Pete Cheema: SGF in action

War on snacks?

Posted by: Pete Cheema Thu, 12 Jul 2018

Like all retailers, c-store owners use promotions to encourage sales across a range of categories and they are an important tool for retailers to show they are delivering value to customers.

The convenience sector therefore awaits with interest the Scottish government’s diet and obesity strategy. In the autumn there will be a consultation specifically looking at restricting promotions, at the same time there will be another looking at an out-of-home strategy.

Its approach could be seen as a war on snacks: confectionery; sweet biscuits; crisps; pastries; cakes; and soft drinks which contain sugar. The overall aim is to reduce the intake of ‘discretionary foods’ by at least 50%, reduce over-purchase and impulse buying. At the moment the plan is to restrict multibuys including meal deals. It will also look at ‘in-premise’ marketing. Multipacks and pricemarked packs are not on the hit list at the moment, and it is not clear whether any regulations will be part of the Good Food Nation Bill or a standalone piece of legislation.

Given the condition of the high street and the number of shop closures, if the Scottish government were to consider introducing additional measures to that of the rest of the UK, this would place extra costs on to Scottish retailers.

For independent retailers, promotions are a way of differentiating themselves, responding to competition, changing customer demand and tailoring their offer to their customer and all within the context of responsible community retailing.

The industry must work together to ensure the best possible outcome for both retailers and customers.

100 years in business

Posted by: Pete Cheema Wed, 4 Apr 2018

The rapid pace of change we experience in modern life means that we can miss or downplay milestones of real and historic significance. SGF has reached such a milestone – we are celebrating our 100th anniversary! The Scottish Grocers and Provisions Merchants Federation was formed in the closing months of the First World War. Since then we been at the forefront of promoting the interests of convenience stores and community-based retailing.

In that time SGF and the industry have changed immeasurably. Membership has grown to include all the major convenience groups and Co-ops operating in Scotland, and a key function is to help retailers deal with the constant barrage of regulation and legislation coming from government.

Speaking at our centenary celebrations, cabinet secretary for the food and drink industry Fergus Ewing said: “When the Scottish Grocers Federation was formed in 1918, Scotland’s retail landscape was very different. It is testament to the Federation’s enduring relevance, as well as its adaptability that, 100 years on, the SGF remains the authoritative voice for the convenience store sector, and can be justifiably lauded as a Scottish ‘institution’.”

This type of recognition shows how far we have come. Going forward our task is to enable our members to stay competitive, be innovative and respond effectively to changing customer and expectations. Key issues will be how retailers make the most of technology, how far they go with food to go and how effectively they can drive costs out of the business. And, as we have for the past 100 years, we will be there to support them.

Working together

Posted by: Pete Cheema Tue, 23 Jan 2018

On 1 May the Scottish government will finally implement its legislation on the Minimum Unit Pricing of Alcohol (MUP). Once again Scotland is a test bed for a controversial policy that will have a big impact on c-store retailers.

As with every policy initiative, there will be both positive and negative effects. Some products in the BWS category may disappear altogether, while it may level the playing in terms of price with big supermarkets. Additionally, any increased profits will go directly to the retailer.

SGF is working with the Scottish government to produce a guide for retailers. Production of the document is being supported by the Scottish government and will be jointly branded, to ensure a ‘gold-plated’ guide. Going forward this is the model we are determined to pursue: for too long government has brought forward legislation and simply expected the trade to foot the bill in terms of ensuring compliance. Our commitment to ensuring responsible retailing meant that we were duty bound to provide guidance but much of the time this meant that we had to rely on contributions from our corporate members.

We are encouraged by the new-found willingness of the Scottish government to work in partnership with us for the overall benefit of the industry.

MUP is highlighting the crucial need for everyone across the supply chain to work together to ensure effective implementation with the minimum of disruption.

Monumental changes such as the proposed Deposit Return System in Scotland can be made to work for us only if the key people – retailers and manufacturers – collaborate effectively.

Targeting proxy purchases

Posted by: Pete Cheema Wed, 18 Oct 2017

Promoting responsible community retailing: that has been the cornerstone of SGF’s activities throughout its existence (next year it celebrates 100 years). We devote significant resources to a range of projects aimed at helping retailers make a positive impact in their community, and October marks the end of a successful campaign across the North Lanarkshire area of central Scotland to reduce the proxy purchase of alcohol.

