This week's retail news 'you may have missed'.....
At mdj2, we’re passionate about retail and always looking to share our news, views and insights. With so much information out there, we wanted to share just a small selection of retail news headlines from last week that we found interesting…??
Retailers call on PM to overhaul ￡2bn waste recycling scheme
The UK’s largest retailers are urging the government to scrap its?waste strategy policy,?or risk forcing prices up for consumers who are already facing a cost of living?crisis.
In a draft letter from the?British Retail Consortium, obtained by?Sky News, the group of retailers outline industry concerns about the costs associated with the proposed new packaging and bottle recycling measures due to come into force in 2024.
The letter urges the Prime Minister?Rishi Sunak?to intervene with the Department of the Environment, Food and Rural Affairs (DEFRA) to “redesign a deposit return scheme that is close to being introduced in Scotland and would subsequently be extended south of the border”.
An excerpt shows industry bodies pleading with the PM to adopt “a more pragmatic approach” to the government’s waste strategy.
Currently, deposit return schemes are used across the world as a way of encouraging more people to recycle drinks containers, such as bottles and cans.
They charge anyone who buys a drink a small deposit for the bottle or can that it comes in.
In Scotland, the new scheme which is set to be introduced in August, will see people pay a 20p deposit when they buy a drink that comes in a single-use container made of PET plastic, steel and aluminium, or glass.
Consumers will get their money back when they return the empty container return points which will be set up across the country.
“The current policy proposal will add to inflationary pressures and fail to deliver a fit for purpose scheme,” the draft letter, which is rumoured to be signed by retail bosses of major UK supermarkets, read.
“It will significantly increase the costs of packaging which, in the current economic climate, will increase prices for consumers, without seeing the desired increase in recycling,” the plea continued.
The industry body also warned that the return scheme will add another ￡2bn to industry costs.
In the draft letter the BRC said: “We would also ask you to raise our concerns on the design of DRS with Defra, where we have struggled to convince ministers of the need for pragmatic implementation that works with the businesses which will deliver it.
Lloyds Pharmacy to sell ‘significant number’ of stores amid funding concerns
Lloyds Pharmacy is understood to be offloading a “significant number”?of its standalone stores amid concerns over government funding for the industry, with several branches sold in recent weeks.
Pharmacy Network News?reported?Hutchings Consultants, which specialises in pharmacy sales, had informed prospective buyers in an email of a?“divestment campaign by a multiple operator to include a significant number of new branches” across England, Wales and Scotland.
The stores are said to be sold under three projects – Project Clover, Project Mulberry and Project Sapphire – with each managing a different geographical region in the UK.
Hutchings Consultants declined to comment to Retail Gazette.
It has emerged that some Lloyds Pharmacy branches have been offloaded in recent months with two?stores in Aberdeenshire, Scotland, sold to independent chain Porter Pharmacy earlier this month, while one of the group’s stores located in Chingford, North London, was sold to Rosewood Pharmacy late last year.?
A spokesman for Lloyds Pharmacy declined to give details on the sales process but told Retail Gazette: “Lloyds Pharmacy regularly reviews its pharmacy estate to ensure it is operating sustainably and any decision to sell stores is taken in the interests of patients, colleagues and the business.”
“At all times, patient safety remains our top priority ensuring that our customers and patients are always able to access vital prescriptions, health advice, products and services.”
The news comes as the pharmacy retailer revealed it would?close all of its 237 outlets inside Sainsbury’s?over the course of the year in response to what it termed??“changing market conditions”.
It is understood that the Lloyds Pharmacy is also cutting roles.
One source told Retail Gazette that several regional managers had been made redundant and the remaining regional managers have been told to take on more stores.
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The source added that staff at several shops had been informed by building landlords that their lease was coming to an end and Lloyds Pharmacy had not renewed.
Lloyds Pharmacy’s moves come as concerns have been raised over funding for the pharmacy industry.
