Transformative Food Retailing, Data and Consumers

Posted on June 1, 2023 by Leigh Sparks

The knowledge that retailers and especially food retailers have around their customers and their behaviours has been a topic of interest and concern for decades. The small independent corner shop of old and the localism of buying are historical illustrations of the role of knowledge and information. Recent decades though have seen the rise of multiple retailers, mass retailing and changed consumer and retailer dynamics. The sense of localism and knowledge of consumers at the store level waned, although aggregate data remains important for operations.

This growth of chain retailers was enabled, amongst other things, by the harnessing of technology. As this has developed, and not only in consumer-facing practices such as loyalty cards, so the ability to identify and store data on individual customers has returned. Much of the use of this data (as far as is known) takes the form of personal transactions, often via the loyalty scheme. As mobile phones and apps have emerged, so such instant result schemes and knowledge have proliferated.

At a macro level there is an increasing interest from governments and public health bodies in the role of retailers in public health. This has been seen through restrictions on cigarettes, alcohol and various foods. Such restrictions have taken different forms (taxation, levies on product content, advertising bands, minimum unit pricing are amongst the examples) and have become a battleground politically and legally. This is often viewed as a contrast between the “nanny state” and marketized unhealthy environments and practices. To that extent I have argued before that retail are “social engineers”.

With colleagues from Finland, our recently published article takes a different approach, building on some of our previous work. It takes the concept of transformative food retailing and presents a framework for its development and understanding.

The starting point is that retailers, rather than being seen as the problem in health, could increasingly be developing their role to assist consumers. By sharing data and understanding with consumers, and reflecting the broader trends in technology, data and consumer activity, personalised solutions for individuals can aid their behaviour changes for good.

This potential has been around for some time, and there are small scale trials and programmes, often linking a range of commercial and other datasets to help individuals. So much more though can be done and retailers can be at the forefront of this. The start of this is understanding the practicalities. We hope our paper (Open Access so can be downloaded here) helps.

Reference

Hannu Saarijärvi, Leigh Sparks, Elina Närvänen, Maijaliisa Erkkola, Mikael Fogelholm & Jaakko Nevalainen (2023) From transactions to transformations: exploring transformative food retailing, The International Review of Retail, Distribution and Consumer Research, DOI: 10.1080/09593969.2023.2213423

Abstract

Food retailing is undergoing a major restructuring process that is altering its boundaries, service provision and operations. Digitalisation and other technological advances are shifting the focus from products to services, from offline to online and from physical to virtual. Simultaneously, initiatives such as the United Nations Sustainable Development Goals are exerting pressure on food retailers to address contemporary global challenges, such as promoting healthy and sustainable consumption and production. However, these areas not only challenge food retailers but also provide opportunities for facilitating favourable dietary changes that benefit consumers, companies and society at large. This study introduces transformative food retailing as a construct that shifts attention to the reconfigured role of food retailing and its potential. We identify the shaping forces and characteristics of transformative food retailing and discuss the implications for consumers, food retailers and society at large. This paper is among the first to define and conceptualise food retail as transformative and, as a result, sets a platform for future scholarly research and practice to uncover the full potential of food retailing in serving both consumers and society.

Posted in Behavioural Economics, Consumer Change, Consumers, Customisation, Data, Food Retailing, Health, Loyalty Schemes, Personal, Personalisation, Public Health, Public Policy, Sustainability, Transformative Food Retailing | Tagged , , , , , , , , | Leave a comment

Urban Logistics and Retailing

Posted on May 16, 2023 by Leigh Sparks

At the start of May, the details of the Routledge Handbook of Urban Logistics was published. The Handbook itself will be available for pre-order from early June with formal publication on June 23, 2023.

I was happy to contribute a chapter on Urban Logistics and Retailing. The Routledge Handbook of Urban Logistics offers an overview of urban and city logistics. The 29 chapters examine five topic areas reflecting the diverse nature of current research and thinking in urban logistics: transport modes, urban logistics sectors, technical analysis, policy, and sustainability.

My chapter starts from a recognition that the importance of supply chains has become more generally recognised by businesses, the public and the media in recent years, partly due to major external shocks.  The implications of the UK’s Brexit referendum result are now being felt more clearly, most notably in the introduction of friction (paperwork, checking, borders) into supply chains.  As predicted by many supply chain operators, disruption to the supply of products has been the consequence The COVID-19 pandemic produced extreme volatility in demand and supply leading to issues around panic-buying, stockholding, and transport availability.  Product shortages became more common and global supply chains have continued to be adversely affected by the pandemic.  The inter-relationships between production, consumption, retailing and distribution have become more strained, generating additional disruption and costs. This has been further exacerbated by the war in Ukraine resulting in supply problems and price spikes in energy, including fuel, further affecting supply and, via price increases, demand.  For many, the awareness of the potential fragility of supply chains has thus risen sharply, as has the understanding of our corporate and personal reliance upon them.

