Category Archives: FMCG

Nestlé Professional® Launches New Report To Tackle Hospitality Skills Shortage

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Nearly a third (31%) of people don’t think hospitality is a career path you actively choose, according to a new report from Nestlé Professional®.

The ‘BuzzBites: Talking Talent’ report offers an in-depth look at perceptions of the hospitality sector, as well as advice from industry professionals on how to better attract, upskill and retain talented individuals.

It aims to help tackle the current staff crisis, as the scale of recruitment needed becomes increasingly significant. Growth in the sector is surging, opening-up more and more roles, and Brexit is only expected to widen the skills gap further, leaving a shortfall of 60,000 workers a year.

Key findings from the research, conducted by Nestlé Professional® in collaboration with 3GEM, reveal that 45% of millennials consider a career in hospitality a “stop gap”. What’s more, almost three quarters (73%) of managers are concerned the hospitality industry is no longer an attractive career option for millennials and 18% of those currently working in the industry are thinking of leaving in the next year.

However, all is far from lost. More than two thirds (70%) of hospitality workers say they are proud to work in the industry and 53% of those outside the sector think it would be rewarding. The research, which also found that more than half (57%) of those who have left the industry would consider returning, uncovers a huge opportunity for the sector to grow.

Paul Lumley, Brand & Communications Manager at Nestlé Professional®, explains how the report has been designed to help hospitality businesses tackle these challenges head on: “BuzzBites: Talking Talent brings together some of the biggest names in hospitality to offer best practice on the topic. It provides insight and innovative ideas on how to change outdated perceptions and top tips for how best to encourage new people into the industry for long-term careers.

“One of the strongest messages to come out of our research was just how important it is to reward employees for their achievements and help develop their career. Our very own Toque d’Or competition supports apprentices and students in their progression by celebrating their fantastic skills and has evolved over the last 30 years to leave a legacy that we can be proud of.

“If you are not involved already, we invite you to find out more about Toque d’Or today and join the growing number of businesses, individuals and industry bodies who are already sharing a common vision to nurture the talent of the future.”



Find alternatives to plastic, take action now

Alexander Tredwell – Leaders in Specialist Professional Recruitment

The chancellor’s announcement on Wednesday of an investigation into introducing charges on single-use plastics in the UK is an interesting prelude to the forthcoming EU Plastics in a Circular Economy strategy document due to be published next month.

Certainly, the implementation of a tax or similar measure could significantly reduce the UK’s contribution to the millions of tonnes of plastics waste produced globally each year.

But what about addressing the issue at source? We look to both the UK government and Brussels to more actively promote alternatives on a wider scale.

The EU plastics strategy, in particular, needs to take a holistic view as a crucial part of the answer to reducing plastic waste is using more sustainable materials in the first place. Plastic clearly has a valuable role to play in society today, but action needs to be taken to ensure that the amount used, where not essential to the product’s quality, is dramatically cut down.

We know that plastic can never achieve a circular value chain. It is made from a non-renewable resource and will virtually never biodegrade, which is why it can now be found in the deepest trenches of our oceans where it’ll probably remain forever. To encourage steps towards a circular economy, the grocery and packaging industries need to examine where plastics are currently being utilised, and whether alternative renewable materials such as cartonboard, which is compostable and easily recyclable, can replace them.

Measures need to be put in place to encourage the use of more sustainable materials. Taxation is one option and this was highly effective when the 5p charge was applied to plastic bags. Alternatively, finding ways to encourage the use of more sustainable materials could also see brands reducing the amount of plastic packaging they use.

A quick glance through a supermarket highlights many brands that use plastic packaging when they could turn to more sustainable materials. Take a look at some brands of tea bags, batteries, multipack drinks and stationery, not to mention lots of food products, all of which could be packaged in biodegradable or recyclable alternatives to plastic. The opportunity to achieve quick results and make a significant difference is huge.

We encourage brand owners to review the packaging they are using to identify where they could make a move to more sustainable materials. After 11 million viewers watched a blue whale mourn its newborn, poisoned by its mother’s polluted milk, and judging by the social media and news coverage, consumers clearly want action to be taken. Forward-thinking brand owners will surely already be reviewing their own environmental strategies in a move towards using more renewable and recyclable packaging. If they don’t, governments will act and consumers will vote with their wallets.

It is truly the responsibility of brands and manufacturers to embrace their environmental obligations. I hope to see them take action regardless of whether a UK tax or next month’s EU statement forces their hands.


