Catherine Shuttleworth
I'm the CEO and founder of shopper and retail marketing agency Savvy. I'm also an active member of both the Institute of Promotional Marketing (IPM) and The Institute of Grocery Distribution (IGD) and hold the position of Chair of CAP’s Sales Promotion and Direct Response Panel - a group comprising senior figures from the promotional marketing industry which provides invaluable advice and opinion to the ASA and CAP.
47 comments By Catherine Shuttleworth
News from the BRC this morning shows that retail sales are hitting a new low on the high street and are also starting to flag online. May 2018 was a strong retail month with football fever in full swing and great weather, but a year later it seems that the nations confidence in spending is at a real low point. Whilst the numbers can be interpreted in different ways, the bottom line is that the high street is continuing to struggle and despite talk of interventions and new plans, jobs are being lost every day in the retail sector and stores are continuing to close.
A strong set of numbers this morning from Pets at Home with retail sales growth of 6.9 percent and vet business up 13 percent! It shows that we still love our pets - and that in an increasingly digital world there’s a strong place for specialist retail that delivers the right offer.
A really significant step in the UK food market this am. We know from our stats that 42% of UK shoppers have used an app to order from a food delivery service (such as Just Eat, Deliveroo or Uber Eats). This rises to 74% for those aged 18-35. 12% having specifically used Deliveroo, rising to 28% among 18-34 year olds. In large part geographic coverage is their main current obstacle to penetration growth and Amazon could offer immediate scale. In perspective 16% of shoppers have used Amazon Prime Now (1-2 hour delivery service) though not necessarily for food.
So why should this make not just the food to go sector but food retailers including the supermarket sector, shiver? Well, younger shoppers see the likes of Deliveroo as an alternative route to meal for tonight so instead of going to Sainsbury’s Local or the Coop around the corner, it’s quicker and easier to have dinner delivered. This is all about a convenient solution and its take up is rapid and part of spend that replaces food spend elsewhere.
Additionally environmental concerns will continue to rise up the shoppers agenda with more and more deliveries going out from all sorts of businesses. The impact on the environment is a ticking time bomb in the mind of consumers. Deliveroo’s network of cycle deliveries is in a strong position. The challenge will be scaling outside of cities and other large conurbations but this is a really interesting development.Clearly nothing is off the table in Walmart’s approach to business in the UK. And an IPO would be an interesting option - albeit not an immediate one moving forwards.
The relationship between WALMART and ASDA has always been of the heart and the head. ASDA now needs to get its head down and have a solid plan to trade in the UK market against a competitor base that remains strong and growing.No surprise on the announcement from Debenhams this am as they push the button to close 22 store closures. Devastating news for the high street and the employees affected. There is no other choice but to close stores if they want to business to survive however executive comment that Debenhams have a clear strategy and a bright future seems extremely optimistic at this stage. Strategically, it is difficult to understand where the retailer is heading at this point.
Fast fashion is indeed thriving – great results from Primark this morning! Offering great fashion solutions at very reasonable prices & arriving to the market very quickly, Primark is increasingly becoming the biggest and best retailer in town. With a high street only offer they provide a vital presence in many UK towns and cities. Only last week I was shopping in Ipswich which was a desperately sad retail experience – the shining star of the city centre was Primark which was busy, well merchandised and tidy with positive staff - a complete contrast to Debenhams across the road which looked tired, empty and with no visible staff. The formula is clearly connecting well with shoppers and Primark’s commitment to the high street should be commended.
The news that Boots is suffering from a decline in like for like sales is not surprising. As a former Saturday assistant at Boots it holds a very dear place in my heart and was the start of my retail journey. Back in 1985 Boots had jewellery counters, a cook shop and of course a record department. No Saturday would be complete for any teenage girl than a visit to the No 17. cosmetics counter.
Of course much has changed since then - not least the ownership of Boots. Since the takeover by Stefano Pessini and the later merger with Walgreens, Boots has gone from a stalwart of the British high street to become part of a global retail bemouth and the retail landscape has transformed, whilst its core shopper has changed how and where she shops.
A world of choice has arrived in health and beauty - from core health and beauty brands expansion into retailers like Poundland and B&M at one end of the spectrum, to subscription services like Birchbox and Glossier at the other - and the shopper has a real array of riches and choices in front of her when she’s looking to buy. And health and beauty is fun - really good fun. We are prepared even when times are tough to spend big on lippy, skin cream and mascara and we won’t scrimp on making sure we look good. The problem is Boots isn’t as much fun as it used to be.
Sure, stores look good, they're starting to introduce more exciting brands, the advantage card is embedded in the shopping experience and could be driving loyalty - plus the service experience for health can’t be beaten but......
There aren’t enough staff in the stores - trying to find an assistant or a manned checkout is difficult and (I know I’m biased) Boots staff help make the experience. Going to Boots should always make you leave with a smile on your face but it’s become a bit sterile and lacking engagement.
There are so many opportunities to win at Boots - with a great supplier base who have the opportunity to create excitement instore, an engaged work force, some of the best retail real estate in the UK (close to and easily accessible to the population), a great source of data in the advantage card and the nations great affection and love for the Boots brand. The Boots business also have some smart ideas - the sponsorship announced yesterday with the Football Association could be brilliant if it’s allowed to really come to life instore and out.