The ‘You’re Asking for It’ campaign has developed a positive relationship between retailers, Police Scotland and Licensing Standards, to great effect. Police Scotland analysts report that youth disorder incidents fell by 10%, while reports of children drinking on the street fell by 51%. In addition, 38 adults were reported to the prosecution service for buying alcohol for children. The campaign made extensive use of out-of-home media, while campaign packs were distributed to all retailers in the area.

Police Scotland used a number of tactics to crack down on hot spot areas including analytical mapping, town centre CCTV and gathering intelligence from the local community. They engaged directly with young people during the campaign, delivering presentations and awareness sessions.

The successful rollout in North Lanarkshire has generated interest from a number of other local authority and policing areas keen to learn from the campaign. SGF chaired the campaign steering group and is also collaborating with Police Scotland’s video production unit to develop a training resource for retailers to help them tackle the issue.

A healthy challenge

Posted by: Pete Cheema Fri, 14 Jul 2017

Scotland has well documented problems with diet-related ill health and obesity, and the Scottish government is currently considering a refresh of its diet and obesity strategy.

Into the debate has stepped Food Standards Scotland with a report which aims to transform the retail environment to enable healthier purchasing.

The report makes a series of recommendations, many of which manage to both baffle and enrage at the same time.

There is a recommendation that grocery retailers should be subject to a licensing regime akin to alcohol licensing, where the store is expected to meet certain standards in relation to products, placement, price and promotion. Next – wait for it – is a recommendation that grocery stores be subject to restrictions in opening hours!

We then progress to calls for legislation to clamp down on promotions, and a call for the soft drinks levy to be applied to other categories.

What Food Standards Scotland needs to do is recognise the big steps forward industry has already taken. The SGF Healthy Living Programme goes from strength to strength and manufacturers have made big strides forward in reformulation, reducing pack sizes, reducing trans fats and improved labelling. Meanwhile, the consumers’ responsibility for what they eat continues to be ignored.

Food Standards Scotland is essentially an advisory body and has little power to implement any of this. It is a very useful indicator, though, of the landscape we are moving into. If you want to look into the future it sometimes pays to look over the border.

Down to The Wire

Posted by: Pete Cheema Wed, 5 Apr 2017

The classic HBO series The Wire focused on the interminable war of attrition between the police and drug gangs in Baltimore, USA. The ‘war’ dragged on, using up time and resources, with the strategies being employed by one side simply being nullified by the other. Something similar is happening with the debate on a deposit return system (DRS) for Scotland.

The Scottish government’s evidence gathering and feasibility studies have been going on for almost two years, and the environmental groups have continued their own campaigns – one of which is supported by the manufacturers of the reverse vending machines central to many deposit systems.

Quite mistakenly in our view, the Scottish branch of a national trade association has also pledged support for a deposit system. To them and others we have to point out that there will be no financial rewards for retailers.Retailers are neither the producers nor the polluters, but are being asked to quite literally tidy up this mess.

Small stores will be most drastically impacted in terms of space, cost, staff time and effort – rather than serve customers staff will be getting paid simply to sort through and process returned containers.

We have been successful in highlighting the serious problems DRS would cause c-stores. Of all the arguments used against DRS, the impact on retailers has been the most effective in holding off any implementation. In partnership with ACS, we have completed a short piece of research looking at the impact on consumers and retailers. This could give us the edge in this increasingly prolonged and divisive ‘war’.

Banking on it

Posted by: Pete Cheema Tue, 24 Jan 2017

We know from the recently published Scottish Local Shop Report that at least 80% of customers in convenience stores pay by cash. This statistic shows how important a c-store is in providing a community facility which enables local people to buy goods and services in cash and so circumvent the need for a bank account, a cheque book, a debit or credit card.

There’s a big issue here about financial inclusion - and underscores the importance of c-stores to communities.

We know the cost pressures facing retailers and might be able to do something about them most effectively by showing that by damaging c-stores, these cost pressures will damage communities.

If customers can no longer get access to bill and utility payment services in cash, or if constantly-increasing bank charges push retailers toward card and contactless payments, or if a shop goes out of business because of constantly increasing costs, then a large section of the community will experience real financial exclusion. This will have a significant affect on local authorities, housing associations and a whole range of other local services. 