Diageo aims to become best employer for women in the UK

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Diageo has revealed that women working for the company in England and Wales earn on average 9.8% more than men, as it aims to become the best employer for women in the UK.

The figures form part of the beverage company’s Gender Pay Gap Report. Diageo ranked third in the 2017 Hampton Alexander Review FTSE 100 for Women on Boards and in Leadership.

In Great Britain the company has two legal entities which employ more than 4,500 people: Diageo Great Britain (England and Wales), and Diageo Scotland.

The company has a median pay gap of +8.6% for Diageo employees across both legal entities in Great Britain – meaning men earn on average 8.6% more than women – lower than the median across the country of 18.8%.

The  Diageo Scotland business has a median pay gap of +16.7%. This is said to be driven by a large number of manufacturing roles, which struggle to attract women in part due to unsociable shift patterns. Diageo said that the other driver of the pay gap is that there are fewer women at senior levels, which it is working to resolve.

In April 2018, Diageo’s board of directors will reach gender parity, when Ursula Burns starts her role as non-executive director. The company said that 40% of its global executive committee are women and more than 30% of its global senior leadership team are women.

In a statement, the company said: “Achieving gender equality and developing a strong, talented pipeline of future female leaders underpins our firm belief that a more diverse and inclusive workforce accelerates business growth.”

Diageo human resources director Mairéad Nayager said: “I am proud of the progress we are making at Diageo with gender, ethnicity and sexual orientation and want us to go further. Creating a truly diverse and inclusive culture is not only the right thing to do, it supports the success of our company.

As it aims to lower the gender pay gap, Diageo said it is providing training and mentoring for women at all stages of their careers to support their development as leaders.

It is also also identifying opportunities in Scotland, including creating scholarships for science, technology, engineering and mathematics students to support leadership development through its Women and Leadership in Supply programme.


UK foodservice sector achieved £35b turnover in 2016

Alexander Tredwell – Leaders in Specialist Professional Recruitment

The foodservice sector is forecast to grow next year, despite concerns around increased costs and staff recruitment, according to a new report.

The British Hospitality Association’s Leading Through Unprecedented Change and Uncertainty – Food Service Management Market Report 2017 revealed that the UK foodservice sector saw a turnover of £35b last year and forecasted growth for this year, despite the uncertainties revolving around Brexit.

In particular, respondents to the survey said that they were concerned about post-Brexit immigration and restrictions on the UK labour market with 31% of their overall workforce coming from the EU.

Regardless, they did estimate that they would add 32,000 new jobs next year.

The report also showed that the industry’s confidence in government support has dropped. The sector wants the government to introduce ways to improve attractiveness of catering as a long-term career choice.

It also expressed the need for a more measured approach to the National Living Wage and a stronger recognition of the importance of immigration.

The British Hospitality Association (BHA) predicts that the forecast growth will be spurred on by demographic trends, the ageing population and rising student numbers.

The rise of healthy eating and street food were identified as future trends, highlighting the sector’s support of the government’s ambition to combat obesity and improve the nation’s health, with nearly all companies which took part in the survey stating that they had reduced the amount of sugar and salt in their offerings and were providing healthier meals.

Ufi Ibrahim, chief executive of the BHA, said: “This report is a vital resource for those in the industry. Its results show the strength and confidence of the industry but also its concerns, most notably those about Brexit and its impact on employment. We, as the major representative of the hospitality and tourism sector, are the main voice of this industry and can communicate its concerns to government.”

Caroline Fry, chief executive business and industry, CH&Co, added: “The report shows that whilst there are clearly some major changes afoot that affect all companies, the foodservice sector is also optimistic about growth and job creation in the short to medium term. This sector works with just about every part of the economy and is a very big employer.

“Given how supportive we are of the Government’s efforts to reduce obesity and improve the nation’s health, we hope that in return they will understand the challenges faced by the industry and support us, especially when it comes to planning the potential restrictions on the UK labour market.”


Morrisons signs deal to sell food to Amazon customers

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Morrisons will supply groceries to Amazon customers in the UK under a new deal with the US online giant.

The supermarket said it will supply products for the Amazon Prime Now and Amazon Pantry services.

Amazon Pantry was launched in the UK last year, escalating competition with the big four supermarkets, but did not offer fresh food.

Under the new deal, Morrisons will supply fresh, frozen and non-perishable goods to Amazon customers.

The expanded Amazon service will be available later this year.

Analysts at Shore Capital said there was “strategic merit” in Morrisons exploring a commercial tie-up with Amazon.

Ocado has a 25-year agreement with Morrisons to run the supermarket’s online delivery service.

