nickshanagher

 Nate Silver, whose new book The Signal and the Noise aims to help people make better predictions, is celebrated in America for his ability to predict the outcome of the presidential election. However, a former professional poker player, Silver explains that his advantage comes because his competitors are television pundits and they are widely inaccurate in their views. The views of TV pundits are shaped by their own biases and they get lost in the narrative. By which he means the pundits believe in the candidates whose stories they most like. The FT last week started a series on Big Data, where companies are looking for advantage through better customer understanding, searching the internet for hidden patterns and trends to give them an edge. How much data is out there? 2.6 zettabytes are generated every year. How big is a zettabyte? It is 1 billion terrabytes. How big is a terabyte? It is 650,000 high quality photos. Should an independent shopkeeper worry about th...

This short BBC news item to take note of the move to standardised packaging in Australia is important. I was especially struck by the views of the British people about what plain packaging does and the arguments of Simon Clark. UK tobacco retailers should watch this and think about what is being said and look at the tobacco displays. I will share this link with my MP and ask him to contact the health minister and say we don't want such an experiment here. Of course I am biased but as Nate Silver demonstrates in The Signal and the Noise, everyone is. The arguments on this short item, saved for us on You Tube by Simon as the BBC does not upload Breakfast on to its iplayer, are persuasive.

and carrots too, says Time magazine in its December 1 edition, arguing that shoppers should forget what the foodies tell them. "Some of the tastiest and healthiest food around is also the lease expensive and most ordinary,"it says. Written by Mehmet Oz, professor of surgery at Columbia University, the article argues that frozen spinach is nutritionally similar to a fresh organic leaf spinach. The rise of foodie culture has venerated all things small batch, local farm and organic. "The fact is a lot of the stuff we ate in childhood can be good for you and good to eat if you know how to shop," he says. Knowing how to shop means the ability to read the label, which will tell you how frozen or canned food was prepared. Dr Oz is a big fan of the tuna salad sandwich and of ice cream! The problem with the latter is the amount consumed. And peanut butter - what you are often seeing is "a source of quality nutrition disguised at indulgent junk". Peanut butt...

Eric Anderson and Duncan Simester published a paper* on pricing in 2003 that showed that $9 price endings increased demand in three experimental settings. The benefit was greatest when the products were new and not previously sold. They were less effective on sale items. And they should not be used on every item. This obviously predates the prevalence of round pound and price-marked packs in the UK convenience channel. I think the point to note is that you need to mix it up. Earlier this year I suggested to one retailer that he did not have any promotions in his shop. He said it was because it was so hard to change prices on his IT system. My reply was to just keep the prices the same but to promote one SKU harder where his shoppers would expect to see a promotion. I have not yet been back to see what he did. This has no scientific evidence to support it. But I have appended it to a report about a scientific study so perhaps you will be persuaded to act on it like you were ...

David Hockney tells a story about a great European portrait that was presented to the Empress of China. In Europe, artists like Caravaggio painted shadows. In China, Japan, Pakistan and India, the artists did not. Looking at the picture, the empress said: "I can assure you, my face is the same colour on both sides." While David Hockney uses this story to promote his idea that cameras were used as technical tools to support great art by the old masters, it is useful to consider what it tells you about gifts and how you receive them. Hard pressed local retailers considering the gift of strategic insight from suppliers often don't get it. The suppliers leave frustrated at the "independence" of the retailer. The retailer perhaps scratches his or her head. Booker this year handed out an excellent guide called "5 Steps to great retailing". I have been meaning to blog about it for a long time. (It would be interesting to hear from anyone who has used ...

