The Kraft-Heinz Co. - the next steps?

This deal will see Heinz pick up a 51% stake in Kraft Foods, becoming a shot-caller in anybody’s language...

Draft Agenda as follows:

• Key driver is changing eating habits in many countries, resulting in reduced sales and over-capacity, a trigger for more of the same
• Obvious synergies in terms of geographical and category coverage globally
• Increased negotiating muscle ref. major global, local customers and bought-in goods and services...
• ...which will help when rationalising credit terms, margins and trade support
• Inevitable regulator-driven disposals arising from competition issues
• Leading to acquisition opportunities for other suppliers…

Next one, please?

Morrisons chief admits multiples' recession price rises 'mistake' - a need for a trust-reboot?

If it has taken 60 years for supermarkets to build trust in best prices since the fifties, and has now been – as Andy Higginson says – ‘wiped out in an instant’, the issues for retailers have to be:

- How long to rebuild that trust?
- What degree of price-cutting will be necessary to make a difference?

Rebuilding trust?
Given that pricing confusion – difficulties in making like-with-like comparisons -  is but one element of the consumer-retailer-supplier contract, those retailers that are really serious about rebuilding their credibility with shoppers will need to re-assess the entire ‘package’ in order to ensure that any gains via deep-cut prices are not diluted by disappointment on opening the tin…

In other words, household brands and even private label products that have been disguising price increases by reducing contents have to be regarded as parties to the ‘deception’ in that whilst they comply with the ‘letter’ of contents legislation, they are often in breach of the ‘spirit’ of consumer expectation…

Also, when it comes to actual ingredients, it hopefully goes without saying that any ‘short-changing’ of the shopper-consumer via inferior substitutes will add to a savvy consumer’s view that brand owners or retailers cannot be automatically relied upon as outsourcing-partners in making the decision to buy.

All of these areas have to be corrected to get to square one in rebuilding trust in major multiples…

Making a difference via price-cuts
Given the above entry-level changes on-shelf, the question is how big a price cut will make a difference?

Essentially, given the easy-availability of price-comparison facilities, on-shelf prices will have to at least match the discounters on an ongoing basis, with any (minimal) price premium being justified by advantages in the shopping experience. Any over-estimation arising from retailer-ego will soon be challenged via consumer walkaways...

How long?
Given that it took 60 years to build the trust…

Seriously, any retailer that succeeds in correcting the above trust-issues, has to experience growth at the expense not only of the discounters, but will also eat into the shares of other multiples...

It simply depends on how radical they want to be…

Amateur shopkeepers, breaking all the retail 'rules'?

pic: Brian Moore

Minimal shelving, some product samples and 10 floor staff.....
....and a world-beating £3,000 sales per sq ft per annum, 3 x Tesco performance, and no sign of being eclipsed, despite the built-in warning in their logo........

Simply creative - provocative, memorable, and above all 'uncopyable...'

http://adsoftheworld.com/media/print/carlsberg_dont_drink_and_drive  
Advertising Agency: BBR Saatchi & Saatchi, Israel

Hat-tip to Keith Hallam

Checkout scam for the 'discount' shopper?

pic: Brian Moore

Checkout operator tapes a barcode for a low-price item (say pack of screen-wipes @ £2.50) and scans it instead of the £30 Box-set in order to oblige a pal in the checkout queue.

Relating retail business rates to sales performance - the unintended pay-off?

Over at The Telegraph, Graham Ruddick develops some good reasons for how local councils’ discretionary expenditure of retail business rates could transform the high street in terms of positive use of the funds at local level.

However, basing rates on sales achievement could result in even more positive benefits for the High Street...  By relating the business-rate to a retailer’s sales, rather than an out-of-date value of the property, the retailer could focus on driving business rather than covering overheads.

Even more importantly, the council could actually play an active role in helping business succeed…

As a stakeholder, the focus of the council could change, giving councillors a reason to make pro-active moves to help create an environment that meets the needs of all parties in the High Street.

This could bring a whole new purpose to maintaining building fabric, level and quality of domestic and retail occupancy, access and parking facilities, cleansing and lighting, and even some accountability…

These moves would eventually result in higher retail property values, but the council having a pro-active stake in thriving businesses, combined with the power to spend locally at their discretion, could get everyone there faster… 

Does Cadbury chocolate taste different in different countries?

Can international taste-harmonisation help?

The BBC have published a detailed study of consumer reaction to perceived differences - 37,000 petition signatures to boycott Hershey's! - in the versions of CDM as made in the UK and by Hershey's under licence in the US.

The article goes into a degree of detail that will prove compulsive to those in the 'candy' sector, but the key issues raised in terms of consumer expectation that global brands should taste the same in every country may have implications for brands in other categories.

For instance, Nescafé UK blend might seem weak to hard-core Mediterranean coffee users... 

Now whilst traditionally, such variations in local versions of brands might have been 'kept where they belong' by harmonising prices and terms, in a well-travelled world where every little helps, it might be necessary to find a way of harmonising taste..

Accordingly may we propose the use of Taste-corridors..?

In the 'worst-case' scenario, the brand owner decides that one taste will fit all and pulls all global variations 'down' (?) to a common formula, in which case it had better be good...

In the 'Recommended Scenario' the extreme versions are gradually merged into a corridor that provides sufficient variation to satisfy some needs, saves face in the marketing department, and probably goes unnoticed by the bulk of users...

...until you try....

St Patrick's morning-after shop closure, a Reason vs an Excuse...

                                                                                              Galway, source Joe.ie

Hopefully, this valid reason for achieving a worthwhile life-work balance can provide an excuse for Mick to move to self-service...thus avoiding any perceived drop in service level!