The successful launch of the Essentials range – now accounting for 16% sales – has made the brand more accessible, Mark Price, MD of Waitrose says, “We’re seeing weekly sales growth of 11%”.

Waitrose convenience store Nottingham

Geographical spread

With the brand achieving new relevance with consumers, Waitrose plans to expand its base out of the southeast by developing new sales channels.

Despite high growth, poor geographical coverage is hampering the brands ambition, “Our research shows that seven million people want Waitrose quality but can’t get it today where they live,” says Price.

Boots tie up

A tie up with Boots will give Waitrose access to hundreds of high street locations, potentially very quickly. The agreement will see Waitrose offer a selected range of food in Boots stores, in return Waitrose’s in-store pharmacy will be rebranded Boots.

New convenience

In the longer term, Waitrose are set to roll out their own convenience stores between 2,000 sq ft and 4,000 sq ft in size. Price is quoted as saying he hopes to open 300 stores over the next “five to ten years”.

New stores are expected to sell an edited range of mainly fresh food, providing customers with staples for top up, convenience shopping. In addition the company plans to increase the number of stores found at Welcome Break motorway service areas from two to eleven. A move that will help them gain exposure to middle England.

Double-digit growth

Price is positive that Waitrose can build momentum and continue to be the fastest growing grocery brand in the UK, “With continued strong performance from our existing stores and this move into the convenience market, we are planning for double-digit growth for the foreseeable future”.

Market slow down

Cushman & Wakefield’s, European Shopping Centre Development report predicts that 2010 will see just 7m sq m of new space open, 2011 will see less still, 5m sq m being the estimate.

The report expects 8.7m sq m of new shopping centre space in 2009, down 5% on 2008. This will represent a rally, first six month figures show just 3.1m sq m of space opening, 18% down on same period 2008.

Russian resilience

Russia is the most active European market, with 580,000 sq developed in the first half of 2009, just under half can be found in Moscow. Elsewhere Italy has added 18 new centre’s; totaling 370,000 sq m of new space. In terms of largest percentage increase in new space, Bulgaria leads the way with 33%.

To view the report, sign up to the Cushman & Wakefield website here.

Read it here.

Places and people

On one hand you can argue that dismissing Gehry as a “Starchitect” is insulting to one of the most influential designers of our time. On the other, you can be forgiven for concluding that Gehry’s lack of appreciation for “context” shows that high profile architects have forgotten the people that bring their buildings to life.

Gugenheim Museum, Bilbao, Spain

Public response

Despite the pompousness of the argument, the exchange raises an interesting question – to date has iconic architecture delivered useful public spaces? And more importantly, while designers, journalists and critics get rather excited by high design, does the public care about the aesthetic detail, or are they more interested in places that fulfill their needs.

Read the full blog here, the comments at the end of the piece are particularly interesting.

India retail

The tour itinerary takes in malls and shopping destinations in Delhi and Mumbai and is clearly aimed at foreign brands still looking at India. Their aim is to give attendees the opportunity to compare and contrast how malls are transforming themselves in order to stay relevant in the fast changing Indian market.

Having seen many of the malls ourselves, we can vouch for the fact that attendees will see a range of developments, from the good to the bad. The event appears to be an ideal way to assess the current state on Indian retailing, the opportunities and the challenges.

The report, “21^st Century High Streets: A new vision for our town centres”, sets out a six point recovery plan for town centres and urges national and local government to work with retailers to ensure that retail failures do not bring down previously functioning high streets. The report shows a deeper level of thinking than government plans announced by (then) Communities Secretary Hazel Blears back in April.

“Tipping point” fast approaching

The report warns that a “tipping point” is approaching and immediate action is required. At the current rate, business failures and lack of new capital investment is likely to leave an even bigger hole in the high street. BRC estimate that the level of vacant premises will hit 15% by end of 2009, up from 7% in January.

Distinctiveness and identity

Central to the recovery plan is developing a sense of local identity on the high street, “The distinctiveness of many town and city centres is an asset, not an impediment. New developments can be complementary to existing features rather than seeking to homogenise surroundings.”

Place making

In addition the report highlights the importance of attracting customers, BRC suggest a more holistic approach combining retail, entertainment and cultural events that maintain local identity.  “Communication and marketing are key elements in developing an effective sense of place. People living within reasonable traveling distance need to be able to recognize and identify the essential nature of a high street.”

