Retailers
Half-year profit of £66m for The Co-op Group, which has named Richard Pennycook as its permanent CEO
The Co-operative Group has posted a return to profit.
The group reported a half-year underlying profit of £66 million for the 26 weeks to 5 July – down from a profit of £116m in the same half-year period in 2013, but bouncing back from the full-year loss of £2.5bn posted in April.
The food business saw like-for-like sales up by 1% overall, albeit with underlying operating profit falling by just over 8% to £107m.
Furthermore, the group has appointed Richard Pennycook as chief executive on a permanent basis, and has started to implement a three-year turnaround plan.
Pennycook, who had been working as interim CEO, said: “2014 has marked a defining period for The Co-operative Group. We have delivered the changes we set out including fundamentally reforming our governance and we are developing clear plans to drive our success for the future.
“We took the tough decisions to re-shape our group to ensure it is on a sustainable footing and the disposals of our pharmacy, farms and Sunwin Services businesses as part of this will repair our balance sheet.
“Our Group strategy is to build on our existing strengths as a convenience food retailer and to optimise the performance of our new consumer services division, comprising of funeral care, general insurance and legal services. We are now in a position to rebuild and restore the group and can look to the future with greater confidence.”
By the end of the year, the group’s food business plans to have launched 100 new stores, with over 300 further refits, 800 new products launched and 4,000 products now under our ‘Loved by Us’ range.
The Trinidad Scorpion, which until recently was the hottest chilli in the world, has an average reading of 1.2m Scovilles
The UK’s latest ‘hottest-ever’ commercially grown chilli pepper is to go on sale at Tesco.
The Trinidad Scorpion, which until recently was considered the hottest chilli pepper in the world, has an average reading of 1.2 million on the chilli-heat measuring Scoville unit scale.
Some Trinidad Scorpions have been measured at 2 million Scovilles. In comparison, the average Jalapeno pepper comes in at 3,500 Scovilles.
Tesco chilli pepper buyer Shannon Berry said: “The Trinidad Scorpion is unbelievably spicy and should be approached with extreme caution even by so-called chilli heads.
“You can sense the strength just by smelling the chilli and the first bite leaves you under no illusion at all that you are about to undergo an intense culinary experience.
“But besides the scorching heat the Trinidad Scorpion also has a wonderful fruitiness that if tempered in a chutney or salsa with mango or banana it will create quite a wonderful relish.
“Be warned, it is so strong you need only the tiniest smidgeon in order to add some excitement to your food.”
The Trinidad Scorpion has been grown by Salvatore Genovese, who produces one million chillies a week on his farm near Sandy in Bedfordshire.
Salv, as he is known in the business, has become so renowned within the UK’s chilli head community that he has attracted a loyal fan base with followers eagerly anticipating the arrival of his latest variety.
Two years ago, he launched the Bedfordshire Super Naga in the UK, and demand was so high that initial supplies ran out within a few months.
This time, he has planted enough to at least last through most of the summer.
Genovese said: “It could be that the Trinidad Scorpion is way too hot for the UK market, so I’m eager to get feedback before deciding on whether to grow more or not.
“For the Bedfordshire Burner I was getting calls from chilli heads all over the world and it went down a storm which is why I decided to grow an even hotter variety.”
The Trinidad Scorpion will go on sale exclusively in 235 Tesco stores across the UK and will cost £1 for a packet of between two to three chilli peppers, depending on their size.
Ex-Tesco finance director Andrew Higginson will take over on 1 October when Sir Ian Gibson retires
Morrisons has appointed Tesco veteran Andrew Higginson as its next chairman.
Higginson will take over on 1 October following the retirement of Sir Ian Gibson, amid speculation that his arrival could pose problems for the beleaguered current chief executive, Dalton Philips.
Higginson spent 15 years on the Tesco board during years of rapid growth, as finance director and later as chief executive of the retailer’s online and bank divisions. He left in 2012, shortly after previous Tesco boss Sir Terry Leahy.
He is currently chairman of home shopping group N Brown. On Tuesday (29 July) he stepped down as chairman of the recently floated Poundland when his new role at Morrisons was announced.
Poundland’s senior independent director and former Sainsbury’s finance chief Darren Shapland replaces him.
Higginson joins Morrisons amid a continuing sales slump. The latest Kantar Worldpanel data shows that Morrisons now has an 11% share of the market, down from 11.6% a year ago.
It posted an annual loss of £176 million in the year to February, and in June announced it was cutting 2,600 jobs as part of a drive to modernise the way its stores were managed.
Morrisons has said it is investing £1 billion over three years as it cuts prices to compete, and its online shopping platform is growing in size and scale.
Judges unable to split Waitrose and Sainsbury’s as 21st Bramley apple awards celebrate industry excellence
To a retailer, sharing a stage with a competitor is usually the ultimate no-no.
But it was all smiles at the Brammy Awards yesterday as representatives of Sainsbury’s and Waitrose posed for photos after becoming the first joint-winners of the Best Bramley Retailer of the Year gong.