The supermarket also said it will expand the geographical coverage of by taking space in Ocado’s distribution centre in Erith, southeast London.

However, Morrisons said of the Erith deal: “This amended agreement is subject to detailed terms being agreed and will only proceed if it enables Morrisons to achieve profitable growth online. There can be no certainty that an agreement will be concluded.”

Shares in Ocado fell 9.7% to 254.3p in afternoon trading, while Morrisons’ shares rose 4.9% to 197.2p.

David Potts, chief executive of Morrisons, said: “This is a low risk and capital light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business. We look forward to working with Amazon to develop and grow this partnership over the coming months.”

This agreement will sound a warning to the big on-line grocers that Amazon means business as a destination for UK online grocery shopping.

It currently has a small food delivery business but it has big ambitions and this tie-up is an important step in realising them.

Morrisons was relatively late to online delivery so have little to lose to the new entrant as they only have 3% of the market themselves but it may worry Tesco which has over 40%.

Morrisons will also gain an important new channel for its food manufacturing business and will at a stroke essentially become a food wholesaler to Amazon.

It will further sour the relationship Morrisons has with Ocado who currently supply delivery services. Morrisons chief executive, David Potts was already unhappy with the deal struck by his predecessor, Dalton Philips, as the Ocado network doesn’t serve key areas such as the North and Scotland – Morrisons heartland.

There is a crumb of comfort for Ocado in that Morrisons has agreed to take up capacity in Ocado’s new fulfillment centre in Erith – a move it had been delaying.

Ocado will also provide logistics to send online orders to be picked and delivered locally from Morrisons stores in the North.

However, those concessions will be eclipsed by the boost this deal give’s Amazon’s designs on the UK grocery market.



Sainsbury’s to ‘future-proof’ with £1.3bn Argos deal

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Sainsbury’s aims to “future-proof” its business with the £1.3bn offer to buy Argos owner Home Retail Group.

Chief executive Mike Coupe said the deal would allow consumers to shop “whenever and wherever” they wanted.

“We can bake a bigger cake and do a better job for our customers than we can do as separate businesses,” he told the BBC.

Sainsbury’s made an offer worth 161.3p a share for Home Retail on Tuesday.

The offer represents a 63% premium to Home Retail’s closing share price on 4 January when the supermarket’s interest was revealed.

Why does Sainsbury want to buy Argos?

Sainsbury’s approached the owner of Argos and the Homebase DIY chain in November, but was rebuffed by Home Retail’s board.

The deal will depend on the sale of Homebase that Australia’s Wesfarmers has agreed to buy for £340m.

Steve Clayton, head of equities research at Hargreaves Lansdown, described the offer as a “bold play” by Sainsbury’s.

“It is looking to buy a struggling business when the supermarket itself is fighting strong headwinds,” he said.

“The takeover will be a considerable strain on management time when they already have quite a lot on their plate.”

Like-for-like sales at Argos fell 2.2% in the 18 weeks to 2 January amid intense competition in the retail sector.

Home Retail shares, which had traded at about 100p before the approach by Sainsbury’s, were flat at 152.8p in afternoon trading, while Sainsbury’s rose 2.1% to 249.8p.

John Rogers, Sainsbury’s chief financial offer, said he was confident that shareholders in both Sainsbury’s and Home Retail would back the deal.

The £120m of annual savings expected by 2019 was also a “conservative” figure, he added.

Sainsbury’s expects to make savings by moving some Argos stores into supermarkets as leases expire, as well as removing “duplication and overlap” and selling its own clothing and homeware ranges through Argos.

However, it said making these changes would cost it £140m in the first three years.

Sainsbury’s had until 17:00 on Tuesday to make an offer for Home Retail.

It now has three weeks under takeover rules to carry out due diligence on the Argos owner, meaning it must make a firm offer by 17:00 on 23 February or walk away.

Under the cash-and-shares deal, Home Retail shareholders would receive 0.321 new Sainsbury’s shares and 55 pence in cash for each share.

To reflect the proceeds of the Homebase sale, investors would also get about 25 pence per share and payment of 2.8 pence in lieu of a final dividend.

The chain’s shareholders would own about 12% of the combined group if a deal progresses.

Home Retail said it “believes in the prospects for the standalone company”, but that the possible offer provides an “attractive opportunity” for shareholders.


Tesco knowingly delayed payments to suppliers

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Tesco “knowingly delayed paying money to suppliers in order to improve its own financial position”, the supermarket ombudsman has found.