Most visible sign of recession

The high street provides the most obvious sign of recession. Shoppers unable to ignore increasing numbers of vacant units are likely to lose more confidence in the economy, accelerating decline. This downward spiral needs to be broken if high streets are to recover. For this to happen stakeholders need to work together to create a new vision for high streets across the country.

To read the full report click here.

Above average sector score

Based on 25,000 respondents, the banking sector as a whole scored 75.3% in the index, fourth out of a total of ten sectors. Top performing sector is tourism (79.1%), the lowest is utilities with 66.1%. Average score across the ten sectors is 74%, so banks are delivering above average customer service.

Jo Causen, chief executive of the Institute of Customer Services was quoted in the Times saying, “Even though there are challenges in the banking sector, people rate the customer service provided by front-line staff”. This point is proven best when looking at the score given to Royal Bank of Scotland, a bank that has had a desperate 6 months. Despite turmoil and the fact that their score has dropped slightly, RBS still score above average 75.9%.

“World class” service delivery

80% is the benchmark for “world class” service delivery, John Lewis topped the scoring with 90.9%, of other retailers Waitrose finished fourth overall (87.1%) and Marks & Spencer made the top ten with 84.5%. Co-operative Bank were best-bank, scoring a creditable 81.2%.

Increased profits and competitive advantage

The research confirms that companies that take customer service seriously can make a difference to the bottom line. The institute believe profits can be increased by as much as 24%, in addition firms are twice as likely to to retain staff and develop a customer base that is three times more likely to recommend their products and services.

Looking local

A major trend identified in the survey is the preference for all things local. Local plumbers outscore every bank with a satisfaction rating of 87.2%, local fish and chip shops score 86.9%, and local hairdressers score 86.1%.

The message to banks and major retail brands is clear, place the customer at the center of your business, treat them well and provide the personal approach.

Cultural sensitivity isn’t always a quality associated with McDonald’s. Rightly or wrongly (depending on your point of view) the brand has been labeled as uncaring, unhealthy and imperialistic. However, in India it appears that their market entry strategy has earned them a number of fans and many Rupees.

Setting the standard

Over a conversation with an Indian retail expert our attentions turned to western retail brands and India market entry. My friend was very clear in terms of which brand had managed the transition best, without having to tinker with their core brand values or the fundamentals of their business; McDonald’s was the clear winner.

Products and Price

Through use of a joint venture arrangement they have successfully developed products and a pricing strategy to suit the local market, based on the fact that they have 160 restaurants across India you have to say it works.

Product: The McDonald’s menu in India contains no beef or pork, there is also an extensive vegetarian menu. Vegetarian and non-vegetarian food products are kept separate throughout the sourcing, supply chain, cooking and serving processes.

So while you can’t buy a hamburger or Big Mac, you can buy a McAlloo Tikki or a McVeggie burger.

Price: A price point of around – equivalent of – 20p for a burger means that McDonald’s has mass market appeal, making it a viable option for the majority of the population, not just an expensive treat for the more affluent.

McDonald’s India

Riding India’s demographic wave

While McDonald’s know older generations brought up on a different cooking style are unlikely to chose to eat from their menu, India’s young demographic allows the company to concentrate on attracting younger consumers, eager to try newer food concepts.

Local knowledge

While some retailers see joint ventures as unsatisfactory, McDonald’s have benefited by tapping in to local knowledge and developing cultural understanding. Following four years of preparation and twelve years of trading, McDonald’s have established the perfect business at the perfect time, without compromising their core brand.

Written by Dominic Twyford

The theory

My theory is in a booming market full of eager retailers looking to expand and consumers willing to spend, building profitable shopping malls is relatively easy. When these dynamics go in to reverse things aren’t so simple, a scenario facing India.

The squeeze is being felt, AsiaProperty magazine have reported that 11 of 15 malls on MG Road, Gurgaon, have had to refit to create mixed-use schemes as demand for retail space slows. In my opinion part of the reason is that developers have been building malls, not building brands, they have been busy badging “me-too” malls instead.

While a well-positioned and clearly defined brand wont solve all problems, it will help malls stand out. More importantly it will help the developer make informed decisions about the tenant mix and service offer based on an understanding of who their target customer is.

