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…?
?Pepco Group could put Poundland up for sale.
Poundland’s owner, Pepco Group, which also operates Dealz and Pepco, is exploring the sale of Poundland as part of a broader strategic shift.
In its Capital Markets investor presentation, the group outlined how its ultimate ambition is to operate under a single Pepco format, oriented around its higher margin Pepco clothing and general merchandise ranges. As a result, Pepco Group is looking to move away from FMCG and is evaluating all options to separate Poundland from the group in FY25, including a potential sale.
The group said?Poundland?is operating in an increasingly challenging UK retail market and highlighted how higher wage costs following the tax changes announced by the government in October’s Budget will add further pressure to Poundland’s cost base.
In January, Pepco Group reported a 7.3% decline in first quarter like-for-like revenue at Poundland, driven by weak clothing and general merchandise performance and ongoing challenging market conditions.
The group has also announced that Barry Williams, former Poundland managing director, who took over as managing director of Pepco in September 2023, has returned to Poundland in the position of managing director.
Stephan Borchert, chief executive of Pepco Group, said:?“We are taking clear strategic action to focus on the Pepco brand as our single future format, to move away from FMCG and create a simpler business focused on higher margin clothing and general merchandise.
“Pepco will continue to be the engine of the group’s earnings potential, and its strong customer offer and price leadership give it a compelling ‘white space’ opportunity to drive further profitable growth in its Central and Eastern European heartland, as well as select markets in Western Europe.
“The board and I are actively exploring separation options for Poundland, including a potential sale, from the group, with consideration also given to the separation of the well-performing Dealz Poland over the medium term.
“Barry Williams did a great job as managing director of Pepco, returning it to like-for-like sales growth, and I am confident he will play a pivotal role in getting Poundland back on track, given his previous success there.”
?Boohoo renames itself Debenhams in major revival of former department store brand.
Online fashion retailer?Boohoo?is renaming itself?Debenhams?in a major revival of one of Britain’s oldest and best-known?retail?names.
Boohoo bought the 247-year-old former department store chain out of administration for ￡55 million in 2021 after it collapsed during the?pandemic?and kept it trading as an online only retailer. All the stores, including the Oxford Street flagship, were shut down.
But today Boohoo said it had successfully turned around the Debenhams business which is now the “majority contributor to group profitability.”
As a result, the “business will be rebranded and will now go forward as Debenhams Group.” Other brands in the group include boohoo, PLT, MAN, and Karen Millen.
The Debenhams name dates back to 1778 when William Clark opened a drapers store on Wigmore Street. In 1813 William Debenham joined him as a partner.
In a trading update the company said: “Debenhams is back.... It has been repositioned as Britain's online department store and is underpinned by a new marketplace led business model.
“Debenhams is growing rapidly. The business model is stock-lite and capital-lite. It is very profitable and highly cash generative.
“For our consumers, Debenhams is once again becoming their destination of choice. It is an iconic British heritage brand with huge brand awareness and significant consumer trust.
“For our partners, Debenhams is becoming a partner of choice, providing access to millions of consumers and driving strong growth for those selling on the Debenhams platform. “
The company said it wanted to create a multi-billion gross sales business with a target margin of 20% on net sales.
?Sainsbury’s unveils new convenience store format.
Sainsbury’s has unveiled a refreshed look for its Local convenience stores, marking the debut of its new format at the recently reopened Pudsey Town Local store in Leeds.
The supermarket’s store, which opened in late February, is the first to feature the updated design and layout and is being followed by similar changes at two new London locations, Sainsbury’s Bermondsey Square and Sloane Avenue.
This update?is a key element of Sainsbury’s broader Next Level strategy, which aims to enhance its convenience store offering in line with evolving customer needs.
According to?The Grocer,?the new Pudsey format builds on the successful elements seen in the company’s Cobham, Surrey, supermarket refit, incorporating features like a closed refrigeration system and multiple digital screens.
Additionally, Pudsey is trialling Sainsbury’s first-ever self-serve locker for on-demand deliveries, a step forward in its convenience strategy.
The changes at Pudsey include a reorganised layout and new aisle signage, designed to improve the shopping experience and increase product availability. The store’s updated offer includes a 5% increase in the range of products, achieved through space optimization and the addition of energy-efficient enclosed refrigeration units.
This has allowed?the supermarket chain?to expand core categories like food-to-go, alcohol, and breakfast items. For example, Pudsey now stocks four different own-label bacon products, up from just one before the refit.
