sainsburys mission format clothing

Growth in Value Clothing opportunity for Grocers

With the risk of a downturn in consumer confidence and a predicted boom in value clothing, the grocers have a fantastic opportunity to grow clothing sales and market share, which in turn opens up potential to better utilise excess space.

The risk of a significant impact on retail spending as consumer confidence falters is very real according to the BRC and law firm Bond Dickenson’s latest retail employment monitor. Also reported this week by Verdict Retail is the report predicting growth of 23.6% in 5 years looks quite possible.

As confidence diminishes, and spending is reigned in, consumers will be looking for better value for money in their clothing purchases, which implies cheaper prices. However, they are not looking for poorer quality or fit which places retailers in another margin squeeze.

Retailers already established in the value clothing sector are well placed to grasp the sales opportunity and maximise scale to achieve the quality and price consumers are looking for.

Key for grocery clothing is how it is marketed and merchandised to the consumer. Quality is still a critical facet of the purchase decision and if the environment in which the product is offered is cheap, then the value perception will be affected.

We have been critical of Sainsburys in store clothing offer in the past and are still waiting to see consistent improvement. However, online TU clothing is a very strong offer: trend-led edits, fast changing ranges (although that is a perception from the edits and regular website refreshes) and good value endorsed by Gok Wan.

tu clothing online

George at Asda and F&F have a way to go to take advantage of the value clothing boom and could lose out if they do not up the pace significantly in the coming 12 months. We have seen poor use of space in store, weak ranges and some uninspiring product in the past.

What must happen to take advantage of the value clothing trend is a translation of the online communication and messages into store. Alongside this, staff training and in store operations must be optimised to provide customer service at every point adding value to the proposition which will reflect on the value perception of the product.

The opportunity therefore is not so much in price, rather in value and environment and that is where margin can be supported. Value clothing retailers can use merchandising techniques, range editing, clever buying and fast fashion to achieve growth. Any retailer with any degree of complacency will miss the boat.

Will we see a Click and collect price war?

According to new research from Verdict, click and collect sales are positioned to double by 2021.

It is easy to see why click and collect is growing at such a pace: the attraction to the customer that it was either free or significantly cheaper than delivery to a specified address.

However, as the customer’s need for speed amplifies, which it is doing daily, and retailers accelerate next day delivery trials to satisfy those customers, how do retailers cost click and collect?

The obvious answer is to price click and collect competitively and cost it as realistically as possible to avoid scale issues further down the line.

Most retailers would prefer customers to visit a store to collect their order, it is cheaper and it gets product in front of the customer that they may have missed online. So if home delivery becomes quicker and offers better value to the customer taking time into the equation, should retailers be looking at offering click and collect for free again?


The model is continually evolving and more delivery options being developed to add into the mix.

Sainsburys are trialling same day online orders with the click and collect delivery option being ready to collect within 4 hours. There is also the launch of their Chop Chop app which offers 1 hour delivery within 3 miles of Wandsworth.

We know Sainsburys have a delivery pass, and priced at £60 per year seems very good value for home delivery. But click and collect is free for orders over £40, and orders under £40 are only charged at £4.

We have had the grocer’s price war which not abating yet, and the next war will be delivery value: Faster for less. The attraction of a membership fee is its simplicity so Sainsbury’s delivery pass, Amazon Prime etc could be a model we will see more of in the future. Setting the price is key though and with volumes growing quickly, the dependence on a good forecast is apparent.

In the short term profit is secondary to volume and being blunt, market share. But the tipping point will come again, when retailers will be forced to find more margin. There are other avenues to recoup costs. For example Ebay are looking at renting space in Sainsburys for collection points. Perfect use of space.

It will be fascinating to see how retailers juggle cost and convenience for the customer of the next couple of years, how Amazon change the landscape again and how malleable the customer is to changing delivery prices and speed.

Among the tough decisions at M&S, productivity modelling is an easy one

After a dire set of trading figures for Q1 it is no surprise to hear that Steve Rowe is talking about how to cut premium pay costs in M&S. What is surprising is how this marries to the pledge for improved customer service in store.

Cutting overtime and unsociable hours rates, is going to save salary costs, and will in part cover the National Living Wage costs but it will also hit morale and therefore customer service. Staff have already been quoted as saying it is like giving with one hand (NLW increases) and taking away with the other.

To us this is a classic productivity modelling scenario. Tasks are identified that deliver the most value to the business and are optimised in consultation with employees to be executed efficiently and effectively. The result is cost savings and improved customer service levels.

productivity modelling

Have M&S identified what their target customer (not necessarily their current customer) values most in customer service? Have M&S isolated the tasks that deliver those values? And have M&S identified the tools and a training to deliver it? We don’t know. But evidence would suggest that not all of those questions have been answered in the affirmative.

At the full year trading announcement Rose said “We will improve standards and offer better service by investing in more employees in our stores and improving our instore facilities. Some basic changes to the environment, coupled with great service, can turn a shopping trip into an experience.” Absolutely agree, but we are yet to be convinced that the way M&S is approaching this is the right way.

In our opinion it is short-sighted to only address pay rates without addressing what the staff are actually doing to add value to the customer’s shopping experience. A productivity modelling exercise cuts wasted effort, ensuring that the employee’s efforts are adding benefit and sales potential to the operation, which is very much more rewarding and motivating to the employee. In turn employees are more effective and efficient.

If you are interested in learning more about productivity modelling you can watch our information video or give us a call to discuss how to reduce costs and improve sales in your business.


There will be more tough decisions for Steve Rowe to make but the easiest one is to implement productivity modelling and reap those benefits to invest in future growth and not let customer service and payroll be the reason for another quarter of poor trading results.