Black Friday to stand out from the crowd again. EDLP strategy does not have to mean no promotional excitement in the calendar at all. It can sit alongside discreet and focussed events that present something new to the customer outside of their normal shopping patterns.

We hope that the incoming Chief Strategy Office will have an influence on marketing. The Asda Christmas advert this year takes the excitement and fun of Christmas food and shows how it has been created in the Imaginarium. Appealing to children and adults, the advert features some of the innovative products Asda has to offer at Christmas, giving the customer a reason to visit the store.

From the ubiquitous roast potato to a smashing igloo dessert, the appeal is evident, price is the only thing missing. What messages resonate with the Asda customer though? What is core to their reason for shopping at Asda? Price sits up there. We have seen Aldi’s clever, fun focus on price and product and see an opportunity for Asda to take back that place in the customer’s conscious.

Optimism is definitely high for Asda, despite a few words of warning starting to permeate from the analyst’s quarter of a slow Christmas. Christmas spending could be early, taking advantage of Black Friday, or late, waiting for retail nervousness to trigger early discounts. It just depends which report you read. Our view is that Asda will muddle through this Christmas, but with Burnley’s strong leadership skills on board, Asda will be upping the pace next year.

retail trends 2017 update

2017 Retail Trends update from Retail Remedy

Doesn’t time fly! At the end of last year, we looked forward to 2017 and made a few educated guesses about what we might expect from grocery retailing. If you would like a recap, read the blog here first.

retail trends 2017

Sweeping statements concerning online grocery sales, the use of tech in supermarkets and pricing were made by many and we added our thoughts to that stream of consciousness, influenced by what our clients were wrestling with and where we saw consumer trends heading.

As we approach the upswing of the golden quarter we thought it would be fun to look back and see whether the predictions we made came to fruition.

Price architecture outweighs promotions

Concentrating on the grocery sector we first predicted that the industry focus would be on price architecture rather than on promotions to present good value to the customer.

This was an easy prediction to make, the customer increasingly influenced by price as demonstrated by the discounters, and their increasing market share.

We were told most recently by Tesco that the number of multi-buy promotions has reduced year-on-year by 10% and that Tesco has the lowest level of food price inflation for customers amongst its peers, c.1% lower than rest of market.

We have often said that price is not going to win share of customer spend on its own. Aldi and Lidl are growing with luxury products, but at very competitive prices. It is about how price fits into the overall proposition. If it’s just cheap, that isn’t enough and Tesco with Aldi and Lidl know that.

Margin enhancement through volume

The grocers will be looking to grow store margins that don’t depend on price increases. The pressure that grocers are under to maintain prices and grow margins while Brexit is pushing costs up, is extraordinary. On a unit by unit basis the buyer has an impossible task.

However, through strategic consolidations we are seeing evidence of supplier volume growth. Again, looking towards Tesco’s H1 results, they reported doubled volumes with c.100 suppliers.

According to a study by IRI, the number of items stocked by supermarkets across the UK declined by -5.7% in the year ending February 2017.  An average of 930 fewer products were available to shoppers in their local supermarket. This naturally gives rise to the opportunity to grow volume and improve margins.

But beyond that the grocers are penning supply deals with wholesalers, convenience chains and Amazon. The volume advantages that this presents position the grocers to be able to grow margin to offset whatever life after Brexit has in store.

Ebb and flow of innovation suffers

Simplification is the margin’s friend. Innovation is complexity’s friend and with that cost. We suggest that the conversations in Head Office have been ‘go forth and innovate, but only with existing suppliers at minimal cost’. Range innovation, namely own brand development is evident in food and non-food but store innovation has been less pronounced than we have experienced in prior years.

Store refurbs, face lifts and tweaks are present but beyond that it is all about tech driven innovation and business model innovation.

The purchase of Whole Foods by Amazon and their increasing foray into the grocery sector seems set to continue to rock a few boats. Amazon are not playing at shops but have an earnest intent on being a real player, and have the resources and organisational culture to test, fail, test, trial and make it happen.

Innovation takes on a new MO, we are seeing a drip feed of small changes that each in their own right feel inconsequential, but when taken collectively and compared to prior years, start to take on a new innovative shape.

Tech available to customers will explode

Smartphones and apps were predicted to heavily influence the customers shopping experience, but we said none would pay back in 2017. We have seen cashless shopping trials, beacon messaging and Alexa writing our shopping lists for us; none are revolutionising the business model and paying back.

