Retail failures forecast to spike at Christmas

The FT reports that UK retail insolvencies and corporate failures could rise nearer to levels at the end of 2008 when the financial system was on the verge of breaking down and the economy was on the rocks. Pressures include difficulties in rolling over bank loans, paying Quarter-day rent demands, shopper reaction to price inflation on food, fuel and a flatline economy.

In these circumstances it is vital that NAMs attempt to assess the viability of customers and review trade partnership criteria based upon a combination of Companies House data and personal judgement of distress signs on the ground.

If sentiment or unwillingness to face up to market realities is causing a NAM to hesitate in pulling the plug, it might be worth remembering that a customer going bust owing £150k to a supplier on a 5% net margin, requires that the supplier make incremental sales of £3m to recover the loss…

Still feel like taking over the role of ‘bankers’ in the high street?

Rock’n'roll becomes form of economic stimulus

Live rock'n'roll is replacing recorded Christmas carols in the windows of Galeries Lafayette as the Parisian department store seeks to drum up curiosity, and client numbers, for this year's gift-buying season.

True to tradition, the shop is putting on a dazzling show for shoppers and tourists alike in the countdown to Christmas, but this year it is seeking to strike a chord with music-mad teenagers as much as fairytale fans young and old.

With a debt crisis forcing much of Europe into austerity, consumption has dropped in recent weeks, making crowd-pullers all the more important, even for upmarket stores that can count on a large tourist contingent in the heart of the French capital.

Rock legend Iggy Pop will open a series of nightly live shows in the window by a variety of major-label rock and folk bands, one from Mali, another from Australia and most of the others from France itself.

Have an instore, theatrical weekend, from the Namnews rockers!

Mind-goggling

It is now possible to scan someone’s brain and get a reasonable idea of what is going through his mind.

The Economist reports on three recent and fascinating studies that point a way to obtaining a better idea of what consumers (and buyers) really think.

One paper describes an attempt to study dreaming. A second can reconstruct a moving image of what an observer is looking at. And a third can tell what someone is thinking about.

A: Munich dreaming

Recruiting a group of lucid dreamers, where the person doing the dreaming is aware that he is dreaming, and can control his actions almost as if he were awake. This will perhaps solve one of the great mysteries of biology: what, exactly, is dreaming for?

B: Mind-reconstruction

The second study shows that it is now possible to make a surprisingly accurate reconstruction, in full motion and glorious Technicolor, of exactly what is passing through an awake person’s mind. As the pictures above show, the result was often a recognisable simulacrum of the original.

C: Mind Reading

The third study was similar to mind –reconstruction above, but rather than recreating images, the analysts were able to determine what topics people were pondering. In other words they could work out what type of object something was i.e. they could not distinguish a carrot from a stick of celery, but could say that it was a vegetable.

As the stakes increase in persuading consumers and buyers it will become increasingly important to get closer to real need assessment.

Early days, but these studies will show us how… 

Walmart opens Dot.com store to feature their online services

Walmart opened two trial outlets on 1^st November,  in a San Diego mall and in Los Angeles.

Walmart.com is a typical store-front space with big screen TV's on the wall, some computers and tablets on the desks and toys on a shelf. However, the idea isn't to sell the TV's and toys in the store but to help customers to shop online.

By opening up this type of store inside a high end mall, Walmart is aiming at shoppers who may not normally think of going to the discount giant.

Walmart officials said they will showcase key products like toys, home theatre and electronics.  Items ordered online can be delivered back to the Walmart.com store, to a regular Walmart location or shipped to the customer's home.  Any home orders will be reimbursed for shipping with an online gift card.

A scalable model giving them a footprint in locations too small for a regular store…

Video 

The £2.89 Dinner – A Christmas Threat For Brands?

                                                             Pic: Daily Mail & Good Housekeeping

It’s possible to serve turkey with all the trimmings for as little as £2.89 per head. According to The Daily Mail, a study by The Good Housekeeping Institute outlines a traditional own label Christmas dinner that it claims will serve eight for just £23.08

Selecting key ingredients from Lidl and the major multiples, the menu targets the savvy consumer with a brand-free solution to Christmas fare…

With consumers increasingly prepared to walk for a bargain, the dilemma for brand-owners has to be whether to try to regain access to the Christmas Dinner, or focus on Christmas categories where own labels do not dominate, yet….

NB. Despite a diligent search, the above menu still showed a 10% increase in ingredient cost since last Christmas!

Shops offered £1 rents on high-vacancy streets

With vacant shops increasing on high streets, retail landlords seek to avoid paying business rates on empty units and are happy to offer £1 annual rental in return for payment of business rates.

Retailers taking advantage of the rental offers on end-of-lease outlets include Dixons and Card Factory, a lower-cost rival to Clinton Cards according to the Financial Times.

Apart from falling demand, unfair competition from charity–shops that have an 80% discount on business rates, and unrealistic parking charges, high street retailers have been unable to compete because of being tied into long (25 year) leases with no break-clauses and upward-only rent reviews. This legislation has to some extent fallen into disuse in recent years in response to market realities, but the law still needs to be changed in order to totally eliminate the practice.   

Finally, according to the Financial Times, high street retailers are also disadvantaged by the fact that business rates are based on a shop’s estimated annual rental value, on a five-year cycle, pegged to inflation More  

This will inevitably lead to further trade concentration in out-of-town developments, at the expense of the high street.
Suppliers face the dilemma of wanting to stimulate and support alternative routes to consumer, but current high street realities force them to invest in major players giving more reliable returns on trade funding investment... 

If the government are serious about attempting to restore the health of the retail high street they need to conduct realistic diagnoses and tackle root causes on a fair-share basis, in line with market realities…

Why Walmart’s new pharmacy-only shop is a breakthrough…

The Retailnet Group report that Walmart have opened their first standalone pharmacy in Mexico, a 3,000 sq.ft. outlet specialising in pharmacy goods and services.

They already operate their instore pharmacies in Argentina under the Farmacia Walmart brand, so the name is not unknown

Apart from the full range of Health, Beauty and Wellness products, the outlet offers optical, medical consulting services by qualified staff in the store

Why is this so fundamental?

Given their experience of instore pharmacy, this trial outlet represents a step-change for Walmart, and could be scaled up, fast.

Previously pharmacy was an ‘add-on’ to their mass-merchandise outlets, merely an additional service for shoppers.

The new standalone pharmacy represents dedication, Walmart-style…

Think about the possibility of Walmart buying up small independent pharmacies that are feeling the (after?) effects of the global financial crisis, small/medium sized chains, before they check out the big players like Boots, etc

Think about the buying power, prices & terms disparities, influence on global/regional and national government…

There is only one way this is going to go…

More details and instore pics   
Time to dedicate this weekend to rewriting your global and local pharmacy trade strategies?

Turning Product Placement on its head?

Loblaw has revealed an innovative move for its own label food range, the development of ready-meals based on recipes from reality TV show ‘Recipes to Riches’

The show features 21 contestants cooking up recipes which are voted upon by industry experts as well as home audiences. Loblaw said the winning recipes from each of 7 categories – from appetisers and entrees to desserts – will be offered as samples at its outlets across Canada. Once the winners of all the categories are declared on the show, they will then be turned into ‘President’s Choice’ own label products. The Canadian public will then vote for their favorite among the category winners and that person will take home the $250,000 grand prize.

An innovative application of an old Lateral Thing tool ‘what is the opposite of (product placement)?’

Application to the UK retail?

It would probably need an ex-Loblaws COO wanting to try something really innovative in a well-established No3 Grocer, ideally based in Bradford..(come-on folks, need I say more?)

Watch this ( TV ) space….