IRI's Weekly FMCG News Update - w/c 25th april 2016

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Weekly News update
Your window on the latest trends
in Packaged Groceries
Stephen Hall
Friday 29th April

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• Consumer confidence stumbles in the face of uncertainty
• Tesco to install defibrillators in over 900 stores
• Boots says getting into schools is creating loyalty among the next generation
• Asda ‘Income Tracker’ shows consumers enjoyed another boost in spending
power last month
• Tesco scrapping boost events as part of moves to make Clubcard simpler and more
appealing
• Self-Service checkouts and lack of pricing transparency turning customers away
from the high street
• Asda agrees to make changes after being singled out by CMA in probe into
supermarket pricing practices
• Motor Fuel Group agrees supply deal with Booker Retail Partners
• British consumer confidence damaged by European uncertainty
• Nisa hails success of Bank Holiday bonanza
• SPAR launches new radio service to help drive sales
Weekly News Summary –25th April 2016

Consumer Confidence Stumbles In The Face Of Uncertainty
UK consumer confidence fell in the first three months of 2016, according to the latest Consumer Tracker from Deloitte. The quarterly survey of
3,000 UK consumers reveals a renewed caution in the consumer sector, after confidence fell by three percentage points year-on-year in Q1 2016,
from -5% to -8%.
The business advisory firm said the fall in overall confidence was driven partly by an unusually large seasonal decline in sentiment about general
health and wellbeing. This year the trend has been particularly pronounced, with the confidence reading for health and wellbeing falling by six
points from Q1 2015, to its lowest level since the survey began in Q3 2011.
Ben Perkins, head of consumer business research, commented: “The UK’s consumers are increasingly health-conscious. The flu season arriving
later than usual and extensive media coverage around health in the first three months of the year seem to have focused consumers’ attention on
health and wellbeing as an issue.
“In addition, the recent sugar tax debate, as well as the growing use of health and fitness wearables and apps may also be increasing consumers’
awareness of their own wellbeing.”
According to the survey, the confidence gap between homeowners and non-homeowners is now at its widest point since the Consumer Tracker
began. Non-homeowners reported a four point fall in confidence from the previous quarter.
Furthermore, London-based consumers were significantly less optimistic than consumers in other regions, with overall confidence in the capital
falling by ten points year-on-year. Londoners’ confidence towards job security fell by six points and disposable income by nine points, compared
to the previous quarter.
Ian Stewart, chief economist at Deloitte, added: “For UK consumers, homeownership is synonymous with financial security. Those in ‘generation
rent’ are starting to feel the impact of private rental prices having outstripped wage increases in recent years.
“London, with its particular exposure to developments in the global economy and financial markets, has seen a particularly marked drop in
confidence.” The Consumer Tracker also revealed that the gap between expansionary and defensive spending behaviour has flattened since the
start of the year, indicating that consumers have become more measured in their spending. In the coming months, consumers expect to spend
more on essentials, such as groceries, and less on utilities and big ticket items, possibly in anticipation of political and economic uncertainty in the
short term.
Stewart added: “Despite what appears to be near-perfect economic fundamentals for UK consumers, with low unemployment, low cost of
borrowing, low inflation and rising wages, confidence has taken a knock.
“Confidence in the general economic situation is now 18 points lower than at the same time last year. Greater risks in the global economy and
domestic uncertainty in the run up to the EU referendum on 23rd June seem to have unsettled consumers.”
Source: NamNews 25th April 2016

Tesco To Install Defibrillators In Over 900 Stores
Tesco has announced that it is set to introduce defibrillators in over 900 of its largest stores, aimed at providing lifesaving
support to its customers and staff.
The move follows statistics from the British Heart Foundation that show that over 30,000 people suffer a cardiac arrest
outside of hospital in the UK every year, but less than one in ten survive. For every minute without CPR and defibrillation,
a person’s chance of survival decreases by around 10%.
729 Tesco Extra and Superstores all over the UK will be fitted with defibrillators as part of the initiative, and the retailer
also plans to install the equipment in all of its 178 Metro stores over the coming months.
Tony Hoggett, Tesco UK Chief Operating Officer said: “We are always looking for ways to help the communities we serve,
and we know that having a defibrillator to hand can mean saving the life of someone suffering a cardiac arrest. This
initiative has the potential to make a real difference to customers and colleagues all over the country.”
Sara Askew, BHF Head of Survival, said: “We are delighted that Tesco is supporting BHF’s Nation of Lifesavers campaign
by making public access defibrillators available in all its larger stores. Knowing vital CPR skills and having access to a
defibrillator can often be the difference between life and death.”