The Grocery Code Adjudicator, Christine Tacon, said the supermarket seriously breached the industry’s code of conduct to protect grocery suppliers.

She found extensive evidence that Tesco had acted unreasonably when delaying payments to suppliers.

Tesco apologised for the practices, saying they had harmed its suppliers.

Tesco remains under investigation by the Serious Fraud Office (SFO) into alleged accounting irregularities.

The grocery ombudsman’s investigation began in February 2015 following the revelation of an accounting scandal at Tesco.

In September 2014 a £250m black hole was found in the company’s accounts – a sum later revised up to £326m – because of the way Tesco booked income from its suppliers.

Ms Tacon said: “I received internal Tesco emails which encouraged Tesco staff to seek agreement from suppliers to the deferral of payments due to them in order to temporarily help Tesco margins.

“I also saw internal Tesco emails suggesting that payments should not be made to suppliers before a certain date in order to avoid underperformance against a forecasted margin.”

The SFO investigation began in October 2014.

Laith Khalaf, a senior analyst at Hargreaves Lansdown, said stockbrokers believed Tesco would be hit with a substantial fine from the SFO.

“Cantor Fitzgerald are suggesting Tesco could face financial penalties in excess of £500m for its accounting misdemeanours, pending the publication of the forthcoming Serious Fraud Office investigation,” he said.

“The company is not out of the woods yet, but has at least started on the slow path of recovery.”

Chief executive Dave Lewis said Tesco had changed substantially: “Over the last year, we have worked hard to make Tesco a very different company from the one described in the GCA report.

“The absolute focus on operating margin had damaging consequences for the business and our relationship with suppliers. This has now been fundamentally changed.”

Mr Lewis said that material changes were made in January 2015 that addressed the majority of the historic practices referred to in the report: “We have changed the way we work by reorganising, refocusing and retraining our teams and we will continue to work in a way which is consistent with the recommendations.”

Shares in Tesco rose almost 1% to 157.1p in afternoon trading London. The stock has fallen more than 30% over the past 12 months.


Ms Tacon’s investigation found that even when a debt had been acknowledged by Tesco, on occasions the money was not paid for more than 12 months, with some amounts taking two years to be repaid, the investigation found.


One example involved a supplier owed a multi-million pound sum as a result of price changes being incorrectly applied to Tesco systems over a long period. This was eventually paid back by Tesco more than two years after the incorrect charging had begun.

“I found that delay in payments was a widespread issue that affected a broad range of Tesco suppliers on a significant scale,” Ms Tacon said.

“The delay in payments had a financial impact on suppliers, was an administrative burden to resolve, detracted from the time available to develop customer focussed business and had a detrimental impact on some suppliers’ relationships with Tesco.”

This is the first investigation by Ms Tacon since the creation of her role as Grocery Code Adjudicator.

Her investigation covers the period from June 2013 until February last year. Tesco provided her team with the findings of its own review, specifically aimed at finding practices which might be in breach of the code.

Ms Tacon cannot fine Tesco as she only acquired this power after the investigation began.

The adjudicator examined three key areas: the length of time taken to pay money due to suppliers, unilateral deductions from suppliers and an intentional delay in paying suppliers in some cases.

On the issue of payment for better shelf positions or space for products, Ms Tacon found no evidence that Tesco breached this part of the grocery code.

However, she found evidence of a range of practices that she would like examined.

Her five recommendations include stopping Tesco from making unilateral deductions from money owed for goods supplied. Suppliers will be given 30 days to challenge any proposed deduction and if challenged Tesco will not be permitted to make the deduction.

Ms Tacon has set a four-week deadline for Tesco to say how it plans to implement her recommendations. She will then require regular reports from the company on its progress.

Business minister Anna Soubry said the adjudicator had conducted a thorough and fearless investigation into a “scandalous situation”.

“Tesco say they have changed their practices and I very much hope they have. Paying smaller suppliers on time and treating them fairly is good and proper business. Late payment can hinder the growth and productivity of these suppliers and can threaten their existence,” she said.

The sharp fall in Tesco’s share price that resulted from the accounting scandal has prompted legal action by a number of institutions and other investors in the retailer.

Stewarts Law said on Tuesday it will be contacting Tesco ahead of starting formal legal action for the group, which had suffered losses running into the tens of millions of pounds following the revelation of the accounting scandal.


Next blames warm weather for ‘disappointing’ sales

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Retailer Next has blamed the warm weather in the final few weeks of last year for a “disappointing” trading performance in the run-up to Christmas.

The company also said trading at its Next Directory online and catalogue operation had been difficult, due in part to poor stock availability.

