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SPAR retail sales increased 4.0% to €3.2 billion (£2.82 billion) in 2017, despite the ongoing uncertainty of Brexit and a weakened pound.  The results were announced in SPAR International’s Annual Report 2017 and mark five years of consecutive growth for SPAR UK.

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Two UK convenience retailers are trialling mobile payment apps to improve the shopper experience.

Co-op trials “shop, scan-and-go” service

Co-op is trialling a “shop, scan and go” app which allows shoppers to purchase products in-store using their smartphones.

The trial of the new mobile app will start at the shop located in Co-op’s customer support centre in Manchester, followed by the store in Microsoft’s UK headquarters in Reading.  A wider rollout is planned to start in the summer.

Using the new app, shoppers can scan and pay for an item directly with their mobile phone without needing to queue at a till.  Payments made via the app are linked to shoppers’ Co-op membership accounts, with shoppers being able to see them how much they have saved via the retailer’s loyalty scheme.

The new service is a joint venture with Mastercard and has been launched to provide a “frictionless” buying experience after Co-op noticed a steep fall in cash transactions in recent years.

Spar UK retailer rolls out payment and loyalty app across estate

After a successful launch in October 2017, Zapper - an all-in one mobile payment, loyalty and vouchering app - is now available in 20 Gillett-owned Spar sites in the south west of England.

The app is similar to Apple pay, where shoppers use their mobile phone to pay at the till, but offers retailers the additional benefit of being able to combine payment, loyalty rewards and digital vouchers in one app.

Phil Darch, Operations Director at Gillett’s said, “We are delighted to be the first convenience retailer in the South West to offer customers payment through Zapper. We have been looking for some time how we can reward our customers with a loyalty program that is easy to administer offers real value to consumers and is integrated into a simple payment process. We believe that Zapper fits the bill and early indications have been very positive”.

Zapper is now available in over 1,000 convenience retail stores including Spar, Nisa, Premier, Londis, Family Shopper, Best-One and Costcutter across the UK.  Read more about its launch in Gillett’s Spar here.

Developing a “frictionless” buying experience

The development of mobile payment technology by Co-op and Spar follow similar trials by the likes of Sainsbury’s , not to mention the opening of Amazon’s first automated convenience store, Amazon Go, in Seattle in January this year (read about our first impressions of this store here).

By removing the need to queue at a till to pay, retailers are aiming to make the buying process as quick and convenient, or “frictionless”, as possible.  Although this may require a change in how shoppers feel about the payment process (to be seen walking out of a store without paying at a till may be uncomfortable for some) the drive to remove all barriers to hassle-free shopping looks set to continue.  Watch out for more developments in this space.


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Following the announcement that the UK's largest delivered wholesaler Palmer & Harvey is now in administration, PwC, the administrators, have advised the company's customers that it cannot provide any further wholesale service and that even orders placed before the administration cannot now be honoured.  Therefore customers "will need to arrange an alternative source of supply going forward."  With sales of £4.4bn from a customer base numbering up to 90,000 retailers and institutions, the resulting redistribution of business-to-business supply is perhaps one of the biggest short-term upheavals ever seen in the UK wholesaling sector, and as such the opportunities for other wholesalers are considerable.

Not all the £4.4bn likely to be 'wholesale accessible'

Amongst Palmer & Harvey's broad customer base is included multiple grocery retailers such as Tesco and Sainsbury's using it mainly as an outsourced specialist distributor of tobacco.  Accounting for an estimated 60% of total company sales it seems likely that this element of the business can be quickly diverted through in the in-house supply chain/logistic functions of these very big customers, and thus the opportunity for wholesale competitors will be limited here.  However, in contrast those many smaller customers without their own supply chain resources will be looking to third party wholesale/distribution sources to fill the gap.  As well as many small scale retailers (with only one or a handful of stores), this category of P&H customers does include some significant, even national, store operators such as McColl's, Esso, Shell and forecourt dealership MRH, and is worth up to £1.7bn on an annual basis.

Booker, Nisa and SPAR: key players in the delivery space

The obvious businesses for larger retailers, needing well-organised multi-site service, to turn to are Booker (in particular the Booker Retail Partners division), Nisa and SPAR all of which operate national delivered wholesale services, and all of which specialise in supplying convenience stores.  However, the scope that these wholesalers have for taking on significant new customer accounts at short notice is unclear.  Typically when new accounts are activated there is a gradual roll-out process with stores switching into the new supply network in manageable batches, a luxury not available in the current circumstances.  Thus while we will see these delivered wholesalers taking on former national account customers of P&H in due course (and of course Morrisons in the case of McColls), in the short term we are likely to see a wide range of ad hoc, short-term contingencies being put into place.

Key cash & carry players to benefit in the short term

The simplest short-term contingency for any smaller retailer will be to turn to cash & carry wholesalers, allowing ready access to stock by collecting it for themselves.  In these current circumstances with distribution arrangements needing time to set up (if only to establish credit facilities), even larger retailers are likely to be dealing with Booker, Bestway and Dhamecha (plus many others) on a cash & carry basis in the next few weeks.  National symbol group Costcutter, including some 2,200 stores has already sought to register all its retailers with local cash & carry depots to ensure access to stock over the coming weeks.  Meanwhile the wholesale buying group Today's has advertised to P&H customers that it is working with suppliers "to ensure upweighted stock holdings and key pricing on critical items in order for independent businesses to be confident in making their local Today's Group member wholesalers (which includes Dhamecha) first choice to support this change."  

Following the provisional approval of the Tesco/Booker merger and the vote in favour of Co-op/Nisa, major national symbol group SPAR UK has announced a renewed recruitment drive.  Flagging its recent growth and ongoing stability it aims to attract independent retailers seeking enhanced support to face the challenges of a changing competitive environment.

Sales up 6% in 2017

Revealing figures on a sixth consecutive year of growth, SPAR UK has reported that store numbers are already up 5% in 2017, driving increases both in wholesale sales to its member retailers and in retail sales to shoppers.  Forecourts continues to be a major focus for expansion.  SPAR is the biggest retail presence on UK petrol filling stations, providing the partner brand for stores on over 1,200 forecourts nationwide.

Format innovation to target stores above 3k sq ft

While providing retail solutions primarily targeted to small stores with an average sales area under 2,000 sq ft, SPAR UK has always had flexibility to support larger stores.  Under the EUROSPAR fascia the national network includes a number of small supermarkets up to 5,000 sq ft.  Now SPAR UK has launched a new concept for these large stores under the SPAR Market banner.  The updated format, now live at Y Maes, Pwllheli in Wales, includes a host of new features such as fresh bakery, a fresh pizza counter, self-serve hot and cold food-to-go, and orange juicing machine and dry-ageing meat cabinet.  Operated by established local retailer, Conrad Davies, the new store has been designed specifically to provide scope to showcase local produce and suppliers.

Ian Taylor, SPAR UK Retail Director commented:

'We offer independent retailers a highly profitable business model, which meets the needs of the changing customer, as well as offering independence and entrepreneurialism; and we encourage our retailers to build businesses that are hugely valued in the community.  We are ready to move the convenience sector to the next level and bring independent retailers a bright and exciting future.'

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An essential summary of trading priorities, latest developments, and other key commercial insights for SPAR UK.
We review five key themes from this year's Convenience Retailing Summit.
Our guide to a sample of great stores in SPAR’s Northern Guild.
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This in-depth guide to the United Kingdom explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for SPAR UK.

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