Boots says getting into schools is creating loyalty among the next
generation
Boots, which today (25 April) launched the second year of its Soltan Sun Ready awareness education programme, says that targeting
young people is helping it to create brand awareness among the next generation.
The programme, created with agency EdComs, provides curriculum-linked learning resources and materials to schools to tackle awareness
issues around sun safety covering subjects from PE to Science.
Boots’ head of brand and innovation Amber Kirby says the programme has expanded this year to 28,000 schools, with half a million
children now given access to the materials.
It will also provide a 1,000 free Explorer packs to registered primary schools, which include sun cream samples and hats.
Kirby told Marketing Week: “Yes, it is raising our presence among the young but it is about much more than that. The UK has the highest
rise of melanoma while UVA rays are creating hidden damage to people’s skin.”
“There is an opportunity here to not only provide a service with the Soltan sun tan lotion brand but also to really link sun awareness to the
curriculum and do more [than just above-the-line advertising],” added Kirby. “We had 1,000 schools signed up within the first 24 hours last
year, the rise in demand this year shows this message is resonating.”
A strong CSR message has become a marketing fixture over recent years.
Boots recently launched a similar educational campaign raising awareness of undiagnosed eye problems through the Zookeeper Zoe
storybook, which is designed to help parents and carers to check if a child might need support with their vision.
Globally, meanwhile, 55% of consumers are willing to pay more for products and services provided by brands that are committed to
positive social and environmental impact, according to Nielsen. This also appears to be translating into ROI for brands.
Last week, Pearson’s VP of brand Emilie Coker revealed that its Project Literacy campaign, which features advocates such as model Lily
Cole talking up the negative social impact of illiteracy, had a 800% return on investment.
Kirby says that Boots will continue to make CSR a big part of its marketing. She concluded: “Boots wants to make sure it is always raising
a health and happiness message. It has to be part of our ethos.”
Source: Marketing Week 26th April 2016

Asda Income Tracker Shows Consumers Enjoyed Another Boost
In Spending Power Last Month
Whilst the retail sector struggles to attract cash-conscious shoppers, it appears consumer spending power is continuing to increase.
According to Asda’s Income Tracker, families across the UK enjoyed another boost in March, with discretionary income reaching £198
a week despite a gradual increase in inflation over recent months.
The latest figures for March reveals that household were £12 a week better off (+6.3%) compared to the same time last year,
marking the 17th consecutive month of double digit growth in disposable cash.
However, consumer spending power wasn’t the only area on the rise last month. Essential item inflation reached 0.1% – the first
time the measure has stood above zero since the end of 2014, suggesting that prices of household goods may be on the rise. In
addition, consumer price inflation also saw an increase of 0.2 percentage points (reaching 0.5%), due to the seasonal impact of an
early Easter on air and travel fares.
The report also demonstrated some positive signs for UK families. In contrast to the rising prices across clothing and footwear
(1.4%), as well as the increased expense of dining out in restaurants and cafés (1.9%), notable drops were seen in the cost of
vehicle fuel (-9.2%) and electricity and gas (-3.7%) compared with the same time a year ago, helping to keep inflation generally
low.
Meanwhile, a further decrease in the cost of food and drink (-2.7%) provided a welcome surprise for some at the tills.
An Asda spokesperson said: "The sustained rise in discretionary income gives family finances a welcome boost ahead of the summer
months. While inflation has slightly increased in recent months, low overall interest rates continue to be good news for consumers.
“The outlook remains cautiously positive, despite a slow-down in wage growth across the country as a whole, which really can be
seen on a regional level where we are already noticing an increase in household income. Wage levels in Wales in particular are
extremely encouraging, while discretionary income in Northern Ireland has reached a milestone of £100 – a promising figure. This
represents a number of positive indicators which should give British families confidence for the coming months.”

Tesco Scrapping Boost Events As Part Of Moves To Make Clubcard
Simpler And More Appealing
Tesco is ending its popular Clubcard Boost events as part of moves to make its loyalty scheme simpler and more
rewarding all-year round. .
The Clubcard Boost events were generally held twice a year and allowed shoppers to double the value of their loyalty
points to spend in a selected number non-food departments for a limited period. The last such event will now be held
between the 16 May to 26 June with Tesco saying it wanted to give customers the chance to “get more value” from their
Clubcard across the year and make it simpler to understand and easier to use.
A statement on the group’s website said it will now be doing more to help customers get the most out of the scheme,
such as double points events to help them grow their points balance faster and improving its Boost Partners offer, where
card holders can already get up to four times the value of their vouchers. It added that it will provide further details soon.

