Kirkland vs. Coca-Cola ... Is private label winning?

by Chace Binnie

At first glance, it looks Kirkland is winning, but I wanted to dig deeper into this.

Revenue is only one metric, so I thought: What if they are both winning at different games?

Where Kirkland is winning:

• They keep the product line simple
• Every product gets shelf space in Costco
• They don’t advertise... they let Costco’s reputation do the work
• It’s efficient to run, with strong margins and low overhead
• Shoppers trust it because it’s consistent, high quality, and good value

Why Coca-Cola is still doing well:

• You can buy it literally everywhere... restaurants, stores, stadiums
• The brand is iconic and instantly recognizable
• They dominate the beverage aisle with multiple popular products
• They’re constantly launching new flavors and formats to stay fresh
• Their marketing connects emotionally... it's more than a drink, it’s a feeling

So which one is winning? Again, it depends on how you look at it.

Jean-Marc François gave his take on CPG's current struggle against private label:
“They’re chasing growth through fragmentation,” Jean-Marc said.

“...in the process, they’re diluting their brand equity.”

Credit to Jean-Marc for this chart of the Top 10 global CPG brands.

Tesco’s CEO Says Retail Conditions Have Rarely Been As Tough; Not Planning To Stock US Beef

Tesco CEO Ken Murphy warns that retail trading conditions have “rarely been as tough” (rising costs, red tape, supply chain disruptions, a weak economy).

Speaking at the World Retail Congress in London this week, he pointed to mounting pressures from rising labour costs, as well as increased regulation in areas such as packaging.

The Labour Government has heaped billions of extra costs on retailers via increased National Insurance Contributions, an above-inflation hike in the minimum wage, and higher business rates i.e. warnings of shop closures, job losses.

Murphy: “Things have rarely been as tough for retail as they are today”, highlighting global supply chain disruptions ( via military conflict, trade wars, climate crisis).

Murphy warned: “There is geopolitical instability from the Ukraine to the Red Sea, which will continue to disrupt our supply chains and markets.”
Trump tariffs uncertainties risk upending existing supply chains.

He also highlighted that farmers in its UK supply chain are “under unprecedented strain”.

Meanwhile, days after the UK and US announced a limited trade deal, Murphy revealed that Tesco has no plans to source American beef.
The deal gave US farmers a quota of 13,000 metric tonnes for beef, which meets UK standards, with UK farmers having the same quota for sales into the US.

Speaking to Reuters on the sidelines of the World Retail Congress, Murphy said: “We source 100% Irish and British beef in Tesco and for the foreseeable future that policy will be the same, we’re not planning to change it.”

Last week, US Secretary of Agriculture Brooke Rollins hailed American beef as “the safest, the best quality and the crown jewel of American agriculture” and predicted the trade deal would “exponentially increase” US beef exports to Britain.

However, with little difference between the prices of British-produced beef and US beef that does meet UK standards, industry commentators have suggested that the US product could struggle to find retail buyers in the UK.

NamNews Implications:

• ‘Retail Conditions Have Rarely Been As Tough’ – agreed 100%+!
• “But when the going gets tough, the tough get going”, as we used to say (!)
• Real opportunities for those who act while rivals await evidence of a return to normal.
• Tesco have made clear their strategy in optimising real market conditions…
• …and in fact keeping up with Tesco will be a challenge for suppliers.
• Meanwhile, Tesco's US beef position is significant: (in our opinion)
• ‘with little difference between the prices of British-produced beef and US beef that does meet UK standards’…
• …it is unlikely that US Beef will find a UK market.
• In which case, much depends on the UK government’s determination to resist any attempts to compromise quality standards, under US pressure.
• Watch this space…

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Sainsbury’s Introduces New Anti-Theft Measure At Self-Service Checkouts

Sainsbury’s has started testing a new security feature on some of its self-service checkouts to combat shoplifting.

The system uses AI-driven video scanning technology to check whether items are scanned properly. When an item is placed in the bagging area without being scanned, the system immediately displays video footage of the incident.

Customers then receive a message saying: “Looks like that last item didn’t scan. Please check you scanned it correctly before continuing.”

Retail sources have described the measure as “a deterrent to shoplifters”.

A spokesperson for Sainsbury’s said: “We regularly review the security measures in our stores and our decisions to implement them are based on a range of factors, including offering our customers a smooth checkout experience.”

NamNews Implications:

• Much depends on what % of customers are potential shoplifters…
• i.e. Sainsbury’s have obviously ‘done the sums’…
• …to balance deterrence vs ‘treating me with suspicion’.
• Think about a shopper’s succession of ‘didn’t scan’ warnings being seen by neighbouring checkers-out…

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Sainsbury’s Testing New Checkout-Free Tech

Sainsbury’s is trialling a new checkout-free system that lets customers pay for their shopping on its SmartShop handsets as part of moves to “reduce friction”.

