nickshanagher

In Good to Great by Jim Collins he devotes a chapter to the Hedgehog Concept, the one big thing that a company must focus on to become a great company. Every business can learn from this. The retail example that he uses at the start of the chapter is a company called Walgreens, which is what Americans call a drug store and in the UK we call a chemist. Its strategy was to be the best company at operating convenient drugstores and its economic denominator was to measure the profit per customer visit rather than profit per store. The economic driver is interesting as it systematically closed all its shops that were in inconvenient locations and opened new shops in convenient locations. "If a great corner location would open up just half a block away from a profitable Walgreens store in a good location, the company would close the good store (even at a cost of $1 million to get out of the lease) to open a great new store on the corner," wrote Mr Collins. It pioneered dr...

Today is the official launch date of the Fusion ProGlide shaving system in the UK and after a brief exposure to the power of the Gillette marketing machine last week I would recommend that local shopkeepers stock it for their shoppers today - enough so that shoppers see it in your store. Behind this recommendation lies two thoughts. The first is that the product is good. People who choose to upgrade from their previous razor are not likely to be disappointed. I am already trying to work out whether to write off my three new cartridges for my old razor - and they were not cheap. Already, after a week, I remember to press the button so the razor vibrates slightly so I "barely feel the blades". The second is the track record of Gillette, now owned by Procter & Gamble, which is celebrated in Jim Collins' Good to Great. In his book, Mr Collins identifies that great companies are all powered by simple ideas. In the case of Gillette it was that it could be the best in th...

The value of retail outlets sold by Christie + Co rose by 2.1 per cent in 2010, with the number of transactions it completed up by 24 per cent (excluding its sale of 300 outlets from the failed First Quench off licence chain). As business agents, Christie + Co do not focus on high street shops so its estimates are a good proxy for owners of c-stores and CTNs, suggesting that prices are firming up again after two years of falls. The company says valuations are supported by the favourable market conditions for independent traders, despite the move of multiple stores into the channel. Managing director Chris Day is confident that the banks will be supportive of the property sector as a whole. However, for independent operators this is unlikely to translate into easier access to finance. "The independent shopkeeper is finding it difficult to get funding," Tony Evans, head of retail, said at the launch of its Business Outlook 2011 ...

The Financial Times has covered the success of the Eurocash wholesale operation in Poland, a country where independent shops still retain a remarkable 40 per cent share of the grocery market. "Shopping is not entertainment. Buying yoghurt and iPods in a single shop is not convenient for customers. You need quality shopping close to home," Luis Amaral, the Portuguese owner of the wholesaler, tells the newspaper. It is clear from this that Polish shoppers are not UK shoppers, who regularly put undergarments into the same trolley as their raw poultry. However, one reason why Polish local shops do well is said to be the poor state of roads in Poland, which makes travelling to a hypermarket difficult. This impact may transfer to the UK as the price of petrol soars and councils cut road maintenance budgets. Another is that 25 per cent of Poles shop daily and find it easier to go to a neighbourhood shop. The multiples have opened neighbourhood shops but the independents compet...

Asda's price guarantee, that it will be 10 per cent cheaper than rival supermarkets, was clearly a marketing stunt from the off. Few people are going to have the energy to complete a major shop in Asda and then check what price the same products were across town at Tesco. However, Tesco has said that it will protest to the Advertising Standards Authority about the "confusing and misleading claim". "It is vitally important that the whole industry acts in a way that deserves the trust of customers," says UK chief executive Richard Brasher. "In our view customers are being misled by false Asda claims." What is remarkable about this is that Tesco is getting twitchy - following on from last week's weak results statement. Local retailers may take comfort from the inference that the market leader is finding things as difficult as they are - whatever you think about the actual issues of the way that supermarkets represent themselves to the media and ...

