IRI's Weekly FMCG News Update - w/c 10th April 2017

IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Thursday 13th April

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• Forecourt sector stabilising; supermarkets hold 44% of the market• Irish grocery market returns to deflation; SuperValu regains No.1 slot• "Disappointing" retail sales in March as late Easter hurts figures • Boots No7 names stuntwoman Amanda Foster as new face• Tesco profits surge as UK sales recover • WH Smith first half profits boosted by travel business• Asda reignites "fake farm" row with Farm Stores re-brand • Forbes Top Influencers: Meet the 10 beauty power players• Sainsbury's accelerates Argos integration as 50th store opens• PoS marketing the most effective marketing channel for influencing the shopper

Weekly News Summary – 10th April 2017


Forecourt Sector Stabilising; Supermarkets Hold 44% Of The MarketThe UK fuel retail sector has turned a corner, with the long-term trend of forecourt closures stabilising at 8,489 sites operating at the close of 2016, according to the latest Retail Marketing Survey, conducted by the Energy Institute (EI). This compares to 8,472 sites in 2015 and 8,609 in 2014.

The survey found that BP led the forecourt branding field, topping the listing with 1,278 outlets (the same as in 2015), Esso secured second place, with 1,081 branded sites (1,030 in 2015), whilst Shell was in third position, with 1,029 branded forecourts (1,023 in 2015). Texaco was ranked fourth, with 768 branded service stations (820 in 2015)

Meanwhile, the supermarket sector held 44% market share, accounting for nearly 45% of total UK fuel sales. However, with all major chains curtailing their store expansion plans, the number of forecourt outlets remained relatively stable, part from Asda which added 26 outlets last year:

• Tesco – 504 sites (506 in 2015)• Morrisons – 333 (336 in 2015)• Sainsbury’s – 306 (302 in 2015)• Asda – 304 (278 in 2015)

The small and unbranded sector, which makes up the balance of the UK network, numbered 710 by year-end (747 in 2015).

Source: NamNews 10th April 2017


Irish Grocery Market Returns To Deflation; SuperValu Regains No.1 SlotThe Irish grocery market has slipped into deflation for the first time in almost two years, dropping 0.7 percentage points month-on-month to -0.2%. This is according to the latest figures from Kantar Worldpanel in Ireland for the 12 weeks ending 26 March 2017.

David Berry, director at Kantar Worldpanel, explained: “Only now are we starting to feel the effect of the weakened pound following the EU referendum as the price of British imports drops. For the first time since May 2015 grocery prices are falling so consumers are likely to have a little extra cash to hand, though this doesn’t necessary mean they’ll spend more in store. Many will see the break from inflation as a chance to cut down their grocery costs and pocket the savings instead.”

Meanwhile, SuperValu regained the title of Ireland’s largest grocer having been pipped to the post by Dunnes Stores for the past two months.

Berry commented: “The battle to attract shoppers remains fierce as ever as SuperValu makes its way back to the number one spot. After two consecutive months at the top, Dunnes was unable to remain Ireland’s largest supermarket for a third month with SuperValu finishing 0.3 percentage points ahead of the retailer.”

The latest figures reflect the impact of Easter on consumers and retailers alike. With the Easter weekend not until the middle of April this year, the holiday falls outside the latest 12 weeks while it was within the comparable period last year. As a result overall growth in the market fell to 0.7% – significantly below the level during the same period in 2016, demonstrating Easter’s significant boost to the market. The recent return to deflation has also contributed to the slowing of growth.

Kantar Worldpanel said that one of the main trends within the Irish grocery market this year is shoppers’ move towards own label, with these goods now accounting for 54% of total grocery spend – up 6% in the past four years. Discount retailers Aldi and Lidl are a major contributing factor; their stock is predominantly own label so they have driven this growth, with shoppers now also more accustomed to seeing own label ranges on shelves.

Berry said: “SuperValu and Tesco have both responded and expanded their own label ranges. The retailers see this as a real opportunity for growth, with own-label lines offering them the chance to set themselves apart from the rest.“However, brands are still dominating in Dunnes Stores, with own label accounting for just 38% of sales this year – up only 1% since 2013, much lower than its competitors.”

