ONE of the world's most successful supermarket bosses, Sir Terry Leahy, who took the British chain Tesco from a struggling, third-ranked competitor in its home market to one of the biggest grocers in the world, has a message for Woolworths and Coles: there is a limit to how much private label goods can dominate their shelves.
Sir Terry knows what he is talking about. Tesco helped drive the proliferation of private labels in Britain's supermarkets, and when Woolworths revealed its new strategy last year to match a resurgent Coles and improve its own bottom line, it named Tesco as the world's leading supermarket when it came to house brand penetration as a proportion of total sales.
''Like so many strategies it depends on how you execute,'' Sir Terry told BusinessDay from London. ''The UK consumer has always trusted private label, as much as anything because of Marks & Spencer, and Marks & Spencer is 100 per cent private label, and so the UK consumer were used to that offering and then Tesco developed it for a wider market and has had a lot of success.
''But there is a natural level, or natural limit, from sector to [supermarket] sector, between 30 and 50 per cent, and it's very important that you let the consumer choose. Don't force the choice for the customer.''
For Tesco, that limit is roughly 40 to 45 per cent of all sales, and the retailer stands out among its global peers in the penetration of unbranded groceries. Woolworths and Coles are believed to have a private label penetration of only 10 to 15 per cent - but are keen to increase that quickly. Kroger and Safeway in the US have closer to 25 per cent private label penetration, Walmart (US) and Britain's Sainsbury's more than 40 per cent.
Sir Terry sounded a note of caution to manufacturers and suppliers who have been grumbling as their branded goods are replaced by supermarket-owned groceries on shelves. ''That's not necessarily a bad thing for manufacturers. Some manufacturers will concentrate on brands only and some will concentrate on private label supply.''
He said supermarkets needed to have close relationships with these suppliers. ''The entire reputation of that organisation [supermarket] is dependent on those [private label] products and therefore you have to make sure the product you buy is safe, high quality and attractive.
''Therefore you have got to make sure you are paying the suppliers enough so that they can invest in their business. It just makes no commercial sense for a supermarket like Coles or Woolworths to press down on costs so much, because it's their name on the label.''
Under Sir Terry's guidance, Tesco increased the number of its British stores from 568 in 1997 to 2482 in 2011, when he retired. It increased the number of foreign stores from 190, mostly in France, to 2329 in 13 countries. Annual sales rose from £13.8 billion to nearly £60 billion in 2010.
Sir Terry said online sales would be a key driver of growth for supermarkets in the future.
Source: www.smh.com.au
Councillor Ken Gregory cautioned for 'get Aids' voicemail - BBC News
A Tory councillor who left a message saying "with a bit of luck you'll get Aids" on another councillor's phone has been cautioned by police.
Ken Gregory, a member of Thanet council in Kent, received a caution for malicious communications on Wednesday.
John Worrow, who is bisexual and an Independent on Thanet District Council, received the voicemail message on his mobile phone earlier in May.
Mr Gregory has been suspended from the Thanet council Conservative group.
'Cannot possibly remain'Mr Worrow said: "Last night I received a telephone call from an inspector from Kent Police confirming that Councillor Ken Gregory is the person who committed a homophobic hate crime against me in the form of a voicemail.
“Start Quote
End Quote John WorrowThere is absolutely no justification whatsoever for that kind of behaviour”
"As Mr Gregory cannot possibly remain a member of the Conservative Party or a member of Thanet District Council after saying 'With a bit of luck you'll get Aids', I feel that a caution should be punishment enough.
"My colleagues and I hope that this has not triggered a hate campaign.
"There is absolutely no justification whatsoever for that kind of behaviour towards anyone regardless of their race, religion, gender or sexuality and I expect a full apology at the next council meeting."
A spokesman for Kent Police said: "A 59-year-old man from the Ramsgate area was given a caution yesterday for an offence of malicious communications."
In April, Thanet District Council became the first local authority in Kent to officially support the government's proposals for same-sex marriage.
Independent Councillor Ian Driver moved the motion in support of equal marriage and said he hoped it would encourage other Kent councils to follow its lead.
'Complete ignorance'A statement issued by Conservative Councillor Bob Bayford, shadow leader of the hung council, said: "It has come to my attention that Councillor Ken Gregory has received a police caution for an offence against another council member.
"The Thanet District Council Conservative group demands the highest standards of conduct from its members and I have decided to suspend group membership from Councillor Gregory with immediate effect, pending further consideration of the situation."
