RURAL RETAILER Winter 2014/5

RuralRetailer

Issue 28 l Winter 2014/15www.ruralshops.org.uk

The Journal of the RuralShops Alliance

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2 RuralRetailer ● Winter 2014/15 ● Issue 28

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RuralRetailer ● Published by The Rural Shops Alliance. ● Printed by: Russell Press, Nottingham. ● Design: Kavita Graphics. [email protected]

Contents...

● Rural Shops Alliance20 Garland, RothleyLeics. LE7 7RF

● Tel: 01305 752044● E-mail: [email protected]● Website: www.ruralshops.org.uk

● In my opinion, By RSA Chief Executive

● Your Action Checklist / General Election Alert

● Heath Stores: Fusing a Convenience Store

with a Farm Shop

● Keeping in Touch Online

● RSA Views: General Election 2015: Potential Quick Wins

for Rural Retailers; Labour’s Approach to Rural Issues;

The Link between Post Offices and Royal Mail

● Legal Bits & Bobs: Pensions – Automatic Enrolment of Staff;

Personal Alcohol Licence Renewals; Alcohol Licencing -

Section 182 Guidance; Single Use Carrier Bags;

Shared Parental Leave and Pay; Electronic Cigarettes

● Price Marking and Own-brand

● How Prices are affecting Customers’ behaviour

● Calling All Small Shops! - Best Small Shop Competition

● For Urgent Action: Tobacco Display Ban

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Please note our new

postal address

In my Opinion...It is very difficult to spot turning points in history. Back in 1977, none ofthe Tesco managers stopping the issue of Green Shield Stamps in theirstore would have had any inkling where it would lead, for it started achain that led to Tesco’s dominance of the UK retail scene.

In four decades, the vibrant Tesco of the 1970scame to dominate the UK retail scene, to becomethe status quo of the 2010s. They became theone to fear but also the one to beat. Today it iseasy to see Aldi and Lidl as the modern dayequivalents of Jack Cohen’s thrusting game-changing company.

Tesco’s management team is apparently workingflat out to relaunch their business in 2015, withsuppliers expecting that the current complexsystem of discounts, over riders, listing fees andthe like is to be swept away in favour of a simple“screw the supplier into the ground and thentwist a little more” approach. The company’srecent much-publicised difficulties might be atemporary glitch, but they might also herald thestart of a new era in UK retailing.

My bet is that things are changing for good, withno going back. Customers are rapidly alteringtheir demands. Suddenly convenience and priceare trumping one-stop shopping and huge carparks. At the moment, rural convenience storesare benefiting from customers shopping “littleand often”. It is inevitable that prices in suchstores will typically be higher than the dedicateddiscounters but this gap cannot be allowed togrow too large. And with all the big supermarketchains trying to emulate the discounters, smallrural shops will get caught in the crossfire.

This means that these businesses will have to relyon the buying teams at their wholesalers to make

sure that they drive a hardbargain with suppliers, sothat good prices can bepassed on. There is a veryreal danger that suppliers,faced with massivepressures to givesupermarkets very keenprices, will meet their own overall margin targetsby taking more profit from their smalleraccounts. One bit of the market is pushed down;another part rises in response – the “waterbed”effect. That’s life, that’s how markets work,unless governments intervene. Expressed thisway, part of the problem is actually the largenumber of symbol groups, cash-and-carry’s andwholesalers, all with a limited market share andhence restricted buying power. There are quitesimply too many fascias and too manywholesalers serving the sector.

The last time the market exploded, it was retailfascias that disappeared. Companies such asSafeway, International Stores, Home & Colonial,Keymarkets, MacFisheries and KwikSave, allwere swallowed up by bigger competitors. Mybet is that this round of price competition will seea marked reduction in the number ofwholesalers, in a similar manner.

However, it may take a few years for history togive its verdict as to whether I’m right or wrong!

Kenneth Parsons

Issue 28 ● Winter 2014/15 ● RuralRetailer 3

History in the time of Price Wars

To obtain further information on any of these companies, pleasecontact the RSA at [email protected] or phone 01305 752044

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Your Action Checklist for this issue...1. INVITE YOUR LOCAL MP

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5. ENTER BEST SMALL SHOPSCOMPETITION


organise – we hope to run a feature on them in thespring edition of Rural Retailer.

If you would like a member of the RSA team to comealong and join you in meeting your local MP or candidate,do get in touch – with limited resources, we cannotpromise to come to every one but we will do our best.This is a once in 5 year’s opportunity – don’t miss it.

■ [email protected]

GENERAL ELECTION ALERT...The next general election is not that far away. Itpromises to be impossible to call, with the traditionalWestminster three parties joined by the SNP, UKIP andthe Greens, all muscling into a first past the postelectoral system and faced with an electorate that isunused to the horse-trading that goes to form andsustain coalition governments.