Self-Service Checkouts And Lack Of Pricing Transparency Turning
Customers Away From The High Street
A survey of the UK’s consumers has revealed what shoppers are looking for when it comes to high street service.
Retail specialists shop4pop.com asked 10,000 people what would improve their in-store shopping experience. Despite a rise in DIY till
points and all major supermarkets getting behind the self-service experience, the study revealed that 39% of respondents would like to
see more manned checkouts in stores.
It was also the top answer amongst 18-24 year olds, with a substantial 52% of participants saying it would most improve their shopping
experience. According to the study, customer service is a key concern for a quarter of participants, who prefer to stick to traditional
methods of checking out and said that more available staff would aid their in-store experience.
Confusion surrounding the cost of items was also a major gripe for Brits - with 35% of those surveyed saying clearer product pricing would
keep them shopping on the high street. This struck a chord with women aged 45 and over in particular, who called for more transparent
prices on in-store products. Britain’s 35-44 year old population said they were less concerned with more clear-cut product costs, giving it
just 20% of their vote.
Meanwhile, despite the government’s plans to relax laws around Sunday trading hours being quashed last month, 30% of those surveyed
said that longer store opening hours would improve their shopping experience. The 25-34 year old age group were particularly in favour of
more flexible trading times.
Grievances surrounding refunds and exchanges were also raised, with just under a fifth of participants voicing their want for more relaxed
returns policies.
Other respondents cited more disabled-friendly stores and clearer price comparisons between retailers as things which would enhance their
shopping experience.
Siobhan Sweeney, Marketing Executive at shop4pop.com (part of the Simpson Group), said: “These results are quite eye opening - before
carrying out the research we would have assumed that 18-24 year olds in particular would actually prefer to see more self-service
checkouts, as opposed to manned till points.
“It does go to show that despite the continuous rise in technology throughout retail, good old fashioned face-to-face communications is
invaluable.”

Asda Agrees To Make Changes After Being Singled Out By CMA In
Probe Into Supermarket Pricing Practices
Asda has agreed to change the way it operates promotions after the Competition and Markets Authority (CMA) singled it out during its
investigation into pricing tactics used by the leading supermarkets. .
Consumer watchdog Which? raised concerns about supermarket pricing and promotional practices via a super-complaint last year. The CMA’s
investigation found that supermarkets generally had “good awareness” of consumer law and took compliance seriously. However, it committed to
follow-up work that involved engaging with the supermarkets to ensure that ‘was/now’ offers and multi-buy deals were genuine and did not
mislead shoppers.
In a statement today, the CMA said it had met with a number of supermarkets and asked them to work with their Trading Standards Services
partners to review their pricing and promotional practices. All of these supermarkets were said to have engaged “constructively” with the CMA and
it now expects them to review their practices and make any necessary changes to ensure consumers can be confident they are “getting a good
deal”.
The CMA added that it has had particular engagement with Asda in relation to specific areas of concern. While the CMA has not made any findings
against Asda, the chain has given a written commitment to the competition regulator to change the way it operates ‘was/now’ and multi-buy
deals. The CMA said it welcomed Asda’s commitment to change its promotional practices and strengthen its compliance controls, adding the
revised business rules it is implementing will ensure that:
‘Now’ prices will not be advertised for longer than the ‘was’ price applied, ensuring they are a meaningful comparison
Multi-buy offers will represent better value than a single product before the offer
Multi-buy offers will not be immediately followed by ‘was/now’ promotions, so it will be easier for shoppers to tell what is a good offer
Asda has already started making changes and these will be fully implemented by August 2016 with CMA saying it will check how they are working
6 months later.
Michael Grenfell, CMA Executive Director, Enforcement, said: “The CMA’s examination of the market, following the super-complaint, found that
supermarkets generally take compliance seriously, but there were some promotional practices that could mislead shoppers.
“We welcome the commitment we have received from Asda as well as the engagement from other supermarkets, and expect them all to ensure
that their practices are not misleading and that shoppers are better informed and able to choose the products that most suit their needs.”
The CMA added that its follow-up work to the super-complaint has now come an end. Which? executive director Richard Lloyd commented:
“Following our super-complaint last year, we are pleased to see the CMA investigation has resulted in Asda taking action to stop misleading
special offers. Asda has been found breaking the rules and now must immediately clean up their act.
“Our super-complaint and actions taken by the authorities should serve as a clear warning to all retailers. If they try to pull the wool over
consumers’ eyes they will not get away with it. Retailers must get their house in order.”

