Strikeforce is very much open for business to support retailers and manufacturers/suppliers. Get in touch if you need in store execution help, demand planning/vendor replenishment, space planning, experiential campaign planning or planograms. Don’t get caught out when normality in the supply chain and shop floors normalise even if everything else is not normal.
In this issue:
- Pay Rises for Shop Teams
- Woolworths New Payments Deal • Walmart No-Contact Payments
- BG Growth Best Ever
Wesfarmers Drops Coles Shares
Wesfarmers expects to make a $130 million pre-tax profit as it prepares to sell down another stake in Coles Group to shore up its balance sheet. Wesfarmers, which owns Bunnings, Kmart, Officeworks and other businesses, told the market late on Monday of the impending sale of a 5.2 per cent stake in the supermarket, worth $1.06 billion. It’s the second time in two months Wesfarmers has sold down its stake in Coles. It offloaded a 4.9 per cent parcel worth $1.1 billion in February.
The latest shares will be sold at $15.39 each — an 8.5 per cent discount to Monday’s traded price of $16.82 — and settlement is expected on April 2.
The conglomerate will retain a 4.9 per cent interest in Coles and will retain its remaining shares for 60 days from completion of the sale. The coronavirus pandemic and its economic fallout prompted Wesfarmers to shore up its balance sheet. Wesfarmers retained a 15 per cent stake in the company when it spun Coles off as a separate entity as part of a $20 billion demerger in November 2018. (Inside Retail)
Communication the Basic Necessity
Both Coles and Woolworths have been active with their communications to suppliers and the decisions they are making will change the relationships for some time to come. In what is a remarkable situation both, along with other retail companies, are seeking thousands of new employees and outside assistance to ease the burden across the supply chain. The ASMCA has been communicating with the authorities seeking acknowledgement of the work provided by Merchandisers and Representatives in aiding stores to keep shelves full and product available to the consumers. This support, which is welcomed by the major retailers, is keeping many people in work and providing extra hours outside the normal situation. The flexibility in hours is balancing the issues of child care within the home while ensuring the family income remains even. The Federal Government and National Cabinet have the most difficult of jobs with many broadcasters citing war as the closest comparison. Making decisions that will have a quick impact on the health of the community while trying to predict the economic weather is a job that most of us would not wish to have. So far they have been cohesive although some state-by-state messages are confusing. The Prime Minister has been open on the balance between essential services, the need for food, health and emergency support and the necessity for all of us to stay out of the public arena as much as we can.
The benefit of the Government is fewer people seeking Jobseeker social security payments and less panic at the store level.
While WFH is the new acronym for the foreseeable future, many outside roles will be required to keep the country viable. The ASMCA has also sought policy changes from the Fair Work Commission to enable flexibility of working hours to allow store assistance to be given in less crowded times. This increases the safety of the workers and allows the retailers to ensure that their “special hours” shopping for health workers and the elderly are times when stock is available. We commend those who are continuing with their service roles and will do what we can to help them.
Supermarkets Focus Online on Elderly
Supermarket giant Coles is in the early stages of rolling out an Online Priority Service (COPS) to service elderly and vulnerable customers who are struggling to access groceries as a result of COVID-19 panic buying. After unprecedented online orders, Coles halted Click&Collect and Home Delivery through Coles Online from March 18 and the service has been temporarily diverted to COPS to prioritise those most in need. The service is expected to be rolled out by the end of this week. “We’re looking to deliver food and grocery essentials to elderly and vulnerable members of the community, including retirement and nursing homes as soon as possible, hopefully by the end of the week,” Coles said in a statement on its website on Tuesday. “Our priority is ensuring we can offer a good range of everyday grocery essentials with high availability to our customers who find it difficult to shop in-store.” Woolworths will continue to scale its online delivery capacity over the next week to help meet the essential food and grocery needs of the growing number of customers in self-isolation because of COVID-19. The retailer has partnered with Australia Post and DHL Supply Chain to launch the ‘Woolworths Basics Box’ across ACT, New South Wales and Victoria for customers unable to leave their home. Other states are expected to follow in the coming weeks.
Available for $80, the ‘Woolworths Basics Box’ will contain meals, snacks and a few essential items.
The price also includes contactless doorstep delivery by Australia Post within an estimated time of two to five business days of order. Woolworths will not be profiting from providing this service. Customers can’t choose, switch or select specific products with the ‘Woolworths Basics Box’. By streamlining the picking process and partnering with Australia Post for the delivery and DHL for the packing, Woolworths will be able to get more essential items to many more vulnerable customers faster. (OnlineNews)
Walmart “No Contact” Payment
The retailer is introducing no contact payment for customers using the Walmart Pay app. Walmart developed the payment service four years ago as part of its goal to transform the shopping experience in its stores, particularly at the front-end. Previously, customers had to select a payment method by touching a screen on its self-checkouts when using Walmart Pay. The retailer has adapted this so that customers who have a smartphone can scan a QR code and Walmart Pay is synced, allowing customers to pay completely free of contact. The retailer is also introducing no contact pickup and delivery for its online services. Walmart, along with most retailers global-ly, has seen the demand for online shopping increase significantly during the pandemic. Customers choosing pickup can open the boot of their cars for store associates to load their groceries in, with no requirement to sign for the order.
