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Departure of Sainsbury’s CEO “not due” to Asda deal collapse

Departure of Sainsbury’s CEO “not due” to Asda deal collapse
Credit: Peter Nicholls, Reuters, The Times

 

Sainsbury’s CEO, Mike Coupe, has announced his resignation but will remain in his post until the end of May. His replacement will be current retail and operations director, Simon Roberts. Coupe has denied that his resignation is linked with the collapse of the £12 billion merger with Asda, emphasising that it was his own decision to leave. 

Sainsbury’s proposed merger with Asda fell through last year when the CMA found that the deal could lead to higher prices for customers. Speaking to the BBC, Coupe said, “If you looked at our AGM last year, 99.5% of our shareholders voted for me to carry on what I’m doing. It’s absolutely my choice You see the amount of change that is going on in the world of retail, who knows what will happen in the next five to 10 years, but one way or another there will be a significant rationalisation of brands you have taken for granted for a generation.”

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Marks & Spencer extends network of in-store farms

Marks & Spencer extends network of in-store farms, credit. Thomas Samson, AFP
© Thomas Samson, AFP

 

UK retailer Marks & Spencer have extended their indoor farms to six other stores in London. In partnership with vertical farming specialist, Infarm, M&S has installed hydroponic indoor units that incorporate machine learning, Internet of Things technology, and eco-controlled systems to ensure the optimum amount of light, air and nutrients are used. Growing a selection of herbs, each unit can be controlled remotely via a cloud-based platform, which learns, adjusts and continually improves to ensure each plant grows better than the last one.

Infarm’s solutions offer environmental benefits, as each unit consumes 95% less water and 75% less fertiliser than soil-based agriculture. Each unit produces the equivalent size crop to 400 square metres of farmland, with absolutely no pesticide use. M&S has announced that it plans to continue rolling out in-store farms over the coming months.

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Sainsbury’s to top Tesco with Asda merger

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Sainsbury’s says its proposed merger with fellow UK retailer Asda would see prices drop by about 10% on many products and create “significant opportunities” for suppliers.
Based on their current shares of Britain’s grocery market, a merger between the second and third biggest supermarket groups would give the new business a 31.4% slice, overtaking long-time leader Tesco’s 27.6%.

In an April 30 press release, J Sainsbury plc said there are no plans for store closures as a result of the move and both the Sainsbury’s and Asda brands would be maintained and their distinctive customer propositions sharpened. However, Sainsbury’s CEO Mike Coupe later said some stores might be sold to other grocers if required by competition regulators. He hopes the deal will go through by the second half of 2019 and said it would benefit customers, staff, suppliers and shareholders.

The plan would create one of the UK’s leading grocery, general merchandise and clothing retail groups with a network totalling more than 2,800 Sainsbury’s, Asda and Argos stores and 47 million customer transactions a week. In the latest financial year, the revenue of the two companies together totalled about £51 billion.

source: Sainsbury’s (L-R: Sainsbury’s CEO Mike Coupe, Walmart International CEO Judith McKenna, Asda CEO Roger Burnley)

“The retail sector is going through significant and rapid change, as customer shopping habits continue to evolve. This has led to increased competition across grocery, general merchandise and clothing, as customers seek ever greater value, choice and convenience. Bringing Sainsbury’s and Asda together will result in a more competitive and more resilient business that will be better able to invest in price, quality, range and the technology to create more flexible ways for customers to shop,” Sainsbury’s said in the release.

Under the deal – which values Asda at about £7.3 billion – Sainsbury’s said it would give US retail giant and Asda-owner Walmart a 42% stake in the new, combined business and nearly £3 billion in cash. Walmart would not hold more than 29.9% of the total voting rights for the new group.

Analysts predicted the proposal would trigger a major competition inquiry and, if approved, result in some store disposals to ensure competition did not suffer. The plan was variously described in UK media as “the biggest shake-up in the market since Morrison bought Safeway in 2003” and a seismic shift which will transform the UK retail landscape. There were also reports of fears of job losses and that suppliers, particularly small ones, could be squeezed on prices.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said it was a pivotal moment for the British grocery market, one in which the German discounters Lidl and Aldi continue to enjoy strong growth. He also pointed out that Sainsbury’s and Asda supermarkets appeal to different customer bases. Asda achieves nearly two-thirds of its sales outside London and the south east of England in contrast to Sainsbury’s, which registers 59% of its sales in those two areas.  Sainsbury’s also appeals to more affluent shoppers, he said.

sources include:
Sainsbury’s press release
Kantar Worldpanel news

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Health driving UK food trends

Health is Brits’ top priority: popularity of vegan cheese, venison and turmeric soars

The free-from phenomenon was one of the biggest food trends of 2016 in the UK, reports Sainsbury’s.

The UK supermarket chain said sales in what was once a niche market grew over 18% and it is now a £770 million (€900m) industry.

One of the most popular free-from items sold by Sainsbury’s was vegan cheese. Its seven varieties of cheese alternatives exceeded sales expectations by 300% in the first month after the September launch.

