September 2011

UK Retailand

Lloydspharmacy initiative

Some statistics• UK retail sales over £293bn 2010

• UK retail employed over 2.9m people end 2009, 11% of total UK workforce

• 2010 - approximately 286000 retail outlets, 9% of all UK VAT-registered businesses are retailers, total number 188000

• However, number of empty shops has trebled since 2007 to 29000, 14.5%

• Latest BRC figures for August, sales up 1.5% compared to 2.8% August 2011. Food doing better than non-food

Consumers• Consumer confidence poor

• Fear for their job

• Rising inflation and pay freezes leading to less disposable income

• VAT rise January 2011

• Paying off debt

• Focus on value

Retailers• Many retailers closing or reducing number of stores

• Increasingly concentrated market with multiples dominant

• Some success stories e.g. supermarkets, John Lewis, poundstores

• Shopping malls doing better than high street e.g. Westfield Stratford

• Ecommerce, mcommerce, multichannel

IT in retail• Some retailers still investing and trialling

– Tesco investing £27m in IT infrastructure

– Ocado trialling use of smartphone for shop wall

– Wilkinson trialling contactless payments

– Sainsbury trialling iPad holder to watch Sky Sports via Sky Go app

– However, trials are expensive for suppliers and can take up to three years of development

Lloydspharmacy Innovation Day

• How it started

• How it developed

• What was the result

Lloydspharmacy

• Lloydspharmacy is a community pharmacy chain with over 1,650 pharmacies

• 2009 turnover £1.8bn

• Employs approximately 17,000 staff

• Dispenses over 151 million prescription items annually

• Vision is to become a great healthcare brand

How it started

• Notification of a Lloydspharmacy supplier innovation day in south east England

• Early May 2011, made direct contact with Innovation team in Lloyds

• Initial discussions to explain Enterprise Ireland, our clients and what we could offer

• Clarification from Lloyds as to what they wanted to do

Initial scoping

• Legal agreement – confidentiality agreement signed by both parties

• Clarification from Lloyds as to product/service areas on which they wanted to focus– Retail Solutions map– Lloydspharmacy areas of interest

The questionnaire

• Identification of potentially relevant suppliers

• Lloydspharmacy pre-qualifying questionnaire sent to 47 Irish companies

• 25 companies returned questionnaires

• 12 were selected by Lloyds to meet them in Dublin

Preparation

• Meeting format agreed with Lloyds

• In-depth conversations with Lloyds as to their strategy and requirements

• Briefing disseminated to Irish companies

• Logistics– Lloyds flights, hotel etc– Booking facilities at Eastpoint– Client timings, car parking

Results?

• Twelve company meetings with six Lloydspharmacy personnel at Eastpoint yesterday

• Lloyds feedback?– Quality and suitability of companies they met?– Service of Enterprise Ireland?– What worked? What didn’t?

• Client feedback?– Useful to them?– Meet their expectations?– More of the same?

Next steps

• Feedback on the specific company meetings

• Follow up conversations and meetings between companies and Lloyds

• Phase 2 – other product and service areas

• More of the same with other retailers