Customers can also bypass leaving the signature for home delivery, also making this service contact-free.
These initiatives provide another layer of safety in-store for Walmart’s associates and customers. The retailer has started to introduce plexiglass checkout screens and floor stickers to support social-distancing, along with enhanced cleaning measures. The change to the Walmart Pay app could help the retailer to drive sign-ups to the payment method, a service which has proved popular with its shoppers since it was launched. Going forward, we expect to see a stronger focus on contactless payment, especially as some retailers have been accepting card payments only during the crisis. (IGD)
Tesco 35,000 New Staff
Employed Britain’s biggest retailer Tesco said on Tuesday it had recruited 35,000 additional workers in the last 10 days to help get it through the coronavirus emergency, which has triggered a dramatic increase in demand for grocer-TESCOies. The supermarket group is the country’s largest private-sector employer with around 340,000 workers in the United Kingdom and Ireland and nearly 3,800 stores. The new workers, including in-store shelf stackers, pickers for online deliveries and drivers, will help fill a gap left by those absent due to sickness or self-isolation.
In a letter to customers, Tesco Chief Executive Dave Lewis said that after a week of national lockdown most panic buying by shoppers had eased.
He said in fresh food, stock levels had returned to almost normal levels, with plenty of fruit and vegetables available, while in packaged groceries the recovery would take a few more days. Lewis also said Tesco was donating 30 million pounds ($37.4 million) to community organisations under pressure from the crisis. Separately on Tuesday industry data showed UK grocery sales leapt more than a fifth to a record 10.8 billion pounds in the four weeks to March 22, as Britons stocked up on everything from pasta to pet food ahead of the lockdown (Reuters)
Fastest Growth in Britain
Market growth for the 12 weeks to 22nd March was +7.6%, the fastest rate in over a decade, according to Kantar. The rapid growth was driven by a 20.6% surge in sales over the last four weeks — equivalent to an extra £10.8bn of spending – as shop-pers stocked up on groceries and switched back to retail from out-of-home consumption in response to the Coronavirus (COVID-19) pandemic. For the first time since October 2018, all of the ten tracked retailers were simultaneously in growth. This was driven by people making additional shopping trips and buying slightly more rather than a widespread increase in very large trolleys. The average household spent an extra £62.92 during the last four weeks, equivalent to five days-worth of groceries. Spending rose most in London where infection rates are highest, up by 26% during the month. There was also a big increase from households with children over the age of 16 as students returned from college and university, up £88.13 on a year ago to £508 this month. Over the past four weeks, sales through larger stores operated by the Big Four, Waitrose, Aldi and Lidl were 19% higher than in March 2019 as shoppers’ favoured stores designed to support larger shopping missions. The market share of the Big Four alone picked up 0.2 percentage points to 68.3% in the 12 weeks to March 22nd, re-versing a long-term decline. Within this group, sales growth at Sainsbury’s accelerated most – from 0.3% to 7.4% – significantly ahead of Tesco, Asda and Morrisons. Grocery spends online was 13% higher than the same period of 2019 as shoppers rushed to secure all available delivery slots. The average order size reached £81.88, over £6 more than in March 2019, with 14.6% of households receiving an online delivery in the last four weeks, up from 13.8% a year ago.
The discounters continued to advance strongly, with Lidl achieving astonishing growth of 17.6% and Aldi reaching a record high market share of 8.2%.
Both Aldi and Lidl have introduced measures in-store to help shoppers and staff. They are also actively recruiting new team members. Read more about the responses from discounters in the UK and Ireland here. (Supply Chain)
Johnson & Johnson Test Vaccine
J&J stock climbed 8% Monday after the company said human testing of its experimental vaccine for the coronavirus will begin by September and it could be available for emergency use authorization in early 2021. J&J also said it has committed more than $1 billion of investment in partnership with the federal Biomedical Advanced Research and Development Authority, which is part of the Department of Health and Human Services, to co-fund vaccine research.
J&J’s lead vaccine candidate will enter a phase 1 human clinical study by September, the company said, and clinical data on its effects is expected before the end of the year.
If the vaccine works well, the company said it could be available for emergency use in early 2021. The company said it is also increasing its manufacturing capacity with a new site in the U.S. and additions to existing sites in other countries to produce and distribute the potential vaccine quickly. J&J said it seeks to produce more than 1 billion doses of the potential vaccine. (CN8C)