Paul Rollins, from the gay campaign group Thanet Pride, said Mr Gregory's comments showed "complete ignorance of the Aids issue".
He said: "This sort of homophobic behaviour is an insult to the general community rather than people who are just gay and lesbian, bisexual or transgender.
"I find it appalling that an elected representative would use a cowardly and illegal phone message to try to get some strange point across."
Source: www.bbc.co.uk
Tesco boss warns on house brands - The Land
Sir Terry knows what he is talking about. Tesco helped drive the proliferation of private labels in Britain's supermarkets, and when Woolworths revealed its new strategy last year to match a resurgent Coles and improve its own bottom line, it named Tesco as the world's leading supermarket when it came to house brand penetration as a proportion of total sales.
''Like so many strategies it depends on how you execute,'' Sir Terry told BusinessDay from London. ''The UK consumer has always trusted private label, as much as anything because of Marks & Spencer, and Marks & Spencer is 100 per cent private label, and so the UK consumer were used to that offering and then Tesco developed it for a wider market and has had a lot of success.
''But there is a natural level, or natural limit, from sector to [supermarket] sector, between 30 and 50 per cent, and it's very important that you let the consumer choose. Don't force the choice for the customer.''
For Tesco, that limit is roughly 40 to 45 per cent of all sales, and the retailer stands out among its global peers in the penetration of unbranded groceries. Woolworths and Coles are believed to have a private label penetration of only 10 to 15 per cent - but are keen to increase that quickly. Kroger and Safeway in the US have closer to 25 per cent private label penetration, Walmart (US) and Britain's Sainsbury's more than 40 per cent.
Sir Terry sounded a note of caution to manufacturers and suppliers who have been grumbling as their branded goods are replaced by supermarket-owned groceries on shelves. ''That's not necessarily a bad thing for manufacturers. Some manufacturers will concentrate on brands only and some will concentrate on private label supply.''
Source: theland.farmonline.com.au
Tesco Bank cuts personal loan rate to just 6% as battle for best borrowers heats up - This is Money
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Tesco Bank has reduced the interest rates on its personal loans, offering borrowing between 7,500 and 15,000 at just 6 per cent.
While this does deliver one of the best rates on the market, supermarket rival Sainsbury’s just pips Tesco to the top spot with an interest rate of 5.9 per cent.
The rate cut from Tesco increases the pressure at the top end of the personal loans market, where lenders are competing for the best borrowers.
Rate cut: Tesco Bank loans get more competitive thanks to new interest rate cuts
While both Tesco and Sainsbury’s loans are available to new and existing customers, Sainsbury’s bank does require customer to hold a Nectar card. Since getting the supermarket loyalty card is free, it’s worth the effort of applying if you want the very best rate.
But those enticed by the low rates should remember that they will only be offered to borrowers at the top of the credit rating tree, rules allow up to 49 per cent of applicants accepted for loans to be offered higher interest rates than the representative one advertised.
Tesco has cut rates for all loans ranging from 5,000 and 25,000, but the keenest rates from both providers are found between 7,500 and 15,000.
Borrowing 7,500 from Sainsbury’s over 36 months at the representative 5.9 per cent would see customers paying 682.80 in interest, while the equivalent loan with Tesco would cost 694.68.
However, if you’re looking to borrow between 15,000 and 25,000, Tesco’s rate cuts put it ahead of Sainsbury’s, offering 7.8 per cent interest compared with 8 per cent.
But in this category it is Clydesdale Bank that beats them both, offering a market leading 7.7 per cent.
Customers should bear in mind that borrowing over a longer period than three years will see the interest rates rise.
Consider a low rate card
For borrowing smaller amounts, it is worth considering a low rate credit card as an alternative to a personal loan. Borrowing 2,500 from a loan provider would incur an interest rate of 18.5 per cent over 36 months, even with the most competitive loan currently on the market. That would mean paying back 713 in interest over the life of the loan.
Borrowing the same amount over the same period on Sainsbury's market-leading low rate credit card would mean paying interest of 6.9 per cent, and paying back 274.83 over the life of the loan. That's a saving of 438.17.
Sainsbury’s Bank has its own standard low-rate card; a market-leading 6.9 per cent APR card on both new purchases and balance transfers. The offer is only available to Nectar Card customers and to those who do not have an existing Sainsbury’s credit card.
Barclaycard Platinum Simplicity offers a rival low rate card with a 7.9 per cent APR.
Source: www.thisismoney.co.uk
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