For retailers, their supply chain has become a key component of their operations.  Historically reliant on producers and distributors, retailers were unable to easily provide the range, availability and prices required for their customers.  They reacted to that over time by both, when legally permitted, taking more direct control of supply, and also by using their data and knowledge of consumer demand, and subsequently scale, to re-organise supply chains.  This is evident across most sectors of retailing.  Retailers’ aim has been to produce a more efficient and effective supply of products to stores and customers and thus enhance the customer experience and in turn increase sales, satisfaction and consumer loyalty.  This has resulted in a transformation of approach and operations in retailing, and especially in their supply chains.

This supply chain revolution has gone hand in hand with other retail changes.  In many sectors stores have increased in size and relocated away from central urban areas and on to decentralised retail parks and shopping centres.  Purpose built out-of-town retailing has considerable operating advantages, including simpler, separated, efficient logistics supply.  In the last two decades, there has been a further major structural change in the retail sector.  The rise in the use of the internet and online shopping, to a point where it is now c25% of all sales in the UK, has altered the channels of distribution, but has also generated new issues, including that of the scale of ‘returns’ of unwanted or unsuitable products, especially in the fashion sector. 

Retail stores have historically been a key part of major urban centres.  Recent trends of decentralisation and online retailing combined with cost pressures of operating in such sites (including logistics issues) has seen central urban retailing come under increased pressure.  Previously the focal point of supply for many, urban stores are still significant, but their operations have become more marginal in many instances.  For those that remain, pressures on their logistics have also grown.  The transport issues of urban areas in particular have come more into focus and so urban retail logistics has become more significant.

Congestion and costs have become major issues for the supply of product.  The environmental impact of human activity has been increasingly recognised.  Retailers, as a focal point in the distribution of products to consumers, have been increasingly concerned over environmental sustainability.  This is not all problematic, as within their own operations, there can be clear commercial benefits to actions, as for example in packaging and transport reduction.  Efficient supply chains also hold less stock in the main, reducing wastage.  However, sectors built on high short-term demands (and often at the cheapest possible cost) are prone to extractive models and to questions over practices (e.g., labour) and environmental sustainability.  A system built on high levels of over-ordering and returns is environmentally questionable.  In urban areas, traffic congestion and pollution have become human health issues.  The very visibility of retail supply has made them a target for activists, as seen in recent UK demonstrations against fossil fuel and milk by Extinction Rebellion and Animal Rebellion.  Over the last two decades or more there has thus been increased questioning of how our retail supply systems operate, for whose benefit and with what adverse affects.

Retailing logistics has developed into a highly sophisticated operation over this period, attempting to match supply and demand whilst reducing costs and operating on a global basis.  Pressures on urban systems and complications of urban delivery to stores, linked to the development of online sales and omni-channel retailing have increased and added costs and complexity.  Concerns over the environmental impact of retail logistics and major recent disruptions to supply chains (such as Brexit, COVID-19 and capital infrastructure and labour shortages) have further pressured retail systems.  Retail logistics generally and urban retail logistics specifically have thus begun to be re-assessed.

My chapter considers these issues.  It begins with a review of logistics and supply chain management and a focus on retail logistics and supply chains.  This is followed by a consideration of the main practical issues that have emerged in recent years. The final section provides a consideration of the implications of these recent changes and trends, with a focus on the future shape of urban retail logistics.

A pre-print version of my chapter will be available from the University Repository in the near future.

The slide show below provides details of all the chapters and the book (currently only in hardback and targeted at a reference market) is available from the publishers and other bookstores (use local bookshops preferably)

Reference:

Monios J, Budd L, Ison S (2023) (Editors) The Routledge Handbook of Urban Logistics. Routledge. ISBN 9781032148571

Posted in Books, City Centres, Congestion, Consumers, LEZ, Logistics, LTN, Relationships, Retailers, Retailing, Spatial Planning, Suppliers, Supply Chains, Sustainability, Town Centres, Towns, Urban | Tagged , , , , , , , , , , , , , | Leave a comment

Ground Down

Posted on May 9, 2023 by Leigh Sparks

Last February I wrote about the state of customer service and specifically the failure of KRUPS to honour their manufacturer warranty.  A further two months have now passed and last week I finally got a replacement coffee grinder, but not made by KRUPS and not without further struggles. 

We left the saga in February with KRUPS saying I had to wait for some more months for repair.  They then said I could instead use the Sale of Goods Act/Consumer Rights Act to make this the retailer’s problem (I paraphrase a little).  I decided to wait for them to repair it.  Mistake; as it seems they were not bothering to try, or at least with no urgency.  They made no attempt to contact me. When I asked in mid-April, they indicated no progress had been made and no likelihood now of making progress.  Four months and no action. Again, they told me to make it the retailer’s problem as they could not resolve it.