We would urge rural retailers to take advantage of thissituation by inviting current MPs and strong prospectivecandidates to visit their store to see at first hand theissues facing small retail businesses. Alert the localpress - even if they do not send anybody along, domake sure you have a good photograph and write ashort press release about the visit. We hope thatreaders of Rural Retailer will be up to speed on theissues that we think important but we are happy toprovide further information and advice. We can alsoprovide advice on press releases and dealing with thepress. Do please send us a photograph of any visit you

Two life-long scientists might not be top ofthe list of contenders for ‘successful ruralshop keeper’. But in just three years,Andrew and Kate Mills have not onlyquadrupled the turnover at Heath Stores inHorsmonden in rural Kent but also wonKent Community Retailer of the Year 2014.

70s, there had been no investment in more than20 years, it had odd opening hours, a handful ofloyal customers and some passing trade for‘emergency’ shopping. Turnover was around£6,000 a week.

The couple wanted to create both a successfulbusiness but also one at the heart of the villagecommunity. They knew there was potential – thevillage has more than 2,000 people, withhouseholds ranging from farm tied cottages andsocial housing to modern executive developmentsand large country houses. Horsmonden is not adormitory village; many of its residents are outand about locally during the day.

Heath Stores...


The refit retained the traditional look

It was a gamble, Andrew admits. “I knew theshop and the village from my childhood – and acomplete change in lifestyle was appealing”. Itwas a tired shop in a Grade 2 listed building in aconservation area. Its décor was stuck in the

Fusing a Convenience Store

The Mills’ background as scientists, plus anacknowledgement of their lack of experience,led them to put in hours researching andlearning from others to develop their businessplan. This encompassed:

■ Gaining experience from other successfulretailers

■ Optimising the product range to appeal tomore customers

■ Re-fitting the store to create a morewelcoming and profitable space – but withroom for locals to sit and chat over coffee

■ Marketing using a range of tools■ Events to attract more people, more often

and to become a real part of the village ■ Invest in people and time by offering part-

time work to local youngsters, and trainingand supporting staff

The Mills had strong feelings on how to realisetheir vision. “For example, we were encouraged

to re-fit the shop as soon as we took over, butwe felt that we really needed to live and breatheand work in the shop for a while,” says Andrew.“This delay helped us understand the logistics,ergonomics and efficiency of the place, and whatspecialist equipment might be needed. After 13months, we were far more confident on the brieffor the re-fit designer.” One result from thisexperience was a key decision, to move thestockroom into the cellar and to give deliveredcaged stock its own, separate, holding area,improving the efficiency of the whole operation.

While they got to know the shop – and theircustomers – they were visiting a range ofsuccessful local food enterprises, prestigeLondon stores and speciality/fine food shows.“We were told by the experts that if you aregoing to do a deli, you need to do it well or notat all. We decided it was all about the customerservice, the welcoming atmosphere, high qualitypresentation and choice of food – especially thedeli format – that we felt needed replicating. Wedecided to focus on a fusion of typicalconvenience store/village store with a farm

By Beth Whittaker


Andy and Kate with some of their staff dressed for a 1950s themed event

The serve over deli. is a key part of the offer

with a Farm Shop

shop. We felt too many village shops only stockthe basics for “emergency shoppers”, and toomany farm shops only stock luxury or artisanproducts and no daily basics. Londis Musgravereally helped us with merchandising, EPOS, etc.., invaluable with our lack of experience”, saysAndrew. “Part of the process of optimising therange of products was listening to advice fromLondis, but at the same time realising that mostof their experience is in an urban setting.”

The couple chose to spend money on branding,working with a marketing company to helpdesign a logo and even a Heath Stores colour.“Professional branding and marketing isparticularly important if you want to reach out


beyond your immediate local community. I’drecommend it – we use a local firm and it hasmade a real difference,” comments Andrew.

However, the big challenge was refreshing the lookand feel of the store, with generous aisles, goodlighting and a flexible space for tasting events andspecial promotions. They had great support fromSharon Davis, Kent County Council Rural RetailAdviser who suggested layout ideas, local products,and retailers to visit. She also put them in touchwith shop fitters who understood the Mills’ visionof not ‘just another mini-supermarket’.

The re-fit was financed through a bank loandraw down facility, a five-year leasingagreement for all the refrigeration whichrepresented half of the total cost, and a smallgrant from Government/EU funding throughDEFRA. “During the refit, we kept the shop openthrough the two weeks with a ‘pop up’ shop inthe front garden – this was really appreciated bythe villagers who even helped us take it all downat the end of the fortnight, and joined in theopening celebrations!”

They decided to open up the shop’s lovelywindows which were previously covered up, andinstall expensive track lighting. “It’s astonishing

Heath Stores...continued

The old shop looked very tired Their vehicle acts as a promotional tool

Clean modern fittings and flooring give a classy ambiance


the difference opening up the front windows hasmade - many new customers commented theyhad passed the building for years and not realisedit was a shop! Track lighting has created the rightatmosphere in the new store and its versatility infocussing light on certain products or productranges has been very effective,” says Andrew.

