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Insider View: September 2016

insider-view-sep-2016

19 Oct Insider View: September 2016

News of a sharp drop in profits at John Lewis this month were, according to chairman Sir Charlie Mayfield, the result of “far reaching changes taking place in society, in retail and in the workplace”. The rise in click-and-collect and on-line shopping is clearly having a detrimental impact on John Lewis and the company has responded to the threat by renewing its focus on customer service. Waitrose has long championed its attentive store staff in delivering a pleasant shopping experience – something that is clearly valued by shoppers – we found that being a ‘nice place to shop’ was one of the top reasons for remaining loyal to a particular store[1].

However, such a strategy comes with a hefty wage bill and the company has decided to trim back its store opening programme rather than cut down on its staff. While customers accept minimal service in the Discounters in exchange for rock-bottom prices, they expect more from the Big 4. Other retailers have also looked to improve their customer service offer as well as providing other ways of adding value to the shopping experience. Tesco’s attempts at winning back shoppers is beginning to pay off and has in part been in response to higher levels of staffing and better availability. Morrisons claim to be totally customer focussed, accompanying recent price reductions with a renewed focus on Quality – something that Sainsbury’s have long been focussing on in their marketing campaigns. Asda are also trying to win back customers on their Quality offer rather than just low prices, while the Co-op continues to reinforce their ethical credentials by announcing they will be investing £1.5 billion over three years on sourcing UK meat and vegetables as part of the Love British Food campaign.

Another news story this month is that supermarkets are considering shrinking pack sizes and preparing to switch to cheaper ingredients to offset increased costs because of the fall in the pound. While this type of ‘value engineering’ is nothing new, it is often condemned by consumers who feel cheated if they are not informed of the changes. Consumers rarely hear about the other side of the story: the constant drive to improve Quality as retailers all fight for market share. Reformulations may be common, but they are usually in a drive to increase consumer acceptability.

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This month we have seen some interesting new products from familiar brands.

  • The success of Fromageries Bel’s new Yellow Laughing Cow Mini Cravings shows consumers are not averse to buying small. These bite sized snacks offered a creamy treat while still being low in calories. (Showcase Product of the month Review 160943)
  • Ryvita strengthen its reputation in the cracker category with a versatile snack, Cheddar & Black Pepper Thins; a “moreish” flatbread that was bang on trend. Review 160941
  • Kenco’s Sunlight Wholebean instant proved a tempting proposition. More convenient than ground beans and less bitter, this was popular with lovers of more mellow blends. Review 160948.
  • And KP hit the top spot with its Sour Cream & Chive Golden Hoops, 50 (Review 160914)

Less successful this month were some of the more ‘niche’ health oriented products

  • Most would rather abstain altogether than opt for Tesco’s Eatlean Protein Cheese, check out why: Review 160933.
  • Tea Retail’s We are Tea Glow for Skin Radiance was clearly innovative but most were sceptical of its health claims: Review 160936.
  • While Ethical Food’s Organic Edamame Spaghetti failed to live up to its potential (Review 160903).
  • Aldi may have been bang on trend with its GF Beetroot & Pomegranate Soup with Chai Seed Topper, but it proved just a little too worthy for many testers. Review 160925.

Finally top marks to the produce team at Asda whose innovative range of fresh produce prompted much curiosity: Extra Special Candy Floss Flavour Grapes, Review 160924

[1] 61% of the 299 shoppers we surveyed earlier this year claimed they would remain loyal to store ‘if it remains a pleasant place to shop’. This % increased to more than 80% for Waitrose shoppers.

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