“The line was developed following research indicating that the most longed-for dishes for shoppers with allergies and intolerances included pizza, cheese boards and cheesecake,” it said.

Other trends included exponential growth in sales of venison, which is low in fat, high in protein and rich in minerals, making it a good alternative to other red meats.

Turmeric and coffee sales were also up in 2016, something Sainsbury’s said might be due to the popularity of turmeric lattes – coffee blended with almond milk and the super food spice. Sales of fresh turmeric root saw a 45% uplift.

Source: Sainsbury’s

(Free-from foods usually refer to those that are targeted at consumers who suffer from food intolerances and/or food allergies.)

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Sainsbury’s on its support for sustainable agriculture in Peruvian desert

Sainsbury’s Supports Sustainable Agriculture In The Peruvian Desert

UK supermarket chain Sainsbury’s has higlighted in a recent blog post that as you walk through its aisles you might be surprised to find that some of its products – including asparagus, peas, beans and grapes – come from one of the world’s oldest, driest deserts in southern Peru.

“While it might sound unusual, the results are some of the successes from our partnership with Kew Royal Botanic Gardens, a world famous center for botanical and mycological knowledge, as we develop the idea of ‘conservation through use’.

“We’re really proud of our work around this idea, which helps return native and threatened species to otherwise arid areas, introducing them into schools and communities to ensure sustainable, effective growing. Now two years in it’s proven really successful, not only improving farming, but integrating and maintaining delicate ecosystems to build a sustainable future for local people.

“For example, we’ve been able to introduce nitrogen-fixing trees, like Acacia species, to sufficiently improve the soil quality to grow everything from maize and Lima beans, through to guavas and cottons.

“Thanks to its success, we’ve already seen attention from across Peru and the whole community is keen to make this work. That’s why we’re delighted to say that, thanks to support from Sainsbury’s, Kew has established the first Native Plant Research and Conservation Centre. This facility is developing native seed management and propagation protocols for rare native plants at large scale, and is currently acting as a training hub and a much-needed community resource.”

The retailer said that at the heart of this lies its commitment to ensuring that its sourcing “does not have a negative impact on the local environment or communities,”

Whether it’s asparagus or guava in your basket, you’ll know that the items you buy help promote sustainable farming for local communities abroad, Sainsbury’s said.

source: Sainsbury’s blog

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Tesco introduces cauliflower & mushroom ‘steaks’

Cauliflower steaks and portobello mushroom burgers are already very popular in trendy restaurants around the country and in recipes from celebrity chefs such as Jamie Oliver but this is the first time they’ve ever been available in high street supermarkets.

In a nod to vegetarians who feel an afterthought at BBQs, UK supermarket chain Tesco this week launched a new prepared vegetables BBQ range featuring cauliflower steaks and Portobello mushroom steaks.

The cauliflower steaks come with a zingy lemon and garlic drizzle, while the portobello mushrooms come with a peppercorn sauce. They are joined in the new line – items in which will cost £2 each – by Halloumi Kebabs and Mega Potato Wedges.

Tesco food developer Alison Stokes said the steaks will be a delicious option not only for vegetarians but also meat eaters.  

“Cauliflower steaks and portobello mushroom burgers are already very popular in trendy restaurants around the country and in recipes from celebrity chefs such as Jamie Oliver but this is the first time they’ve ever been available in high street supermarkets,” she said.

In a press release, Tesco said cauliflower has become one of the food trends of the past few years thanks to the huge trend for spiralising vegetables as a low carb alternative to rice and couscous. By cutting the cauliflower into steak sized chunks and pan frying it, an amazing meaty caramelised flavour develops, it said.

Portobello mushrooms are equally delicious and filling, as well as low in calories, fat-free, cholesterol-free and very low in sodium. “Adding mushrooms to vegetarian meals add a meaty texture, savory flavour and deliciousness,” Tesco said.

The launch comes at a time when demand for vegetarian food is on the rise. In the last year the supermarket has seen sales for chilled vegetarian ready meals soar by nearly 20%, it said.

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Tesco chief calls for retailer-government parternships to tackle challenges

Dave Lewis Tesco boss

The rise of e-commerce was among the challenges for retailers – and nations – that Tesco CEO Dave Lewis raised during a speech today in London.

Saying that “increasingly the world is mobile first, “ Lewis said major online retailers report more than half of their UK transactions are completed on a smart device. “In the UK, digital retailing has doubled over the last five years to become a £10bn business.”

“As a business, we expect continued growth…the challenge for us is how to make our online business of tomorrow as profitable as our offline business yesterday,” he said.

But there are significant challenges the growth of digital  poses for the nation, too. “Digital operations have no real community footprint, far fewer employees and a far lower tax contribution.That should be a dilemma for the Exchequer. Without rebalancing to reflect digital business models the physical side of retail pays a higher and higher proportion of the total tax bill.

“Furthermore it will incentivise a swifter shift to infrastructure light, low employment business with little interaction with communities,” he said.
 