Underneath the hype, the Christmas announcements by the major grocers demonstrate tough trading conditions, with Tesco saying that like-for-like sales in the UK were up by just 0.6 per cent. The analysts will be having this in negative territory in no time. The impact of Tesco's investment in new space is a 3.6 per cent increase in sales yet the Kantar Worldpanel figures show its market share remains unchanged at 30.5 per cent. The two sets of figures are not strictly aligned but local retailers can see the picture. Across at Sainsbury, which is doing well, the Kantar Worldpanel figures show it adding 0.3 per cent of market share to 16.6 per cent, just behind Asda on 16.8 per cent (which lost a 10th of a basis point). Sainsbury reported like-for-like sales growth of 3.6 per cent but City analysts cut this down to almost zero after stripping out new space, VAT and food price inflation. The Tesco press release highlighted "Steady UK Performance" and Sainsbury trumpete...

Writing in the Sun, Kelvin MacKenzie, recounts how he took part in a television discussion about the links between obesity and poverty, when a fellow panelist said to him: "It's all right for you, shopping at Waitrose". Mr MacKenzie then defends his choice of supermarket by saying it is the nearest to where he lives and as "any food retailer will tell you - thanks to their extensive research - no customer wants to travel more than one and a quarter miles to shop. It's why supermarkets build more and more stores". If he is correct, then Waitrose must locate its shops where there are fewer obese people - and as it adds more stores then it will have more "problem" shoppers, where I use the term "problem" loosely. Research by Kantar Worldpanel shared with me by Ed Garner before Christmas plots the major supermarkets and independent shops on to a graph where the two axis are the percentage of upmarket ABC1 shoppers and the relative numbe...

 Buried away inside issue 39 are four trends that the Monocle team of trend spotters say will change the "business of what we eat and drink". They are: Blueberry juice and its ilk will sell more based on the trend towards "super-foods". Khaled Yafi, who set up the Berry Company in 2006, is expecting fruit bars and frozen desserts to take off. Less fancy dining. For example, Michelin starred Hamburg cook Cornelia Poletto is giving up her star and posh eatery to open a place where customers can "buy cheese and ham over the counter, or have a coffe at the bar". The rise of Korean food as the new Japanese food with soy or chilli-marinated meats, lead by Jung Sik Yim opening a restaurant in New York. The rise of part-time urban farmers and the Slow Food movement, with people growing fruit and vegetables on their balconies or in their basements. Before you scoff or say these are the same old same old new things, pause to consider what you see shoppers doing...

I aim next week to visit the Monocle shop, which is said to be very small and sells mainly back issues of the Monocle magazine. Looking up the address on its website I flicked over to the listing of what's in the current issue. A few of the headlines caught my attention and I made a note to buy the December/January issue before it was off sale. I also made a note not to buy it from WHSmith, which is easy as it has outlets at Paddington and Reading stations, which are two parts of my commute. Instead I got off my bus early with the intention of visiting the newsagent at Angel. As I approached, I could see the shutters were up. I had been an infrequent visitor to this shop. While it had a big magazine range, its service was poor. Nothing really made you want to journey two minutes off route to visit. No problem, I thought, I will go to the shop that we buy our newspapers from. It is tiny and used to be stuffed full of magazines. Now it is tiny and stuffed full of snack products...

A friend of mine whipped out this booklet of vouchers that he was handed in Starbucks, with a 50p off your favourite beverage voucher for each day starting 4 January and lasting about a month. Mark quoted me the total value of the coupons and how pleased he was to be handed them when he visited the coffee shop for a drink. Thinking about it, he said that he probably would use less than a fifth of the vouchers. However, Starbucks had achieved a little bit of a coup in turning Mark into an advocate of its attitude to shoppers and its approach to the VAT rise to 20 per cent. Many local shops do something similar. Any examples would be welcome.

There is an advertisement from Coca-Cola Enterprises in the last issue of Retail Newsagent of 2010 that says: "71 per cent of customers are more likely to buy a product with a price-marked pack." The research by HIM that supports this view is not particularly new but the execution of the advertisement by CCE is very impactful. It is illustrated with an array of 10 strong CCE brands in price-marked packs. The message underpins a huge change in what independent retailers are prepared to stock. When Mars, armed with similar insight, tried in the 1990s to champion price-marked products, the retail trade refused to stock its products. Today, shopkeepers understand the power of price-marking in generating sales and often seek out the price-marked option. However, with a fixed price comes a fixed margin. In making this trade off, retailers need to be clear about the overall impact on their sales and to get the mix of price-marked and higher margin products in the right balance. ...