Motor Fuel Group Agrees Supply Deal With Booker Retail Partners
Motor Fuel Group (MFG) has announced a new shop supply agreement with Booker Retail Partners (BRP), which will
commence at the beginning of July. .
The deal will see some 300 of MFG’s 374 petrol stations being supplied by BRP, whilst a major rebranding programme will
commence introducing both the Londis and Budgens brands to the network, replacing many of the current Costcutter
outlets.
Jeremy Clarke, MFG’s Chief Operating Officer said: “After many months of trials and negotiations, we are delighted to be
now working with the team at BRP. We believe that they can help us to develop our rapidly growing business model and
also provide a rewarding offering for our contract managers and customers.
“This supply change will not affect our ongoing pilot with Morrisons which has recently been expanded.”
He added: “Costcutter will continue to be an important supplier to our business as we diversify our brands to meet
customer expectations and I would like to take this opportunity to thank them for their support in helping us build and
develop our existing forecourt shop offer over the last four years.”
Steve Fox, Managing Director, Booker Group – Retail, commented: “It is a privilege to serve the Motor Fuel Group. This
new agreement is a fantastic opportunity for Booker Retail Partners to work in partnership with MFG and their contract
managers to help grow and develop their business. We are delighted that the stores are joining Londis and Budgens
brands and I am looking forward to serving them from July.”
Morrisons began trialling a new convenience food offer with MFG towards the end of last year with it supplying branded
and own label food to the forecourt stores. The first store called ‘Morrisons Daily’ opened at a MFG petrol station in Crewe
in December, with four more openings expected in the first quarter of 2016.

British consumer confidence damaged by European uncertainty
Consumer confidence has dropped in April due to a continued uncertainty about the current political status of Britain in
Europe. It is understood that the on-going Eurozone crisis has slowed the economy.
According to GfK’s Consumer Confidence Index, the main headline index fell by three points to minus three this month.
April’s rating is the first negative result after a consecutive 15 months of positive figures.
The index for personal finances over the next 12 months fell by two points to 7, while the index for expectations of the
general economic standing over the next year fell by two points to -14. The climate for major purchases also decreased
by six points to five.
“The biggest dent to confidence comes from consumers’ depression about the general economic situation in the UK for
the next year, dropping 20 points in 12 months” said Joe Staton, Head of Market Dynamics at GfK.
“Against this backdrop, even faith in our personal economic fortunes has taken a battering contributing to the overall fall
in the numbers. Trends in confidence show our degree of optimism about the state of the economy and this indicator will
make for interesting reading between now and the EU referendum on June 23rd.”
Source: Retail Gazette 29th April 2016

Nisa Hails Success Of Bank Holiday Bonanza
Nisa has revealed that its recent Bank Holiday Bonanza initiative achieved £1.1m in additional sales.
The Bank Holiday Bonanza was launched to enable Nisa retailers to provide “market leading offers” over the Bank Holiday
period on a range of branded products. The offers were available exclusively on Nisa’s recently launched Order Capture
System from between the 18th and 20th April and included deals on key convenience lines including Floralba Prosecco,
with a saving of 30%, and Persil Auto Non Bio, with a saving of 52%.
The initiative follows the success of its Black Friday event held in 2015 which saw a record amount of sales placed by Nisa
members in just one day, resulting in an 11% increase on the same period for the previous year.
Stewart Smith, Nisa trading director, commented: “The engagement with our Bank Holiday Bonanza has been fantastic.
The trading team have worked exceptionally hard to ensure they secured market leading deals which would drive footfall
into Nisa members’ stores and it is great to see Nisa retailers engaging so heavily with these.
“This Bank Holiday Bonanza is the start of Nisa’s increased focus on promotional activity for the coming year, where Nisa
retailers will experience market leading prices on key convenience lines.”

SPAR Launches New Radio Service To Help Drive Sales
SPAR UK has recently launched a new broadband radio service for retailers, aimed at driving sales and creating a better
atmosphere in stores.
SPAR Radio broadcasts pop music, creative advertising updated every three weeks, and seasonal or event themed
content. It will also feature ‘take over’ shows in partnership with suppliers, and the option for personalised content
specific to areas or stores to better target local customers.
The radio service has been developed in partnership with in-store radio provider KVHStudios, with SPAR saying it will
bring retailers significant savings on maintenance and the cost of hardware per store.
Philippe Rondepierre, SPAR UK’s Head of Marketing said that SPAR Radio could pontentially reach an audience of up to 11
million shoppers every week. He added: “SPAR Radio is a great platform for our retailers to engage their customers and
encourage them to spend longer in stores. With personalised content and advertising, it will also help retailers stand out
from their local competition.
“There is also a great opportunity for suppliers to get involved with SPAR Radio, as they can choose from many
advertising options to suit their budget, create bespoke adverts for their brand and even take over SPAR Radio for the
day!”

IRI's Weekly FMCG News Update - w/c 25th april 2016

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