While we listen to the customer about what they want from tech, none of it is a real need and has not penetrated to the masses. Rather we are seeing a lot of gimmicks that are good PR stories but are all too early for even the early adopters. The industry just needs more time for the transition from gimmick to mainstream.

Ways to reduce the labour cost

The National Living Wage became a good PR story for a couple of grocers, increasing salaries earlier than legally required, as Lidl did, by more than was legally required, as Lidl did. Later in the year we saw job cuts.

The battle to find the right formula between payroll and service plays on. From experience the only winners are those that maximise productivity in stores, streamlining tasks to reduce hours in non-value-added activity and reinvesting in customer service. Morrisons for instance, are making progress in that direction with the long awaited automated ordering system. Availability is improving and operational efficiency will follow once the reaction to change has subsided.

We are not there yet. Sainsburys announced a further 2000 job cuts largely from within stores this week. While we appreciate the overwhelming effect this will have on store staff, the business must be as efficient as it can be. Whether it feels like an axe or scalpel is down to your perspective, but ultimately a streamlined efficient business is a business that has happier more productive staff which is more able to grow profit.

Filling space with known footfall and profit drivers

The Big 4 are still over-spaced in their largest formats. Some headway has been made, notably Tesco opening Currys PC World in its biggest stores and Sainsburys rolling out Argos digital stores and Habitat shop in shops. Footfall and profit drivers beyond that have been a bit scarce and this action remains doggedly on the to-do list.

Watch out for our predictions for the retail trends to watch in 2018 in a few weeks’ time.

currys kettle range good

Retail Basics #1 – Ranging

There are a number of basic principles in retailing that evolved from the very beginnings of trade, I have something I do not need myself that someone else will want.

Long ago it might have been excess crop or an inherited tool. It was probably bartered for another item the originator thought worthy and then this evolved into money instead. The principle is still there, rule number one, you must have something someone else will value and want to buy. Obvious.

The fashion traders spend hours understanding what this is and how they can best present it to their customers, the food retailers similarly create vast amounts of information on customer trends, all trying to gauge what the customer is really looking for.

Yet on visits this last week I have seen the good, the bad and the ugly of ranging from retailers that really should know better. Nothing here is rocket science yet the absence of good range merely suggests poor connection with the target audience (customers might be too strong a word here), and potentially poor retail operations that challenges the veracity of new change activity.

The first example is our GOOD………well done to Curry’s on this part of the market. Curry’s presented a fantastic range in kettles, from high end at nearly £100 to cheap and cheerful for around £10, all laid out with clear “reasons to buy” and “how to buy” information. Frankly if I was buying a kettle I would pay a visit and buy one as it gives me not only a full range but clear spend thresholds.

currys kettle range good

Great if you have a lot of space yet I know that even if 30% of the range was taken away the movement from a cheap kettle, through to a decent offer to a high-end brag about in the pub type kettle would have still been retained. The buyer here clearly understands ranging.

Our next example is not so good. If most of your range is dominated by one type of product then it seems that either you are on the money with knowing what your customers want, you are in the pocket of a supplier who is leading you down the garden path, or you have lost touch. This example of toilet seats in B & Q could be good, but it just isn’t.

BandQ toilet seat range -  bad

Retail consultants often get accused of simplifying to remove cost. We have specialised in reducing the cost of selling items, yet not at the expense of a range that delivers a Good, Better, Best offer to customers. The range allows a little ambition in purchase and clearly explains the difference between the various products and their features.

Against all of these factors, B & Q fail. The display is very functional with stock held behind the toilet seat and able to be tested (in part of course!) by the customer. The problem is, if you want a higher end solid wooden seat with a nice soft close and traditional wood stain then you have lost out. The ranging is grouped around a similar white plastic product of similar price points, just not good enough for a retailer with this amount of experience facing an incoming challenge of a new more professional competitor (Bunnings).

The Ugly example is worse possibly because the store itself is named “The Range”. Again, we see a display dominated by lower end product that offers little in the way of ambition.

The Range toilet seat range - ugly

The fact that the display prohibits trial of the product and is destined to look scruffy as soon as the first customer physically browses, means the operational elements have just not been considered.

If you know that your customer is working to an extremely tight budget, you still should be offering a broader spectrum of choice in quality, look and feel. A more systematic approach to ranging is one of the key factors The Range must adopt for future development. Not doing so will limit the types of customers they attract. Even with a cap on price, there needs to be a way you can help people differentiate the product themselves.