Most of the high street banks across the UK are implementing a programme of branch closures which, at a stroke, will reduce customers’ ability to pay bills in cash. Additionally, the banks are keen to cut the cost of running the Link network which will put the future of free cash machines in doubt.

Retailers should not be financially disadvantaged for providing cash services to customers. Communities need our stores and we have begun talking to the major banks about protecting the services our members offer.

Political progress

Posted by: Pete Cheema Fri, 4 Nov 2016

The Scottish Grocers’ Federation (SGF) and the independent convenience store sector in Scotland recently achieved a major breakthrough in its political engagement work. Holyrood has given its backing to a proposal from SGF and MSP Gordon MacDonald to establish a Scottish Parliament Cross-Party Group (CPG) on independent convenience stores.

For the past 12 months SGF has been working closely with MacDonald to get the group up and running. In a major step forward, the CPG held its inaugural meeting in Parliament in September. The meeting itself was extremely successful both in terms of SGF stakeholders who attended and in terms of support from MSPs. Support from at least three MSPs is required for CPGs to be approved, but in fact 11 MSPs registered to become members of the group.

Despite this the Standing Orders of the Scottish Parliament required that the CPG had to be officially approved by Parliament itself. However, recognising the success of the inaugural meeting, the Scottish Parliament has now approved the establishment of the group. Gordon MacDonald MSP was appointed Convenor with my colleague John Lee, SGF head of public affairs, appointed to head up the Group Secretariat.

This is the first time a retail-focused group has been set up within the Scottish Parliament. It will provide a unique platform for MSPs to engage with retailers on the key issues affecting the retail industry in Scotland. Our hope is that the group will enable retailers begin to shape and influence the political agenda in Scotland.

Going it alone

Posted by: Pete Cheema Wed, 27 Jan 2016

Increasingly, the Scottish government is trying to develop its own approach to a range of issues. One such ‘Scottish solution’ being considered is to introduce a deposit return scheme to improve recycling rates and reduce litter in Scotland.

Essentially, a deposit charge will be added to the price of drinks and other containers, and customers will be encouraged to return the containers to a retail outlet and claim their deposit. This ignores the fact most shops will simply not have the space to store returned containers, and how staff will cope with the return rates – potentially thousands a week – has not been considered.

Reverse vending systems are available, but are expensive to buy and install and again would take up valuable space. Most independents simply do not have access to the ‘backhauling’ services which could alleviate the problem and even if they did this would simply move contaminated containers further up the supply chain.

The person who will make the decision on this is the Cabinet Secretary for the Environment, Richard Lochhead MSP. We recently had a constructive meeting with him at which he agreed to instruct officials to develop modelling on the impact of deposit return and undertake a series of store visits to see first-hand the problems deposit return would cause.

With the SNP on course to win another majority in the Scottish Parliament in May this process of ‘policy divergence’ will undoubtedly continue. It’s more important than ever for manufacturers and suppliers to engage with SGF to influence the political agenda north of the border.

The cost of living wage

Posted by: Pete Cheema Mon, 21 Sep 2015

That George Osborne’s proposed Living Wage could reach £9 by 2020 took everyone by surprise this summer, not least the Low Pay Commission (LPC) whose remit will now have to be rewritten.

In our view it is vital that the commission should retain the power to vary wage rates according to the overall performance of the economy.

The government has done a superb job in shifting the responsibility for maintaining standards of living from themselves and onto employers. It is just as bad a deal for workers. Once the changes to benefits and tax credits begin to bite, a single person, working full time, 
with two children, is likely to be more than £1,000 per year worse off even with the Living Wage.

This will have a big impact on retailers’ ability to provide jobs and reinvest in their business. How much of an impact is hard to say. 

Wage rates are one of the key economic areas reserved to the Westminster government, and as such the Scottish Grocers’ Federation has to work at a UK level to try to exert some influence. We have joined forces with the Association of Convenience Stores (ACS) to ensure the concerns of the c-store industry are recognised. We are collecting data from members on its likely impact and this will be fed into ACS’ submission to the LPC.

The initial results from Scotland suggest that most retailers will respond by cutting staff hours and working longer in the store themselves. A few respondents have even said the rise in staff costs might force them to close altogether. We have to make sure that this doesn’t happen.

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