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Initially this seems like a good option for retailers in need of a quick cash fix considering how tricky it is to get anything from banks at the moment.

But if you look at the small print you see that a business borrowing the maximum amount of £10,000 over the maximum term of a year would be faced with costs of nearly £11,000 – more than the original loan. And currently this is not regulated by the Financial Services Authority.

Wonga’s John Moorwood spoke to me this week and said the company is not taking advantage of hard up firms and is really aimed at those with an immediate cash flow problem rather than those needing a long term loan.

Perhaps you have to accept that the guys at Wonga are savvy businessmen just taking advantage of the market economy. But what Wonga’s entrance into the world of business loans really tells us is that banks and traditional lending systems are simply broken.

The government’s Enterprise Finance Guarantee scheme is not doing the job it is supposed to and banks are not lending as they should. Lack of funds for investment are holding independent retailers back. Now Chancellor George Osborne needs to show some bottle, flex his muscles and make the banks lend more by using either a juicier carrot or a bigger stick. If we’re going to get the economy back on track it’s got to be led by our businesses and they need all the cash they can get in order to build and look to the future.

Related posts:

1. Easy money, part B
2. Cash is like oxygen
3. Cash and Carry Price Wars

 

The staff cycle starts with advertising. To recruit effectively and within the law we prepare a job description and person specification that defines the skills, qualifications and experience we are looking for.

When recruiting we look at what the business needs as whole, not simply at what role we are re-filling. It’s about the demands of tomorrow not yesterday. Once we have reviewed our need we take the simple approach to advertising by placing an advert in our window. We have tried local newspapers in the past, but found that they cover too wide an area.

The next step is the application form. Our staff are briefed about all current vacancies so that when potential applicants enquire they know what to do. We set an application deadline and once this has passed short-list candidates to be invited for an interview.

Structured interviews

Firstly I look to find out about the applicant, their past and their aspirations.

Next I explain the job and our passion for great customer service – In effect the start of the induction programme for successful candidates.

Finally I answer any questions the candidate has about our business and working for us.

I always make notes on the application form, as when dealing with recruitment one needs records to be able to justify why one candidate was successful and others were not.

When I have seen all the applicants I review each one and make my decision. I always ask:

• Will they fit in with the team?
• Are they are capable of doing the job?

I contact successful applicants by phone to make the offer and agree a starting date. I then send them a formal offer letter. I also send a letter to unsuccessful applicants. If there are any that we wish to keep on file for future vacancies I send a letter explaining that.

Employee packs

The offer letter – created with a mail merge program to automate the task – is just the start of the 20 page pack which includes:

• The terms and conditions of the offer
• The contract of employment
• A letter about selling of alcohol
• A uniform guide.

I believe that it is full and thorough, but it is something that I update whenever there are new regulations.

We endeavour to have a stable and reliable team and measure the success of our staff policies by monitoring both staff turnover and absentee rates. For us, these are both low.

Our budgeted staff costs are a little over 7% and we therefore need to have the flexibility to match the needs of the changing way that our customers use us. We have a deli counter that demands a high level of staff hours than the self service part of our store, but this is covered by a higher margin on the products sold off it.

In the second part of this article, I will look at how we undertake staff induction and early training to ensure that our new members of staff are both happy and productive.

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When we arrived we were warmly welcomed by the staff, who were pleased that we had traveled from London to look around. It was a Tuesday afternoon and not especially busy. Even so, the shop was immaculately merchandised.

The coffee assortment looks great.

So too the chilled bottled lager…which demonstrates an attitude towards having a comprehensive range rather than profit optimisation. This seems to be in keeping with the whole shop which has a very high quality finish.

Great flooring and lighting plus good signs…

And still there are some areas for improvement, with this deals end unit looking cluttered…

And this offer doesn’t pack a punch.

But this is mere quibbling. Loco as executed in Gosforth is fantastic. Provided you have the correct customer catchment area, this could be an attractive symbol offering for you.

However, I note in this week’s Retail Newsagent, that Neil Turton, chief executive of Nisa, suggests that Morrisons is more of threat than Tesco. “It’s been proven time and time again that a decent independent can compete with Tesco,” he said.

North East Convenience have delivered more than just decent. However, there is a big gap between what it is doing and what the average symbol store operator is doing. Are we raising the bar too high at a time when shoppers’ budgets are ever more distressed?

If you are in the north east, a detour to see this shop will pay a dividend. There is a Nisa Local nearby that you can visit as well to evaluate the step up that this shop demonstrates.