According to trade publication The Grocer, the supermarket is testing the new payment-enabled devices in its stores in Richmond and Kempston. At the end of their shop, customers tap their card on the SmartShop handset to pay. They can print their receipt at a physical bay or ask for it to be emailed to them.

The SmartShop app, which can be downloaded onto phones, has had a payment function since 2022. However, Sainsbury’s director of future stores and customer experience, Darren Sinclair, told The Grocer that consumer research had found many shoppers preferred to use a physical handset to save their phone battery.

“It’s a bit more ergonomic,” he said. “I think about this as trying to reduce friction, improve payment and simplify the shopping journey, as well as the future potential space.”

Sinclair noted that there are advantages for Sainsbury’s to encourage more shoppers to use the SmartShop facility.

He said: “From a heatmapping perspective, we can see how people shop. We don’t see the physical customer, just see the heat, so we can see which ends are looked at, which screens are looked at and the flow around the store.

“That’s massively insightful when we are working out store formats, or when we are doing Nectar screens for suppliers.”

NamNews Implications:

• An extra little help for customers…
• …a major help for Sainsbury’s.
• And extra insights for suppliers…
• …all in terms of making every trip count.

Aldi Seeking Public Input To Find Sites For New Stores

Aldi is calling on the public to help identify the best locations for new stores in the UK.

Customers can submit suggestions for where the discounter should open new outlets, with the most popular areas being considered as part of Aldi’s expansion strategy.

The supermarket currently has more than 1,050 stores and has committed to a long-term goal of operating more than 1,500 sites across the UK.

In the coming months, Aldi will be bringing new stores to areas such as Ashford in Kent, Eastbourne in Sussex, and Caterham in Surrey, as part of its focus on expanding in the South East.

“We’ve always believed that great quality food should be within everyone’s reach and many communities would therefore still benefit from having an Aldi nearby,” said Jonathan Neale, Managing Director of National Real Estate at Aldi UK.

“We’re always looking at key places where we see potential, but we also want to hear directly from the public about where the demand is greatest. Their input is invaluable as we continue to grow and bring Aldi’s unbeatable value to more areas across Britain.”

The supermarket ran a similar initiative last year, which saw locations in London, Manchester, and Derbyshire recognised as priority locations amongst shoppers.

Progress has already been made to bring a new Aldi store to Chesterfield in Derbyshire, with the company recently securing planning for a site on Ringwood Road, Brimington.

To nominate a town or area for consideration, people have to email NextNewStore@aldi.co.uk and state the town they would like to put forward in the subject of the email.

Aldi is asking for submissions by 8th June, with plans to share the results and unveil the next round of priority locations later this year.

NamNews Implications:

• Aldi will obviously use scientific bases for site selection…
• …But public support will patently help in securing planning approvals.
• Besides, one never knows, local support may uncover potential sites missed by the science…
• Either way, Aldi appears to be determined to achieve their long-term goal of operating more than 1,500 sites across the UK.
• Watch this space…

Sainsbury’s Completes First Conversion Of Sites Acquired Last Year As Part Of Accelerated Store Opening Programme

Sainsbury’s has launched the first of 14 retail sites that it recently acquired for conversion into supermarkets, kick-starting its biggest store opening programme in over a decade.

The new supermarket opened in Felixstowe yesterday and is part of Sainsbury’s ‘Next Level’ strategy to offer “more food choice to more customers in more locations” across England, Scotland, and Northern Ireland.

Last autumn, the company snapped up 14 sites, which were predominantly former Homebase stores, and two outlets from East of England Co-op. Since then, Sainsbury’s has been working to convert them into new supermarkets, with the first in Felixstowe to be followed by a second in Brightlingsea later this year.

Combined with its organic store opening programme, the group expects to open 15 supermarkets during its 2025/26 financial period, and over the next two years, new openings will add over 400,000 sq. ft. of new space to its estate. It also plans to add another 25 new convenience stores in each of the next two years.

The new 19,000 sq. ft. supermarket in Felixstowe is Sainsbury’s first in the East Suffolk town and represents a multimillion-pound investment by the retailer. Its arrival means almost 23,000 more people in the area now live within a 10-minute drive of a Sainsbury’s supermarket.

“We were delighted to open our fantastic supermarket in Felixstowe today, putting Sainsbury’s on the doorstep of customers in the town for the first time,” said Patrick Dunne, Sainsbury’s Chief Property and Procurement Officer.

“It was also an exciting moment for our business as today’s launch marks the first of many brilliant new supermarkets we plan to open over the next two years, following our strategic decision to acquire 14 new sites for conversion into Sainsbury’s last year. Our bold plan is driven by our belief in the strength of Sainsbury’s offer and our commitment to bringing more of our delicious, high-quality and great value food within easy reach of more customers.