This time I did go and have a discussion with Currys in Stirling (I had bought it online with them during Covid lockdown).  They said they could replace it, IF I had the product and a RAN (Returns Authority Number).

Back I went to KRUPS.  Yes, they could supply the broken product but no, they did not issue RANs – the case number (I had two by now) would do. 

When I took the broken product (arrived quite quickly from KRUPS) to Currys, they asked for the RAN, as they could not action replacement without it.  I of course did not have one. Currys staff said no worries, as if they had not sent a RAN, KRUPS have a retailer hot line for such circumstances (let’s pause and think about that in the first place).  They rang it to no avail – it is shut on Sundays! Talk about making life difficult.

Currys promised to follow up, did so and issued me a credit gift card to the full amount a few days later.  Upon which I bought another coffee grinder from them – and no, it was not a KRUPS (incidentally that model has risen in price by 69% in just under 20 months – must be all the spare parts they don’t have, and the customer service lines they have to staff).

So, what do I take from this:

  1. I need to drink more tea.
  2. KRUPS are to be avoided now and into the future.
  3. The manufacturer’s warranty may not be a guarantee of anything and seems to have no real status.
  4. The retailer is having to pay for the problems caused by the manufacturer (though I don’t know the detailed interactions here).
  5. KRUPS are paying for service staff to effectively not satisfy the customer (not blaming the person but the process/system seems mis-specified at various points) – at what cost? And I think I have now clocked up more than 20 “please accept our apologies for any inconvenience” messages from them. How about sorting the problem not passing the buck?
  6. Currys’ Stirling staff (and I dealt with four different people on this) were uniformly excellent and the handovers amongst then were seamless.  Customer service can be good if people trained and motivated/allowed to solve problems.
Posted in Consumers, Currys, Customer engagement, Customer Service, Legislation, Retailers, Sale of Goods Act, Warranties | Tagged , , , , , , , | Leave a comment

Towns and Resilience: A Totally Locally Follow-Up

Posted on May 2, 2023 by Leigh Sparks

On the 20th April I presented at the Institute of Place Management Annual Conference in Manchester.  It was an interesting and enjoyable event; details of what I said can be found in an earlier post on this blog.

There was a good Q&A session at the end of my presentation, but as often the way in such events, a coffee break beckoned.  As people went in search of caffeine, I was approached by someone, brandishing a book.  He gave it to me and said if interested then please read it, if not compost it.  We had a quick chat about Burntisland in Fife where some of the ideas in the book had been followed up, most notably perhaps #fiverfest.

The book was Totally Locally and the Economics of Being Nice and the author and book giver was Chris Sands.  Unfortunately we didn’t have much time to chat. 

As I read the book on the train journey back north, it dawned on me that a lot was familiar, both ideas and places.  Many of the suggestions and places were not new and were things I’d been aware of, and admired, for some while, and always meant to dig a little deeper into it (or had, as in Incredible Edible). 

The book is not traditional in any sense and is more a collection of ideas, suggestions, examples and calls to action.  It is coherent as a set of things – ‘a manifesto for (those)… who want to make their small town a little better’.  It is great fun and makes a lot of sense, focusing on small things that can combine to make change reality.  Totally Locally as an idea is not new, but seeing it all together made me realise the impact – which until then, I had only been seeing in parts elsewhere.

As if to demonstrate the interconnectedness of it all, the opening pieces include some background on Chris’s grandparents business – a cycle shop near Halifax.  Given my age and my father’s rugby league career at the time, it is possible that I got my first bike/tricycle as a child from that shop.  It is a small, local world and all the more interesting for that.  This book suggests ways to keep interesting local places.

Somehow I missed the book when it appeared last June, but am really glad Chris thrust it into my hand the other week.  Not for composting and not available from Amazon (for obvious reasons) – but you can get it here. It is worth it.

Posted in "We" towns, Campaigns, Community, Consumers, High Streets, Incredible Edible, Independents, Local Multiplier, Local Retailers, Places, Retailing, Rugby League, Small Towns, Totally Locally, Towns | Tagged , , , , , , , | Leave a comment

Scotland’s Approach to Towns and Town Centres

Posted on April 25, 2023 by Leigh Sparks

In 2016 for the World Towns Summit in Edinburgh I attempted to summarise what had set Scotland apart on its approach to towns and town centres. Much has changed in the intervening seven years, and I thought it time to again look at the ‘bigger picture’ and the route we are on (partly spurred by a presentation today to a delegation of the All Island Local Authority Forum from Ireland).

This short, personal, piece is my view of the last decade or so, with all the faults that this can entail, but is intended to ‘join the dots’ at a high level (Figure 1).