A third generation family business, TJ Morris, the company behind Home Bargains is both a success story and an enigma. Well on its way to £1 billion of sales in the UK, it is highly profitable. In 2009 operations director Joe Morris spoke to the FT about its reasons for success: 1. Word of mouth 2. Good products 3. Low prices 4. Honesty 5. Transparency. Its strategy for good products and low prices: 1. Only sell brand names 2. Only sell products it can make a profit on. No loss leaders. 3. Don't confuse shoppers with offers that are here today and gone tomorrow [opposite of Zara!]. 4. Stock changes depending on what can be bought cheaply [manufacturers who overproduce are use TJMorris to get rid of volume.] Run by four brothers. The driver is Tom, who is renowned as a great buyer. "If you buy right you can make money even if the stores are not perfect," says Joe. The shop experience: 1. Is about browsing: let's see what is in there motivation for shopp...

Two pieces of analysis in the Financial Times this week offer food for thought for local retailers in follow up to Tesco boss Philip Clarke's claim that shoppers would order ahead while driving to the store. His vision of drive-thru Tesco stores, captured by Chris Gamm in Retail Newsagent last week, includes the following: "As consumers become increasingly connected to the internet we will probably know your lounge light bulb blew this morning, so we will have already added a new one to your order as well." The first analysis by Jonathan Guthrie concerns the plight of Ocado, the delivery only service that purveys "chard and kumquats to yummy mummies". Its problem is that its supermarket competitors "appear happy to subsidise their own lossmaking online operations indefinitely." There is a persistent question mark over the business model of online grocery sales, which is that the cost of delivery is greater than the margin, which means the bricks ...

We had some great news at work last week when our assessor told us that we had successfully retained our Investor in People status for another three years. Julia, the same assessor we had three years ago, thanked all the people who took part (a third of our 27 strong team) for being consistently positive, open and honest and keen to make suggestions. Our culture, she said, had improved. “You have some quite amazing people in place,” she said. Signing up for Investor In People status was one of the steps on our way to become a great company. Another key factor was agreeing our mission to energise independent retailers. Everyone who works at Newtrade knows that the objective of our work is to help local shopkeepers grow their sales and profits. Having a worthwhile purpose in common drives our team work. Serendipitously I have just read Superteams , a book from team building expert Khoi Tu, that promotes seven rules for getting great performance. He has chosen seven...

When you see the stock market valuations of Internet and social media companies that price audiences at billions of dollars even if there are no profits you may scratch your head in confusion. Future Perfect by Steven Johnson is a book that captures the optimism behind those stock prices and despite its US focus provides some good pointers for small businesses everywhere. At the heart of his argument to be optimistic is his belief that LeGrand stars will be replaced by Baran webs. No, I didn't know what he was on about either. But it is compelling to read on. LeGrand stars are systems like big corporations and big government, named after the Frenchman who built France's railway network centred on Paris. It's super-efficient until the centre breaks down. Paul Baran was an engineer who worked in the US defence industry and developed a communications web that the Soviets could not disable by knocking out the centre. It became the internet. In his book. Johnson gives...

My children hate Malcolm Gladwell and they don’t even know him. In his book Outliers, Gladwell proposed that you had to spend 10,000 hours practising something to become an expert. I won’t let them read The Click Moment , a book from Frans Johansson that proposes that luck has just as big a role to play in success – unless you want to be a chess grandmaster, a tennis star or a classical musician. But The Click Moment will make me more sympathetic when they complain about the long work. Maybe they will get lucky early, I think. But I doubt it. Take the story of Ray Preston who found the perfect spot for his independent bookstore in New York. A month after he opened, a major civic project started that diverted foot traffic away from his shop. Ray tried lots of different things to save his shop. He sold his apartment and moved into the stock room to invest in it. But he reached the point when he thought he would go bust in three weeks’ time. I might as well have some fun, h...

The ever thought-provoking John Kay recently used some retail examples in his FT column to explain how pay links with output. He wrote: "I suspect that one reason French supermarket queues are longer than British ones is that the statutory minimum wage applicable to jobs such as checkout assistants is about 30 per cent higher in France..." Does any local retailer have a view on this? Or could you set out to check if the model works? He continued: "British supermarkets, noticing that office workers shop during their lunch break, staff the checkout more heavily then: French ones close tills to allow employees to eat at leisure." Again, is this true? At Heathrow recently I bought a bottle of water at WHSmith - it is much cheaper than from the food outlets when it comes free with the Daily Telegraph. My penalty was to stand in a queue of 15 people as only one of the two tills was manned. The point is that there are lots of things going on that affect queuing...