“We’ve worked diligently to transform the Felixstowe site into a new Sainsbury’s store in just a few months, and we will continue to convert many more of the sites we’ve acquired for launch over the next two years, as well as opening more new stores from our existing pipeline of purpose-built supermarkets.”

NamNews Implications:

• And being retail, initial results will have begun to flow.
• Pointing to a direction forward.
• Retail rivals now need to factor in 14 new compete-points with Sainsbury’s…
• …and appropriate action required from suppliers.

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Couche-Tard Advances Takeover Talks With Owner Of 7-Eleven

Alimentation Couche-Tard has made a significant advance regarding Seven & i, owner of the 7-Eleven convenience store brand, following long-awaited access to critical financial data.

Couche-Tard, owner of Circle K, has entered into a non-disclosure agreement (NDA) with Seven & i to “progress transaction discussions, facilitate due diligence, and collaborate on plans to engage with regulators”.

Couche-Tard has publicly asked for this access since its unsolicited bid last year, saying enhanced visibility into Seven & i’s financials could justify an increased offer, approaching $50bn.

Privately, both parties have attributed delays in progress to the other’s lack of cooperation.

Seven & i confirmed today that the NDA includes a “standstill” clause, a standard provision in mergers and acquisitions that prevents a hostile bid while confidential data is being exchanged.

“We appreciate the special committee of Seven & i engaging in substantive discussions regarding our proposal and providing access to diligence,” said Alex Miller, Couche-Tard’s CEO. “We look forward to working collaboratively with Seven & i in the interests of all stakeholders.”

In late 2024, preliminary and limited discussions via respective advisors started and they signed NDAs (allows a search for potential buyers of US stores likely to be divested to address regulatory concerns if a deal went ahead).

Seven & i shares were up 3.5% in Tokyo today, but well below the offer price (investor scepticism).

Seven & i are “pursuing two parallel paths” to maximise value for shareholders and stakeholders, also also striving to enhance its standalone valuation by divesting non-core assets, planning a partial listing of its North American operations, and executing a share repurchase programme exceeding $13bn.

They recently appointed Stephen Dacus as Chief Executive Officer, who was previously the chair of their special committee evaluating Couche-Tard’s proposal.

In Tokyo last week, Dacus affirmed their focus on increasing US investments, strengthening supply chains, and expanding its fresh food offerings, but the ongoing acquisition talks could be a potential distraction.

“At some point, you’ve got to make a decision, one way or another,” he said. “There’s still a lot of hurdles to clear … I suspect it’s going to take a while still, because there’s still some really serious things that need to be worked out.”

NamNews Implications:

• In agreeing to an exchange of confidential financial information…
• …it could be said that both parties are taking the possibility of a takeover seriously.
• (Albeit within the protection of a ‘standstill’ position and NDA agreement)
• Therefore, if the price is right, all will proceed…
• Meanwhile, suppliers and retail rivals will benefit by treating this as a done deal…
• …and exploring options and acting accordingly.
• (unless they prefer to risk awaiting the inevitable…)

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Morrisons Testing Shelf-Scanning Robots

Morrisons is trialling robots that can check for out-of-stock items, pricing errors, and misplaced products.

According to trade magazine The Grocer, the supermarket is testing the ‘Tally’ robots from US tech company Simbe at three stores. They are claimed to be the world’s first autonomous inventory bot, which uses advanced AI and computer vision technology to collect comprehensive product data by roaming the aisles in stores.

The robots are being tested in Morrisons stores in Wetherby, Redcar and Stockton. Katherine Allanach, technology manager at the retailer, told The Grocer that they are being used to “check that the products on the shelves are being displayed correctly and are legally compliant.”

She added: “It is a crucial but time-consuming task, and so Tally aims to allow more time for colleagues to focus on customer service.”

The report stated that Morrisons is the first UK retailer to invest in Simbe’s Tally robot, which can capture 15,000 to 30,000 products an hour. It self-docks to a charging port when needed.

Morrisons noted that feedback from customers and staff had been positive, with a spokesperson saying: “They have been intrigued and curious but very positive and colleagues in particular can see how supportive Tally could be.”
The robots are currently being used by retailers around the world, including Carrefour, Albertsons, ShopRite and Kroger.

A spokesperson for Simbe told The Grocer that Morrisons’ adoption of Tally was a major step in its drive to expand its global footprint, but also “validation that retailers around the world are increasingly turning to autonomous solutions to gain unprecedented visibility and address key operational challenges.”

NamNews Implications:

• This says it all:
• “Tally aims to allow more time for colleagues to focus on customer service”
• Which has to have a payoff in repeat shopper visits…
• …where items required are found on-shelf.
• Simple but difficult...
• A no-brainer…