The question

Having asked the question, general consensus was that Inorbit Mall – due to its size – was the place to go. While the size of a mall can be important, a competitor can always build a bigger mall, in India where malls are in close proximity this would be a real problem. Regardless, I set off in a taxi with a relatively open mind.

Oberoi Mall, Mumbai

The Taxi twist

The taxi driver spoke good English and asked what I wanted to buy. Having told my story he suggested the Oberoi Mall instead. His reasons were telling, it was closer and in his opinion all Mumbai malls were the same, as he put it, they have McDonalds, cinemas and the same shops.

Oberoi Mall, Mumbai

If taxi drivers can see this, the customers they deliver to malls can too. If the retail and leisure mix isn’t providing differentiation, the brand has to. If this scenario is correct Mumbai shoppers are likely to be visiting the mall nearest to home, making customer attraction and retention increasingly difficult.

Written by Dominic Twyford

Recession good for “challengers”

Proving that recession creates opportunity for “challenger” brands, Virgin aim to take advantage of cheaper rents and landlord incentives on offer due to a slowing retail sector – market analyst, Experian forecast that retail vacancy could hit 15% by end of 2009. Stores are planned for the likes of London’s West End, Meadowhall in Sheffield, Victoria Centre in Nottingham and Ropewalk Shopping Centre in Nuneaton.

Showcasing the “digital home”

While Virgin Media products are available in 4,000 independents the brand currently have just 27 own-brand stores. Virgin’s aim is to create interactive formats (much like Apple) that will build brand awareness, grab market share and showcase their range of family entertainment products and services for the “digital home”. Managing Director of consumer retail Peter Taddep explains, “This expansion will reinforce Virgin Media’s presence at the heart of communities across the UK and provide a valuable contact point for existing and potential customers.”

Stores without walls?

Most intriguingly, as part of their growth strategy Virgin Media have developed a new retail format for prominent mall locations named “Retail Lite”. Virgin Media describe their formats as a “new retail experience”, and believe that they are “the most advanced customer facing outlets”.

Apparently designed along the lines of a permanent walk through installation, new formats will sell the same range of broadband and mobile phone packages as a traditional store.

Recession should = Innovation

The easy option for brands is to cut back in an economic slow down, instead, Virgin Media are focused on the opportunity. Their approach illustrates the importance of investment in innovation. Virgin Media are banking on improving market share and establishing themselves in the marketplace for when the (temporary) recession ends. They are looking forward, while other retailers are reining back.

Brand transparency

During his speech he highlighted the importance of transparency, using Carphone Warehouse’s decision to publish customer complaints on their website as an example of brand openness.

The internet, giving the consumer a voice

While recession may be the catalyst, the internet empowers the consumer. Social networking sites Twitter, YouTube and Facebook provide consumers with a new forum to register displeasure. If unhappy with in-store service or the overall shopping experience, consumers can tell the world.

The consumer has a platform to register their disquiet and connect with others, creating communities of vocal, united consumers. This is word of mouth marketing on a mega-scale; transcending geography and time zone. Referring specifically to the internet, Bond tells his peers, “it is no good trying to hide”.

The Domino’s effect

Recently Domino’s Pizza took the full force of online consumer backlash when footage of two employees ‘preparing’ food appeared online. While the episode damaged their brand, their response – once they had finally realized that the issue wasn’t going to disappear – was generally praised. Ironically they exploited the same medium that had hurt them; YouTube (see below) and Twitter (@dpzinfo) provided a platform to quickly reach their customers and counter negative coverage. Clearly the organization understands (or quickly learned) how to use social tools; most importantly they did not hide.

In the dark

Yet evidence suggests that brand owners are in the dark. McCann Erickson’s “Social Media in Marketing Study” concluded that two thirds of communications professionals do not understand how to use social media correctly. In addition 46% claim that their organizations IT department block access to social media sites, in effect freezing themselves out of the brand-consumer conversation that is taking place.

Brand management

The internet has shaken up brand management. Retailers and brand owners need to change mindset and realize that they no longer have the same level of control. Brand managers need to be aware of the conversation surrounding their brand and be prepared to engage with their consumers.

Minimum requirement is to create a monitoring system that regularly tracks brand coverage and commentary on influential blogs and social sites. In addition brands should start communicating, whether it is through a blog or on Twitter, brands need to be “in” on the conversation. Hiding is no longer an option.