“Where we can compete on price with thesupermarkets, we do – with alcohol, dairy andsliced bread for example. Where we can’t, westock local fruit and veg, or speciality flour, localchutney and preserves, ice cream and Kent’sfamous apple juice and luxury local readymeals,” says Andrew. He also rates the Londisoffers and uses them regularly. Country Choiceproducts satisfy local workmen wanting pastriesand pies and the shop bakes off its ownbaguettes and takeaway pizzas.

Alongside the local stock is a good range of finefoods, using speciality suppliers. To build andmaintain interest in the higher-end products, thecouple have worked with suppliers andproducers to put on a range of successful tastingevents, repeated throughout the year. The highly

Horsmonden – A picture postcard village

popular deli is housed in a large and expensiveserve over, the focal point of the store, offeringa wide range of fresh meats, local cheeses,olives and cutting meats including home-cookedhams alongside high quality food to go, tartlets,hand raised pork pies and filled rolls. “The delirepresents up to 10 per cent of all sales, with ahigh profit on return, so the expense of theserve over unit was well worth it.”

Andrew and Kate have also introduced asignificant fair-trade range, including a Traidcraftrange. So alongside Londis Supervalu rice sitsfair-trade rice, for example, while Traidcraftgreeting and Christmas cards and crafts add apoint of difference. “The fair-trade range wasvery firmly driven by us, whereas our gluten-free products have been driven by ourcustomers,” adds Andrew. “This illustrates thatwhile it is essential to have a vision, you need tobe flexible and respond to customers’ needs.

Apple Day is a great opportunity to celebrate local produce in Kent

After all it’s their shop - you are just the currentcustodians! It’s not just our business, but it’s ourcommunity too and we want to be part of whatmakes the village tick. We offer lots of localyoungsters part-time jobs - starting them offwith leaflet and newsletter delivery, moving onto re-stocking and so on.”

A non-profit making community space has beencreated for people to meet and chat over coffee,and also houses the Outreach Post Office threetimes a week. “This area is used every day byolder residents for tea, coffee and gossip, localproducers showcase their goods, localcouncillors use it for surgeries and residents forcharity events such as selling raffle tickets.Although it is difficult to quantify whether thespace encourages extra spend, it really helpscreate a pleasant atmosphere in the shop andgenerates a huge amount of good will.”

There’s a monthly newsletter delivered to over600 homes highlighting local suppliers, offers,events and tasting opportunities, while socialmedia keeps customers informed in badweather, or the latest food or charity event in thestore. “We always see uplift immediately afterthe newsletter has gone out; people are askingfor the next month’s edition before we havewritten it! They say they really look forward toreceiving it; it makes them feel more involvedand helps them get to know us and our staff.”

Community events organised by Heath Stores arebecoming increasingly popular and includetasting events such Burns Night, charity fund-raising activities, occasions such as the Queen’sJubilee and the World Cup, and seasonal eventsincluding International Talk like a Pirate Day (sic)and an Apple and Cider Festival. These activitiesimpact directly on sales – Andrew and Katefirmly believe the events have played a significantrole in the store’s success story. “It is theseevents, more than anything else we have done,that differentiates us from our competitors.

■ For more information, see:Twitter: @heath_storesFacebook page: The Heath Storeshttp://www.heathstores.co.uk/about-us.php

Heath Stores...continued


The shop provides a price proposition alongside the more upmarket ranges

The popup shop that kept basic services going during the refit

Get the latest news and information relevant toyour business. Share your ideas and views, hearwhat other retailers are thinking.

Connect with us on-lineShare our details with other retailers orsupporters. The Rural Shops Alliance is expandingits use of these channels to get information outfast. We hope you find this useful.

■ If you have any questions or suggestionsabout our digital media, please [email protected]

Keeping in Touch Online...


Connecting with the Rural Shops Alliance

Our WebsiteVisit our website at www.ruralshops.org.uk

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Copies of Rural RetailerYou can see the latest versions (and back issues)of our journal “Rural Retailer” atwww.ruralshops.org.uk/what-we-do/magazine

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RSAViews

Business ratesThis is clearly an area that needs wholesale reform, butgiven the size of the task, it is not going to be addressedquickly. However, one aspect could be. Some ruralretailers are caught in an unintended trap, where twoseparate business rates relief schemes come intoconflict. Small rural retailers have to apply for the ruralbusiness rates relief scheme rather than seek smallbusiness relief. Under some circumstances, this canmean they have to pay more business rates thanintended. To eliminate this anomaly would be a small butwelcome improvement to the business rates scheme.

Compensation for roadworksEach year, some rural retailers are adversely affectedwhen a road is dug up, often for weeks at a time. Thiscan result in a massive fall in turnover and in extremecases can lead to the shop closing for good. Entitlementto compensation depends on who is digging up the roadand in many cases is not payable at all. There is anurgent need for new legislation to give smallshopkeepers more rights for defined levels ofcompensation, irrespective of which utility or highwayauthority is causing the problem.

