It’s been another busy week at The Grocer.
The biggest story has surely been the Diageo results, where Sir Dave Lewis finally revealed further details of his plan to revive the struggling drinks giant. There’s lots to digest, including a new operating model, as the ex-Tesco boss and a number of colleagues outlined the plans in great detail at the accompanying capital markets day. We’ve highlighted some of the most interesting plans in this follow-up analysis from drinks editor James Beeson. Interestingly Sir Dave has vowed that M&A will not form part of the plan.
But on the retail side we’ve explored the implications of Sainsbury’s sale of Argos last Friday. It’s also the subject of my leader this week in which I argue that big decisions lie ahead for Sainsbury’s CEO Simon Roberts.
The decisions are particularly moot in light of this morning’s news that the CMA has decided that Aldi and Lidl should face the same planning rules as supermarket rivals. While that’s significant in its own right it also signals that the CMA will consider the discounters in any future competition rulings over potential M&A/consolidation.
As we’ve seen in the last couple of years Lidl in particular has been enjoying meteoric growth. And this week we reveal it’s now level with Aldi in the race for UK retail space despite having fewer stores. Aldi has a UK retail footprint of 13,662,000 sq ft, while Lidl has 13,610,000 sq ft, just 52,000 sq ft less.
Political pawns
On the international trade side a summit between the UK and EU to agree a potential sanitary and phytosanitary (SPS) deal now looks likely to be held later this year, following Keir Starmer’s replacement by Andy Burnham.
And, as we await confirmation of the deal, red tape continues to plague exporters. We report this week that meat trade body AIMS has launched legal proceedings against French border authorities over new rules requiring lorry drivers to bring meat carcases to the back of wagons.
Meanwhile the quality and provenance of Brazilian beef and chicken is also back in the headlines, after the NFU called on the UK government to follow the EU in proposing a ban on Brazilian exports, due to concerns over antibiotic use. But as The Grocer reports from the SIAVS trade fair in São Paulo this week, Brazilian producers are holding firm, and insisting their produce already meets EU regulations.
As everyone gets hot under the collar, ex-FDF boss Ian Wright argues in his latest column that the heatwave’s impact on supply, both internationally and domestically, is impossible to ignore from a political perspective.
That tallies with our own reporting. Vegetable crop conditions are becoming “critical”, growers have warned, as parts of the country reach their seventh week without significant rain. Brassicas are worst affected, but yields of sweetcorn, garden peas and green beans are all significantly down. Julian Marks, CEO of Barfoots is the latest to warn there “will be gaps on shelves” adding that the industry was already “scrabbling about trying to fill” them.
It won’t stop there either, of course. Milk supply is expected to fall in the coming months in the wake of a rapidly escalating shortage of grass and silage. Dairy farmers were already having to feed cows inside earlier than normal due to the lack of grass caused by drought, warned NFU dairy board chair Ian Harvey.
Shot in the foot
Health continues to be a minefield for marketers, with The Turmeric Co this week falling foul of an ASA ruling after using customer testimonials on its website. Despite not mentioning any diseases or health conditions by name, the shots business was nevertheless deemed in breach of the CAP Code rules, the advertising watchdog adjudged. As we argue the case illustrates the tightrope health-focused brands must walk to effectively communicate the benefits of their products.
If you’re interested in hearing more from The Turmeric Co’s founder Hal Robson-Kanu about how brands can navigate the increasingly complex health landscape, he’s among the star-studded lineup at The Grocer’s Health Summit next month. Tickets are on sale now.
In some areas there are no such restrictions. Like protein for example. It seems no product is too outlandish for a dose of protein to be added in order to burnish its health halo and appeal to modern shoppers. There’s just one problem: almost no one in the UK actually needs more protein. So, what’s going on? Features editor Dene Mullen investigated how the protein trend got so big. Is it all just marketing hype? What impact are GLP-1 drugs having? And is the trend here to stay or might there be a backlash?
And finally, in our report on the OTC Medicines & Healthcare market, we highlight the soaring success of Pepto-Bismol, up a whopping 300%. With widespread use of GLP-1s it’s notable that many heartburn and indigestion remedies are performing well, but Pepto-Bismol’s growth isn’t down to GLP-1s. It’s thanks to its brilliant, old-fashioned TV commercial, with its memorable ‘diarrhoea-aa’ jingle touching hearts, minds and other parts that rival medicines cannot reach.
Of course there’s loads more stories brilliant stories in this week’s magazine. And even more on thegrocer.co.uk. But those are some of my faves. And we would love to know your thoughts on our coverage. Or is there anything we’ve missed? We’re all ears! Please get in touch via LinkedIn or adam.leyland@thegrocer.co.uk.
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