 

The onset of the ‘great recession’ in 2007-8 reinforced and produced visible fault lines and scars across Scotland, as elsewhere. It heightened awareness of, and the urgency needed to tackle the changing nature of place and towns and our economic, social and cultural lives.  Whilst many organisations were already playing a vital role given recession was not the only problem, responses in 2008-11 felt piecemeal and addressed symptoms rather than causes.

In 2012, Nicola Sturgeon (then Deputy First Minister) responded by establishing a National Review of Town Centres, chaired by Malcolm Fraser the leading architect and urban thinker.  Rather than focusing on the symptom – empty shops and a declining ‘high street’ as in the Portas review in England – this review tackled the causes – what are towns for and how do we think about and care about places?

Reporting in July 2013, the National Review of Town Centres focused on the underlying rationale for investing in, and re-energising towns.  The social and economic benefits for all sectors of the population, and the essentially sustainable attributes of towns provided the focus for the recommendations.  Under an overarching ‘town centre first’ principle the Review lined up six core themes to be pursed and integrated and aligned them in such a way as to set up a blueprint for action.  The Scottish Government accepted the Review and in November 2013 published their response and call to action as the Town Centre Action Plan.

There are many implications of this at a detailed level, but in terms of policy implementation the Town Centre Action Plan, in my view, generated two lasting lines of activities within which sometimes producing new things, sometimes aligning existing approaches.

The first of these was a public commitment, pursued firmly by the then Minister, Derek Mackay, with COSLA, to implement the Town Centre First principle, not only for retail but for public and other private investment where possible.  Whilst not formally or legally binding, the public nature of the commitment focused attention and actions to stop developments outside existing town centres, where alternatives are clearly available.  This was subsequently enshrined more broadly in the Place Principle.

Secondly, and in recognition of the fragmented landscape of bodies operating in the broad ‘towns space’, small-scale funding was provided to Scotland’s Towns Partnership (STP).  The aim was to establish STP as the ‘go-to’ body for towns in Scotland, collating learning and activities from others, providing a single voice and amplifying the activities underway, whether undertaken by STP, by other bodies, in demonstration projects or more widely.

Within, and beyond STP, a number of tools were developed including the Towns Toolkit, The Place Standard, Understanding Scottish Places (USP) and Town Centre Audits.  Consistent approaches and applications of these tools provides a focus for self-analysis of places and towns and provides a method of beginning conversations about change.  Other STP activities tied together policy and practice as in demonstration projects and a parliamentary Cross-Party Group.

In June 2016 the decision to leave the European Union signified a major disruption to the country.  Other disruptions, of different forms, have coincided with this Brexit period.  The recognition of the climate emergency and its formal declaration in Scotland showed a long-term crisis coming to full consciousness.  Covid-19 in 2020 was a completely unanticipated shock to economy and society, necessitating conversations and actions for social and economic renewal.  

At the  same time the approach and legislative direction within Scotland has continued to diverge from England and the rest of the United Kingdom.  The focus on society and community empowerment and community wealth building has been far stronger in Scotland as well as more explicit recognition of the urgency of actions to address climate impacts. 

It is at this point that a long-held ambition to bring together Scotland’s Towns Partnership (STP) and Scotland’s Business Improvement Districts (BIDS) under one umbrella was realised when BIDS was taken over by STP.  This has allowed the unique features of Scotland’s legislation to begin to be utilised more broadly (as in Community Improvement Districts and other themed approaches) with Improvement Districts beings one of several approaches places can adopt and adapt for their particular circumstances.

It is in this context, and in the pandemic, that a review of the Town Centre Action Plan took place and which I was asked to chair.  My report ‘A New Future for Scotland’s Town Centres’ reflected on the situation, progress in a decade or so and the steps needed for the future health of town centres, towns and community.

Focusing on people, planet and the economy ‘A New Future’ argued for strengthening planning further, using fiscal and taxation levers to reverse damaging developments and proposals and focused sustained investment in specific themed areas which benefit towns (eg living, digital, green, community).  These align closely with the 20-minute neighbourhood principle.

The approach was formally endorsed by the Scottish Government and COSLA in 2022 and the plan is now in its delivery phase.  Importantly planning has been strengthened via National Planning Framework 4 and a five-year investment plan for places was agreed.  Progress on the trickier issues of taxation and fiscal levers is stalled politically, but also due to the cost-of-living crisis brought on in part by the war in Ukraine. 

At the core of much of this effort and energy remains Scotland’s Towns Partnership (Figure 2), seeking to be a voice for Scotland’s towns and an amplification of the great efforts underway locally and nationally.  STP continues to run tools and toolkits as part of its resources for towns and to drive, energise and catalyse specific projects under the action plan. 

It has three other roles, however. It remains the central body bringing together groups to review progress and dismantle barriers, now focused on the Town Centre Action Plan Review via the Ministerial/COSLA joint Town Centre Forum.  STP also continues to run Scotland Loves Local, an innovation set up in the pandemic to promote local spending and which has achieved significant success, operating to strengthen communities and towns. Finally, Scotland’s Improvement Districts remain a core component of STP.