I really hope that Sebastian James gets under the skin of the Boots brand and its people - they are what good British retailing is all about. And whilst it looks like store closures are on the cards he needs to invest in his core store estate and in people that will make the shopping experience really exciting again.So all change as everyone bar the company secretary resigns this afternoon! This leaves Julian Dunkerton with just what he wanted - the phrase be careful what you wish for comes to mind. This is a difficult time for Superdry with consumer confidence really wobbly and the future looking unclear. This combined with an ambivalent attitude to the brand from shoppers and the continued shift to online, means that the challenge to win back shoppers and create a positive attitude to the brand will need some magic, luck and a stack of hard work. Let’s hope that Mr Dunkerton has all three in equal measure.
The joint statement this morning from Asda and Sainsbury puts forward a clear position to the CMA following their slightly strange and unexpected interim findings last month.
A commitment to transparent and audited savings on food and fuel is significant and is in my opinion, in the best interests of the shopper. The significant point that the CMA seemed to have missed so far is that shoppers will choose whether this is a good deal based on what they pay at the checkout. It is in no-ones interests shoppers or suppliers alike to make this deal anti-competitive and it never was.
Even since the findings were published the food retail market has had further competitive change in the tie up between M&S and Ocado which was inevitable, but apparently not to the CMA. Split baskets and savvy shopping are a way of life in the UK that is just not changing and the CMA really need to visit families and see how they are living their lives.
Whether the CMA grasps this reality really does remain to be seen, but the unintended consequences of the deal being called off will likely have a much bigger negative impact on the UK shopper than it going ahead.A growth story from Morrisons this morning - reporting like for like numbers of 1.5 percent in the core estate including Morrison.com. The real success and growth driver is clearly the wholesale agreement with McColl and the ongoing sales driven by their relationship with Amazon. Not only are these two initiatives growing top line sales growth, but they are the levers of profit. Morrisons are not immune to the continued pressures on consumer spending.
Morrisons have much to be happy about, but there are concerns that their 3rd growth lever, .com appears either to have slowed down or their store performance has significantly dropped. The changed dynamic in their relationship with Ocado with M&S now at the table is going to be a concern in the short to medium term.News this morning that Mothercare have off loaded ELC to the toy retailer The Entertainer for £13.5m is another step in their turnaround programme. They bought ELC back on 2007 for £85m and it goes to show what a difference a decade has made. Still a good brand, it will be fascinating to see if The Entertainer will adopt it on product or in some retail capacity. The UK toy and play market has seen significant change over the last couple of years - with the abrupt exit of Toys R Us, the changed ownership of Argos plus the switch to online. It’s been interesting to see Smyth’s Toys and The Entertainer solidly develop their footprint in bricks and mortar retail as well as online. This move shows confidence in the market and some belief in continued growth.
The data shows some - albeit limited - volume growth, with Aldi and Lidl the very clear winners. Aldi’s sales up 10 percent show their growing market significance and perhaps more importantly that shoppers are completing more of their shopping at the discounters. Even more interesting is the performance during Valentine's Day where Aldi really won across all participating categories. Conversely JS was the worst performer with sales falling 1 percent and marketshare reducing by 0.5 percent. Asda has a 1 percent sales increase but that’s still underperforming the market.
Maybe the CMA could read the numbers and rethink what shoppers are really doing?A warning ahead of the guts of the golden quarter that consumers are spending less frequently and visiting stores significantly less often. It’s certainly true that footfall is down in town centres at weekends and the shift to online spending with clothing retailers offering sharper pricing to the target market.
The sluggish sales in September - especially in non food - demonstrate continued consumer caution. Clearly parents have still funded back to school shopping but they have done so by cutting back elsewhere. The continued warmer weather in September has probably held back purchases of new season clothing - but we think that many consumers are holding back waiting for Christmas shopping.
Today's news shows that despite an uptick in sales in womenswear and an obvious boost from the World Cup seeing electrical sales up 7.8 percent, price matching and discounting have hammered margin for the business. This combined with challenging business conditions at Waitrose has impacted on margin leading to a significantly reduced profit, strategically they are doing all the right things but the cost climate is showing no sign of easing.
Great to see positive sales numbers from Morrisons. We would expect supermarkets to have had a storming summer of sales with a hugely successful World Cup campaign and fantastic weather and Morrisons have clearly won more of their fair share of the BBQ bonanza this alongside their developing sales channels online - but the pressure on profit is significant with profits down 29 percent.
Strong results from the sports and athleisure wear retailer showing again that shoppers do want branded product and are prepared to pay for it. A retailer with a strong online presence and stores in the right place that cash rich younger consumers can connect with!
What a difference the sunshine makes!
A strong quarter from Kingfisher supported by shoppers buying hot weather related items at B&Q. The star of the show though is clearly Screwfix with a spike in sales - this business attracts both the remaining keen DIY fans but also the growing group of independent trades people and small businesses that are attracted to the great product catalogue and availability and speed of delivery. Coupled with new store openings this is a business set to grow and will be a key part of the Kingfisher turnaround plan.Inevitable but sad news this morning as this UK high street stalwart is forced into administration. We understand that there are advanced talks with potential buyers for part of the business so let's hope that as many jobs as possible are saved – another difficult day for the high street.
Today’s results show that challenges to their operating model continue in a fiercely competitive market. As the discounters ramp up their store opening programme across the south east, shoppers are starting to split their baskets and this will be having an inevitable impact on Sainsbury’s performance. Reductions in the pricing of fresh fruit, meat and veg earlier this year demonstrate Sainsbury’s focus on remaining competitive.
Commented on: 2019-06-04T08:16:39.577
Retail sales suffer 'biggest decline on record' in May