iri's weekly news update - w/c 19th june 2017

IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Friday 23rd June

Copyright © 2017 Information Resources, Inc. (IRI). Confidential and Proprietary. 2

Retailer News:• Sainsbury’s frontrunner to buy Nisa for £130m• Co-op’s membership jumps 700,000 in just a year• Amazon expands Dash button to 20 more brands• Superdrug owner eyes Holland & Barrett takeover

Category News:• Poundland launches rival to Toblerone bar• Unilever to acquire cosmetics brand Hourglass• UK colour cosmetics market to hit £2bn in 2017 • Skinny Tan delivers ‘exceptional performance’ over past year • Argos releases top toy predictions for Christmas 2017

Other News:• New study finds strong correlation between a product’s number of online reviews

and sales• Shoppers looking to innovate in the way they buy their groceries

Weekly News Summary – 19th June 2017


Retailer News


Sainsbury’s Frontrunner To Buy Nisa For £130m

Sainsbury’s is reportedly closing in on a deal to acquire Nisa Retail for £130m as it moves to counter Tesco’s planned £3.7bn takeover of Booker.

Various newspapers say that Nisa has entered exclusive talks with Sainsbury’s after selecting its offer over rival proposals, including ones from the Co-op and Morrisons. The Co-op, which is focused on growing its convenience chain, is said to have been wooing Nisa for months and is willing to offer “materially more” for the group, although sources close to the talks say Sainsbury’s is now the frontrunner.

Nisa is a £1.3bn turnover business currently owned by almost 1,300 registered shareholders that operate over 3,000 independent convenience stores across the UK. The group’s board has been working with Lazard, the investment bank, on a potential sale since Tesco unveiled plans to acquire Booker. Back in April, Nick Read, the Chief Executive of Nisa, warned that the Tesco-Booker tie-up could cause an “enormous amount of pain” in the convenience sector. He said at the time that it would be “churlish” to say the deal would not be a threat to his business, as it would increase Booker’s buying power, range and ability to lower prices.

For the deal to go ahead, Nisa’s board would require the backing of more than 50% of its shopkeeper members. Whilst they would be in line for large windfalls, their support for the deal is likely to depend on what Sainsbury’s can do to support their businesses longer term, given that a sale would see the members-owned group demutualised.

“The Co-op would have been a better fit for its mutual values,” said one source familiar with the deal quoted in The Guardian. “Sainsbury’s is just a PLC trying to do what Tesco has done. It’s an extreme outcome, Nisa has no need to sell itself.”

Sainsbury’s and Nisa have yet comment.

Source: Namnews 19th June 2017


Co-op’s membership jumps 700,000 in just a year

The Co-op has hailed a surge in its membership over the past year as young people flock to sign up to the mutually-owned grocery retailer.

Membership has risen by 700,000 over the past 12 months to 13.6 million. The directors of the grocer have attributed their success to “political shocks”, as consumer confidence and spend decreases and shoppers reach out for discounts.

Last year, the Co-op reintroduced their loyalty programme in an effort to draw customers back into its 7000 UK stores.Members receive a five per cent reward on every own brand purchase, while a further one per cent goes to charity.

“Underlying the political shocks the country has experienced over the last year is a call from many parts of the UK population for an economy over which they have more of a say and from which they get a fair share,” Co-op’s UK secretary-general Ed Mayo said.

“As organisations owned by 13.6 million people, the UK’s 7000 co-ops give people a say in what they do and how their profits are used.

“They offer a practical way to re-imagine an economy in which people have more control over their homes, work and local areas.”

“It’s no surprise we’re seeing a spike in interest in co-ops, whether it’s social care providers finding that a co-operative approach can give its users and workers a voice, or young designers and web developers seeing co-ops as a natural way to collaborate at work.”

Source: Retail Gazette 20th June 2017


Amazon Expands Dash Button To 20 More Brands

Amazon has announced the expansion of its Dash Button programme in the UK with the addition of 20 more brands.The Dash Button, which was launched in the UK last August, is a Wi-Fi-connected device that enables Amazon customers to reorder their favourite products with the press of a button.