As ever much remains to be done.  We have the directions needed; we require a focused and rapid adoption of critical actions. Some of these are underway but more needs to be done on critical financial and cost issues.

Our towns and town centres have been steadily altered by decentralisation and changing economic, social and technological capabilities and behaviours. This has been going on for at least 50 years and has cumulated in our present situation.  Scotland is not unique in this. Given half a century of decline and damage, expecting radical transformation and reversal of these macro-trends in the short time since 2013 is clearly unrealistic. But where Scotland is distinct is in having a coherent, aligned and formally recognised national plan for how to attempt to reverse the situation, including focusing on communities and community wealth building at the heart of the process. 

A pdf of this post (without the hyperlinks) can be downloaded below.

all-ireland-april-2023Download
Posted in 20 Minute Neighbourhood, Brexit, Community, community wealth building, Cross Party Group, Government, High Streets, Ireland, Local Authorities, New Future for Scotland's Towns, NPF4, Place Based Investment Programme, Place Principle, Place Standard, Places, Planning, Scotland Loves Local, Scotland's Improvement Districts, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Town Centre Action Plan, town centre first, Town Centres, Towns, Understanding Scottish Places | Tagged , , , , , , , , , , , , , , , , , , , | Leave a comment

Towns, High Streets, Resilience and Place Governance

Posted on April 20, 2023 by Leigh Sparks

I was very pleased to be invited to speak (Trans Pennine Express willing) at the Institute of Place Management Conference being held in Manchester on the 19th and 20th April. My presentation is on the 20th and so today, as customary, I post my overheads for anyone interested.

The title of the conference is ‘Good Growth: Tackling big issues using place-based policy, theory and practice.’  The description of the conference continues:

“The UK is battling for a return to economic growth. And not just the abstract glow of climbing GDP figures but a real change that is recognised and felt by people in the communities where they live and work.”

“Good growth is a familiar narrative of post-war politics, but place leaders are now facing new and acute resource challenges and tough choices about where and how to invest in our towns and cities.”

I was asked to speak about resilience and governance mainly in terms of retail (given my earlier paper) but also around towns and high streets. The overheads cover themes that will not be unfamiliar to the readers of this blog, so here I will focus on some of the key points I want to make.

It is clear that what we have and what we had before Covid was not working for our society and places. Places though are not islands and do not operate in a vacuum and are governed in various spatial contexts. This demands we consider resilience and governance for whom.

The inadequacies and absurdities of the Tories Build Back Better High Streets “policy” have now been joined by the Labour Party’s 5 point Save the High Street Plan. We have to ask where is the national leadership on the real issues facing our communities, towns and high streets?

Recent academic work (Ntounis et al 2023) has reviewed high street viability in the English context but I would ask whether this simply shows we are not asking the right questions and failing to provide national and local leadership.

As I have noted before, we will not succeed by doing the same things we have for the last 50+ years, only a little less badly. If we need a more inclusive society and economy and towns to be engaging, vital, viable etc for all and to address our climate crisis then focusing attention and limited resources on one part of the problem (the town centre) and ignoring its relationships with the alternatives (out-of-town, sprawl, online) and enablers (local services, location, transport) will simply mean nothing changes at worst, or at best small local changes take a long time for limited effect. 

We require a grown-up conversation about the causes of our current plight in towns, high streets, disadvantaged communities and governments and leadership – and then implement the policies needed to reverse the situation. This is uncomfortable and requires us all (individuals, organisations and companies, as well as all levels of government) to change our behaviours, approaches and actions. 

There is no point in being resilient if it is failing large parts of communities and the country. The same is true of place governance. Good growth is local, inclusive and sustainable, whereas so much of what we currently support is the direct opposite of this. We must demand better.

Reference:

Ntounis N, SØnderland Saga R, Warnaby G, Loroño-Leturiondo M, and Parker C (2023) Reframing High Street Viability: A review and synthesis in the English Context, Cities, 134, 104182

ipm-april-2023Download
Posted in 20 Minute Neighbourhood, BIDS, Car Dependency, Car Use Reduction, community wealth building, Governance, Government, High Streets, Internet shopping, Local Authorities, Manchester, New Future for Scotland's Towns, Non-domestic rates, Online Retailing, Out of Town, Places, Retailers, Scotland's Town and High Streets, Scotland's Towns Partnership, Social Renewal, Town Centres, Towns | Tagged , , , , , , , , , , , , , , , | 1 Comment

The Cost of Employment in Local Convenience Stores

Posted on April 14, 2023 by Leigh Sparks

Almost a decade ago, we began working with the Scottish Grocers Federation on understanding the costs of doing business in the convenience sector. One aspect of this work has been the relationship between the headline figure for the National Living Wage (Minimum Wage) and the cost actually paid out by the local retailer. Through working with a sample of retailers we attempted to link the employment costs directly associated with the rate of the NLW and to build a picture of the true cost to the business of employment.

