How do they sell Xmas champagne for £9.99?

The question is, how on earth can supermarkets afford to sell their champagne at such rock-bottom prices? In all its essential elements, the Aldi champagne @ £9.99 follows the time-honoured rules of the drink. It’s made from traditional champagne grapes - a third chardonnay, a third pinot noir, a third pinot meunier - using the double fermentation method that produces the famous bubbles. Its alcohol level is 12% - a classic figure for champagne. And it doesn’t taste too bad, either.

According to The Daily Mail, you need 2.2lb of grapes for a single bottle of champagne. At current market rates, that will cost you £4.38. Excise duty on top of that is £2.43, and VAT, at 20%, must be paid on the total - another £1.36.

Already we’re up to £8.17, and we still haven’t paid for bottling, warehousing, shipping and distribution. Those overheads vary but, altogether, the total cost price is almost certain to match or exceed the selling price of £9.99. So, a tight fit until they revert to the normal price of £12.99 until the new year.

If Aldi seems a step too far this Christmas, try Asda @ £10, or Waitrose/Tesco @ £14.99

However, if you feel this removes some of the romance from the Christmas festivities, why not pick up a couple of the traditional brands, the only issue being whether you serve these up before or after the Aldi version…

Tesco and Asda poles apart in Cyber Monday web performance speeds

If speed is key, then Tesco will increase their online lead over Asda at Christmas.

A study by Aberdeen Group published by Internet Retailing into ecommerce site performance found that a one-second performance delay reduces sales conversions by seven per cent, a figure which can represent £2.55 million a year lost for a £100,000 per day site.

The results showed that Tesco came out on top with 100% availability on the day and an average response time of just 1.403 seconds, a far cry from Asda, which had an average response time of 13.634 seconds and an availability rate of only 86.44%. The sluggish Asda rate was more than double the average UK-retail benchmark of 6.369 seconds and far behind the average availability of 98.48%, making Asda the worst performer of all the retailers that were tested.

However, the big issue for me was the fact that with a worse than UK average response time of 6.378 secs, Amazon have most to gain by bringing their response times up to match the simplicity of 1-Click purchasing…

Average response times and availability for the Top Ten UK online sites can be seen here. 

Pound shop backstory - 'Commodity City' - home of pound shop supply

Ever wonder where pound shops obtain those supplies not sourced via your surplus goods department?
Quick answer: China. However, nowhere reflects China's contribution to the pound shop phenomenon better than the town of Yiwu, about two hours by fast train from Shanghai. Four decades ago it was a small town - now it is a "commodity city" with a population of over a million.

Yiwu City has the largest small commodity market in the world.
It seems dedicated entirely to the production, exhibition and sale of the thousands of small products that cram the shelves of pound shops. Any shop owner can visit the city, order a dozen different kinds of vases, teddy bears or fishing nets, anything they want and which can be made for under a pound, fill a container and have it shipped back to the UK.

Vital statistics
And massive it is. 4.3 million square metres of floor space containing 62,000 booths representing factories and suppliers producing everything from 2011 Rugby World Cup balls to Hello Kitty socks.

Yiwu’s 3,000 jewellery booths make it the largest supplier in China and the jewellery accessories sector is even bigger. 70% of pens in China come from there, 60% of the gloves, and for those inclined, there are 3,000 booths peddling underwear. Yiwu is often called Sock City – if you’re wearing socks anywhere in the world, there’s a 50% chance they came from Yiwu.

Can’t wait to pay a visit? 
In which case, a  few helpful Chinese terms for visiting Yiwu
Yī wàn ge duō shao qián? … How much for 10,000?
Tài guì le! … That’s expensive!
Wà zi nǎ lǐ? … Where are the socks?
Wǒ néng bu néng mǎi yī ge? … Am I able to buy one of them?

Ten of Britain's most unusual shops?

Bored with store visits? Next time you need a break in the market-checking routine why not include an unusual shop in your schedule?

The Observer have identified what could be the 10 most unusual shops in Britain
1. Unicorn Antiques on Dundas Street in Edinburgh
2. Mr B's Emporium of Reading Delights, Bath
3. Fragile Design, Birmingham
4. Laste, Brighton
5. Nook & Cranny, Liverpool
6. Labour and Wait, London
7. Junk, Manchester
8. Junior Toys, Wells
9. Blaze, Bristol
10. Lupe Pintos, Glasgow
(pics and details in The Observer )

Given the conditions in the high street and the increasing emphasis on productivity, you can be sure that any ‘quirky’ shop still standing must have a unique and profitable appeal. This means that it stands out because of its high degree of match with shopper need, a real standard-setter in terms of assessing how well major mults branches are aligned to your target consumer….

These unusual shops can look messy, disorganised and unprofitable…but in practice they are re-writing the shop-shopper rulebook, in unprecedented times, when everyone is searching for new solutions…

Perhaps these shops have the courage to be different, and have simply found an unusual way forward…..?

Rewards points scheme for smaller shops

Scotland's independent shops are fighting back against the invasion of chain stores and the march of online retailers by launching their own customer loyalty scheme. Over 400 retailers have signed up to Clickypoints, giving them access to mobile marketing and online sales, and will go live early next month with hopes of spreading throughout the UK within two years.

