The greatest challenge in 2004 for retailers and other businesses will be how the economy shapes up. Consumers are still spending but with interest rates edging up the government needs to think carefully about the impact of future rate rises.
Regulation will be a challenge in the year ahead as it has been in previous years. There is a risk that over regulation will stifle innovation and inhibit growth. Taxation is another challenge. Again the government must think carefully about the impact of tax rises on business and consumers. Increases in National Insurance and pensions costs in 2003 were a double whammy for business. The contribution Tesco makes to the UK economy through job creation and taxation is huge. We nominally pay 53% of our profits in tax, including corporation tax, rates, stamp duty and employer’s National Insurance contributions. Health will be high up everybody’s agenda this year, especially with the debate on obesity. This is an issue for others in the industry with whom we work and we have an important part to play by offering customers choice and information which enables them to live a healthier lifestyle. We already provide comprehensive nutritional information on our packaging and by expanding our Healthy Living range and backing initiatives like 5-a-day we are helping customers.
Consumers will continue to demand more from their food. They have come to expect new and innovative products from Tesco that offer them quality, value and convenience. Staying one step ahead of consumers is always a challenge but one Tesco responds well to. Last year we introduced new ranges, including our Free From brand and specialist foods for ethnic customers.
2004 is going to be another tough year but every year is tough in our sector. We have learned not just to cope but how to maximise opportunities.
The multiples will continue to take chunks out of each other, moving price wars to new heights. This means the wholesale sector will need to place even greater emphasis on that all-important word - “service”.
That means availability,in stock or delivered at over 96%, and punctuality, with competitive deals which are not at the expense of retailer margin. If you are not already a one-stop shop, become one and offer all-temperature regimes to stop your retailers going elsewhere. No room? Do it on drop shipment.
What does the government have instore for us during 2004? Tax strips for spirits as a starter. Wholesalers with bonds must have clarity of Mr Brown’s intention’s here. They certainly want to see the fraudsters driven out, but the point at which duty will become payable may prove to be a very costly change.
Going forward, independent retailers, more than ever, need the protection of a symbol group or at least a fascia and retail solutions package.
There is an absolute necessity to pursue our argument with the OFT that there is only one grocery market in the UK and not two, that is multiple and convenience, or in other words, the reason why the OFT nodded through the Tesco acquisition of T& S. We have to convince the OFT in order that no other retail multiple is given the advantage of moving into our sector with such a huge estate almost overnight!
Sustainability issues will continue to rise up the industry’s agenda in 2004. Food safety will remain the topmost priority. The sector’s contribution to the health and nutrition agenda, and its environmental performance, will increasingly fall under the consumer and media spotlight. The Food and Health Action Plan being drawn up by the Department of Health will provide a framework for the sector to build on its existing contribution to issues like obesity and the level of salt, fat and sugar in the diet. The Food Industry Sustainability Strategy being developed for public consultation by Defra and stakeholder representatives will help the sector to improve its resource use and tackle issues like waste. CAP reform and WTO issues will loom large during the year.
Major multiple: challenges lie in the economy and regulation >>Sir terry leahy, chief executive, tesco
Wholesale: service and availability will be crucial>>Rodney hunt, managing director, Today’s Group and president of the Federation of Wholesale Distributors
DEFRA: clean, green and lean targets>>Callton Young, head of food and drink industry division, DEFRA
Regulation will be a challenge in the year ahead as it has been in previous years. There is a risk that over regulation will stifle innovation and inhibit growth. Taxation is another challenge. Again the government must think carefully about the impact of tax rises on business and consumers. Increases in National Insurance and pensions costs in 2003 were a double whammy for business. The contribution Tesco makes to the UK economy through job creation and taxation is huge. We nominally pay 53% of our profits in tax, including corporation tax, rates, stamp duty and employer’s National Insurance contributions. Health will be high up everybody’s agenda this year, especially with the debate on obesity. This is an issue for others in the industry with whom we work and we have an important part to play by offering customers choice and information which enables them to live a healthier lifestyle. We already provide comprehensive nutritional information on our packaging and by expanding our Healthy Living range and backing initiatives like 5-a-day we are helping customers.
Consumers will continue to demand more from their food. They have come to expect new and innovative products from Tesco that offer them quality, value and convenience. Staying one step ahead of consumers is always a challenge but one Tesco responds well to. Last year we introduced new ranges, including our Free From brand and specialist foods for ethnic customers.
2004 is going to be another tough year but every year is tough in our sector. We have learned not just to cope but how to maximise opportunities.
The multiples will continue to take chunks out of each other, moving price wars to new heights. This means the wholesale sector will need to place even greater emphasis on that all-important word - “service”.
That means availability,in stock or delivered at over 96%, and punctuality, with competitive deals which are not at the expense of retailer margin. If you are not already a one-stop shop, become one and offer all-temperature regimes to stop your retailers going elsewhere. No room? Do it on drop shipment.
What does the government have instore for us during 2004? Tax strips for spirits as a starter. Wholesalers with bonds must have clarity of Mr Brown’s intention’s here. They certainly want to see the fraudsters driven out, but the point at which duty will become payable may prove to be a very costly change.
Going forward, independent retailers, more than ever, need the protection of a symbol group or at least a fascia and retail solutions package.
There is an absolute necessity to pursue our argument with the OFT that there is only one grocery market in the UK and not two, that is multiple and convenience, or in other words, the reason why the OFT nodded through the Tesco acquisition of T& S. We have to convince the OFT in order that no other retail multiple is given the advantage of moving into our sector with such a huge estate almost overnight!
Sustainability issues will continue to rise up the industry’s agenda in 2004. Food safety will remain the topmost priority. The sector’s contribution to the health and nutrition agenda, and its environmental performance, will increasingly fall under the consumer and media spotlight. The Food and Health Action Plan being drawn up by the Department of Health will provide a framework for the sector to build on its existing contribution to issues like obesity and the level of salt, fat and sugar in the diet. The Food Industry Sustainability Strategy being developed for public consultation by Defra and stakeholder representatives will help the sector to improve its resource use and tackle issues like waste. CAP reform and WTO issues will loom large during the year.
Major multiple: challenges lie in the economy and regulation >>Sir terry leahy, chief executive, tesco
Wholesale: service and availability will be crucial>>Rodney hunt, managing director, Today’s Group and president of the Federation of Wholesale Distributors
DEFRA: clean, green and lean targets>>Callton Young, head of food and drink industry division, DEFRA
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