Along with the issues of Brexit, stock shortages and the pandemic, 2022 has also added inflation to the list. The Bank of England expects consumer price inflation to hit six per cent in April, the highest since 1992. While its impact will be seen overall, small, independent stores need to be more careful in managing their business costs and decline in customers’ footfall in their stores. Stocking products for price-conscious customers and looking for higher margin products can help stores in this tough year.
Falkirk retailer Anand Cheema says, “Wholesale prices and utility costs have increased rapidly over the past year and ultimately, we as retailers have to claw that cost back by tightening margins, increasing prices and cutting back on staff.”
David Wyatt
David Wyatt of Crawley Down Group, which operates a Shell/Costcutter fuel garage on the A264 between Crawley & East Grinstead, believes that there might be a decline in sales as customers will probably have less money in their pocket.
“From the customer’s perspective, there is a cost difference. The official inflation rates are way higher, so we are paying more and getting less. So, customers have less choice and that has put a lot of pressure on them. They are obviously going to offset themselves on going to supermarkets,” he observes.
Amish Shingadia of Londis Caterways and Post Office
“We will have to pass on the price burden to the customers. We are looking to start selling higher margin products within the store,” says Amish Shingadia of Londis Caterways and Post Office. Shingadia is also planning to go with suppliers who provide good margins, “pretty good to vaping”, which has got very good margins.
He adds, “So let me try and increase our margin for a business profit as well as reducing costs on the other side, using current staffing hours to balance my business cost.
“As a retailer we're looking to have two different ways and try and push the two different prices within our store. So, the wholesale and discounted range of products, this kind of range, does give you a valid value message. But it's not in brands: the whole branded products will go up in price. But, it will go up everywhere, so it shouldn't be detrimental.”
Anand Cheema
Regarding PMPs, Cheema feels that the margins will not increase significantly; even if there will be a rise in prices.
“Ultimately, PMP prices will have to increase. We have seen this in the energy sector due to HFSS law and this is likely to transfer over to other categories such as BWS and soft drinks in the very near future. The margins for PMP will roughly stay the same; however, there will be more emphasis on PMPs due to the value perception for the customer,” he adds.
Shingadia explains: “If the prices of PMP products go up, then it will give us a minor increase but it is never significant. The margin on PMP product is not going to have any effects to the business. What is best about PMPs is that they are very good for customers because it's cheapest, so it sends a message. But margins on every product will not improve, just because the costs are going up, therefore, they're not going to give us a better margin. They'd rather keep it with themselves and especially with Covid time, where people are losing money.”
He believes there might be some impact on sales. “But on the flip side, I think there's a lot of opportunity if retailers are smart. If you're focused on the business as being stagnant, and you just keep to that as it is, your sales will go down.
“I think Booker is looking to launch Jack's within the estate, so that would give us a very good label. Tesco family have got a very good quality of products, a very good pricing on products. So, I think that will give retailers hopefully good sales. So I'm hoping by doing all these things, we can have an uplift in sales. The very basic things would be like looking at the community, with marketing and advertisement for the local community. People respond to that. I don't think we just give enough effort to do it,” he says.
Many stores are planning to stock own brands rather than branded products. Cheema opines, “Buying has to be sharper than ever and we have to stay ahead of the game when tweaking margins. Going to own-label products is key. With Costcutter, we are lucky that we have access to the full Co-op range which allows us to compete with the multiples to a certain extent. Therefore, I will increase the level of own-label products we stock in store to combat the price increases.”
Wyatt comments, “I know customers like PMPs but the margins are cut deeper on PMP products compared to non-PMP products. I want to go with our own brands rather than brands with price marked.”
“When I look year-on-year, I see that margins have been squeezed on everything and my overall margins are rolling down. Today, customers have less money in their pocket, especially with the pandemic, job uncertainty and inflation: food is probably another big expenditure, next to buying a house.”
He concludes: “To deal with this I am stocking our own (Co-op) branded products along with the branded products, to give it to price-conscious people.”
Scottish business conglomerate Glenshire Group has hired Daniel Arrandale as its new Property Director.
Starting in the newly created role last week, Arrandale brings a wealth of industry experience to the business, including his most recent position as Acquisitions Manager for Asda and his previous position as Development Manager at EG Group.
“I am thrilled to be joining Glenshire Group in a period of tremendous growth, with many exciting opportunities on the horizon,” said Arrandale. “I’m looking forward to working with the existing development team to maximise the opportunities within our current estate, whilst also growing the business further with the acquisition of new sites.”
As part of Arrandale’s remit, he will oversee acquisitions, development, and growth for Greens Retail, Pizza Hut, and wider Glenshire Group property development and investment interests.
