nickshanagher

Like arch-rival Unilever the previous week, Procter & Gamble told investors that consumers had accepted the range of price increases that it had introduced because of the rising costs of raw materials. In summary, its results for the fourth quarter included 8 per cent sales growth of which 3 per cent was from price rises. In a conference call to chief executive Bob McDonald, one analyst asked about how the company might respond to a low single digit growth environment in developed countries [like the UK]. He said they had two strategies. One was to keep on investing in research and development and to develop new categories. The other, if no growth was possible, was to keep its costs under control so that it hit its profit targets. What is clear is only two areas are not under threat of spending cuts - research and development, and advertising. One of Mr McDonald's concerns is if competitors do not raise prices. They were watching markets closely to see if they had to resp...

After years of being on the front foot in the PR war as the people's champions, UK supermarkets got a bloody nose on March 1. First ACS boss James Lowman unveiled his research that demonstrated that while Tesco and Sainsbury had added 2.3 million square feet of selling space in the past year, they had achieved a net loss of 426 jobs. That is the equivalent of 1,500 medium size local shops and no new jobs. "The government is desperate for growth and jobs," Mr Lowman told the ACS summit in Birmingham. "The supermarkets claim they are the answer and the goverment needs to liberalise planning laws. These facts show they are not." Local shopkeepers should use Mr Lowman's facts in conversations with their local MP, local authority people and local planners. The supermarkets are expert at influencing local planning decisions and here is some ammunition that may help you stop them opening next to you. At the same time, analysis by City bank UBS of whether fo...

News this week that the average price of a CD has fallen below £8 for the first time, compared to more than £11 in 2000, tell all retailers that prices do not have to just go up. While the recording industry may blame the internet and supermarkets, which are accused of below cost selling, the business of music may not be suffering in proportion. Radiohead guitarist Ed O'Brien told Time magazine that "the music industry isn't in crisis, the recording industry is; it is an unbelievably good time to be a fan of music and new bands." Whatever, most corner shops are not big into music. However, the implications for book, magazine and newspaper sales is more sobering. The Boston Consulting Group has just studied the attitude of shoppers towards buying digital content in the US, China and Germany. They will pay $100-$150; $70-$120; and $130-$160 respectively for an e-reader. For a book the price ranges are $5-$10; $1-$2; and $7-$12 respectively. For a magazine $2-$4; $1-$2; ...

A local foodservice business has just issued its new price lists. Its solution to the tricky issue of the 1 January VAT price increase? Put up its prices today! Not necessarily a strategy suitable for all businesses but those who can will know that they can.

Availability is a term used in the convenience industry to measure whether you have a product (or service) available for a shopper when they seek to purchase it in your shop. Good availability requires an investment of your money (to have the stock), your energy (to monitor stock levels and to match stock to the most common requirements of your shoppers) and your know-how (to stock the products that will make you the most money). In discussing availability with retailers recently I notice that many measured availability differently. They chose to remember the occasions when someone asked for something unusual and they got the product in-store for the customer. In other words, they believed that their advantage in availability was the ability to get stuff that big grocers would not. However, there is a danger that these retailers are missing out on an essential discipline. They pride themselves on fulfilling occasional requests but do not check that they are always stocking the top sell...

On the day that Tesco unveiled a great set of financial results I was with a south coast independent retailer who says the major competitors for his three local shops are two Tesco Express stores. At the same time he says his business is booming. If in Tesco's model it is always reassessing the top 100 lines and giving shoppers their favourites if they make the top 100, my friend says he serves his shoppers with what they want, including the "just-delisted" and me-toos at good prices that he has nimbly sourced. This seems to be a sustainable business model but may be not as easy to achieve as my friend makes out!

In covering Marks & Spencer's results, some analysts have been questioning how much of the 2.5% VAT cut has been retained by the company. Sir Stuart Rose is adamant that it is passing on the full cut to its customers. However, with prices set to rise again in November, it will be interesting to see how retailers plan to manage the upwards transition.