The store has also introduced new meal solutions, such as a ￡12 Dine in For Two Taste the Difference offer, and additional ready-to-eat items. Aldi Price Match branding remains prominent, though?the number of matched products has been reduced recently.
One of the key changes in Pudsey is the introduction of a dedicated “food on the move” breakfast hub at the front of the store, designed to cater to busy customers looking for quick meal options.
Further updates to the layout include category-focused gondola ends, with dedicated sections for breakfast items, world foods, stocks, condiments, and food cupboard essentials.
Sainsbury’s has also introduced a self-serve locker for on-demand deliveries, a new service for the company. The locker, located near the store’s entrance, allows customers to pick up orders placed through services such as Deliveroo, Just Eat, Uber Eats, and Sainsbury’s Chop Chop.
The system, which is linked to the store’s picking systems, ensures that orders comply with cold chain regulations. A similar service is being trialled at the Sloane Avenue store.
Other updates at the Pudsey store include a refreshed checkout area, complete with new barriers and updated lighting, as well as a relocated Argos Click & Collect station.
The changes to Sainsbury’s convenience store format come as part of the retailer’s ongoing efforts to improve its c-store offer,?which kicked off last October with a comprehensive range review.
This range improvement programme, which is expected to run through 2025, will see Sainsbury’s continuing to adapt its convenience store estate to meet the demands of today’s shoppers.
In addition to the ongoing store revamps, Sainsbury’s plans to open or?reopen around 25 new Local stores?annually as part of its Next Level strategy, further bolstering its presence in the convenience market.
?M&S to make biggest ever investment in retail pay.
Marks & Spencer has pledged to invest ￡95m in retail pay, to at least ￡12.60 per hour, in line with the Real Living Wage, effective 1 April 2025.
From 1 April, the rate of pay for UK customer assistants at M&S, approximately 50,000 people, will increase from ￡12 to ￡12.60 per hour, representing a 5% increase on last year and a 26% increase since 2022, which is double the rate of inflation over the same period.
For a full-time staff member outside of London, that’s an increase of around ￡98 per month.
For customer assistants working in London, the hourly rate will increase from ￡13.15 to ￡13.85, representing a 5.3% increase on last year.
For UK team support managers, the hourly rate will increase from ￡13.05 to ￡13.65, while for those in London, it will increase from ￡14.20 to ￡14.90.
Since 2022, M&S has invested more than ￡285m in its retail pay package. The latest investment is the biggest the retailer has ever made in its retail pay offer, and the third consecutive increase since?Stuart Machin?became CEO in 2022.
Marks & Spencer's?benefits package includes an uncapped 20% employee discount, an "industry leading" pension contribution of up to 12%, 26 weeks maternity and adoption leave at full pay and six weeks paternity leave at full pay.
Machin said: “Following the government’s recent increases in tax and National Insurance contributions, it’s no secret that Marks & Spencer and indeed the entire retail sector has some significant cost headwinds to face into in the new financial year.
"However, I have always believed that we should not allow these headwinds to impact our hourly paid colleagues, which is why today, for the third year in a row, we are making a record investment in our retail pay offer. This means we have now invested almost ￡300m in our pay over the past three years, well above the rate of inflation, in addition to our market leading discount and pension offer for colleagues.”
?B&Q increases pay for over 15,000 store employees.
B&Q is increasing its minimum hourly pay for store staff to ￡12.71 and up to ￡14.05 for those in London, effective 1 April.
The move sees over 15,000 colleagues receive an extra 50p per hour – worth over ￡955.50 more a year for a full-time employee.
The?DIY retailer?claimed the new rates are among the highest of all major UK retailers and said that its minimum rate is well ahead of the UK Government’s 2025 National Living Wage (￡12.21 per hour), and 11p per hour above the Real Living Wage (￡12.60 per hour).
It added that the wage rate applies to all colleagues aged 18 years old or above and those in apprenticeships, who receive the same pay as other colleagues doing the same role.
B&Q chief executive Graham Bell said: “We’re delighted to further recognise the exceptional value, commitment, and performance delivered by our colleagues every day.
“We pride ourselves on having one of the UK retail sector’s most competitive pay positions. We believe rewarding our colleagues fairly is a critical part of delivering growth for our business and continually improving the experience we provide for our customers.
“We also remain committed to supporting our colleagues’ professional development through our training offering – including our apprenticeship scheme which has already been completed by over 2,000 colleagues.
“These initiatives all contribute to our ambition to make B&Q a great place to work with a high-performance culture that delivers for our customers.”