We have produced the results each year since and the latest version was published at the end of March to coincide with the April 2023 increase in the National Living Wage. The short report with the detailed figures can be downloaded below.

What follows is my commentary on the data:

“This has been a winter of labour discontent. Strikes have become commonplace across the economy. At the heart of these are demands for better pay (and conditions), contracts and fairer workloads in some sectors.  The full implications of Brexit, the recovery from Covid and the ongoing energy crisis arising from Russia’s invasion of Ukraine have combined with a decade of austerity in the UK. This has not been helped by the economic turmoil brought about by the revolving doors of Prime Minister and Chancellor in the latter part of 2022.  The outcome is the sharpest fall in living standards in decades and a 40 year high in inflation.  It is no wonder demands for pay increases have become so commonplace and vocal. 

This is seen as a cost-of-living crisis.  It is affecting many, though not all, in the economy. People feel worse off and their bills, whether energy, utilities, rent, rates, mortgages and so on are all increasing.  Inflation and especially the price of food in shops, has sky-rocketed and being so visible has added pressure on to pay demands.  Life has become harder and more of a struggle especially for those on lower incomes.  The contrast with their status as ‘key workers’ in the pandemic could not be more stark. 

The understandable reaction to this cost-of-living crisis is to demand pay increases to soothe the cost rises and, in some cases, catch-up lost wages from austerity. If inflation is running at 11% then why are workers expected to put up with a pay rise of 2%?

It is in this context of economic turmoil and a cost-of-living crisis beyond that of most living memories, that the April 2023 National Living Wage has been set.  In April 2023 the headline figure will rise by £0.92 to an hourly rate of £10.42 (i.e. an increase of 9.7%).  For those lowest paid in the economy this will be a welcome boost in these circumstances, and it is hard to argue against this.   

There is though, a second crisis at play here, and it is a cost of doing business crisis.  This affects all businesses (and indeed public sector and other organisations) but is perhaps more keenly felt in smaller operations.  Convenience store retailers for example have been affected by all the business cost increases in the economy, including energy.  The cost of doing business in this sector has accelerated rapidly, at a time of weak consumer demand in many places. 

This is the eighth year we have run an analysis of the direct relationship on other labour costs of the rise in the National Living Wage.  This year we have again tested our relationships with a sample of convenience retailers and find they still hold.  Raising the National Living Wage directly increases other costs for the retailer and drives up the cost of doing business.  Our figures in the table show that the £10.42 wages rate is in fact £14.00 for the retailer.  This true cost of doing business in terms of labour has to be paid for from somewhere.

For some, especially larger businesses, often operating in major urban areas there is an added problem; the lack of labour. Major retailers have provided their workers with multiple pay increases this year already, taking the rate above that of the National Living Wage (and the estimated Real Living Wage of £10.90).  This is due not only to a recognition of the cost-of-living crisis but the tightness of the labour market in some places.  By paying more they hope to keep and attract labour.  This is far less affordable for smaller retailers.

This true cost of labour is not the only cost of doing business of course.  Convenience retailers continue to be faced with high energy and property costs as well as administration and management costs beyond those associated with labour.  This helps explains in part the sector’s vocal concern over the associated costs for businesses of implementing new government schemes and proposed regulations and restrictions. Convenience retailers cannot face further cuts in profitability and have limited capacity to increase prices (which of course only re‑enforces the inflationary cycle).”

The report can be downloaded here:

sgf-true-cost-of-employmentDownload
Posted in Convenience stores, Cost of Living, Employment, Independents, Local Retailers, National Living Wage, Scottish Grocers Federation, Uncategorized, University of Stirling, Wages | Tagged , , , , , | Leave a comment

Personal Announcement: FRSE

Posted on March 21, 2023 by Leigh Sparks
The Royal Society of Edinburgh

I don’t often use this blog to make personal announcements, but given the nature of this one, and the clear link to my work, much of which has been discussed and reported on here, I am making an exception.

Today I have been made a Fellow of the Royal Society of Edinburgh.

I am one of three senior staff at the University of Stirling and a former Chair of University Court who have been elected today to the prestigious Royal Society of Edinburgh (RSE).

Myself, Professor Rachel Norman, Dean for Research Engagement and Performance; and Ms Cathy Gallagher, Executive Director of Sport, have been made Fellows of Scotland’s National Academy. In addition Dr Alan Simpson OBE, the Lord Lieutenant for Stirling and Falkirk, who served as the University’s Chair of Court for eight years has also been elected.

I am obviously personally delighted by the honour of election to Fellowship of the Royal Society of Edinburgh.