Post Office computer systemThe controversy over sub postmasters accused ofstealing money from the Post Office, who continue toprotest their innocence and blame the Horizon computersystem, continues to rumble on. The very fact that it

Winter 2014/15

GENERAL ELECTION 2015: POTENTIALQUICK WINS FOR RURAL RETAILERSWith the 2015 general election looming, it is a good time to highlight some of the issues thataffect rural retailers. Here are four topics which are relatively uncontroversial and which wewould ask all political parties to support.

seems impossible for the best forensic accountants inthe country to provide a definitive answer shows one ofthe shortcomings of the Horizon system. Basically, it wasintroduced decades ago and needs to be replaced.There comes a point where further updating of anexisting system quite simply does not make sense. Thiswould require government funding.

Support for rural shopsIn the past, there was funding to provide direct supportfor rural shops and post offices, reflecting theirimportance to local communities and wider society. Inthe last 20 years or so, responsibility for this has restedin turn with the Rural Development Commission, theCountryside Agency, the Regional Development Agenciesand now Local Enterprise Partnerships. Each time, ruralshops have fallen in priority. Responsibility at nationallevel falls between DEFRA (because they are rural), theDepartment for Business, Innovation & Skills (becausemost are commercial businesses) and the Departmentfor Communities and Local Government (because theyhave significant community value). Devolved assembliesin Wales and Scotland have helped. Give onedepartment clear responsibility and a modest ring-fenced budget to provide advice and some grantfunding for rural shops in England.

■ More information on these and other issues willfeature on our website. Keep visitingwww.ruralshops.org.uk for more details.

regulator. Of particular interest were his thoughts onlending for small businesses, where he was able to talkof his visits to Sparkassen in Germany. These arecommercial banks, established with state backing, whichare confined to lend within a specified region and with alegal responsibility to promote local economic growth.Germans talk about these banks in the same terms as aBriton might talk about the NHS or the BBC. Local bankmanagers are intimately attuned to their local economiesand have the autonomy to lend to local businesses thatthey believe are worth backing. Mr Perkins believes thatthe key principles – permanency through state backing,the core duty to support growth in a particular area andprofessional bankers who know their locality well – couldtransfer well to the British market.

Other issues Mr Perkins raised included a desire toaddress the issue of late payments to small businesses.Certainly the proposal to make late payers pay interestto their suppliers at 8% above base rate wouldconcentrate the minds of large companies. This is aLabour Party commitment if they get elected in May.

Recent Labour support for the ending of onerousarrangements for tied pubs does suggest that theirinterest in small businesses is not just lip service. We believe that a potential Labour government couldintroduce policies that would help support the future of rural shops and post offices.

RSAViews

The Labour Party has established a rural front benchgroup to bring together representatives of every shadowministerial team to devise policies that work for thecountryside right across government. The intention ofthis is to ensure that every department pays heed to theimpact on rural areas in everything they do. HuwIrranca-Davies, Labour’s shadow DEFRA minister, hasbased Labour’s policy around “three P’s” – People,Process and Policy.

Mr Perkins expressed strong support for the rural PostOffice network. His words made a lot of sense,combining an acknowledgement of the need to sustainthe link between Post Office Limited and Royal Mail butat the same time, tempering the need to sustain theUniversal Service Obligation with ensuring that otherpostal service operators are subject to equivalentperformance and service standards, enforced by the

Historically, the Labour Party has been seen as less concerned with rural issues than the Conservatives,reflecting in part the fact that historically most Labour MPs have represented urban seats. For the last RSANational Meeting, we invited Toby Perkins MP, the Labour Shadow Minister for Small Business, to discusscurrent Labour Party thinking. Mr Perkins is the MP for Chesterfield and has a business background – a real recommendation min this era of professional politicians.

RSA NATIONAL MEETINGRSA NATIONAL MEETING WITH TOBY PERKINS MP

Labour’s Approachto Rural Issues

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TNT Post) has been delivering post to addresses incentral London and Manchester, city centres wheredelivery is the easiest to manage and costs per letterare lowest. This leaves RM to deliver post for a fixedcost in the more challenging areas.

This is blatant “cherry picking”, although the postalregulator, Ofcom, is allowing it to continue. It is obviousthat Royal Mail’s business model depends on crosssubsidising expensive collections and deliveries in

RSAViews

Although they are two totally separate companies, thehealth of Post Office Limited (a company wholly ownedby the government) is inexorably entwined with that ofRoyal Mail (now fully commercial). The Rural ShopsAlliance is primarily concerned about the long-termsurvival of rural Post Offices.

The massive decline in government business passingthrough them (pension payments and the like) meansthat in 2015 a very high proportion of their transactionsis post work. Indeed, it is probably no exaggeration tosuggest that unless there is a game changer,maintaining income from postal services is crucial to thesurvival of the Post Office branch network in its currentform, with its large number of loss-making but cross-subsidised rural branches.

Under the current ten-year agreement between the twoorganisations (eight years left to run), Post OfficeLimited branches are only allowed to deal with RoyalMail post and are prevented from working with anyother postal or courier companies. Conversely, RoyalMail cannot sell its services through other new retailoutlets.

