OPINION | "Foodstuffs North Island: The charm offensive begins courtesy of their new PR agency
With Foodstuffs North Island releasing what I understand are "selected" parts of their latest submission to the Commerce Commission, perhaps the question we should be asking is this:
"What would I do if I were Foodstuffs heading into the next stage of the Commerce Commissions Market Study?"
Discussing the Foodstuffs predicament and likely responses with colleagues and my network, including current and ex-retailers and wholesalers, there are many thoughts around what actions Chris Quin and his team might take. Based on these discussions, if I were them, I would try to diffuse some of the heat that's come on in recent weeks (not least from the public complaining of escalating prices during New Zealand's lockdowns).
So how would I diffuse the public scrutiny and ire while appealing to the Commerce Commission that I am the victim here? That Foodstuffs North Island are the good guys? Well, I would do that in several ways:
Sell some land or release a few covenants
By dumping real estate at a time of high property prices under the guise of releasing some of their landbank to promote competition. Positioning this as:
- "aren't we good corporate citizens?"; and,
- "We listened to the Commerce Commission, and we reacted".
Of course, both these responses ignore acknowledging how much they have land banked and how most likely they wouldn't sell any truly prized real estate.
Verbalise that Foodstuffs support a code of conduct now that the Commerce Commission has stated one is needed
- Hearing Chris Quin say, "I'm willing to work with suppliers on a Grocery Code of Conduct", this is undoubtedly designed to quieten criticism from suppliers, but does it improve their position?
- Let's not forget that Foodstuffs has previously declined a "voluntary" Code on multiple occasions.
- The suppliers are pushing for a Code to be independently run and mandatory, and rightly so because that's the only way of making sure everyone is included and governed by it.
Shift critical internal timelines to reduce fallout
- Delay major reviews (e.g. their Frozen review) until after the Commerce Commission's consultation conference later this month.
- Doing this will offset visibility into the many vendors at-risk/threat of deletion and the tactics employed to achieve higher earnings from vendors.
Loosely discuss the issue of consumer loyalty
- Foodstuffs are saying they are willing to address the loyalty rewards programme that the Commission was critical of.
- Saying you are willing to address the issue doesn't mean you will change how the programme operates.
Financials that don't say much nor give the real picture away
- Continue the financial smoke and mirrors that is Foodstuffs North Island by releasing a financial report that masks the numbers while also avoiding a discussion around the actual retail member financials (e.g., the P&L's of their members).
- Masking the issue of executive bonuses for the recent 'money grab' that FSNI has been consolidating.
This action ahead of the Commission releasing all the submissions together is an odd move but expected given the pressure.
Say the suppliers are the real culprits here
Meanwhile, we expect to start hearing a narrative from the PR machine that the suppliers' prices are the real problem here. It's not Foodstuffs fault that consumers are paying too much at the register.
The retailers will want as many suppliers as possible to support their position "of nothing to be seen here". That it's just producers who complain when their products don't stand up commercially anymore.
How would you do this if you were them, you ask? Well, you could:
- Charm larger vendors who wouldn't feel the same pressures as smaller suppliers when working through terms and net pricing negotiations.
- Lean on members within industry bodies who could defend their cause or step away from such bodies as a demonstration of lost faith in the industry body or association.
- Ask selected suppliers to voice their disagreement and publicly challenge views not aligned to Foodstuffs (as many of you have seen in paid-for articles and the occasional spat on LinkedIn).
Worthy of note; Foodstuffs North Island has engaged Sherson Willis's services (https://www.shersonwillis.com), specialists in managing large businesses Corporate Reputation and Government Relations. Hiring this blue-ribbon PR agency is designed to assist Foodstuffs in getting on the front foot after the Draft Market Study was released.
PR agency could create the white noise
Watch the expected spate of the white noise over the coming weeks, and subscribe to this narrative at your own risk."
Article submitted by Hexis Quandrant (HQ).
Hexis Quadrant (HQ) are an independent consulting firm working across consumer goods and retail businesses in Australia and New Zealand. With extensive experience in sales, marketing and category, they specialise in building bespoke solutions to business-critical problems that include strategy, planning, negotiations and trading terms.
Its team is made up of industry professionals that have worked at executive level and above in a range of local and international blue-chip businesses across multiple channels and markets.