The hypermarket and superstore share of all retail sales declined from 23.8% in 2000 to 18.6% in 2011, according to Planet Retail/Comscore figures quoted by the Financial Times. In future, general merchandise will not be in a big box - it will be delivered in a cardboard box, the FT quotes Dalton Philips of Morrisons.

Malcolm Hepworth of eXPD8 (say it out aloud), a UK field marketing company, pinpointed retailer compliance as one of the weaknesses of the symbol groups that was a barrier to greater supplier support. While some of the groups - such as Spar and Nisa - are doing well, others are falling down because they accept compliance levels of just over 50 per cent and they "accepted that retailers liked to shop around the various cash & carries for the best deals!" The retailers need to learn, he suggests, that discipline is the best way forward. However, he ignores the fact that the members of these symbol groups are independent retailers with different trading philosophies. On paper, his business model is correct. In practice, there must be a tension between the wholesale and retail partners as buying decisions make a huge difference to profitability and what works on a national or regional scale may not work in a local context. His other point about how long it was taking ...

City analysts are in the business of talking shares up and talking them back down again. So you have to treat what they say with caution. Even so, their feedback about Tesco, offers some pointers about where the convenience market may be headed. At Citigroup they talked about a future Tesco that within a few years would be an "entity without growth or cash flow generation." That is, it would not longer be opening new space and it would be forced into cutting prices. The issues are: concerns that new space opened will reduce profit margins (which may include on line sales as delivery costs are subsidised by bricks and mortar shoppers) competition from Aldi, which is about 25 per cent cheaper and growing strongly. In the UK, Tesco has 39.1 million square feet of selling space. In the last half year it achieved sales of £23.9bn in the UK. That is just over £23 of sales a week per square foot. This compares with estimates for Spar of £13, Premier of £12 and Londis of £11...

Between starting to read The 7 Habits of Highly Effective People in the Spring of 2011 and finishing the book today, its author Steven Covey died. I am not sure about where the book is placed in the pantheon of great business books (I can see from the cover that 15 million copies have been sold) but what made me buy the book was the number of times it was referenced by people I respect. His seven principles (to which an eighth has been appended for the digital age) underpin a lot of other good self-development and management books. His ideas are frequently used by others. "Begin with the end in mind" is not quite what I had been told it was. There are two reasons why it took me so long to read the book. The first reason is Steven himself urges his reader to take it slowly. The second is that his prose style is frequently dry. But I am glad I set out on the journey. As T S Eliot wrote: "We must not cease from exploration. And the end of all our exploring will be ...

In my latest Retail Express column I write about the need for local retailers to have some sort of digital platform so that they can build a network of followers. The email that follows is from a shop called Alfred the Grape, which is in Marlow, a town about 10 or 12 miles from where I live. Except that I was already going to a birthday party - and the weather forecast was dreadful - this is a great email, selling the idea of fun things to do, not necessarily connected directly with buying stuff. Have a read and think about what you tell local customers - and what you could tell them. If you're at a loose end this Sunday, why not go to the Marlow Food Festival. Apparently it's free, fun and we're wines merchants  extraordinaire ! So to live up to this bill we'll have some fabulous bottles open for you to try (&, hopefully, buy if you like them enough). For the full blurb, see below.     Moving forward, I'm planning regular Friday evening in-stor...