Between 26 October and 24 December, sales at its High Street shops fell 0.5%, but rose 2% at the Directory arm.

Next, whose shares opened 3.3% lower, lowered its full-year profit estimate.

The company, which has more than 500 stores, says it now expects annual pre-tax profits to be about £817m. This is at the lower end of its previous guidance issued in October, when it predicted profits of between £810m and £845m.

The retailer, which did not take part in some of the heavy discounting sales events at the end of last year, said in a statement: “We believe that the disappointing performance in the fourth quarter was mainly down to the unusually warm weather in November and December.”

The statement also pointed to “mistakes and challenges” faced by the business. “Specifically, we believe that Next Directory’s disappointing sales were compounded by poor stock availability from October onwards.”

In addition, Next said that online retailing was becoming tougher as competition intensified.

Nevertheless, the company said full-price sales for the year-to-date were 3.7% ahead of last year, just below the bottom end of Next’s previous guidance of a 4%-6% rise.

Analysts said the figures, the first winter trading update from one of the big retailers, suggested other High Street firms may have struggled.

Neil Saunders, from retail analysts Conlumino, tweeted: “Next’s lacklustre results do not bode well for the rest of the High Street; warm weather was the main source of its woes.”

Maureen Hinton from retail consultancy Verdict told the BBC that the results indicated a “very tough” market.

However, Phil Dorrell, a director at Retail Remedy, told the BBC that the figures were “pretty positive” for Next.

He told BBC 5 live that after other retailers have released their Christmas sales figures, the view could be: “Wow, Next did really well.”

He expects Marks and Spencer to report a decline in sales for the Christmas period when it releases figures on Thursday.

Department store chain John Lewis will reveal how it fared over the festive period on Wednesday.


UK retail sales show signs of weakness

Alexander Tredwell – Leaders in Specialist Professional Recruitment

UK retail sales grew more weakly than retailers expected in December and the outlook for January sales figures is not strong, according to a survey by the business lobby group, the CBI.

There was a sharp rise in the balance of retailers reporting better sales than in November, but that was below levels expected by economists.

Hopes for sales next month are at their lowest since May 2012.

The CBI said 2015 was a tough year for retailers.

Barry Williams, the CBI’s distributive trades chairman, said retailers were expecting 2016 to start in “much the same vein”.

The survey showed the weakest expectations for business among retailers since May 2012.

The survey of 118 firms showed the volume of retail sales picked up in December, and was slightly above the average for the time of year, but was still below retailers’ expectations. Growth in retail sales volumes is expected to slow somewhat next month.

Following Black Friday on 28 November, internet sales volumes rose at their quickest pace since April, with the pace of growth expected to hold broadly steady in January.

Among the sectors, food outlets reported good sales, as did clothing shops, but footwear and leather sales growth fell.

UK growth forecast cut by British Chambers of Commerce

Alexander Tredwell – Leaders in Specialist Professional Recruitment

The British Chambers of Commerce has cut its UK economic growth forecasts, blaming a weaker-than-expected trade and manufacturing performance.

The business lobby group has cut its growth forecast for this year to 2.4% from 2.6%.

In addition, it has has lowered its forecast for both 2016 and 2017 to 2.5% from 2.7%.

It said the manufacturing sector, which it expects to contract this year, had been hit by “falling global prospects”.

“Our persistently weak trade performance and current account balance are impacting our overall growth,” the BCC’s director general John Longworth said.

Slowing growth in the third quarter contributed to the downgrade, the BCC said.

In November, official figures showed the UK grew by 0.5% between July and September, marking a slowdown from the 0.7% rate in the second quarter.

Mr Longworth warned there was “still a long way to go” before the UK recovery was complete.

The BCC also cut its growth forecast for the dominant services sector – which accounts for more than 70% of GDP – and said the UK could not “rely so heavily on consumer spending to fuel our economy”.

Speaking to the BBC, Mr Longworth said growth in the UK was being fuelled by debt, which was behind rising consumer spending and asset prices, in particular housing.

“If it’s based on debt you then lead to a boom-and-bust cycle again,” he told BBC Radio 5 live’s Wake Up To Money programme.

Mr Longworth noted that in the last parliament the government said it would rebalance the economy towards manufacturing and exports. But he said efforts to encourage export growth had been “a complete failure”.

It expects interest rates – which have now been at 0.5% for more than six years – to rise again in the third quarter of next year.

But Mr Longworth warned: “We have been down this path before, and know that it leaves individuals and businesses exposed when interest rates do eventually rise.”