The expanded selection includes big name brands across dozens of retail categories, including Duracell, Glade, Heineken, IAMS, Joseph Joseph, Kiwi, L’Or, Mentos, Mr. Muscle, Perfect Fit, Regina, Scott, Tassimo, Wellman, Wellwoman, and more. It total, 65 brands are now available using the Dash Button.

“Customers love the convenience of Dash Buttons – feedback has been hugely positive, and we also heard loud and clear that customers wanted more brands and more products across more retail categories,” said Jorrit Van der Meulen, Vice President Devices at Amazon.

Meanwhile, Martin Andreasen, Marketing Director at JDE, commented: “We’re excited about launching a Dash Button for Tassimo in the UK and see it as a great opportunity for our consumers to re-order their favourite Tassimo coffees from the comfort of home. Ordering through Dash Buttons makes restocking these coffee essentials as easy as pushing a button, offering added speed and convenience for our customers.”

Amazon revealed that the most popular items purchased through Dash Buttons since its launch last year included toilet roll, cat food, washing capsules, cat litter, dishwasher tablets and baby wipes. The top 10 most popular Dash Button brands were Andrex, Finish, Ariel, Gillette, NESCAFÉ Dolce Gusto, Listerine, Fairy, Dettol, Whiskas, and Lenor.

Source: Retail Gazette 21st June 2017


Superdrug owner eyes Holland & Barrett takeover

Superdrug parent company AS Watson Group is reportedly mulling the possibility of a Holland & Barrett takeover, with the company looking to make a bid of at least £1 billion.

According to Sky News, AS Watson Group — which is part of the Hong Kong-based conglomerate CK Hutchinson Holdings — has tabled an indicative offer for the British high street health foods chain and talks are reportedly in an early stage.

Sky News reports that there is a chance AS Watson may not proceed to a formal takeover bid for Holland & Barrett.

However, interest in the health foods chain is reportedly intensifying with several private equity groups and other retail investors looking to make a takeover bid.

AS Watson – which also owns The Perfume Shop – has 13000 stores in 25 countries, making it the largest international health and beauty retailer in Asia and Europe.

Source: Retail Gazette 22nd June 2017


Category News


Poundland Launches Rival To Toblerone Bar

Poundland is launching its own chocolate bar that bears a striking resemblance to Mondelēz International’s Tobleronebrand.

The discount chain has partnered with British firm Walkers Chocolates to launch the new own brand chocolate bar called ‘Twin Peaks’. The double mountain bar is said to be inspired by the double hill on the top of Wrekin Hill in Shropshire.Poundland stated that it had a “distinctive British flavour compared to more traditional milk nougat bars from Switzerland”.

It said that development of the Twin Peaks bar began earlier this year after Mondelēz “created uproar” by reducing the weight of its Toblerone bar by 20g and changing the shape of its iconic brand. The altered version saw the famous triangular chocolate peaks spaced out more widely with Mondelēz blaming the move on higher ingredients costs.

At 180g, Poundland said its Twin Peaks is 20% heavier than its branded equivalent, and offers “a double mountain in every packet”.

The bar will be seen in the documentary ‘Trouble in Poundland’ airing tonight at 9pm on ITV. It officially goes on sale in the first week of July at the chain’s famous £1 price point.

Poundland’s Trading Director Barry Williams commented: “Poundland shoppers are savvy and the change in their favourite chocolate bar last Christmas didn’t go unnoticed. That’s why we’ve created a new £1 alternative for them – the size they wanted, with a British taste, and with all the spaces in the right places.”

Source: NamNews 20th June 2017

http://www.kamcity.com/namnews/uk-and-ireland/manufacturers/mondelez-denies-toblerone-change-was-related-to-brexit/


Unilever To Acquire Cosmetics Brand Hourglass

Unilever is following through on its pledge to secure bolt-on acquisitions to help grow revenues following Kraft Heinz’s recent failed takeover attempt. The group announced yesterday that it has signed an agreement to acquire Hourglass, a luxury colour cosmetics brand.