The 21st Brammy Awards was held at Quo Vadis in London, having skipped a year due to the poor crop in 2013. Judges said they were unable to split the two retailers, with Sainsbury’s having shown widespread support for Bramley within its Eat Well For Less campaign, recipe development with Jack Monroe and social media activity, while Waitrose impressed with its dedication to promoting the versatility and cooking qualities of the fruit.
Best Manufacturer of a Savoury Bramley Product was Darlington & Daughters for Mrs Darlington’s Autumn Fruit Chutney, while Tesco Apple Pie by Kensey Foods won the Sweet Bramley Product category.
Best Bramley Apple Sauce went to Cottage Delight, while Chegworth Valley got the nod for best Bramley Apple Drink.
Mr Kipling was named Best Catering/Foodservice Company, and in the individual categories The Times’s Lindsey Bareham won Best Bramley Food Writer and Tom Kerridge was Best Media Chef.
Adrian Barlow, chairman of the Bramley Apple Campaign, said: “The awards present the industry with an opportunity to recognise retailers, manufacturers, catering companies, journalists and chefs who are championing the iconic Bramley apple. The winners have shown outstanding support for Bramley apples over the past year through the quality and breadth of products they have developed, the innovative promotional activities they have undertaken, and their highlighting of Bramley in the media. I am delighted that we have this opportunity to celebrate their achievements.”
Fifteen tonnes of UK-grown stone fruit now on sale in UK, with a huge increase in production lined up to seize export opportunities
The first substantial volume of British-grown apricots have entered the market.
For the next six weeks, stonefruit lovers will be able to buy 15 tonnes of apricots grown near Staplehurst, Kent in 200 Tesco stores across the UK.
Weather permitting, production could be up to 100 tonnes next year.
The release coincides with a growing UK love affair with the fruit, as in the last year, Brits bought 18 per cent more apricots than the previous year, according to Kantar Worldpanel data.
The arrival of homegrown apricots is also to be celebrated as the British growing season will allow production to be taken into September – a time when no other country in the world produces apricots.
Tesco lead fruit development manager Natalie Slack, said: “Not only do British shoppers enjoy arguably the best strawberries, cherries, apples and pears in the world grown here in the UK, but soon we could also have an apricot industry to rival that of France.
“Until a few years ago it was near impossible to grow apricots in the UK because of the climate, but with the selection of the right varieties and pruning of the trees to suit our weather as well as Nigel’s tenacity as a grower this existing project has been made possible.
“And ironically, the cooler British night time temperature is set to produce very high-quality apricots, as the fruit grows more slowly resulting in a more intense taste and stronger, richer colour.”
Tesco started working on the project with one of the UK’s biggest stone fruit growers, Nigel Bardsley, five years ago with view to launching major scale English apricot production.
Bardsley, a Tesco supplier for 25 years, enlisted a team of experts comprising breeders, agronomists and growers to create a production plan which culminated in the planting of eight hectares of orange-fleshed, French-type apricots.
After visiting French growers a few years ago, Bardsley planted 5,000 apricot trees across eight hectares of land, and the first fruit from his orchards will start arriving in Tesco stores this week (w/c 14 July).
Bardsley said: “There is a growing demand for apricots here in Britain, and if all goes well by next year I should see a return of 100 tonnes, and in the next two to three years an annual crop return of about 400 tonnes.
“When I heard about the new apricot cultivars that were available I jumped at the chance of getting these. The fruit we had before flowered too early, in March, when it was still too cold. It was far too risky which is why no one ever tried to grow them on a commercial basis.
“Generally, the British weather pattern has changed over the last few years and we now tend to be getting milder winters and later springs which suits apricot production.
“And because production will go into September then for the first time ever, we may soon have France, Spain, Portugal and other countries around the world buying apricots from Britain.”
Retailer is working with lettuce supplier G’s to get more Icebergs on offer when good weather produces a crop flush
Tesco is to offer Icebergs to customers at two for 75p in a bid to boost sales and consumption of the leaf vegetable.
The retailer is working in partnership with G’s Fresh in what it calls “an effort to be more responsive to the natural peaks of the summer growing season”.
The two businesses are identifying where good weather is going to create a bumper crop, and setting up the special promotions in tandem with this to make extra lettuces available to customers at a lower price.
The first promotion went live in Tesco stores in early July, and also allows customers to mix and match their Icebergs with celery and beetroot from G’s Fresh.
Rick Clay, commercial manager for G’s Fresh, said: “This year Tesco gave us a base volume commitment for the whole of the season – something we’ve never had with any retailer before now – and we’ve worked together to come up with a plan to trade crop flushes as and when they occur. It’s all about being more responsive within the security of an underlying commitment.”
Adam Hill, Tesco’s salad sourcing manager, said: “This work is part of Tesco’s commitment to working in partnership with our suppliers and helping customers to tackle food waste from farm to fork.
“We want to make sure our customers benefit from the natural peaks in the growing season and over the coming months, customers and suppliers will see the benefits of this same approach across various British crops.”
The promotion will run until 26 July.