The bulk of Arrandale’s career has been as Retail Director at commercial agents Christie & Co, focussing on the convenience, forecourt and franchise markets. Arrandale served at Christie & Co. for 23 years.
Harris Aslam, Managing Director at Glenshire Group added: “We are very excited to welcome Dan into the Glenshire family. Having worked with Dan many times over the years on several transactions, I can confidently say his breadth of knowledge and experience in this sector will give us a huge advantage as we continue to expand our portfolio.”
Currently operating 27 convenience stores and 20 Pizza Hut franchises in Scotland, Glenshire Group has committed to significantly furthering new location openings in Scotland as well as bolstering their property portfolio.
Brewer Carlsberg is shifting some of its marketing focus to cheaper brands, it said on Thursday (31), as consumers in major markets bought cheaper beer and in reduced quantities.
The maker of Kronenbourg 1664, Tuborg and Somersby said beer sales volumes fell by 1.3 per cent in the third quarter, noting declines in China, France and the United Kingdom. Premium sales fell 0.5 per cent in the quarter."In Western Europe, there's no doubt that the average consumer is holding back," CEO Jacob Aarup-Andersen told Reuters.
"In Asia, China stands out as a market where the consumer is very weak. Most other Asian markets are actually okay," he said, adding the company had not yet seen Chinese stimulus measures having any impact on consumer behaviour.For years, brewers have relied on a strategy of developing and promoting their more expensive premium brands to offset an overall decline in drinking.
Aarup-Andersen said he remained confident in the long-term growth potential of premium beer and that the category will comprise a significantly larger portion of Carlsberg's business in a decade.For now, however, the company is adjusting its marketing.
"In markets where we are seeing a significant pressure on premium, we are reallocating some of our focus into making sure that we are promoting properly around the right mainstream brands," he said.
The world's third-largest brewer behind Anheuser-Busch Inbev and Heineken said third-quarter sales rose 1 per cent to 20.5 billion Danish crowns ($2.98 billion), compared with 20.7 billion expected on average by analysts in a poll gathered by the company.
Despite the shift in consumer behaviour, Carlsberg said it still expects full-year organic operating profit growth to be between 4 per cent and 6 per cent. The company lifted its full-year guidance in August.
Also on Thursday (31), the world's largest beer maker Anheuser-Busch InBev reported third-quarter profits, revenues and volumes behind forecasts. AB InBev's third-quarter statement highlighted stronger growth for its more expensive beers, like Corona, which grew 10.2% outside of its home market, Mexico, during the period.
Consumers now want a greater commitment from retailers in cutting food waste, refilling stations, sustainable packaging, and partnering with social purpose organisations, states a recent research, which also highlights that a good majority (69 per cent) of younger consumers are more likely to shop with what they see as socially responsible retailers though price sensitivity still plays a crucial role.
According to the findings, published in Vypr’s Consumer Horizon Report, reducing food waste is the most important factor for the majority of UK consumers (29 per cent), especially for Gen Z women aged 18-24 (38 per cent). More than a third (37 per cent) of men aged 18-24 said they needed food storage advice. A similar number of women aged 18-24 (33 per cent) want meal kits with the exact amount of ingredients included for them to cut down on food waste.
Refill stations for personal care, cleaning products, dry goods, and beverages are also in high demand. Consumers, particularly Gen Z women, are keen to use these stations, provided they offer a cost-saving of 6-10 per cent compared to packaged goods. The study indicates that older shoppers are less likely to use refill stations unless prices are reduced by 15 per cent or more, which Vypr said shows the importance of price in driving consumers to adopt sustainable shopping habits.
The third priority for brands and retailers is to adopt sustainable packaging. Awareness of eco-friendly packaging is high, especially among younger generations. Two-thirds of UK consumers say they expect to pay more for sustainably packaged products, and that figure rises to 86 per cent among Gen Z and Millennials. However, Vypr’s research suggests that while shoppers express willingness to pay more, price sensitivity still plays a crucial role.
Ben Davis, founder of Vypr, said: “There’s often a disconnect between consumer intentions and actions. Brands need to understand that simply offering sustainable options may not be enough if price points don’t match consumer expectations.
“For Gen Z and Millennials, sustainable products need to be competitively priced or risk losing long-term loyalty. We tested this by presenting products with and without the label ‘100 per cent Recycled Packaging’ and found price remained the key purchase decision-making factor for most consumers.”
Another factor in building loyalty among younger consumers is to showcase social responsibility. The research reveals that 60% of shoppers are more likely to shop at retailers that partner with food rescue organisations or promote a charitable cause. Among Gen Z and Millennials, this figure jumps to 69%, showing a strong preference for brands that demonstrate a social purpose.