Founded in 2004 by beauty industry veteran Carisa Janes, the US company is known for innovation, luxe packaging and product experience. Hourglass products are available online and in retailers worldwide including John Lewis, Harvey Nichols and Harrods in the UK.

Alan Jope, President Personal Care, Unilever, said: “We are delighted to be adding Hourglass to our portfolio of Prestige brands. The colour cosmetics category has been showing high growth-rates, driven by social media content, channel diversity and democratisation of professional makeup techniques, and it therefore presents a significant opportunity. Hourglass is already a successful brand in this space, offering fantastic make-up products that also deliver skin care benefits, and we look forward to continuing to grow this wonderful brand.”

Terms of the deal were not disclosed with the acquisition expected to close in the third quarter of this year, subject to regulatory approvals.

Source: NamNews 20th June 2017

https://www.hourglasscosmetics.com/


UK colour cosmetics market to hit £2bn in 2017

Sales of make-up are forecast to grow as women continue to wear products to alter the way they feel The UK colour cosmetics market is predicted to reach a value of £2bn this year, up 7.2% from £1.8bn in 2016.

According to Mintel, the market is also on track for rapid growth over the next five years, anticipated to grow by 36% to £2.5bn by 2021. Looking at category breakdown, over the past 12 months the most-purchased products were mascara (57%), lipstick (49%) and liquid/cream foundation (46%). Face and lip colour sub-categories saw the largest rise overall, with facial products growing by 10% to reach £580m in 2016 and lip colour growing 11% to £304m.

Led by emotions Colour cosmetics remains a transformative sector, both with regards to appearance as well as emotional wellbeing Key drivers behind the category’s success is the emotional connection that women continue to have with make-up.

Research shows that 64% of women say wearing make-up makes them feel more confident, while 43% say it makes them feel attractive. Conversely just 16% say they feel more professional and 15% feel empowered by wearing make-up. Roshida Khanom, Associate Director, Beauty & Personal Care at Mintel, said: “Colour cosmetics remains a transformative sector, both with regards to appearance as well as emotional wellbeing.

“With confidence rating higher than attractiveness as an emotional impact of wearing make-up, brands should use it as a tool for revealing inner beauty and focus more on strength and empowerment. “While the selfie trend continues to heighten the awareness of one’s own reflection, most women are favouring natural make-up looks to enhance their features rather than create dramatic looks.”

Nature’s way Khanom’s observation is supported by the finding that 35% of women say they use make-up to subtly enhance natural features. However, some consumers are interested in exploring trends with 29% having explored eyebrow defining, 24% experimenting with nail art and 20% turning to contouring. But overall, Mintel’s research found that the majority of women say make-up trends are consuming at 69% and 72% say the end result can look unnatural. -

Source: Cosmetics Business 21st June 2017


Skinny Tan delivers ‘exceptional performance’ over past year

Brand achieves the highest monthly revenues for parent company InnovaDerma for four months in the second half of financial year 2017 Skinny Tan has emerged as the shining star of parent company InnovaDerma’s last financial year.

The UK beauty and personal care company announced that its revenue and profits will be “well ahead” of expectations for the full-year to 30 June, with underlying profit before tax forecast to grow by 355% to roughly £1.28m.

The company’s Skinny Tan self-tan brand, sold through Superdrug, was identified as a key revenue driver and described as having put in an “exceptional performance”. Skinny Tan achieved the highest monthly revenues for four months in the second half of financial year 2017.

The brand is now launching into Boots stores through 35 of its largest locations. Boots Ireland will be carrying the product in 65 of its 80 stores from July.

