Opening Retail Week Live, Judith McKenna, CEO Walmart International refused to be drawn on its future ownership of Asda. The merger with Sainsbury’s is “still in the process, we’re working with the CMA (Competition and Markets Authority), and we’ll see what the road ahead is when they publish their next papers” she stated. McKenna shared her belief that Asda has put together a “fair and reasonable proposal” to enable the merger to be delivered to benefit British consumers. Reiterating Walmart’s international strategy of strong local businesses powered by Walmart, she reconfirmed her objective to position Asda for long-term success.
Addressing Retail Week Live with her opinions on the “Future of Work”, McKenna discussed the integration of technology into the Walmart business, and her view that there are three priorities for retailers:
- Public engagement: having a real conversation with the public around digital evolution, listening to their fears and telling positive stories
- Reimagining education and training: the need for businesses to commit to life-long learning and supporting their workforces to transition into new roles created alongside enabling technology. Walmart see this as a partnership, with governments and education bodies
- Make work more inclusive: being proactive to actively create new, equal opportunities
Waitrose: ranging and online update
Waitrose & Partners' MD Rob Collins provided an update on its ongoing range review process, on plans for Waitrose.com once the Ocado supply agreement ends and on Waitrose’s long-term outlook.
Collins stated 24 categories have now been reviewed, with plans to do 70 more before the end of 2019. Waitrose aims to remove complexity and duplication from its ranges, but in keeping with its strategy to “be close to its most loyal customers” it will keep products listed if data shows they are purchased disproportionately by frequent and main Waitrose shoppers.
On its online plans, Collins reiterated the Ocado relationship had “been a commercial one”, and that it has been very consciously strengthening Waitrose.com by investing 20% of its discretionary capital on it over the last five years. Waitrose.com grew at 14% last year (now accounting for 5% of Waitrose sales) and it plans to double this over the next five years. Customers who shop at Waitrose.com spend four times more in total across the full Waitrose & Partners portfolio than those who do not.
On its future plans, Collins stated his belief that the “supermarket industry is going through a period of change”, and he “fundamentally disagrees that the answer is scale”. Waitrose & Partners is not concerned with “only having 5% of the market”. Waitrose, Collins said, is “comfortable in its own skin” and that its current operating margin of 3.2% is a “very sustainable level for us”. He sees an increasing polarisation between “the function of shopping and experience of shopping”, and Waitrose will focus on delivering its shoppers value over price.
Boots: four take outs
Seb James, SVP, President and MD of Boots, has been in role since September 2018, having joined from Dixons Carphone. Four take outs from his presentation at Retail Week Live were;
- Boots needs to lever the asset of its heritage, not let it be a “straitjacket”: it is 170 years old this year, and the opportunity is to build on the trust the brand has (second most trusted UK healthcare brand after the NHS) rather than living under a “heritage asset shadow” that prevents development.
- The Boots Brand Guidelines need to be relaxed: by constraining how brand owners can execute in Boots stores, Seb feels Boots has “become less relevant to its customers and suppliers”.
- There are three clear elements to the Boots business: these are helping customers to get better, to live well and to look great. In 2019 Boots will be adopting a more missions-based approach to its retail proposition to reflect these different elements, as customer demographics and behaviour is very different in each.
- There will be new format Boots retail stores launched in H2 2019, based around missions and with a more differentiated Beauty proposition. Seb stated that Boots has “got behind the curve” on beauty retailing. Consumers are less brand loyal and are increasingly influenced by social media, so Boots needs to create a new retail experience, with the aim to be the “global leader in personalised beauty”.