Royal Mail is in a very competitive market. The collapseof parcel delivery company City Link over Christmasshowed just how difficult it is to cover costs, let alonemake a profit. Other parcel carriers are striving to gainmarket share at RM’s expense, whilst it is also beingattacked in the letter delivery service.

The universal postal service obliges it to deliver post toall addresses across the UK on six days a week for onestandard price. However, since 2012 Whistl (formerly

THE LINK BETWEENPOST OFFICE & ROYAL MAILThe long-term survival of rural Post Offices depends on the success of Post Office Ltd. (POL).The success of POL depends on Royal Mail (RM).

postage labels from home or office, printing them on acomputer and paying for them electronically.

It is particularly targeted at eBay sellers. The parcels arethen dropped off, prepaid, at the local Post Office. ThePO operator receives no payment for providing thisservice, a fact bitterly resented by many of them!

The Department for Business, Innovation and Skills isproviding a massive amount of money to revamp andimprove Post Office branches. This is excellent, verynecessary and very welcome. However, there is littlepoint in having magnificent branches if the business tosustain them is allowed to slide away.

When the RSA identifies a problem, we usually like tosuggest a solution. For this one, there is no easyanswer. In this world of privatised postal services, RoyalMail, as the incumbent, is being attacked on severalfronts.

It is inevitable that the company itself must try to extractthe maximum income from the services it provides andthat includes squeezing intermediaries such as the PostOffice.

We would hope there would be room for Ofcom toprovide Royal Mail with some protection from unfaircompetition on the one hand, perhaps in return forbeing less aggressive when it comes to bypassing PostOffice branches on the other.

We are not holding our breath that this common senseapproach can be achieved.

RSAViews

sparsely populated rural areas from the income derivedfrom serving densely populated towns and cities.

Royal Mail itself is acting to deal directly with morecustomers, cutting out Post Office branches and thusnot having to pay commissions to POL.

Up and down the country, rural Post Offices report thattheir bigger customers are being encouraged to havetheir mail collected directly by Royal Mail, rather thandropping it off at their local Post Office. In many cases,this reduces their income and the long-term viability ofthe branch. RM does deny that there is a central policyto do this.

In addition, Royal Mail has launched Click & Drop. Thisis an online postage and label printing package,extending the existing Online Postage (OLP) service.Click & Drop encourages customers to buy and print UK


PENSIONS – AUTOMATIC ENROLMENT OF STAFFThe law on workplace pensions has changed. Everyemployer with at least one member of staff now hasnew duties, including putting those who meet certaincriteria into a workplace pension scheme and payingcontributions towards it. The process is automatic as faras members of staff are concerned but the employerneeds to take steps to ensure that they are enrolled. This is a classic case of new administration burdensfalling disproportionately on small employers. For largecompanies it is another cost of doing business, for smallemployers it is another system to get their head round,another call on their valuable time.

Each employer has a date by which they need to complywith the law. This is called your staging date. You candiscover your date by using the official staging date tool at:■ http://www.thepensionsregulator.gov.uk/

employers/tools/staging-date.aspx

There are a number of tasks that will need to becompleted by your staging date, including assessingyour workforce to see who’s eligible, choosing a pensionscheme, and communicating it to staff. The samegovernment site has an action planner to help you withthese tasks.

■ http://www.thepensionsregulator.gov.uk/employers/planning-for-automatic-enrolment.aspx

You need to tell the Pensions Regulator who is going tobe responsible for managing the automatic enrolmentprocess. This nominated contact will be sent informationover the coming months. See:■ https://forms.thepensionsregulator.gov.uk/

workplacepensionsreform/nominate.aspx?Campaign=019ecr-18-12-6-3-Letters

PERSONAL ALCOHOL LICENCE RENEWALSThe Home Office has created a simplified personallicence renewals process – this is excellent news. Ifyour licence runs out from early 2015, you will onlyhave to fill in a very simple application form and submitit to your local authority. This application form can beaccessed from your local licensing authority website.There is no charge for this process provided your detailshave not changed. You need to apply to renew yourpersonal licence between one and three months beforeit expires.

ALCOHOL LICENCING – SECTION 182 GUIDANCEThe Home Office has published updated Section 182guidance for local authorities to use when enforcing theLicensing Act. This is not the law but local authoritieshave to have regard to it to inform their own policy andrelevant decisions. Hence over time this guidance maywell have implications for retailers. It may be used byCouncils, police and other local stakeholders that aremotivated to limit or restrict members’ trade. It mayparticularly affect prospective licensees applying for anew licence or an amendment to an existing one. Twoaspects are of concern:

The Portman Group and its code of practice on thenaming, packaging and promotion of alcoholic drinks

Legal Bits & Bobs...

Legal Bits & Bobs...


has been included in the section 182 guidance. Thismeans that your local authorities could make adherenceto this Code a condition of a licence. Then a retailercould be unable to stock certain alcohol products, suchas high strength lagers or ciders.

‘Health bodies acting as responsible authorities’ can nowuse the data they hold on alcohol related harm to makelicensing interventions, e.g. figures on under agedalcohol-related emergency department attendance. Somelocal authorities may use this as a reason to imposefurther restrictions on licensees, even when it is usuallyimpossible to link health data to one particular outlet.