Haris Chaudhry, Executive Chairman of InnovaDerma, said: "We have been working hard to execute our strategy and I am delighted that this has delivered strong sales and growth in profitability. “Our ability to extend our flagship brand, Skinny Tan, to launch new products successfully and to expand our diverse portfolio of premium brands, together with a robust balance sheet, means we are strongly positioned for future growth.”

InnovaDerma has plans to invest further in Skinny Tan and announced it has secured a new channel to enhance the brand’s professional sales through a partnership with the London School of Beauty & Make-up – part of the Urban Retreat group of companies.

Source: Cosmetics Business 21st June 2017


Argos releases top toy predictions for Christmas 2017

The retailer’s predictions for the toys that will feature in letters to Santa across the country this year include:

• Luvabella• Airhogs DR1 Official Race Drone• Disney Cars 3 Lightning McQueen• Hatchimals & new ColleGGtibles• LEGO BOOST• Tiny Treasures Twin Set• LEGO Friends Sunshine Catamaran• PJ Masks Headquarter Playset• Transformers: The Last Knight RC Sqweeks• Fisher Price ‘Teach n Tag Movi’• Paw Patrol Sea Patroller• SoundMoovz

Linzi Walker, chief toy buyer for Argos, has been curating the list with her team since the beginning of the year. She said: “This year’s top toys list is a fantastic blend, as toymakers evolve childhood favourites alongside the introduction of newer and more technology-led gifts.

“Dolls will have made Christmas memories for many children and this year is no different. Luvabella is an incredibly lifelike doll, with advanced animated features enabling it to drink milk from a bottle and fall asleep just as a real little one would. And Chad Valley has produced gorgeous twins as an extension of its authentic Tiny Treasures Baby Doll range.

“There are many opportunities for children and parents alike to embrace user-friendly technology this Christmas. LEGO Boost provides everything needed for children to make five different LEGO models that can then be coded using a free app. The Fisher- Price ‘Teach n Tag Movi’ is an interactive play buddy that helps kids learn on the go. And music lovers will love SoundMoovz, an exciting wearable tech toy for all ages where players can create their own beats and rhythms as they move by using Bluetooth-connected bands on their ankles or wrists.”

Popular on-screen toys are also set to feature, with appearances from Disney’s Cars 3 Lightning McQueen, PJ Masks Headquarter Playset, the Paw Patrol Sea Patroller alongside RC Sqweeks from Transformers: The Last Knight.

Argos polled more than 1,000 parents of children aged 16 and under about their plans for Christmas 2017. One in seven parents said they had already started buying presents for their children and almost a third are planning to buy gifts for their kids over the summer.The retailer found that the most popular choice amongst parents this year is a blockbuster gift, with over half planning on purchasing a ‘gasp out loud’ present alongside a couple of stocking fillers.

The poll also found that parents are happy to spend £114 on average on the main present, with parents in the North-East budgeting over £150 for the ultimate Christmas gift.

Source: Retail Bulletin 23rd June 2017


Other News


New Study Finds Strong Correlation Between A Product’s Number Of Online Reviews And Sales

The number of online reviews a product has directly correlates with its sales performance, even if some of the reviews are negative,according to a new report from Profitero, with input from dunnhumby’s BzzAgent and PowerReviews.

“The number of reviews a product has really matters,” explained the report’s author Profitero SVP of Strategy & Insights Keith Anderson. “The best-selling products in a category – those in the top 10 – each tend to have more reviews than products among the top 100 in the category as a whole – many with double or triple the number of reviews.”

On Amazon US, this is particularly marked in the small appliances, grocery and dog food categories; on Amazon UK, this trend is most prevalent in the chocolate, skin care and baby categories.

When a product goes from having no reviews to at least one review, that product receives an average 108% traffic lift and a 65% increase in conversion rate, according to PowerReviews.

The report highlights a study pointing to a sweet spot for the number of reviews a product should have as being around the 35-50mark. “We see diminishing returns after generating the initial critical mass of around 50 reviews,” said Darcy Reifenberger, global product manager at dunnhumby’s BzzAgent.

