Innovation: Tony Smith
>>customer management director, Unilever UK foods
Deflationary pressure will continue to bear down on the industry. However, it is doubtful we will see a noticeable decrease in NPD, although this will result over the longer term if market conditions do not change.
As manufacturers, we will need to deliver real benefits to consumers through our brands in order to create value in the longer term.
Therefore, the most likely consequence of deflationary pressure will be a shift of emphasis in promotional activity, from price-based mechanics such as bogofs to creative, brand development-focused support. It will prove increasingly difficult to justify indiscriminate price promotions in mature markets. Resource will need to be focused on activity and promotional spend will become increasingly targeted, efficient and accountable.
This shift in emphasis will take place against the backdrop of the debate on health and nutrition.
As manufacturers, we are in a uniquely strong position to use our brands and our consumer understanding to deliver creative solutions that truly engage with this issue.
I am certain that the government will hold us accountable in those terms.
The rise of the red tape state
The nanny state: Peter Blakemore
>>Managing director, AF Blakemore; chairman, Spar
We hope the government will address core industry issues during the general election.
The national minimum wage is one. The policy of pushing it up has caused a great deal of damage to independent and neighbourhood stores.
I would not want government to give away independent retailers’ livelihoods through rises. We would like to see rises kept to a minimum, certainly no more than the rate of inflation. Over-regulation has also hit wholesalers and retailers hard, increasing business costs and adding to the difficulty of operating within the law.
With more regulation in areas such as drinks licensing, for example, the more likely it is that retailers will inadvertently fall foul of that regulation.
The government’s nannying is inconsistent. Retailers face rising crime and aggravation and the government isn’t interfering enough. On the other hand, so much bureaucracy now surrounds under-age sales it makes it difficult for retailers to operate.
I fear that the government will increasingly pass the buck on problems such as healthy eating and under-age and binge drinking to the trade. I think the trade has a part to play, but government must be called to account for problems for which the trade is not the source.
Healthy ways to gain
Growth areas: Penny Coates
>>private label director, Asda
Non-food is clearly an area that’s growing in importance for supermarkets, but you can never lose sight of the fact that what drives most customers into stores on a daily basis is the need to buy something for their tea. There’s been a lot of exciting NPD taking place in food recently at the same time as growth in non-food, in particular in healthy and premium ranges.
We expect healthy ranges to be key growth drivers next year. We know that customers want healthier but affordable everyday food and that’s not going to change. It is important for supermarkets to make sure they’re giving customers a wide variety of great value healthy alternatives for those wanting to eat a healthy, balanced diet.
We also expect premium ranges to continue to grow into 2005 and beyond and there is definitely further room for growth in this area.
Ultimately, customers want choice, and increasingly a little bit of affordable luxury thrown in with their weekly shop - premium ranges give them exactly that.
Is Tesco now an unstoppable force?
FALL-OUT: Ed Garner
>>Communications Director,TNS Superpanel
One name dominates the landscape - Tesco. Wherever we see a retailer losing share, Tesco is nearly always at the front of the feeding frenzy.
The latest TNS Till Roll data shows Tesco growing at 10% per annum. Impressive though this is, it is the actual cash growth that is outstanding - £2bn grocery turnover added over the last year.
This means that not only is Tesco the biggest UK retailer, it is pulling away from its competitors at an increasing rate. Nearly every other outlet sees the largest slice of any turnover drop being picked up by Tesco.
Asda’s rate of growth has clearly slowed to around 5% per annum from the double-digit growth they used to enjoy. Who has applied the brakes? Tesco.
Sainsbury’s recent troubles have been exhaustively documented and yet since it was overtaken by Tesco in 1995, each year Tesco has gained business at their expense and consistently increased its lead.
Morrisons is seeing its overall Morrisons/Safeway share under pressure for the reason that it has sold off stores to satisfy the Competition Commission and to rationalise the portfolio in favour of larger format stores.
However, over and above this, who is taking large bites out of the remaining business? Tesco.
The supply challenge
THE DETAIL: Chris Poole
>>logistics director, P& G UK and Ireland, co-chair ECR UK
We need to design a supply chain that has what it takes to win with the consumer.
It’s critical to collaborate on the joint processes of event forecasting and evaluation. Information flow needs to become faster and reflect what’s going on in-store. That means a seven-day order shipping and billing operation. It’s key to synchronise supply - we need to be a lot more efficient in this area to sweat our shared network.
Response times need to be faster. Supported by real-time order processing and planning systems, cycle times need to be reduced from days to hours and there needs to be emergency response capability to accommodate the new super-lean chains.
Manufacturing practices need to become more agile. Suppliers need to step up to the mark in the area of customisation and packaging and we have to find ways of doing it efficiently.
On top of that we want to find ways of more efficiently delivering the product through the chain, particularly the last 50 yards.
CSR: Julia Cleverdon>>CEO, business in the community
The positive aspect of food and drink companies being so much in the media spotlight has been the realisation that responsible business practice has to lie at the heart of all that they do.
Our leading edge company members have proved that corporate responsibility is a critical mainstream business activity, helping to manage their reputations, potential risks and future sustainability by continual improvement of their impact on society.
They have demonstrated that responsible practice makes good business sense, bringing benefits such as positioning them as an employer of choice; bringing innovations; and enhancing and protecting their reputations and brands.
The food and drink industry reaches into every home. It can create an environment where people are encouraged to make the right choices; it can use the reach of brands to make a positive difference to disadvantaged communities; and it can use the most up-to-date scientific knowhow to the benefit of consumers and the environment.
By putting corporate responsibility at its heart, the industry has the most effective opportunity to renew consumer trust confidence.