In the first of a new series of monthly columns, Des King takes a sideways glance at matters retail... and beyond
So it isn’t just packaging suppliers who can expect to take a bit of a kicking as they try to survive in the supply chain. Retailers are just as likely to round on their own.
Boots and W H Smith are the latest high profile high street names to feel the squeeze through ever-extending competition from the likes of Tesco. Having attempted to broaden their reach, both are now to re-focus upon those product lines for which they are best known.
Meanwhile, the narrowing down of consumer options into the outward convenience of just one universal provider rolls inexorably onwards.
According to the sociologists, 21st century shopping – certainly for the staples of everyday life – is now more a matter of hunting than gathering. We prefer to go for the quick kill, and as conveniently as possible.
Increasingly, this could mean forgoing the aisles altogether. The upswing in buying via the internet over the pre-Christmas period – £2.5bn and up by 70% on the previous year – suggests online shopping has at last become the mouse that roared.
Needless to add, that apart from its dominance in-store, Tesco is also now the world’s most successful online retailer. One way or the other they’re in receipt of £1 in every eight that we Brits spend – and why stop at that? They have the appetite, they have the purchasing power.
Snapping up the London-based chain of Harts, Europa and Cullens convenience stores – to be re-branded as Tesco Express – is a sure indicator of a clear intent to quite literally corner the market. Forget being a nation of shopkeepers; a shopkeeper of nations could soon be nearer to the truth.
Rationalising the supplier base, with the concomitant knock-on effect of reducing cost, is apparently writ in stone as one of the essential pre-requisites to achieving increased customer share. Something, surely, for Ian Dent’s newly energised Packaging Federation-led lobby group to get its teeth into.
Sainsbury’s is the latest – indeed the last – of the supermarket chains to disband its packaging team. According to Keith Brackenborough, outgoing print services manager, design innovation has already been put largely on hold in the furtherance of driving lower prices.
We can expect the multiples to be increasingly disposed to handing over the management of the bulk of their own-label packaging requirements to repro houses – the direct consequence being the ultimate placement of work at the lowest cost-point of delivery. Think Poland, India, China and all points East.
This might make sense to the bean counters but is as fundamentally flawed as relocating call centres from Manchester to Mumbai. What surely is glaringly, ‘Blairingly’ obvious – and yet something that neither the multiples nor Her Majesty’s Government seem prepared to get their heads around – is that lower food bills are being largely achieved at the expense of a £15bn industry that directly employs over 250 000 prospective shoppers.
How long can they actually afford the real cost of cheaper food? Discuss.