The role of place, towns, retailing and communities has been a focus of much of my work at the University of Stirling and through being Chair of Scotland’s Towns Partnership. I hope that my work has made and will continue to make a difference to improving Scotland’s places and communities. I look forward to being able to contribute to the work of the RSE.

The full list of new Fellows can be found on the RSE website.

Professor Sir Gerry McCormac, Principal and Vice-Chancellor of the University of Stirling, said: “On behalf of the university community, I send our warmest congratulations to Lord Lieutenant Alan Simpson, Professor Leigh Sparks, Professor Rachel Norman, and Ms Cathy Gallagher on being elected Fellows of The Royal Society of Edinburgh.

“This is prestigious recognition from an internationally-renowned organisation, which celebrates excellence across Scottish society; we are incredibly proud of Alan, Leigh, Rachel and Cathy’s achievements.”

Professor Sir John Ball, President of The Royal Society of Edinburgh, said: “It is a great privilege to welcome our new Fellows – they represent outstanding commitment and achievement at the highest level across a diverse range of sectors. From scientific advancement that changes lives to leading business innovation recognised across the world, the RSE welcomes the best minds to harness their unique insight and make knowledge useful for the greater good.”

The RSE – Scotland’s National Academy – was established in 1783 for “the advancement of learning and useful knowledge”, and its mission remains to deploy knowledge for the public good. It has around 1,800 Fellows, who provide independent expert advice to policymakers and inspire the next generation of innovative thinkers.

The Fellows’ knowledge contributes to the social and economic wellbeing of Scotland, its people and the nation’s wider contribution to the global community.

The RSE, using the expertise of its Fellows, creates a unique impact by:

  • Inspiring and supporting talent through a wide-ranging programme of research grants and awards.
  • Engaging the public across Scotland on key contemporary issues through its outreach programmes and a wide-ranging programme of public events.
  • Providing impartial advice and expertise to inform policy and practice through in-depth examination of major issues and providing expert comment on topical matters.
  • Promoting Scotland’s interests overseas through building relationships with sister academies across the world and facilitating research collaborations.

Posted in Academics, Retailing, Royal society of Edinburgh, Scotland's National Academy, Scotland's Towns Partnership, Towns, University of Stirling | Tagged , , , , , , | 2 Comments

Let them eat Turnips

Posted on March 10, 2023 by Leigh Sparks
Turnip growing in Scotland

Therese Coffey’s comments were crass, ill-informed, tin-eared and risible in many regards but did at least shine a light on aspects of our food supply chains.  And in one small sense she has an unpalatable point; we’ve got used to having it all, all the time, whether it is tomatoes, asparagus or even the turnip.  Maybe we now need to get used to this period of plenty drawing to a close and reflect more on seasonality?

The tomato shortage (and peppers, cucumbers so on) has been a big story for some weeks (and months in the case of eggs).  Rationing has been introduced by many large food retailers (though smaller shops and markets are less impacted).  On social media the situation in the UK has been contrasted with photos of stores in France, Spain and even Ukraine.  If they have plentiful supply, why can’t we?

An aspect of the ‘debate’ over the great tomato shortage/rationing is the refusal to treat this as a complex problem with a range of interacting factors (there are some exceptions, see Jay Rayner’s piece and in part the BBC Reality Check).  As much as I would love to blame it on Brexit (and I’d be sort of right), others say it is all the weather’s fault.  Now it is the supermarkets that have caused this. This single issue ‘cause’ helps no one and certainly does not help us understand and then attempt to improve the position. Maybe it is all of the above – and more?

So what might be at play here?

  1. There has been bad weather in Morocco and Spain.  It happens and has happened before. It can create some restrictions on supply.
  2. Brexit has made our supply lines more complex and difficult.  If there is a product shortage then we are at the end of the queue for the supply because we have made it too much effort. Being inside the Single Market has its advantages.
  3. The shortage is also due to the cost of energy, and the uncertainties over future costs which have curtailed production in, for example, the UK and the Netherlands.  Heating energy hungry glasshouses in winter and not getting any coverage of your costs (in the UK a Government decision) have meant that many greenhouses are left empty and unplanted.
  4. Our retail system pre-Brexit was based on long flow-based supply, in which certainty of supply and distribution allowed long fixed contracts to be agreed.  This is now disrupted (and the weather added to this) but supermarket retailers seem to have been caught out by the full implications of this change. Distribution is now about managing uncertainty and volatility not about smoothing predictable flows to satisfy stable demands. Our contracts and prices and speed of adjustment when shortages etc arise do not compare well to European practices, to our detriment.  And as it is harder to distribute into our country/retailers post-Brexit, when producers have a choice, or can get a better price elsewhere, then our reputation goes against us. We are being marginalised and end up paying the price.
  5. Then there is the media.  For decades the mainstream media has pushed the idea of cheap food.  Forget about quality, price is all.  Retailers are ranked on being the cheapest.  It is understandable in a cost-of-living crisis to be concerned but this has gone on for much longer than that. This obsession has focused downward pressure on supermarket prices, eventually being felt most acutely by farmers.  We see this across the supply chains.

