Wednesday, 30 January 2013
I had a really interesting day yesterday, (and I have to say I was very privileged), to be invited to attend the annual trade briefing by Sainsbury's held in London at the Queen Elizabeth II building. (How that got planning permission I will never know but that's another story!). The aim of the event is for the management team at Sainsbury's to get their suppliers together and tell them (us) points of interest about past performance, future plans, business development, supplier relationships and how the economy will be affecting everyones business over the coming months.
First on was Justin King, who gave an interesting insight into customers buying habits. As always a great presentation, and as someone who does some public speaking I really admire! Justin mentioned the pressure that houshold budgets are under, shoppers are buying less (2% year on year) and wasting less food. Investment plans were also mentioned with plans to invest £1bn to grow the estate. Sales, like for like, are up but only slightly at 0.9% excluding fuel, which is better than some competitors. He also mentioned Sainsbury's own brand labels growing 3 times faster than branded products as more shoppers are looking in more detail about where the pennies go. We can all relate to that! Contributions to the performance are coming through from the basics range, Brand Match and Taste the Difference, all backed up with shopper buying habits recorded through the nectar card. He also mentioned the importance of customer trust in the brand, this is something that resonates with us at Overbury. Your customers have to trust what you are doing if you are going to keep them and encourage them to engage more with you.
James Waldon was next up, the IGD's Chief Economist, and again I have to take my hat off to James. He made economics interesting (wish I had felt that way at college). He described the economy as the bus teetering of the edge of the cliff in the film The Italian Job. The gold bullion is the amassed wealth we have borrowed and the weight of that debt could take us (our economy) over the edge. I hadn't realised but in 1976 the government of the day had to borrow money from the IMF (International Monetary Fund). We're not that bad yet but things are close. James talked about the reduction in volume sales in most categories between 2006-2011, except cereals, chocolates, sweets coffee and wine! That says a lot as well. Fruit and veg consumption also fell during that time period, are we building problems and cost for the economy in the future?
One of the key aspects of the day I was interested in was the 20x20 Sustainability Plan. This will involve all of the suppliers listening in the audience and many of their suppliers as well. I would count us in that list as well. Being part of the supply chain we need to listen to what our main customer (for lamb) is telling us and be apart of that supply chain. It's also good to have someone setting targets and goals to aim for. For instance part of the plan is get 35 of the most commonly used raw materials sourced sustainably. Sounds easy? But here is the list: cotton, strawberries, milk, timber, eggs, salmon, citrus, cork, wheat, cod, chicken, leather, apples, peat, pork, coffee, rapeseed, cocoa, palm oil, blueberries, biofuels, prawns, soya, tomatoes, tuna, grapes, haddock, sunflower oil, potatoes, beef, sugar, tea, carrots, paper and finally lamb!
This is no mean feat but one that should be applauded and will only happen with the help of the suppliers and growers. It was also great to see a picture of me with Alice Swift up on the big screen with our ewes and lambs (bottom left above). Other main targets this year include, Live Well For Less, 2020, Fit for the Future, Year of the Product and R&D. We scored highly on the R&D side having two proposals accepted for research work this year. I will be blogging about sheep lameness shortly, watch this space, the trial has begun.