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1. 16th December 60-second update

As many as 30 shops in Brighton face losing their alcohol licence after a raid by Revenue and Customs found they were selling non-duty paid beer.

MP Brandon Lewis spoke to Retail Express exclusively this week to say anyone daft enough to sell illegal booze is basically a mug and deserves to get rapped on the knuckles.

Groups like the Federation of Wholesale Distributors are pressing for the introduction of hard-to-copy duty stamps for the top 10 or 15 selling beers, which would make it really hard for smugglers to carry out their nefarious trade. This would really make it easy for hard-pressed retailers to tell whether alcohol being offered at stupidly low prices is ‘kosher’.

Just as a question to retailers, how often do you come into contact with people trying to sell you illegal booze? And what do you think of the FWD’s duty stamp proposals?

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1. Minimum pricing strategy

I see our community and our stores’ place within it as a key element of our success.  Last year we helped Year 6 children at a local school get the most out of one of their key years in education by helping set up a breakfast club with the assistance of one of our key suppliers. This was able to happen because we see our suppliers and manufacturers as part of our community. A year on, the club is working well and we continue to support it.

When we heard that another local primary was going to fund new sports kit from funds raised by their PTA we offered to sponsor the football kit – if the PTA found a sponsor for their netball kit too. We made them think differently about how the money they raise is used.

There is a forecourt in front of our store and we regularly hold the local Police Neighbourhood Watch caravan. This gives our community and the Police the chance to talk about local issues in a friendly environment.  As I mentioned in a previous article, we also run a summer barbecue and a Christmas party in front of the store. We involve suppliers and up to 300 customers in the events; it’s our way of saying thank you to our community.

We believe showing respect to be extremely important.  The community is like the ripples you get when you throw a stone into a pond – starting with a small circle in the centre and spreading outwards. Great staff are at the centre, then the local community and on the outside are our suppliers and trade partners.

Finally I believe that to be the best in our business I have to take time to go to trade events. I always make the effort to attend whenever I have the opportunity! It shows respect to the trade that enables us to make a living and is a refreshing and highly useful experience. Manufacturers have got to know us and have become our partners by sharing their vast expertise with our business – a big prize for our community.

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1. Service to the community with News International
2. Shouting in the community
3. What does the future hold for community retailing?

Start at page 191, where Adcock explains how to become a smarter shopper by analysing the five shopping missions:

1. Impulse
2. Grab and go
3. Considered
4. Experiential
5. Inexperienced.

All five take place in news and convenience stores and your understanding of why people shop in these ways could help you unlock greater sales and profits.

Shoppers switch between modes depending what is on the shelves in front of them. They buy canned foods in grab and go mode and BOGOF tinned tomatoes in impulse mode. A loaf of bread in grab and go, a chocolate bar in impulse, a pint of milk in grab and go, a bottle of wine to take out to dinner in considered!

Adcock is self taught and set up his own consultancy in 1999 to sell shopper insight based on his learning as a retail display salesman and a merchandising development manager for a UK chain store. He says that lots of promotions are simply not designed to appeal to shoppers and the way that big grocers buy and negotiate with suppliers mean their shops are not set up to maximise sales.

This must be an opportunity for alert independents. The book has plenty of ideas sprinkled throughout it but in the 24 power pages you will get ideas on how:

- To ensure shoppers have the opportunity to interact physically with products. “A product in the hand is halfway towards being a product in the basket,” he says. For, example, include batteries in torches as the heavier weight makes them more appealing.

- To provide space, a good product range and time for considered shopping. This is where adding organic and fair trade options makes a difference. Or an upmarket range of greeting cards. Secondary displays often help shoppers to make up their minds what to buy, he says. Shoppers want the process of comparing to be as practical and easy as possible. Segmenting the shop by meal occasion really helps.

- To serve grab and go purchasers – such as the shopper buying a pack of cigarettes every morning – don’t consciously engage with the process. They are replenishing, not shopping. If you are out of stock, then you break the behaviour. Sometimes you do this to try and sell more stuff but there is a danger that they may change their routine.

- To avoid too much “replenishment”. Taking the excitement out of shopping bores shoppers and devalues your offer. While shoppers may say they want simplified ranges of core items so they can more efficiently grab and go, the evidence suggests that you sell more by including a premium selection.

The book starts with 135 pages on the science of how people function, followed by 51 pages on how the industry is organised. Adcock is clearly setting out the credentials for his ideas and the thinking behind most of it is sound. It is a book for working with.

“Most of us have a limited amount of time and generally take the easiest route, both physically and mentally, to a particular outcome,” says Adcock in a chapter explaining why we don’t all shop at Lidl or Aldi. His book will help you to rethink your strategy and help you to win sales from the supermarkets.