Ranging is definitely rule number 1 in retail, before selling skills, service, pricing or margin, none of which matters if people do not get excited by what you offer. Retail consulting is a funny old game, 5 years ago in the Ukraine we were telling people to reduce the range on DIY products by c.40%. The reason was you just could not see the wood for the trees. Making range visible is an art in itself, but we’ll save that for next week’s visits!

The trials of retail and retail trials

Keeping the customer interested, keeping the offer relevant and keeping the bottom line growing are ongoing challenges that retailers face. Standing still is, quite simply, not an option.

Sainsburys checkout free trial

In the last week alone we are reading news of a checkout-less store trial in Sainsburys, a one hour delivery trial from M&S, and hearing about Microsoft store open on Oxford Street. Each initiative is driven by objectives specific to that retailer, with measures in place to determine its success. One thing we can guarantee is that in isolation each of those initiatives will be loss making.

M&S one hour delivery trial

Retail Trials vs the Big Picture

On the other hand, each new initiative forms part of the whole, and that is what matters for the bottom line. A shiny new store can encourage customers to visit and then make a purchase on line; a high-tech AR mirror in the changing room can help the customer reach a purchase decision quicker; a one hour delivery slot for a meal deal can encourage the customer to buy more in store (although we feel it is more likely the other way round, but we’ll see).

Online grocery delivery is absolutely the right channel for the customer who is increasingly time poor and convenience driven. Yet the industry has yet to find a way to make this profitable. Subsequently grocery margins have fallen. Does the grocer then engineer the delivery process to make it work commercially? Yes of course they scrutinise the operation to make it as low cost as possible while maintaining customer service levels. But they also examine the rest of their operation using productivity modelling for example, to help offset any loss. In short, the whole business model must keep evolving.

Microsoft store coming to London

Getting the customer through the store door is one way of off-setting a loss from online delivery. Store layout, fixtures and ranging all play a role and one that we are very familiar with from working with clients in many sectors within retail. From shelf level availability to store environment and visual merchandising, each plays a role in growing sales. Some make headlines and create a PR perfect store while other initiatives quietly contribute to basket size.

Innovate to Differentiate

When we have worked with retailers on their proposition initiatives, we are intrinsically conscious of commercial objectives but always seek to leverage the strengths of the organisation to deliver a differentiated offer. Differentiation is not often a priority however. More often we find the motivator is the unfounded belief in needing to catch up with the competition, rather than being driven to give the customer something they need or want that they can’t get elsewhere.

We are excited to see more retail trials happening, and realistic in what we expect the results to be. It is easy to be quick to point out the shortfalls of trials but instead we continue to work with retailers to move their businesses forward, and work with them to build their futures.

Morrisons steering it’s own path to growth

What is interesting about Morrisons is that it gets on with the job. While its competitors watch each other, and try to out manoeuvre, our impression of Morrisons is one of steering its own path and using its own strengths to grow the business rather than its competitor’s weaknesses.

The first half of 2017 has given Morrisons a solid set of financial results which are well earned. The short-term future looks to continue the same path with all the key indicators of a healthy business pointing the right way. For the longer term we also hold similar optimism.

David Potts - leading Morrisons to growth

The supply agreements that Morrisons has secured in the last year with Amazon, Ocado, and McColls has given the retailer a revenue stream that they intend to grow to more than £1bn. We see no reason why that won’t happen. McColls will be supplied with Safeway branded fresh, frozen and ambient produce from Morrisons for a period of exclusivity of one year. After that year Safeway could start to appear further afield.

Neither Morrisons nor McColls have written off the idea of Safeway standalone stores reappearing on our High Streets at some time in the future although this does seem a stretch. What seems more likely is supply agreements extending beyond McColls and the Safeway range being extended.

Morrisons have form for range development, picking up awards for Own-label Range of the Year at the Grocer Gold Awards, winning golds for Ready Meals and Frozen Desserts, wine and cheeses. To extend the Safeway own-label range is certainly to come.

Operationally, Morrisons are improving claiming 30% fewer gaps on shelf resulting from its automated ordering system. Fewer gaps, bigger baskets? Actually no, basket size is down. Morrisons are reporting more transactions though, the convenience, smaller shop more frequent visits shopper is apparent. To support this shopping mission Morrisons are installing more self-serve tills so that the core supermarket format still works.