In the wake of Lloyds’ announcement that it was closing branches in Sainsbury’s, rival?Rowlands Pharmacy-owner, Phoenix UK deputy managing director Nigel Swift, told?Chemist+Druggist?that it was “clearest possible sign of the dire situation facing community pharmacy in England as a result of insufficient government funding”.
A fifth of UK retailers fear insolvency amid energy crisis, FRP research shows
Over one in five (22%) retail businesses in the UK aren’t confident?of trading through to the end of 2023, according to new research published by FRP.
The specialist business advisory firm, which has advised on the administration of high-profile retailers including Debenhams and Edinburgh Woollen Mill, polled 250 large and mid-sized retailers across the UK – with the findings presenting significant concerns for the sector.
With three in five (60%) retailers citing increased energy costs as the biggest pressure on their profit margins, the research found that 22% of respondents fear insolvency this year if the government continues with its plan to reduce relief on energy bills from April onwards. Indeed, a third (33%) were keen to see the government increase energy support into the new tax year.
With two-thirds (66%) of retailers having seen an increase in operating costs in 2022 – by 21% on average?– the industry faces a number of market headwinds, including increased wholesale, labour, logistics and warehousing costs. Energy will continue to be retailers’ most significant concern over the next 12 months though, with more than half (52%) citing it as the biggest anticipated pressure on their margins.
Just over a quarter (26%) of retail businesses changed their commercial energy supplier last year, while around one in six (17%) will do so in 2023 according to the findings.
The high volume of supplier switching comes as the sector looks to improve its cash position through a range of initiatives. FRP found that more than a third (36%) of retail businesses have passed on general cost increases to their customers in the last year, with similar numbers (32%) expecting to do so this year. Just over a?fifth (21%) took on new debt in 2022, with a significant majority (68%) of all respondents expecting to seek an increase in debt facilities from lenders this year.
The move comes as retailers anticipate a wave of creditor pressure in 2023. Over seven in ten (72%) of retailers expect creditor pressure4?this year, including CCJs and winding up petitions, with just over a fifth (21%) expecting pressure to be extreme.
Phil Reynolds, restructuring advisory partner and retail specialist at FRP, said:?“These are incredibly turbulent times for retailers. Inflation is pushing up operating costs and dampening consumer confidence, with the looming recession likely to ensure that conditions remain challenging for some time to come.
“However, against such a dynamic backdrop and strong headwinds, the sector is working hard to adapt – with the majority expecting margins to hold up through the next six months and beyond. For the still worryingly high number of businesses concerned about their future, keeping a close eye on the fundamentals – ensuring cash flow forecasts are up-to-date, and tightly managing working capital – will be critical. Management teams will need to ensure that they have multi-level contingency plans in place for every possible scenario as, ultimately, those that thrive will be those who can be flexible and respond positively to cha
Sainsbury’s becomes latest company to trial four-day week
Sainsbury’s has offered its staff the option of working four days a week, in a bid to evolve its current ways of working and increase flexibility.
The supermarket group has been trialling the four-day week for three months, when employees at its head offices in Holborn, Coventry and Milton Keynes, warehouse workers and store managers across its 1,400 shops took part.
Store staff operating below the level of store managers were not part of the scheme.
According to?The Times,?staff have been given the option to work their 37.5-hour contracts across the seven-day week but they are not authorised to take consecutive Fridays off.
The grocer’s move follows news that the majority of companies taking part in the world’s largest four-day week trial have chosen to continue the new way of working.
Workers were reported to be happier, businesses performed better and staff retention levels improved.
A Sainsbury’s spokesperson said: “We are always looking to evolve our ways of working to ensure we can do the best possible job for customers while continuing to be a brilliant place to work for our colleagues. We are currently testing new ways to be more efficient and offer improved flexibility.”
A London store manager added: “No one wants to work full-time anymore. The new condensed working scheme, introduced almost two months ago, means I have more time to spend with my family.”