Despite losing market share, Dunnes still had reason to celebrate. Sales grew by 3.2% year-on-year – the 30th consecutive period of growth for the retailer. Lidl’s success continues too as the retailer experiences a 3.7% increase in sales. Shoppers visited the store once more over the past 12 weeks, compared to the same period last year. Aldi remains Ireland’s fasting growing retailer with sales growing by 5.0%. The retailer increased its market share to 11.3%, closing the gap with its closest rival Lidl to just 0.1%.



"Disappointing" retail sales in March as late Easter hurts figures UK retail sales saw a one per cent like-for-like decline through March in a “disappointing end to the first quarter for retailers”.

New figures from the BRC – KPMG retail sales monitor found that sales fell 0.2 per cent on a total basis in the five weeks from February 26, compared to flat growth a year prior.

This is below both the three-month average of 0.1 per cent growth and 12-month average of 0.8 per cent, although these figures are thought to have been distorted by the unusually late Easter.

“March proved a disappointing end to the first quarter for retailers, with like-for-like sales in the month down 1 per cent on last year,” KPMG head of retail Paul Martin said.

“Easter being later in the year is likely to have contributed to the bleaker picture, alongside the other obstacles facing the sector – especially increased input costs.

Food sales saw a 0.2 per cent like-for-like decrease in the three months to March, but increased 1.2 per cent on a total basis, likely being driven by inflation.

BRC’s chief executive Helen Dickinson stated: “Food sales continue to outperform non-food sales as shoppers focus their spending on essential items.

“This marginal growth in food was bolstered by slightly higher shop prices following increases in global food commodity costs and a weaker pound.”

These figures mark the first time in four months that the three-month average for food sales has dipped below 1.2 per cent.Meanwhile non-food retail like-for-like sales fell by 1.1 per cent over the quarter, but increases by 0.8 per cent on a total basis, marking the slowest growth since May 2011, pulling the 12-month average down to the lowest point since April 2012.

Online sales of non-food items grew by 7.4 per cent over the quarter, compared to an instore sales drop of three per cent on a total basis.

Dickinson continued: “The pressure on prices continues to build, albeit slowly, and will inevitably put a tighter squeeze on disposable income and so to ensure consumers continue to enjoy great quality, choice and value on goods, securing tariff free-trade must be the priority as the Brexit negotiations begin in earnest.”

Source: Retail Gazette11th April 2017


Boots No7 names stuntwoman Amanda Foster as new faceBoots has named 50-year-old stuntwoman Amanda Foster as the face of its latest No7 skin care campaign.

The single mum of three has appeared in more than 250 feature films, television, commercials and video productions.She has worked with a range of award winning directors such as Martin Scorsese and Danny Boyle in a number of roles as the stunt double for actresses Beyoncé, Whoopi Goldberg, Vivica Fox, Naomie Harris and Nia Long.

The Walgreens-owned retailer incorporated Foster into the third chapter of the No7 Ready marketing story. The campaign aims to ‘empower women to get out there and make an impact'.

“I’ve always pushed myself, both mentally and physically, to achieve as much as I can,” said Foster. “I believe that age doesn’t define my job and I am still ready to take on roles that challenge me. When I’m working on a demanding job, I want to feel totally in control.”

Boots’ collaboration with Britain's first black stuntwoman follows the retailer’s partnerships with two other women for the Ready campaign.

The Royal Ballet’s youngest ever principal dancer, Alessandra Ferri kicked off the campaign last year. Then feminist and novelist Chimamanda Ngozi Adichie continued the story.

Kristof Neirynck, Walgreens Boots Alliance Vice President, Skincare, Global Brands, said: “At No7, we believe that beauty isn’t about showing off, it’s about showing up. And to feel in control of how you show up, it’s important to have the best possible skin for your age.

“Amanda is the perfect choice for this advert – she’s a woman doing something extraordinary, whilst defying the conventions of age and showing the impact women can make when they feel at their best.”

Source: Cosmetics Business 12th April 2017


Tesco profits surge as UK sales recover Tesco has reported very encouraging progress in its newly released 2016/17 results, with strong growth in group sales and 0.9% LFL growth in the UK.