To quote David Potts, “we are beginning to realise some of the opportunities that our unique team of food makers and shopkeepers can bring us,”. We think that is the key. Morrisons is focusing on its strengths, not the weaknesses of others. Strategically this is always the most successful way forward, particularly if coupled with strong leadership skills. Morrisons has a strong CEO but beyond that, the leadership mentality is permeating through the organisation and is delivering results.

retail leadership

Where has great Leadership gone?

By Phil Dorrell

I often get asked what makes great leadership go wrong, why do so many lauded individuals turn out to be poor leaders in the long term?

The Jim Collins book “Good to Great” goes a long way to explain the selfless approach needed to be a long-term leader. Parking the ego and allowing questioning and debate of the strategy rather than a “I know best” approach, is one massive step that, frankly, evades most.

Leadership is a wonderful thing that can make you feel powerful and loved, cherished and listened to. For many it is a warm duvet feeling which they take comfort from, giving a purpose that validates them and embolden their decisions. On the flip side it can also be a lonely and cold place when it appears that the decisions made have not delivered, the belief is drifting and the once eager audience seem to be doubting future strategy.

In sport, the trials and tribulations of Leadership are played out in the full glare of the media, it allows a glimpse into a world with heady nights and dreary lows. The fact that poor leaders are engaged again and again in sporting positions, having failed in exactly the same position previously, is staggering. Yet in truth the same is true in business and in retail. It’s almost as if a process for delivering leaders who can grow within a business and be mentored towards the upper echelons does not exist. Yet we know in most large retailers it does.

So how is it that a dearth of Leadership talent is apparent? Role models are not in abundance and when that are it is often outside of the normal channels of career development one could be expected to replicate (Sir Richard Branson).

Short term changes in strategy and direction can drive an improvement in results for two to three years as the workforce has renewed belief in freshly communicated objectives, and start to see themselves as part of the solution. Meanwhile, the longer term grounding of the business in great process, people planning and development towards meritocratic measurement can be left behind. They simply don’t give the immediate return that shareholders and perhaps fellow board members demand.

All sounds pretty grim, and depressing, well it is for those who suffer in the ranks seeing all this happen. It does not have to be though. Leadership can be learnt, it is not genetic, it is not about one MBTI type over another. It is about people being developed correctly by those who understand the individual and their needs.

On some of our leadership away sessions we have seen profound changes in the way people feel about themselves and the interactions they have with their team. In itself, this is a start, nothing more than something to build on. It is learning about yourself and your leadership style, with honest feedback and challenges. It’s a great pleasure delivering these courses, seeing people grow, and something that I, as a leader, recognise is vital to any business.

Picture: Graham Barclay/Bloomberg via Getty Images)

Morrisons winning ticket: Safeway

Morrison deal to supply McColls has come from left field but it really shouldn’t have.

Morrisons have quietly been getting on with business while all the focus has been on Sainsburys and their acquisition trail and the Tesco Booker deal. The scale of the Morrisons deal might be smaller, but Morrisons are racking up a string of relationships that will see their wholesale revenue stream take a big step towards the £1bn mark.

So why have Morrisons done this? The revenue from additional wholesale relationships is obviously attractive and adds to the top line but it is the ability for Morrisons to maximise volume through their vertical integration that makes the relationship so attractive and one that shouldn’t have surprised us.

The quality guarantee that comes from owning the farms and fisheries is one that Morrisons have been eager to leverage in their own supermarkets and it was cited as a key factor by Miller, CEO of McColls in moving to Morrisons for its supply. Morrisons own the Safeway brand and with it, it’s quality perception built from many years of Safeway supermarkets. Coupled together, McColls see how they can offer their customers a better quality offer on fresh produce than they have been able to do to date and with it, better ranges and higher sales.

For Morrisons, more volume through the operation equals reduced cost and that is where the Morrison’s customer stands to benefit. Morrisons would have the ability to cut prices for the customer inevitably putting pressure on their grocery rivals.

We have another possibility to float: the revival of standalone Safeway stores. In a conversation with Luke Tugby of Retail Week, we discussed how the Safeway brand would be enhanced though McColls to the point that, in time, it would give Morrisons the opportunity to consider building its presence in the South of the UK where in the past, Morrisons has struggled. It would give Morrisons a premium fascia that would appeal to another demographic, one that would not consider shopping at Morrisons.

It is, of course, speculation, but we do know this: Morrisons are on the front foot and are proactively exploring all avenues of growth. We’d love to know what you think so please do leave a comment.