Understanding is all

26 October, 2007
Suppliers are not making enough use of supermarket sales data and need to get up to pace. That was the message from Tesco at the recent BSB conference, reports Andrew Williams
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Knowledge is power was the message from Tesco's in-store bakery category manager at the autumn British Society of Baking (BSB) conference. Neil Franklin, who probably has more of both these commodities at his fingertips than many others in the baking industry, said suppliers are not employing supermarket sales data enough.
Franklin, formerly of British Bakeries, gave a frank assessment of the supply chain's shortcomings. His message was: when it comes to understanding consumers and making future plans, many in-store bakery suppliers are off the pace.But while suppliers are already gritting their teeth over massive ingredient price hikes, sweating over how to pass those costs on to the multiples, delegates were told there is plenty of opportunity to grow their business in partnership with Tesco, as long as they question their approach to future strategy. Too often, buyers' questions about long-term plans are being met with a mute response, he said."It always comes back to 'what's the plan?' I don't think all our suppliers could articulate that right now. There's nothing greater for us than someone saying, 'Actually, you should be going after this area because we've researched it and you'd be the first to market on it'. We'll build those plans up together in the partnership," said Franklin.Suppliers were not taking advantage of Tesco Link - a free web-based tool that contains store-specific electronic point-of-sale information as well as stock level data. This offers data on what products are being sold, volume, values and how they compare to the key KPIs within the in-store bakery."The worrying thing is that not all of our suppliers are using it," he said. "As a business, we will look at our numbers daily - probably even more frequently; I'm not sure how any business can get by without actually understanding the sales through the till."Furthermore, Tesco's Clubcard data system, by Dunnhumby, also available to suppliers, is not being checked by them regularly enough, he said. "It gives us the insight into how our promotions are working, what level of loyalty it has, what potential there is for a product's growth and where it's ranked in its category. From that you can draw out the broader trends, and it's available to all our suppliers."Franklin urged suppliers to ditch the mindset that a product's life story ends when it reaches the Tesco depot. "The more you understand your customer, the greater the opportunity to grow your business. If it's getting through the depots, but not through the till, then what fundamentally is going wrong? Is there something within our systems that we need to be challenged on?" he asked. "Sharing your objectives in terms of what volumes you're trying to gain and the value you're hoping to deliver is perfectly achievable."Meanwhile, Franklin gave a broad hint that scratch-baking will play a bigger role in the future of Tesco's in-store bakeries and would not be squeezed out by bake-off. A new training regime is being implemented in Tesco's 500 scratch-bake and 200 part-bake bakeries to address admitted failures in its bakery training programmes. Training of coaches is under way and the programme will be rolling out across the entire estate over the next year."We didn't feel we had the right level of capability in our training programmes," he said. "One of the core things you'd expect of an in-store bakery training programme is how to make a loaf of bread. Rather embarrassingly, ours didn't. So we've revisited the whole programme, putting in four levels from bronze to masterclass and it's a bit of a Jedi programme. If we don't address the fundamental issues - the capability and understanding of how to make the product - then we're throwing away good money after bad."Despite the rise of bake-off, Franklin would like to promote more scratch-baking of core breads. "It's vitally important that we seek to move to more scratch solutions, but, where we can, also have the right level of bake-off operation. Customers' quality perceptions for bakery are second only to fresh produce, so it's an important department. Some stores may wish to do bake-off because it's simpler, but we feel the customer prefers scratch over bake-off any day." While premium lines have dri-ven NPD in the category, it has yet to be seen whether rising mortgage rates and food inflation will destabilise premium-bound consumer purchasing habits. Premium sectors are driving growth, but innovation should not revolve around this, he insisted."In bakery, we have a lot of indulgent products. If the belt is tightening, what are you going to sacrifice - the £800 plasma screen TV or the £1 packet of doughnuts? We're looking ahead and as soon as the answer pops out, we'll adjust our trends accordingly. For me, innovation has to orientate around all our pillar brands. That's an approach I would seek from all our suppliers. We're a broad church and customer trends are changing." n----=== Conference notes ===Suppliers could do more to improve availability - only 15% of shoppers say they get everything they want from a visit to any supermarketNPD should be focused across the whole spectrum of bakery - not just premiumTesco has begun a new in-store bakery training programme to strengthen its scratch bakery offeringSuppliers need to monitor product sales data daily and have a more comprehensive depot-to-till approach, alongside long-term sales strategies



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