SINGLE USE CARRIER BAGSThe Department for Environment, Food and Rural Affairs(DEFRA) has laid the Single Use Carrier Bags Charges(England) Order 2015 before Parliament. This says thatretailers who employ 250 FTE staff or more mustcharge a minimum of 5 pence (including VAT) for eachsingle use carrier bag in England and to report thenumber of bags they sell each year. Assumingparliament approves this measure, the charge will startfrom 5th October 2015. A single use carrier bag isdefined as “an unused bag made of lightweight plasticmaterial with handles.”

This means that the vast majority of rural retailers inEngland are exempt from this order, although in Walesand Eire they have been included in their equivalentschemes and they have worked very well indeed – aperverse example of England refusing to heed evidencefrom other countries. Based on this evidence, the RSAwould recommend that rural shops do start charging fornew bags (as opposed to reused ones) on this date,although of course there is no compulsion to do so. Itwill dramatically reduce use of such bags by yourcustomers and provide a modest income for thebusiness or charity. It is also an opportunity toencourage sales of re-usable bags.

SHARED PARENTAL LEAVE AND PAYNew regulations are now in force. The option to use thenew Shared Parental Leave rights will apply for parents

who meet the eligibility criteria, where a baby is due tobe born on or after 5th April 2015, or for children whoare placed for adoption on or after that date. Employerscould start to receive notices of eligibility and theintention to take Shared Parental Leave from qualifyingemployees from January 2015.

Employed mothers will continue to be entitled to 52weeks of Maternity Leave and 39 weeks of statutorymaternity pay or maternity allowance. If they choose todo so, an eligible mother can end her maternity leaveearly and, with her partner or the child’s father, opt forShared Parental Leave instead of Maternity Leave. Ifthey both meet the qualifying requirements, they willneed to decide how they want to divide their SharedParental Leave and Pay entitlement.

Paid Paternity Leave of two weeks will continue to beavailable to fathers and a mother’s or adopter’s partner,however Additional Paternity Leave will be removed(Shared Parental Leave will replace it).

This measure is designed to give parents more flexibilityin how to share the care of their child in the first yearfollowing birth or adoption. Parents will be able to sharea pot of leave, and can decide to be off work at thesame time and/or take it in turns to have periods ofleave to look after the child.■ For more information, see: https://www.gov.uk/

shared-parental-leave-and-pay/overview

ELECTRONIC CIGARETTESThe Department of Health has published a consultationon the sale of these products. They propose to introducean age restriction of 18 years for the sale of “nicotineinhaling products” and to ban proxy purchasing of e-cigarettes. This seems a sensible measure to bring thelaw in line with the availability of new product types.If you want to respond to the consultation, it can befound at:■ https://www.gov.uk/government/consultations/

nicotine-inhaling-products-introducing-a-minimum-age-of-sale

How important are Booker’s own-labelproducts in a rural shop context? Whether you are in a city location or a rurallocation own label is important. Consumers willalways want quality and value for money nomatter where their location. It isn’t about havingeither branded or own label but a combinationof both.

Is it important to provide a value range tocompete with the big brands or do shopperssee Euro/Happy Shopper as a credible qualityalternative?Shoppers see Euro Shopper and Happy Shopperas both a value range but also offer a crediblequality alternative. Shoppers have come torealise that a cheaper price doesn’t necessarilymean an inferior product

How effective is your marketing campaign tooffer c-stores big brands at competitive pricesie. the current ‘Amazing Christmas Deals’?Does it help drive footfall/sales?

By Steve FoxEvery Premier retailer receives a full POS kit,including leaflets with which to market theirstores, shoppers are more demanding than everand it is vital c-stores to have a strongpromotional offer, enabling them to face up toboth the competition and the multiples.

How much do price marked packs help smallstores compete with supermarkets and attractshoppers?Retailers should use them strategically on lineswhere they will have the most impact.Independent stores should go around themultiples by having a USP such as PMP’s andown-brands

How do you convince retailers that sellingprice marked packs makes business sense –despite the lower margins? All Happy Shopper and Euro Shopper deliver30% POR for retailers so this is not a lowermargin. PMP give consumers confidence thatthey aren’t paying over the odds and this meansthat they are more likely to shop in their store.The key thing as above is to have the right mixand concentrate on the lines that require a PMP.

Do price marked packs increase sales or justcannibalise from the standard fixture?On the right products PMP’s definitely helpincrease sales. Also, on pack offers such as a “2for 1” help drive more cash through tills.

Do you think shoppers want promotions (ie. 3 for £1 or 25% free) or simply lowerprices at c-stores?Shoppers definitely want promotions but as withall things it is about having a balance betweenpromotions and straight price products. Toomany promotions can overwhelm shoppers.Lower prices are key to complementing thevalue message which is why own label productscan be ideal.