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In a fantastic book introducing the small suppliers, the wholesaler says: “By chatting to these [suppliers] we hope you’ll gain new insights into what could be the next big thing in retail: small.”

Whether or not this was the case, by chatting to these small businesspeople, independent retailers will  have had an opportunity to recharge their entrepreneurial batteries. If supermarkets put fruit and vegetables inside the front door to slow shoppers down and get them picking products up – stimulating the buying process – then the market must have worked similarly for retailers on the hunt for new ideas to use in their shops. It certainly worked for me.

Steve Bailey, a former chef, was showcasing his Jackson bars (poorly photographed above), which are healthier snacks developed for his children. Catching my eye on my first visit to the hall, Steve asked me to taste a sample. The bars, of course, tasted amazing. But don’t all products? I challenged. He smiled and told me about  the benefits of his products. How could you refuse to give his snacks a try out?

Possibly by walking around the corner, where you would bump into Rob Bookham in his trademark hat and cheesemakers garb. His Sussex Charmer is a cross between Cheddar and Parmesan. The fantastic thing about this market is that there is so much choice.

The lady in the pink t-shirt is Jo Beach, who was showing her Tasty Little Numbers range, subtitled Real food, perfectly portioned. What is the gimmick? If you want to buy a 100 calorie chocolate bar, that is what she makes. If you want to buy a 200 calorie snack pot, that is what it says on the pot. Here, she is telling P&H marketing director Richard Hayhoe and trade press representatives about the success of the show, with listings promised by a who’s who of travel point operators.

There was a smattering of upmarket chocolate makers, one being Diana David, whose Diana’s Chocolates range includes the tag line, Lovingly Hand Made in Hornsey. Hornsey is much loved but nondescript inner London suburb that you would associate with artisan products. Diana makes her own chocolates from scratch and might be worth contacting if you sell upmarket chocolates and want something different.

Ascot-based Shemin MacGregor Shemin’s Curry Paste is already stocked by a number of leading independent retailers, including Paul Fisher and Budgens Ascot. She produces recipe cards to help promote sales.

Collectable cards were part of the packaging support at Bear Nibbles, a company set up by Giles Brook and partners. Giles was part of the team that set up Innocent Smoothies and it shows in the clever marketing and healthy credentials of his snacks. Stocked already in the major multiples and Caffe Nero, for example, his products are not so much about adding something new as building your authority if you wish to sell healthier alternatives to the main snacking brands. Bear has launched Urban Fruit and collectable cards, Giles says, are much sought after by a certain type of adult.

Also from an Innocent background, Mike Stevens \of Peppersmith was showing his natural gum and mint products. At a personal level, I do not like the packaging and don’t buy into the healthier gum narrative that Mike is passionate about. But when he showed off the little packet of papers inserted inside the gum box so that chewers could responsibly dispose of their sustainably sourced chicle gum after chewing, I started to think that there may be a market for a £1.50 retail selling price 10 piece product. If you have the customers, then this is a product you may want to try.

Two other products from this part of the show also caught my attention. Crispin Buck was present with his Kabuto noodles, an up-market version of Pot Noodles. Since the Food and Drink Expo, he has introduced new packaging that means the retail selling price is now lower (from £2.95 to £2.50). This is a good product and if you sell food to go (or have a coffee machine) could be worth considering. Also, the alibi pretox drink seems to be an interesting variation on the now ubiquitous energy drink.

Before leaving the front of the show, Richard Hayhoe also pointed out the new look Supershop concept store that was on display. P&H says it has developed a special solution for the smaller shop that is left behind by other symbol groups. There were two things on display that caught my eye.

First was the energy saving doors from Bond Display Cabinets. They are nearly invisible and make the products look fantastic as demonstrated here. Phil Proudman of the Bond Group says these doors are being installed in many locations by one of the major beverage brands. In the fresh and chilled display area, I met a number of retailers who were inspired by these.

The second was this six shelf food to go display unit from Fresh Express, which can be half hot and half ambient as displayed. It looked great.

However, at a simple level, the Supershop package is about great consumer facing offers and the point of sale on display looks good. Within the main show, P&H included a section on the Future of Convenience and a strong display of fresh and chilled products. The audience recognition advertising unit and the smart phone applications were the two future products that really stood out but they don’t need your immediate attention. Thinking about fresh and chilled probably does.