Thursday night’s SuperMeat & Fish Awards celebrated the best British supermarkets have to offer, with Tesco winning overall retailer of the year.
Tesco took home the title of Meat and Fish Retailer of the Year as well as the Head office Initiative Award.
Head judge Fred A’Court, who was impressed with the Tesco stores, said: “A high level of consistent quality in its product range, allied to attention to detail and good availability throughout its stores helped Tesco to a good win in this year’s awards. It is now making progress in creating warmer, friendlier and distinctive shopping zones in some of its stores that make customers feel comfortable and relaxed while they shop.”
Attending the prestigious event in central London Mark Green, who collected the overall retailer award for Tesco told Meatinfo.co.uk: “This is the award we wanted and why we entered.“ Tesco are committed to develop and train staff and our fresh food capability sets us apart. From a head office perspective we are committed to train our staff, over the course of the year we have trained 3,000 colleagues on how to skin our meat and fish, right through to the finished product. We are really proud of the products we sell and the service that we offer our customers.“ When you look at the competition whether it be Aldi, Lidl or Morrison’s, everybody has done a great job and it is extremely competitive, so we are extremely proud to come out on top.” Ed Bedington, editor of Meat Trades Journal which organised the awards, said: “Many congratulations to Tesco – a most deserved win. The results, which saw Tesco perform consistently well throughout, show the amount of work the retailer has been doing to improve its quality.”
A total of 13 product awards and seven regional store awards were given out at the glitzy event presented by musician and television personality Myleene Klass.
Best Overall Product was awarded to Marks & Spencer for its Steak and Old Peculier Ale Pie. Morrisons Camden scooped two awards for Best Store Team and Best Meat Counter, while Tesco Superstore, Launceston, Cornwall was awarded Best Fish Counter. The most innovative product was given to Tesco for its Beef Lollipops with a Cherry BBQ Sauce.
This year’s ceremony also played host to the Tri-Nations Butchery Awards, held earlier in the day at the Great Yorkshire Show. This saw top butchers from Great Britain, Australia and New Zealand go head-to-head for the title. The Kiwis were crowned champions for the second consecutive year.
Bedington added: “This competition is a great showcase for the supermarket sector, and this year was no different, with a superb range of entries and a close-fought battle for every category. We look forward to seeing how Tesco defend their title next year, as I know the other retailers will be itching to get their hands on the crown.”
In the wake of the UK’s beef pricing crisis, Waitrose has raised its “price floor” for British beef.
The supermarket set a minimum price it would pay British farmers for their beef at £3.40 per kilo until September 2014. However, this has now been raised to £3.45 per kilo until 1 October 2014. In addition to this price rise, Waitrose will also raise the price paid for standard British cattle, used for the Essential Waitrose range, by 0.02p per kilo. “Because British beef is such a key part of our business and we are certain that a further erosion of prices will not serve well processors or producers, we decided, in early May, along with our own dedicated processor Dovecote Park, to set a price floor for beef,” a spokeswoman for the supermarket told Meatinfo.
Meatinfo has reported extensively on the beef pricing crisis affecting British farmers, who have seen the farmgate price for beef cattle drop significantly. Farmers argue this has been caused by cheaper imports flooding the market, especially from Ireland, coupled by a lack of commitment from supermarkets to support British farmers.
This step from Waitrose has been welcomed by the National Farmers’ Union (NFU), which is urging other supermarkets to follow suit. Pete Garbutt, chief livestock advisor at the NFU, told Meatinfo: “This is good news and an example of a supermarket standing by its suppliers and looking to the long term.
“When Waitrose announced its threshold price last month the NFU came out and praised it publicly. This is a great example of supermarkets working for the long term and would love other supermarkets to take a similar view.”
Premium retailer’s food like-for-like sales were up 1.7% while online sales plummeted by 8.1%
Sales from Marks & Spencer’s website M&S.com fell by 8.1% in the first quarter of 2014, while food like-for-like sales rose 1.7%.
The company said its buoyant food business has been driven by a strategy to be more specialist, as well as new products.
Chief executive Marc Bolland said the new M&S.com site has had an impact on general merchandise sales, while food continues to outperform the market.
“Our food business had a great quarter with our strategy to be more specialist setting us apart from the competition,” he said. “With value top of mind for customers, we remained price competitive while protecting our gross margin. We launched some 700 new products giving customers more choice than ever.
“In line with our increased focus on margin, we were less promotional, both online and in stores. While this has affected the sales performance, particularly online, we are on track to deliver our full year gross margin guidance.”
Bolland confirmed that the premium retailer is on track to open 150 new Simply Food stores opening over the next three years.
He said the website has been “technically resilient” and confirmed the company is now focused on optimising the website commercially, with updates made on a regular basis.
“We have recently seen a gradual improvement in sales performance, despite a lower level of promotional activity. We expect to return to growth ahead of our peak trading period,” he added.
Trading conditions in the Republic of Ireland continue to be challenging, Bolland said, while sales in the Middle East were impacted by the timing of shipments to franchise partners.