Price Marking and Own-brand


Steve Fox

It’s an interesting take on price perception;brands are popular, according to these ruralretailers, who believe some of the symbolgroups’ own label ranges don’t always work intheir locations. A budget wholesaler range justwouldn’t sell at Radley Village Shop inAbingdon, Oxfordshire, adds manager JohnGoodenough. “People aren’t looking for cut-pricebargains.”

Despite this, symbol groups insist their ownlabel ranges offer a real alternative to brandedproducts. Costcutter Supermarkets Group’s newown brand – Independent – has three tiers,

from basic to premium. The group says ownbrands offer retailers increased margins so it’svital that they are a credible alternative and notsimply a cheap substitute. “A strong own brand,alongside branded goods, is essential to giveconvenience retailers the ability to offer a broadchoice to their customers, across several pricepoints,” says Lucinda Stephenson, MarketingManager for Independents.

Londis’s own label products also offer goodvalue alternatives to shoppers who use a Londisstore as their main shopping destination,according to their Marketing Director AnnaBurleigh. “It’s even more important to offer


How Pricesare affectingCustomers’Behaviour

By Helen Gregory

“If someone wants baked beans they willbuy a price marked tin of Heinz rather thana cheaper own brand alternative,” reportsSteve Ansell, of Ansell Village Stores inBedfordshire. “People don’t always wantlower prices,” agrees Colin Woods, whoowns Amberley Village Stores in Sussex.“They often prefer to buy a brand like Heinzrather than a cheaper variety – but they likegetting two tins at a lower price.”

BOGOFs grab customers’ attention

quality and value in arural shop, providing a wide range forcustomers to choosefrom.”

All the symbol groupsalso regularly offercompetitively pricedbrands at their depots;Londis, for example,gives retailers accessto six products at‘industry leading’prices each week aspart of its Super Six campaign, to help smallstores compete with the big boys.

But like customers themselves, rural retailersaren’t afraid to seek out cheaper deals – even ifit means severing ties with long-standingsuppliers. Says Goodenough: “We’re looking tochange wholesalers to get a better deal andrecently changed our milk supplier when theprice went up too much and sales dipped.”

Shoppers can trust suppliers over retailers whenit comes to price, which means price marking isa great way to assure them they aren’t beingripped off. Research group Him! reports that61% of convenience shoppers think these packshelp independent retailers to have better pricesthan the supermarkets. As a result, wholesalershave seen a huge sales increase, according toHim!; last year, 93% of retailers bought softdrink price marked packs – up from 47% in2010.

Woods, of Amberley Village Stores, has sold alot more price marked packs in the last coupleof years – particularly on coffee, biscuits, andchocolate - and agrees that as a result,

customers perceive his prices to be comparablewith supermarkets. Retailers are seeing thebenefit, agrees Adrian Troy, Head of Marketingfor soft drinks producer AG Barr, who says 65%have reported increased sales of price-markedpacks in the last 12 months.

This manufacturer also flags up a multi-buy offeron its price mark packs, such as on Rubicon 1-litre cartons sold with a £1.29/2 for £2 flash onpack. This has proved so successful that it’susing the promotion on other products such asIrn-Bru.

“Price-marking drives footfall and rate of sale,builds shopper loyalty and when managedcorrectly, is a proven way to drive incrementalcategory growth,” Troy adds. Imperial Tobaccoreports price marked packs now account forabout 60% of total volume sold at independentstores (Nielson Market Track 2013) and that47% of adult smokers will always buy thesepacks if available.

How Prices affect Customers...continued


A striking pound section

Well-sited dump bins can add to the price message

Says Anna Burleigh, marketing director atLondis & Budgens: “Price mark packs don’tnecessarily increase sales but they do increasechoice and any increase in choice is always apositive for the customer.”

However, IGD research earlier this year foundthat while price is the biggest factor consideredby shoppers, they only ranked promotions atnumber eight.

“Price mark packs are a type of promotion,”explains Susan Nash, trade communications

manager at Cadbury owner, MondelezInternational, “so retailers should be advised toconsider how much of their stock they want tobe perceived as ‘on promotion’. If they areoffering nearly all their stock as PMP, is thisgiving shoppers an expectation of a store thatcan’t be continued long term?”

There’s obviously a balance to be struck, butsmall retailers are increasingly happy to stockprice marked packs, as while their margins havebeen historically tight, that’s now changingaccording to village retailers. Says Goodenough:“Price mark packs can still offer margins of upto 40% on some products such as confectioneryand drinks – so it’s really no hardship stockingthem.”

While shoppers will pay a bit more on groceriesin a village shop, - no-one likes to feel rippedoff. However, the mindset seems to changewhen it comes to stocking local produce.Goodenough says his customers want to supportthe local shop and don’t balk at spending £5 ona home-made cake. And Woods at AmberleyVillage Stores sells dozens of bags of locallymade premium muesli each week and stocks60, mainly local, cheeses. “I don’t try tocompete with the supermarkets,” he says, “mycustomers arelargely elderlyand appreciatebeing able tobuy productsthey can’t getin the majorstores.”


