Milk producers 'promised' better deal

Sainsburys have promised that they will pay milk producers higher prices if they can deliver a better service to the customer. Dairy Development Group have welcomed the announcement.

Sainsburys Chief Justin king said "We expect to pay more for milk, but we will only pay a premium for what will add value for our consumers.”

“These benefits have to be tangible – we will not prop up inefficient businesses or buck the market.

“Things like environmental issues and animal husbandry are things customers will value and will allow us to pay a premium for. We expect this premium to be real and substantial.”

10k rip off

Tesco are making suppliers pay £10k a year for shelf space. For suppliers who are forced to produce almost at the cost production this just adds insult to injury. Tesco will not even guarantee shelf space for this non-refundable, non-negotiable fee. The supplier has to pay £10k to just be considered by Tesco.

“We’ve been asked for marketing costs before, but this is the first instance I know of where we’ve been asked to pay to have access to a retailer,” one publisher said.

Highstreet of the future

So this what we see at the moment and get used to it because its only going to get worse with more super stores and less smaller ratailers. If you liked the traditional high street then forget it.

A house of commons all party parliamentary report said 2,000 independent convenience stores closed last year (2005), since 2000 there 5,000 independent retailers have been lost or 11% of independent retailers!

The report also said convenience is growing at a rate of 5% a year but during the same period independent retailers lost 5% of sales in the convenience sector to larger companies.

Operationally the smaller businesses cannot sustain competition on price as they cannot achieve economic benefits such as economies of scale. They cannot compete promotionally and they have a less flexible supply chain. It will be harder for small business to obtain finance from banks in comparison to the larger retailers who have large profits to rely on and will find it easier to obtain finance due to the amounts of capital they own.

It concluded: “if current trends persist, the grocery sector will have dramatically altered. Small shops in the sector cannot compete with larger competitors, in terms of buying power, promotional activity, etc. The limitations offered to them by the supply chain in terms of differentiating their stock means there is likely to be an acceleration of shops going out of business, as reduced market share continues to impact on the price advantages enjoyed by the larger retailers.”

£50 PS2

Today sees Asda launch its £49 Playstation 2, the games console will be sold in 316 Asda stores and will under cut high street shops.

Currys, PC, Argos world curently sells the PS2 for £94.99 in their cheapest package.

Whilst the same used consoles are selling on auction giant eBay for between £30 - £65. The asda price almost undercuts the cheapest internet giants. Where will you shop if you want a PS2 now, Asda i suspect.

No more food

Asda are making big moves away from only selling food with the launch of its first ever ‘Asda living store.’ The 3,810 sq m (41,000 sq ft) store will be launched in Northern Ireland on Friday. The store will only sell household goods; no food will be in sight.

Asda have highlighted ‘Asda living’ as the key growth area for the coming year. Asda’s chief financial officer Judith McKenna said: “This is a major investment that will enable Asda to provide even better service and great value products to more people across the UK that ever before.”

Asda also plan to open 18 more UK stores this year, creating 8,000 more jobs. The new jobs will be spread across Asda's 334 UK stores.

Asda have relaunched its pets, health and beauty and baby ranges to create a more department store-type look.