The growth of limited range retailers and convenience shopping

Lewis then went to talk about the rise of limited range retailers and of convenience shopping – in terms of physical shops – which he said have both affected profitability and growth. Limited range retailers have doubled since 2010 and the convenience channel is up 5% again this year.

“Our big stores are also seeing a high proportion of convenience shopping trips – 76% of Tesco convenience trips take place in our Extras or Superstores. But I don’t see this as a challenge per se – I see it as a shift in what customers want or need – and it’s our job to respond.   

“What I do see as a challenge is that whilst the customer was heading in one direction the industry was heading in the other…between 2007 and 2014 it added around 35 m sq ft,” Lewis said, going on to talk about the pain caused by having to close stores and halt construction on others.

 

The burden of higher structural costs when profits are at a low point

Lewis said the real challenge for the sector is that it is struggling with structural cost at a time of historically low profitability. While two years ago food inflation was running at 4%, now it’s -2.4%. That’s great news for customers but puts significant pressure on parts of the retail industry.

“In supermarkets profitability has sunk from 5% to 2% in five years and now we face significant new cost pressure. This is a potentially lethal cocktail,” Lewis said, going on to say that meanwhile property values have fallen but business rates are up. Tesco’s own business rates bill has climbed well over 35% in the last 5 years. “That’s an enormous pressure. Shops have closed. Businesses lost. Jobs sacrificed,” he said.

And on the UK’s National Living Wage, Lewis called for fuller debate, saying that while Tesco was supportive of the living wage when announced, “our concern, and the concern of many colleagues, is that there is pressure to increase base pay at the expense of benefits. We don’t think this is the answer.”

 Tesco boss Dave Lewis

Call for more government-industry consultation, collaboration

Lewis went on to discuss the need and – opportunity – for the retail industry and business to work closely with government on three issues.

“Firstly, I would encourage the industry and Government to sit down at the highest level and consult on the multiple policy changes that are affecting the industry, to share together the consequences of higher rates, the living wage and initiatives such as the apprenticeship levy,” he said.

Secondly, he called for partnership on employment, skills and training challenges.

And Lewis said health and food education is the third area with real potential for partnership and innovation.

“Millions of Britain’s shoppers are weekly Tesco customers.  We have more than 40 million transactions a week. And when we reformulate, we can remove billions of calories from their shopping trips.”

Tesco estimates it has helped save around 1,500 lives through joint efforts to reduce salt and its action on soft drinks means the average customer is now buying 20% less sugar in such drinks, examples of just some of Tesco’s health initiatives. “We make large scale contributions to heart health, cancer research and the fight against diabetes,” he said.

“I want to partner and innovate more on health. Not because I want to burnish Tesco’s image but because two thirds of supermarket shoppers want me to,” he said.

“We are uniquely placed to nudge millions of people every week towards healthier choices. Our customers want it and the government can benefit greatly from it… if we can meet in the middle ground. Nurturing growth – social value alongside economic value – in an era of extraordinary change needs a new level of collaboration.”

Lewis was speaking at the CBI conference. The CBI is the UK’s premier business lobbying organisation, providing a voice for employers at a national and international level.

Read the speech: http://www.tescoplc.com/index.asp?pageid=17&newsid=1242

Images: https://www.flickr.com/photos/tescomedia/albums

 

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Waitrose introduces Sweet Sprouting Cauliflower

In hopes of widening cauliflower's appeal, UK supermarket chain Waitrose has introduced a new, versatile long stemmed version called Sweet Sprouting Cauliflower.

In hopes of widening cauliflower’s appeal, UK supermarket chain Waitrose has introduced a new, versatile long stemmed version called Sweet Sprouting Cauliflower.

In a press release, Waitrose said the vegetable, being grown exclusively for it in Lincolnshire, is faster to cook, crunchier in texture and sweeter than its larger relative.

It said Sweet Sprouting Cauliflower has never been sold before in the UK but has been popular in China for many years.

“It looks like a cross between long stemmed broccoli and the delicate white flowers popular in bridal bouquets. It is naturally low in calories and fats and is a source of fibre. An 80g serving counts as one of your five a day and will supply 60% of the daily requirement of Vitamin C,” Waitrose said.

Traditional cauliflower has had a bit of a renaissance of late. Healthy food bloggers have been blitzing it to make low carb pizza bases and chefs serving it charred as vegetarian ‘steaks‘. Waitrose thinks this new style will only increase its popularity further.”

Waitrose Vegetable Buyer, Gemma Hodgson said: “Long stemmed broccoli is really popular with our shoppers and so we are excited to introduce new variety of cauliflower. It is less dense than the more commonly known type and therefore very versatile. It can be eaten raw in salads, used in stir fries, steamed, roasted or barbecued in a matter of minutes.”

Sweet Sprouting Cauliflower is grown in a similar way to normal cauliflower but allowed to mature further so its florets separate to grow into stems. The stems have small, white heads similar to normal cauliflower but are much smaller and more delicate.

Packs of the new cauliflower cost £1.99 for 160g and are available in 186 Waitrose branches.