I bumped into Philip Shelley in the fresh and chilled section and he is thinking of making the jump into convenience from news. John Parkinson, who has already made the switch, was impressed by the quality of the displays and the show generally. Hapi Cheema, who was visiting Pro-retail for the first time, has just coverted his supermarket to the Mace format.

This meal deal pack looked good, as did a range from Urban Eats. However, P&H still has some way to go to provide an offering that will match the major multiples. Rumblers Pots were on display and this Irish made breakfast solution might be an option.

In snacks, Hogbites are a great tasting product from the Jerky Group. Available in clip strips, if you sell alcohol then this is well worth a try. While the £1.49 RSP is high for a 45g portion (to my mind) I am sure this is a product that will find an audience. The only thing to watch out for is the price point that the multiples might choose to sell it at. Another snack option to consider is the new popcorn flavour from Tyrrells. I also met the team from Cofresh, who claim to be the number one Indian snacks company. Like everyone else in this sector, they are facing increased commodity costs and the pack sizes are getting smaller.

Finally, as Andy Singh said he was on the look out for one, here is a hot dog machine. Billy Eatenton, the sales manager for Rollover, said the unit was not too hot. As I took my hand sharply back, he smiled and remembered that he was a chef by background. Asbestos-hands, he said. Even so, for some retailers this may be a good solution.

In this review I have largely passed by the major suppliers that you know well and who displayed at Pro-retail. They had some great insight also but insight that you will be aware of from the trade press. As I walked around the show I met a great many retailers who were excited about the future of their trade. An £8.6 billion growth opportunity, as P&H says.

To  get your share you need to visit trade shows hungry for ideas and not for free stock. It is the ideas that you will turn into sustainable profit. P&H is a supertanker in many ways but displayed a great degree of nimbleness in this year’s show. Independent retailers need the support of big suppliers and they also need the new ideas that will keep their shoppers engaged.

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There is one thing for certain about what is happening at Tesco with their damaged UK position that lead to their profits warning in January. They will work to correct it. At the time of their annual results they announced that they would be investing £1 billion this year to improve the shopping trip for customers. They say it will be focused on six key elements:

1. Service & Staff – more staff for existing stores, initially in fresh food departments

2. Stores & Formats – faster store refresh programme; introducing warmer look and feel

3. Price & Value – better prices and promotions, more personalised offers

4. Range & Quality – better ranges, starting with re-launching the Tesco brands

5. Brand & Marketing – better, clearer, more relevant communication with customers

6. Clicks & Bricks – Click & Collect roll out, transforming range and online presence

You may not have £1billion to invest in your business, but a look at what the market leader is doing is important to your business. Another good think to know is how Tesco are relating to the suppliers and they have a huge number. On May 1st the IGD held their annual Tesco Trade Briefing and it was attended by over 400 companies in their supply chain. Many of them were at ProRetail the week before like Coca Cola Enterprises, Dole, Kraft, Nestlé, Unilever and some that were not like News International.

The agenda ran from a presentation from Dumhumby, their view of the economy, their UK plan, the Tesco difference and much more.

Don’t think that because they had a poor performance over the past year they are past their best because events like this one suggests otherwise. If Tesco is talking to their suppliers, you need to be doing the same to let them help you build your plan for the future. Let us know what you are going to do and how you plan to achieve it.

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The Local Shop Summit received rave reviews after launching alongside the NFRN annual conference last year.

“I took ideas away with me that have made and saved me money,” said Sunder Sandher, a leading Londis independent who launched his second store in Oxford this year. “It is an event that I wouldn’t miss.”

Michael Heppell, who has inspired some of the world’s largest companies with his How to be Brilliant presentation, anchors the day that is designed to appeal to local shopkeepers.

“We know independents are busy and find it hard to take a day out so we have made the summit a fantastic combination of short bursts of information and quality networking,” said Nick Shanagher, managing director of organiser Newtrade Publishing. “As well as being inspired by our speakers, it is a one-of-a-kind opportunity to meet like-minded retailers and to build your confidence.”

New this year is a series of video tours of leading local shops, showing how they have designed their shops to maximise customer spend. In addition, six leading suppliers will be presenting in the trade forum, which will include ample opportunity for retailer feedback in a moderated Q&A session. 2012 sponsors include United Biscuits, Imperial Tobacco, Kraft Foods, Heineken and News International.

Also in the £47 plus VAT price are refreshment coffee breaks and a networking lunch. More than 250 independent retailers have already signed up.

“It is an unmissable opportunity and we hope to see you there,” said Caroline Cronin, who is managing the event.

Retailers wishing to attend the event can contact 0207 689 3369 to buy tickets.

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