At £1 per point, Clickypoints eliminates the uncertainties associated with traditional schemes, and being redeemable at any member branch allows shoppers to optimise their ‘personal’ value…..

However, in terms of potential spread of usage, the real driver is the fact that offering pound-for-pound points instead of price reductions, not only can the retailer sell at full price and maintain brand equity, they can use what would have been spent on advertising to fund the deals…

Surely a way of combining the interests of shopper and supplier in helping to build a healthy independent sector, everywhere?

'Making do' in austere times?

    'Making-do' in austere times?

For the buyer who has had everything: the world’s oldest Courvoisier vintage

pic: Talking Retail

According to Talking Retail, the world’s oldest known Courvoisier vintage, Courvoisier & Curlier 1789 is now available in the Harrods Wine Shop, from 5 – 8th December. The historic cognac, a snip at £95,000, dates back to the French Revolution, and was bottled over 200 years ago by the Curlier brothers, nephews of Felix Courvoisier.

For those whose buyer has been less accommodating in 2012, four lesser vintages are available priced between £9,500 and £38,500 a bottle.

Livestream today 
If you cannot get to Harrods today, a livestream tasting is available at 12 noon GMT London time / 13:00 CET Paris time, where not only will you get the chance to glimpse the Courvoisier & Curlier 1789 Cognac, but you can also see Master Blender, Patrice Pinet, host a tasting of Courvoisier’s premium Cognac Succession J.S and a chance to send in your inevitable questions to him direct…..
Who knows, you may even see your rival NAM in the background, executing the ultimate in buyer appreciation…

Seriously, what should be your buyer-gifting policy in these austere times? -  too little says too much, too much says too little….

Anyway, why not have a really vintage weekend, from the Namnews Team!

Tesco Q3 - the update options for suppliers?

Given the positive market reaction to a review and probable sale of its Fresh and Easy operation, the resulting focus on core domestic market dominance and business development of overseas markets has to represent a short-term breathing space for Tesco.

The company now has an opportunity to intensify its £1bn regeneration project, perhaps switching the emphasis to food, as the world wakes up to the fact that austerity-driven consumers ‘making do’ have taken real demand from the replacement and new product market in non-foods….

Financial emphasis
Given the city’s focus on financial performance, then Tesco will need to demonstrate its new direction by squeezing costs and driving sales, whilst becoming potentially even more appreciative of the financial value of brands.

Suppliers in turn need to be able to calculate and demonstrate the impact on the Tesco P&L of margin, credit, settlement discount, ATL, trade funding, GMROII and even deductions…
An opportunity for financially articulate NAMs to sound like Tesco think?

A virtual US presence?
Meanwhile, a 100% withdrawal from the US probably means that despite an otherwise global success, Tesco will find it impossible to re-enter the US in the next 10 years. However, leaving aside a traditional 20th century bricks & mortar approach, Tesco could demonstrate its 21st century vision by building and maintaining a virtual presence in the US via:

• Private label via an agency network to build brand awareness
• Online: as a leading online player Tesco could use a combination of local partners in appropriate categories

Both are relatively low-cost, low-risk options especially for a company with an established presence and highly relevant experience elsewhere…

An opportunity for suppliers in relevant categories?

A bogof for B&M Bargains?

Having sold a significant share of the business for a 10x multiple that values B&M Bargains at around £965m, the Arora brothers have secured two major assets:
- A source of funding to realise its UK and overseas potential
- A visionary who saw the global potential when Tesco was tip-toeing into France

Arora bought B&M at the start of the global downturn in 2005 when it was loss-making and had fewer than 20 stores. However, the retailer has been transformed since then. It now has more than 300 stores, 10,000 employees, annual sales of £1bn, and is perfectly positioned to thrive in the global ‘post-recession’ flatline environment…

For NAMs wanting to scope out the company’s full potential, now rather than when everyone can exercise hindsight, think:
- Tesco with no baggage in the era of pile-it-high, sell-it-cheap
- Tesco freed from City restraints, at least for five years…
- A fully focused family with everything to gain
- A well-connected chairman with nothing to lose
- A stripped-down fully transparent discount offer
- A global environment crying out for same…

Mega-Monday - a vision of the future?

The first Monday in December comes shortly after payday for many consumers and in recent years has consistently been the busiest day for online retailers. Today Visa predicts that online shopping will be up 21 per cent on the equivalent day last year, making it the biggest online shopping day ever in the UK, a sentiment echoed by online retailers throughout the UK.

However, what if every Monday was Mega-Monday, on the way to 24/7?

In other words, why not multiply your online sales today by 365 and consider the resulting vision of the online future....? Moreover, in an essentially zero-sum game this online growth has to be at the expense of traditional retail...

Assume also that as consumers we respond positively to the Amazonian experts as they raise our 'norm-bar' for online access and service level, making non 1-click secondary players seem clunky by comparison...

Accepting the above, what can you do omnichannelwise to realise your fair share of the 24/7 dream?

Alternatively, why not ignore the signs and be surprised by the Mega-nightmare...?