I am uncertain who runs the M&S store at the service station near Benson in Oxfordshire but last night Ahmed upsold me two cans of Red Bull that I really didn't want. It was raining hard and I was quite tired when I pulled in to fill up the tank. 64 and a bit litres of diesel later I was delighted that the total on the pump was less than £100. As I looked at this I saw a sign that said buy two cans of promoted beverages and get 5p a litre off your fuel. Inside the shop, after a comfort break, I bought a bag of crisps and stood behind another customer at the till. I noticed by the door a second piece of point of sale with the offer on it. After she completed her purchase, I handed the crisps to Ahmed, the teller, and put my credit card next to the payment terminal. Are you interested in the soft drink offer, Ahmed asked, with a smile. I looked at him and as I did so his eyes flicked to the display of Red Bull behind me. As he was smiling I thought about it for a second and...

As you can see from this photograph of PR girl Suzi Price standing in front of the doors, the new fridge freezer (the rooms behind her) at Palmer and Harvey's new Hemel Hempstead distribution depot is very large. Along with a team of trade journalists, I visited the newly refurbished depot last week after a £6.5 million fit out. Julian Streeter, managing director of operations for P&H, explained that this depot was an investment in capacity for growth. Its two depots serving London and the south east of England were reaching capacity. The Hemel Hempstead location to the north west of London was a great fit with his existing network of 14 sites around the UK. Between them they make 48,000 deliveries a week to everyone from Tesco to the local independent c-store. What may concern independent operators in the south east is that Mr Streeter, pictured here in front of the ambient storage in the 168,000 sq ft depot, says that growth in the south east is being led by the multi...

Generally acknowledged to be doing well, there are three things in the latest Waitrose results to consider. First, like-for-like sales were up by 2.2 per cent, which shows the impact of its price matching branded goods sold by Tesco. Second, own brand ranges now account for more than 50 per cent of its sales mix, which suggests that its margin mix is being protected by these products. Third, the second half of the year is likely to see slower growth.

In the wake of Morrison's results announcement last week, The Lex column in the Financial Times provided a brief and pithy piece of analysis that is food for thought for businesspeople investing in local shops. Lex says there are two reasons for Morrisons to be wary. First, local shops mainly sell food and this means the margin mix is not as attractive as in a supermarket where you can sell more high margin goods. The Co-op, which I think is a good benchmark for independent retailers to compare themselves to, makes a 3 per cent operating margin in food. Lex contrasts this with Tesco's 5 per cent margin. Second, enthusiasm for the sector could be overdone. While the IGD predicts the local shop sector will grow by 5 per cent a year to 2017, Lex says consumers' love of the high street could be an "austerity-driven blip rather than a long-term trend". Indeed. However, the trend started before austerity and is based on the size of households and the age of the ...

How much do suppliers really value local retailers, is a question that independent shopkeepers often ask themselves.   Open to the same competitive pressures as the big supermarkets and competing for the same shoppers, independents often feel they are locked out of the best deals and can’t buy at the prices the grocers sell for. A new edition of Store Wars , co-written by businessman Greg Thain and former Cadbury marketer John Bradley, provides some great answers to the question. Most importantly, they advise manufacturers to support weak retailers. Before independents get too hopeful it has to be said that Thain and Bradley argue that in the past 10 years a major switch in power has happened. After around a century in control, the big brand manufacturers are now number two to the likes of Walmart and Tesco. This has implications for all local shops. There are two reasons for the success of big retail. Firstly, they now know more about their shoppers and market to the...

This is the content of my letter that I sent last week to the civil servants asking for feedback on their ideas for tobacco packaging changes in the UK. 9 August 2012 Retaining the status quo on tobacco packaging is the best option for effective long term tobacco control in the UK Dear Sirs My company specialises in energising independent retailers in the news and convenience market in the UK. These local businesses rely heavily on tobacco to generate footfall and for cash flow and profit purposes. They generally comply with tobacco legislation and make very low profits out of handling tobacco products responsibly. Most retailers share your desire to improve public health and they comply with regulation on the sale of tobacco. This is time consuming but there is widespread consumer desire to buy tobacco products and most local retailers want to meet this demand rather than send shoppers elsewhere. Small shopkeepers have lots of rules and regulations to f...