Headline results• Group sales: +4.3% to £49.9bn (+1.1% at constant exchange rates). LFL sales +1.0%• UK LFL sales +0.9%, the first reported full-year growth since 2009/10 with UK food LFL +1.3%• Positive volume growth and five consecutive quarters of LFL growth in UK and Republic of Ireland• International sales +15.2% (excluding disposals), +2.1% at constant exchange rates: Asia +4.0%, Central Europe +0.5%. International

LFL+1.3%.• Group operating profit +30% to £1.28bn, UK & ROI +60% to £803m (pre-exceptionals)• Step up in group margin from 1.8% to 2.3%, putting Tesco on track to meet 3.4-4.0% ambition by 2019/20• Net debt down 27% to £3.7bn with £1.9bn repaid within the year

Strategic highlightsTesco's recovery owes much to its success in delivering against the six strategic drivers it outlined at last October's interim results. These include building a differentiated brand, reducing costs, improving margins and prioritising innovation. Key achievements to date include:

• A £300m investment in low priced 'farm brands' which has driven market outperformance in fresh food• A much sharper and simpler value proposition. Prices are 6% lower than September 2014 and promotional participation has been reduced

to 32% with multi-buys down 24%. • Range simplification: availability has reached a record high, enabled by a 24% reduction in Tesco's range over two years. This is despite

Tesco introducing 4,400 products during this period as it focuses much more on product innovation• Substantial improvements in all key customer metrics, including being rated first by customers for speed of service and a score for staff

helpfulness up to 80%• Cost savings of £226m have been achieved towards Tesco's £1.5bn medium term target• A more efficient mix across channels and products, improving the relevance of the offer to customers while also lifting profitability• A strong track record on innovation, including major initiatives on health eating and helping customers to reduce food waste

Progress ahead of expectationsCommenting on the results, Group CEO Dave Lewis said: "We are ahead of where we expected to be at this stage, having made good progress on all six of the strategic drivers we shared in October. We are confident that we can build on this strong performance in the year ahead, making further progress towards our medium-term ambitions.On top of this, our proposed merger with Booker will bring together two complementary businesses, driving additional value for shareholders by realising substantial synergies and enabling us to access the faster growing ‘out of home’ food market."Source: IGD 12th April 2017


WH Smith first half profits boosted by travel businessProfits at the travel business were up 11% in the six months to 28 February as like-for-like sales rose by 5%.

Meanwhile, profits at the retailer’s high street stores were flat following a like-for-like sales decline of 3%. The company said the high street profit was in line with expectations.

Stephen Clarke, WH Smith group chief executive, said: “Stationery performed particularly well over the Christmas period driven by strong sales from our new seasonal product ranges and books benefited from good sales of spoof humour titles.”

In the retailer’s growing international business, it has now won 255 stores including 10 stores in Singapore following a significant tender win in Changi Airport.

"Looking ahead, Clarke said: “2017 is a significant year for us as we celebrate 225 years since the business was founded. And, while there is some uncertainty in the broader economic environment, we will continue to focus on profitable growth, cash generation and investing in the business which positions us well in the current year and into the future."

Source: Retail Bulletin 12th April 2017


Asda reignites "fake farm" row with Farm Stores re-brand The fake farm row has been thrown back into the spotlight as Asda relaunched its value food range under the name Farm Stores.

Asda has reintroduced its “heritage” Farm Stores brand after a 2001 rebrand to Smart Price in order to expand its product range to more items.

The change back to Farm Stores has sparked widespread controversy among UK farming organisations.

“Although such rebrands can drive an uplift in sales, in our view it is important that product names and descriptions are clear, accurate and do not mislead consumers,” National Farmers' Union advisor Ruth Mason told The Guardian.“With Asda now using the term ‘farm’ within its branding, it is imperative that the origin of these products is clear to customers.”

Last year Tesco came under fire for introducing seven brands based on fictitious names of British farms, including Woodside Farms and Boswell Farms. Many of the items were imported from overseas.

Soil Association policy director Peter Melchett called these false brandings “misleading for consumers and insulting to farmers".

“Many hard-pressed customers, trying to do their shopping in a hurry, are likely to be misled into thinking they’re buying a product from a specific British farm when they are not,” he added.

A spokesperson for Asda said: “We know how important quality produce at a great price is to our customers.“We’re reconnecting with our heritage by bringing back the Farm Stores brand to Asda – a name that our customers remember and trust for great value quality produce.”

Source: Retail Gazette 12th April 2017


Forbes Top Influencers: Meet the 10 beauty power playersForbes has revealed its list of the ten most powerful influencers in beauty, a first for the magazine.