PMPs can re-assure customers that they are paying a fair price OR act promotionally - two distinct roles

Wine as a range has clearly defined price points Posters can drive home a price message

Calling all Small Shops!


A reception will be held at the Houses ofParliament on the 25th February 2015 for theretailers that have been shortlisted, where theoverall winner will be announced.

The RSA is an active member of theIndependent Retailers Confederation, anumbrella organisation for a range of tradeassociations and which sponsors thisparliamentary group. Our Chief Executive,Ken Parsons, will be chairing the judgingpanel for this competition. We know there aresome really excellent rural shops out thereand we hope there will be a good showing ofthem in the shortlist. Don’t be modest!

Andrew Goddard, PayPoint Retail Director andcompetition sponsor said: “We are pleased to besupporting the Best Small Shops Competitionagain. It is a great chance to showcase the workthat small shops do across the country and howimportant they are to their local communities.”

Applicants need to explain why they are thebest small shop, covering the key criteria areas;innovation in your business, communityengagement and entrepreneurial activity.

Deadline for applications is Friday, 30th January.Full details of the application process for theCompetition are available at:www.bestsmallshops.uk.

The search for the best small shop in the UK has been launched as part of a competitionorganised by the All Party Small Shops Group. Speaking at the launch, Chairman SimonDanczuk MP said: “We are looking for the best small shops in the UK to come forward andtell us the great work they do to serve their communities and create jobs in the economy.Grocers, Delis, Booksellers, Music Shops all have the chance to tell us why they are the best small retailer.”

Best Small ShopCompetition

The regulations that already cover thedisplay of tobacco products in larger storeswill be extended to all sizes of store from6th April 2015. After that date it will be acriminal offence to display tobacco productsor prices except in accord with theregulations. We repeat – non compliance isa criminal offence, that could attract a fineof up to £5000 or up to six monthsimprisonment, or both.

In England, from April all tobacco products mustbe stored out of sight of the public. You canreveal only up to 1.5 m² of display whenretrieving products, showing stock to an over 18at their request (age check must be carried out ifrelevant before revealing stock), counting stock,restocking the fixture, maintenance, cleaning orfor staff training. In every case, the products mustbe displayed for the minimum length of time. It isnot an offence for other customers, includingchildren, to incidentally see tobacco productswhilst the door is open for a legitimate purpose.

Many retailers will already have their solutionsin place or at least planned. If you have not fullydone so, we listed various options in the lastedition of rural retailer. This information is stillavailable on our website www.ruralshops.org.uk.We very definitely do not recommend using acurtain to cover the display except as a verytemporary measure. This is not the right imageto display to customers.

We expect most retailers funding the installationthemselves to opt for adding sliding doors to theexisting gantry. If you do this, do make sure thatwhen they are open it is impossible to displaymore than 1.5 m². Hinged doors are likely to getin the way when open. For any new fixtures, doremember that they should have a life of severalyears but will be subject to quite hard wear andtear – poor quality fittings could be a falseeconomy.

■ You must continue to display a sign statingthat it is illegal to make tobacco sales topeople under the age of 18, as currently. Thislegal requirement has not changed.

D-DAY APRIL 6th... ACTION NEEDED...


Tobacco Display

The display ban will provide a real opportunityto review your tobacco range. Rationalise it bycutting out slow sellers (if they are not ondisplay, sales are not going to increase…) andmaybe even re-organise products on the shelf.Once the need to mount a display for customershas gone, the need for multiple facings of bestsellers may decrease. You might even considerre-arranging products into alphabetical order onshelf, to make it easier for staff to find them.

■ You are allowed to install unbranded genericsigns, such as, “We sell tobacco”, in anyformat and any size. We strongly recommendthat you deploy such signage to make sureyour customers know you are continuing tosell tobacco, once it is hidden away out oftheir view. All other types of price list or labelmust use black Helvetica plain font

■ You can display one A3-sized poster, entitledtobacco products price list. This can only bein characters no higher than 7 mm (30 pointfont) and can only list the brand name of theproduct, its price, the number of units in thepack or the net weight (for cigars, country oforigin and dimensions, for pipe tobacco, thecuts and type of tobacco, are also permitted).

■ You can have a list including pictures ofproducts, which must not be left onpermanent show but which can be shown toany customer aged 18 or over who asks forinformation about the tobacco products sold.This must have wording no higher than 4 mm

These regulations do seem positively bizarre inplaces, worthy of a novel by George Orwell orKafka. We have this mental picture of youngpeople frantic to start smoking, all because thepricelist in their local store was in Times Romanrather than Helvetica typeface, or with lettersprinted in 16 point rather than 14 point. Youreally could not make it up!


Ban

(14 point) and pictures of the actual productmust not exceed 50 cm² (about the size of anormal cigarette packet).

■ Price labels on the fixture must not be largerthan 9 cm² and must use characters nohigher than 4mm.

We suggest that you plan in staff training on thenew requirements for the week before theycome into force. Make sure all staff, includingpart timers, are confident in the newrequirements.

Documents

RURAL RETAILER Winter 2014/5