“Once you have 50, it’s better to move support to the next product in the portfolio. The value of reviews also tends to come from not building them in one fell swoop. If brands need to encourage reviews, they should do so on an ongoing basis through ‘refresh’ campaigns using well-managed sampling.”

Brands and retailers that don’t feature ratings and reviews on their site risk losing shoppers to sites that do. Research on the path to purchase shows that nearly half of shoppers will turn to a search engine if there aren’t reviews – or aren’t enough reviews – for a product on a brand or retailer site, according to PowerReviews. Some 25% are likely to head to Amazon to find reviews, and 20% will leave for another brand or retailer site.

As well as analysing user reviews, the report looks at the effect of star ratings. Profitero’s research finds that on Amazon US, the top 100 best sellers have a star rating between 4.2 and 4.6 on average. This supports observations in the report that shoppers are more likely to purchase a product with an average star rating between 4.2 and 4.5 than one with a perfect 5-star rating. What’s more, four out of five shoppers specifically seek out negative reviews.

Anderson added: “When it comes to competing online, benchmarking to the competition is critical. Profitero’s Digital Shelf 360 platform identifies products with sub-optimal ratings, new negative ratings or too few reviews relative to the competition.”

Source: NamNews 22nd June 2017


Shoppers Looking To Innovate In The Way They Buy Their Groceries

Shoppers are showing an interest in voice-activated technology to make their food and grocery purchases from home, with 28% claiming to be interested in using a voice activated device at home to add food or grocery items to their online basket in the future. This is according to new research from IGD which shows that this ‘conversational commerce’ is just one way shoppers are looking to innovate in the way they buy their food and groceries.

IGD research shows that the online grocery market is currently worth £10.4bn and in the last month, some 41% of all British shoppers say they have bought some of their food and groceries online. More convenient solutions for shoppers to order and receive their products online could also drive appeal – 19% also envisage that it’s likely they may be buying their food and groceries online and getting them delivered to a secure refrigerated locker near their home in the next 2-3 years. In the same time period, nearly a quarter (24%) say they see themselves signing up to an online subscription service to get grocery products they use regularly delivered to them automatically.

As shoppers look ahead to the future, IGD’s research suggests a continuing evolution in the channels and modes used by shoppers. Six in ten (60%) shoppers predict they will be shopping online for some of their groceries in the next 2-3 years. IGD forecasts the online grocery channel to grow 53.8% to be worth £16bn by 2022, which represents a growth in share of the total grocery market from 5.6% to 7.5% and also highlights the ongoing critical importance of physical shops.

Vanessa Henry, Shopper Insight Manager at IGD, said: “With the recent news that Amazon is set to purchase Whole Foods Market, we see the blend of on and offline grocery shopping moving closer to shoppers and our research highlights just how much food is at the forefront of shopper thinking when considering what technological advances might be available in future.

“The more time-deprived, budget-focused and busier in general shoppers become, the more appealing the convenience of online is, so it’s no surprise that we’re anticipating growth in this area. Knowing what shoppers are looking for in this channel, retailers must now look to deliver solutions online that help them browse and make purchases quickly and easily while offering value for money.”

But it isn’t just online shopping platforms that shoppers associate most with technological advancements for making food and grocery purchases. IGD’s research identified the use of technology in-store to be a key interest of shoppers, with just under half (48%) saying they are interested in using touch screens in-store to find out more information about products, and 43% demonstrating an interest in using their mobile to scan and pay for items without going through the till.

Shoppers also see opportunities with technology to take advantage of offers and save money. Indeed, 44% of shoppers like the idea of receiving personalised offers on their phone in different parts of the store, with 42% saying they would be interested in being alerted to relevant offers on their phone when they are near a store.

Source: NamNews 23rd June 2017


Quarterly LfLs

-8

-6

-4

-2

0

2

4

Asda M&S Morrisons Sainsbury's Tesco

Source: IGD

IRI Weekly News updateYour window on the latest trends in Packaged Groceries

Stephen Hall

Friday 23rd June