So is our choice to try to have it all, all the time, scouring the world for cheap prices and then be forced to put up with the inevitable shortages when disruptions happen or actually build a sustainable fair system around seasonality and local supply?

All of these issues intersect and have come together in the lack of tomatoes etc and eggs, the price of milk and butter and so on and on.  There will be other products to come, as the issues are systemic not isolated bad weather alone (and there’s a lot of that around)  We need a recognition that this is a complex problem and we need long‑term sustainable holistic solutions.  This may require more acceptance of higher prices and of seasonality in our produce.  The slick extractive system dragging produce from wherever across the globe is no longer dependable, nor desirable. As countries turn to look after their own, isolated islands will struggle more than most.

We might also do well to remember that the full Brexit paperwork etc requirements on produce do not come in until next year. Things may not get any easier.

As some will know I tend to grow my own tomatoes, peppers etc and am lucky to be able to do so.  It has led me however not to buy such products ‘out of season’ as I find them bland and tasteless in the main.  We can’t all do this, but we might think more about the damage caused by our desire for year round perfect product at very cheap prices, obtained from wherever we can.  It is increasingly an unattainable goal.

Posted in Agflation, Brexit, Consumers, distribution, European Retailers, European Union, Food, Food Quality, Food Retailing, Greenhouse, Pricing, Rationing, Retailers, Seasonality, Sustainability, Sustainable Development, Vegatables | Tagged , , , , , , , , , , , , , | Leave a comment

Walking the Talk: Town Centres and Retailing in a Car-dominated Economy

Posted on March 7, 2023 by Leigh Sparks

Today (March 7th), I am presenting at a Living Streets Seminar.  I was asked to talk about retailing in car-dominated places and what follows is a summary of sorts (and the overheads) of my presentation.

In responses to the climate emergency, some measures of change have been tagged to 2030.  2030 though is only 80 or so months away and so time is really short, if goals are to be achieved.  If we want to move to a just transition, reduce car kilometres driven by 20% by 2030, drive up active travel, develop 20-minute neighbourhoods and so on then we need to get on with it.  The reality however seems to be that whilst we have made a good start on some things, much remains ‘business as usual’ and attitudes and behaviours remain unchanged.

We do have a lot of great sounding policy, but are we robust enough in reversing the patterns of the last 50 years?  Over that time, we have decentralised, disaggregated and damaged our communities and privileged car dependency. The retail revolution has led to a structural transformation focused on car and van journeys.  This has been enabled by the way we have chosen to develop sites (commercial, governmental, housing etc) often without shared local resources and thus ensuring that cars are a requirement.

The net result is the decline in our town centres and community fabric and on the social aspects of life.  This was only slightly remediated in the pandemic when “local” became the required normal.

I won’t rehearse the detail of our report ‘A New Future for Town Centres’ (see summary here) but would note that the recommendations we made for planning and policy and finance for projects has been largely delivered.  Of course it could go further and more finance always helps, but it is a really good start.  Where there is no progress is in the more radical rebalancing of our fiscal levers.  I appreciate this is hard, faces resistance, requires other parties including UK Government to agree etc, but time is ticking to see progress.

We will not succeed in reversing our car dependency by business as usual, nor will we rebuild our communities, develop community wealth building or 20-minute neighbourhoods or increase our health and wellbeing, unless we address not only incentives for positive town centre change but disincentives for harmful behaviours.

Some may recall my not so slight outburst last year at a proposed large out of town development in Stirling, which quite unbelievably received planning permission from Stirling Council.  Thankfully it was rejected by the Government Minister in late 2022.  But the proposal is back again, slightly smaller but still hugely car dependent and car journey generative.  Given NPF4 and all our climate arguments, why would this be entertained? It excludes swathes of the population, harms the environment and our ambitions for liveable places.  This is all about land and money, so we need to use the levers that developers understand.

Overall, I am positive about the directions we are going but slightly frustrated at the pace, though I do recognise the constraints politicians at all levels have to work under.  Three years ago I began to rehearse the arguments I make today (and are in “A New Future for Scotland’s Towns Centres). Change can be slow, but then again, it’s 80 months to 2030 and that clock is ticking.

living-streets-2023Download
Posted in 20 Minute Neighbourhood, Active travel, Car Dependency, Car Parking, Car Use Reduction, Community, community wealth building, Consumers, Just Transition, Local Retailers, Neighbourhood, New Future for Scotland's Towns, NPF4, Places, Retail Change, Retailers, Retailing, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Retailing, Stirling Council, Sustainability, Sustainable Development, Town Centres | Tagged , , , , , , , , , , , , , , | Leave a comment