According to the business publication, these ten influencers have a total reach of 135,000,000 across all major social media platforms.

Seven women and three men were included within the list, with Zoe “Zoella” Sugg coming out on top.

The social media stars span across the globe from the UK and US to the UAE and the Netherlands.

The Top Influencers list will be published quarterly, ranking ten superstars from each of three categories per launch, starting with Beauty, Fitness and Home.

Forbes partnered with influencer analytics firm Traackr and social insight platform Captiv8 to create the list.

Only influencers wthat had built up their reputation online – as opposed to already being an established celebrity – were included on the list, hence the absence of the Kardashian-Jenner dynasty.

So who are they:

1. Zoe “Zoella” Suggs2. Michelle Phan3. Huda Kattan 4. Nikkie de Jager5. Shannon Harris 6. Jeffree Star7. Kandee Johnson 8. Manny Gutierrez9. Christen Dominique10.Wayne Goss

Source: Cosmetics Business 12th April 2017


Sainsbury's accelerates Argos integration as 50th store opensFollowing its acquisition of Home Retail Group last year, Sainsbury’s has accelerated the roll-out of Argos stores within its supermarkets.

The 50th Argos store since the £1.4 billion takeover has now opened inside a Sainsbury’s, as boss Mike Couple pledges another 200 in the next three years.

Eventually, the UK’s second largest supermarket plans to include an Argos outlet in every store.

The company also plans to transform 60 standalone Argos stores to a digital format.

Furniture retailer Habitat, which Sainsbury’s purchased as part of the Home Retail Group, will also see another 10 store-in-stores open by the end of the financial year, taking the number to 17.

"The opening of our 50th Argos digital store just seven months after we acquired the company shows we are moving ahead at pace with our strategy,” Argos chief John Rogers said.

"Our decision to transform 60 Argos stores by March next year moves our strategy on further.“

The retailer reported a 0.5 per cent fall in supermarket like-for-likes last month and warned of price pressures from the weak pound.

Source: Retail Gazette 13th April 2017


PoS Marketing The Most Effective Marketing Channel For Influencing The ShopperEight out of 10 marketers rank point of sale (PoS) as the most influential marketing channel for influencing shopper purchasing decisions, ahead of traditional channels such as TV, radio and press advertising.

Creo, a PoS specialist that carried out the survery, said this shows the ongoing importance of physical stores, despite the shift towards omni-channel shopping.

Three quarters of marketers survey also indicated that between half and all their campaigns are now driven by in-store shopper marketing strategies as more brands and retailers seek to directly impact shopper behaviour at the point of purchase, yet 44% of marketers failed to measure spend against a shopper’s path to purchase.

The 2017 Point of Sale report by Creo, which surveyed 210 brand, marketing and retail executives from a cross-section of industries, including cosmetics, FMCG, food and drink and pet food, also revealed that 82% of marketers are failing to measure marketing return on investment (ROI) in an effective way, with access to data being cited as the stand-out barrier to measuring ROI, followed by time pressures and the complexity of campaigns.

Richard Saysell, Managing Director of Creo, said: “In a world where we are all increasingly cynical and brands need to understand the interaction they’re having with their consumers across a fragmented network of touch points, shopper marketing strategies and point of sale has never been more relevant. The retail industry is evolving so understanding the in-store experience and how to influence behaviour beyond price is critical if brands are to stand out from the crowd.

“While the majority of marketers are clear about the power of POS and reflect this in their marketing spend, there seems to be a real gap in terms of measuring ROI and also understanding a shopper’s path to purchase”.

Andy Bodley, print & distribution manager of in-store marketing at Boots, commented: “We are always looking at ways to improve the experience for our Customers, whether its store layout, website design or greater flexibility of delivery options. We continually challenge ourselves about how we offer and display our products and services. Customers can access information through multiple touch-points, and it has never been more important to deliver a consistent message through the multiple channels available to us and then transform those in to a great ‘joined up’ Customer experience.”

When asked about top trends for 2017, 77% of respondents believe personalised digital displays will be a permanent feature on the high street whereas interactive mannequins and in-store magic mirrors were deemed ‘a flash in the pan’.


IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Thursday 13th April

Date post:	14-Apr-2017
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