?John Lewis and Currys staff to get pay rise ahead of April minimum wage increase
About 65,000 John Lewis shop workers will get a raise of at least 7.4% while Currys’ 15,000 retail staff will get a 6% increase.
Both pay increases are ahead of inflation, and follow retailers Marks & Spencer, B&Q, Sainsbury’s,?Lidl?and?Costa Coffee, among others, are making similar moves.
The Bank of England will pay close attention to the widespread pay increases, after inflation climbed to a 10-month peak of 3% in January.
A recent jobs market report also showed pay growth across the UK hit an eight-month high, which could contribute to inflation rising further.
John Lewis said it is spending ￡114 million on the pay deal, which will see the minimum rate of pay climb to ￡12.40 an hour, and to ￡13.85 for workers in London.
The previous bottom rate would be below the new UK national living wage, which rises to ￡12.21 an hour on April 1.
The retail group said about three-quarters of the pay rise is voluntary, or above the minimum wage.
Jo Rackham, interim executive director of people at John Lewis, called the increase a “very significant investment”.
The group said workers who have contributed “exceptionally” to the business could see their pay rise by as much as 9.4%.
Currys said workers’ minimum hourly rate will rise to ￡12.51, and ￡13.51 inside London.
?Tesco trials giant trolley scales in Gateshead.
Giant trolley scales are being trialled at a Tesco store in Gateshead sparking a mixed reaction from shoppers.
Trolleys are weighed before checkout to identify any items customers who have used Scan as you Shop might have missed or scanned twice.
But some shoppers are unsure whether the new technology will take off with some likening it to airport security. "Am I at border control or Tesco?" one Reddit user posted, while another joked "No Clubcard? Deported!"
Others questioned whether the scales were aimed at cracking down on self-scan shoplifters or cutting back on checkout staff. Tesco declined to comment.
Tesco Clubcard members already have the option to use Scan as you Shop handsets as they fill their trolleys then check out and pay at the end.
Now in the Gateshead Trinity Square Extra store, shoppers can push their trolley on to the scales and if the weight matches the items they've scanned they pay as normal. If there is a discrepancy a staff member will do a manual rescan of the whole trolley.
'Treated like a thief'
Although some Reddit users who commented on the photo of the scales were positive with one saying "they are 10x more convenient and faster", many were more critical of their introduction.
"More and more the honest shopper is treated like a thief," one said, while another wrote "the point of all this is to save on staff".
Business retail consultant Ged Futter told the BBC this was about loss prevention and staffing costs.
"There is no way this is about making it quicker for the shopper. It's supposed to be scan and go - this is scan and stop while your trolley is weighed."
He said self-scan had increased the rate of shoplifting but instead of putting staff back on tills, supermarkets were trying to use even more technology to stop thefts.
"This is supermarkets saying, 'we know there are thefts so what we are going to do is treat every customer in exactly the same way to reduce theft'.
"They're forgetting that trust is the most important thing for all of the retailers and it works both ways. If customers don't feel trusted or think they're being treated like thieves they will go somewhere else."
The British Retail Consortium has said?shoplifting is "out of control"?after its annual crime survey found incidents of customer theft reported by retailers in the UK rose by 3.7 million to 20.4 million, and cost retailers ￡2bn.
Separate figures published by the Office for National Statistics revealed shoplifting offences reported by police in England and Wales rose by 23% to more than 492,000 over the same period.
That is the highest figure since current recording practices began in 2003.
Retail criminologist Prof Emmeline Taylor told the BBC she had seen similar trolley scales used in European supermarkets and there was "definitely an element of trying to control loss" but added "let's not forget a lot of scan and go loss can be accidental".
A random audit of 20,000 scan and go baskets found?43% had at least one error, a 2022 global study on self-checkout found.
Prof Taylor said Tesco's scales were "quite foreboding and reminiscent of security scanners".
"They don't want to give the impression that they are pointing the finger at their honest customer," she said.
"They will need to balance how they respond when there is a weight discrepancy because you can lose a customer for life if they feel they've been wrongly accused of something."
She said she could see customers getting frustrated using the scales.
"You've left your handbag in the trolley, you've got to take your child out of the seat, you might be queueing behind someone who has been stopped and you can't get through so the trial needs to focus on minimising friction points in the customer experience."
The scales are the latest example of supermarkets turning to technology to streamline time and costs. The ratio of self-scan to staffed tills?continues to be fiercely debated. Some shoppers love the speed and convenience while others are fed up of hearing "unexpected item in the bagging area".
In August upmarket north of England supermarket chain Booths?got rid of self-scan altogether, while Asda and Morrisons said they would put more staff back on manned till
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