The report also reveals that 85% of shoppers are willing to pay a deposit for reusable products, though it is younger consumers, particularly those aged 18-24 who express the strongest support for such initiatives.
The Consumer Horizon report which provides insights shaping retail, product innovation, and consumer behaviour going into 2025, can be seen here.
Sugro UK, the number one buying and marketing buying group*, in partnership with b2b.store, is thrilled to announce a further expansion of its existing E-Loyalty scheme programme, which has proven to be very popular with its members and retailers, by introducing E-Loyalty Extra Compliance and Execution scheme as well as E-Coupons.
The E-Loyalty Extra is aimed to boost compliance and execution at retail store level to drive new product launches, core range compliance, some exciting fixture trials with its supply partners and more! It will be available to all member owned and member affiliated retail stores within the group.
The E-Loyalty Extra loyalty scheme will be accessible by retailers via WhatsApp platform and will allow retailers to capture evidence of compliance by simply clicking “take photo” button.
With the addition of another digital enhancement introduced to the group recently – Coupon - based loyalty mechanic, members are now empowered to incentivise and reward customers, driving stronger consumer connections and fostering brand loyalty at a granular level. Retailers can now simply redeem a coupon at the point of check out. Another key digital development within the group is WhatsApp E-Presell which enables Sugro UK’s retail partners to provide advance product volume commitments for new product launches. This functionality is particularly powerful as it ensures that suppliers have accurate forecasts before product launches, enabling better stock availability from day one of product being available on the market.
The ease and speed of using WhatsApp for these commitments simplifies the presell process, ensures accuracy and strengthens relationships across the supply chain.
While other industry players may soon consider introducing similar digital tools, Sugro UK are proud to be at the forefront of enhancing retail-focused digital solutions. This early adoption not only ensures that Sugro UK members remain competitive but also guarantees them access to the best digital tools available in the market. These efforts are part of Sugro UK's ongoing commitment to delivering value to its members and empowering them with innovative solutions for growth and success in an increasingly digital retail environment.
Sugro Head of Commercial and Marketing, Yulia Petitt said: “I am delighted that Sugro UK members are now able to provide photographic evidence of retail compliance and in-store execution to our supplier partners, using a wide range of display and compliance criteria such as planograms, secondary displays, trials, and new product developments (NPDs).These digital features allow members to share real-time proof of execution, enhancing accountability and building supplier confidence. The launch of E-Presell functionality opens a huge digital advantage for the group which will benefit all – members, retailers and suppliers in gaining accurate forecast and ensuring product visibility in store from day one of product being on the market and with the ease of using WhatsApp, the entire pre-sell process becomes a much quicker and easier process to manage for all parties.
"The Group has had 18 consecutive years of growth and, once again, on track to deliver in 2024, with the year-to-date performance of +15% year on year and growth across all categories.” Rob Mannion, CEO of b2b.store, added: “The rate of innovation in the wholesale sector is increasing and these launches are further great examples of that. We’re particularly excited about the developments and different uses of WhatsApp in the industry, with more coming in the pipeline for 2025 – it’s a tool no wholesaler or buying group can afford to ignore because of the level of influence it’s having in the sector and there’s no sign of that direction of travel changing any time soon.”
Sugro UK is proudly owned by its 90 plus independent wholesale members, with a combined turnover of over £2.5 billion.
Expanding its footprint in the World Foods category, Paulig has acquired Panesar Foods, a prominent UK-based producer of sauces and condiments.
Founded in 1992 and headquartered in Tipton, Panesar Foods is a family-owned business with three production facilities, employing 308 staff and achieving a turnover of £59 million in the 2023 fiscal year.
This collaboration is expected to accelerate product launches and drive growth in diverse offerings, including sauces, salsas, marinades, dips, and condiments.
"We have collaborated with Panesar Foods for 17 years, and we are very pleased to welcome the company to Paulig," said Rolf Ladau, CEO of Paulig. "Today, our combined taste expertise and innovation skills unite around a shared ambition: to accelerate our international growth and expand our World Foods offerings."
Bill Panesar, CEO of Panesar Foods, expressed confidence in the partnership, stating, “As Panesar Foods becomes part of Paulig, I am confident that our ambitions for international growth will be realised, and the business will continue to thrive. We share a strong commitment to innovation and delivering high-quality, flavourful products, and I look forward to bringing even more delicious products to the market, together."
Jas Panesar, MD of Panesar Foods, echoed, “This partnership will allow us to reach new markets and deliver our authentic World Food flavors to a broader audience. We look forward to combining our passion for quality food with Paulig’s commitment to sustainability and innovation.”
All 308 Panesar employees will transition to Paulig’s team. Financial details of the transaction remain undisclosed.