The duel between cash and contactless has reached a new peak recently, with parties on both sides making the case for the longevity and relevance of each payment method, says Adam Holt, head of retail at Ingenico.

He said: “On one side, ‘cash champions’ have stated that cash shows no sign of dying out – in fact according to Ovum, the amount of cash in circulation is continually on the rise, citing European Bank figures that there are over 40% more dollar bills in circulation in the US than at the beginning of the millennium – a startling figure, says Holt.

“On the other side, contactless advocates have proposed that the era of contactless is finally here – Visa has increased its contactless card issuance this year to 12 million from eight million, and a recent survey from MyVoucherCodes found that 72% of Brits are in favour of contactless technology in all supermarket stores. Contactless payment has even made its way into schools, with Nottinghamshire County Council providing payments cards for children to buy school meals with sQuid.

“While it is unlikely that cash will become obsolete, contactless is poised to corner the market in low-value transactions.

“Despite Datamonitor’s recent report that retailers have been slow to adopt contactless technology, a number of larger retailers have already demonstrated its success – greatly benefiting from contactless’ queue-busting benefits.

“Recent research from Barclaycard has found that despite our collective reputation for a love of queuing, British consumers are only willing to queue for two minutes, a decrease from five minutes six years ago. This queuing period will be crucial for retailers to transform queues into transactions – which contactless can aid.

“Chains such as Pret A Manger, EAT and Cafe Nero have implemented the technology to great success. These early adopters have experienced an increased average spend of up to 33%, in addition to substantially faster transaction times and higher footfall, which has shown that there are substantial benefits to be gained.

“The key in the near future will be to maximise low value transactions – with nearly 80% of all transactions under £10, outlets such as Pret A Manger, where quick turnarounds are essential to the business, will be a key proving ground for contactless.

“The increase of the contactless payment limit to £15 in February 2010 gave contactless adoption a shot-in-the-arm as it further increases the proportion of cash transactions that can be undertaken, while enhancing many business cases for contactless rollout.

“The key on both sides of the transaction is education,” he said. “Retailers need to be further educated about the benefits, and what contactless technology can do for their business. With research by US firm CVS showing that a contactless payment can be completed in only 12.5 seconds, compared to cash and chip-and-pin transactions taking an average of 34 and 27 seconds respectively, the opportunity for queue-busting is huge.

“In parallel to this, as long as both retailers and card issuers collaborate to help customers understand the benefits and how to use their cards, contactless transactions will spike.

“The recent announcement that contactless technology will be increasingly used at festivals and similar events, will increase consumer exposure to the technology and the convenience it brings – after all, who wants to carry pockets of change around at Glastonbury?

“Of course. contactless payments are not only limited to cards. NFC elements in mobile phones have been used to pay for goods. Once contactless cards are fully integrated and ingrained in society, using mobile phones for payment will only follow suit,” said Holt.

Poundland’s growth hasn’t just come from those squeezed by the recession, it has also rapidly grown its share of the most affluent customers. For example, in 2007, only 2% of AB consumers visited the store. Today, that figure has doubled and the chain pulls in just over 4% of this segment.

Neil Saunders, consulting director of Verdict Research, said: “The success of Poundland is as much about psychology as it is about economic necessity. The recession has made it acceptable to save money. It has taken some of the snobbishness out of where we shop and has made it trendy to be frugal. That’s changing the whole nature of shopping.”

Verdict believes that the trend towards considered consumption is one that will endure long after the economic slowdown has passed into memory.
Saunders added: “This is something that’s here to stay. The recession is like a retreating glacier that’s leaving behind a radically different landscape.”

fruit flavoured wine to target 25 – 45 year old female consumers who are looking for a wine without such a strong alcoholic taste or in a

growing number of cases simply want a lower alcohol wine. The product will deliver a broader lifestyle choice in both the On and Take Home markets.

The launch will be supported by an advertising and PR campaign within the Trade Press alongside a consumer sampling programme and point of sale material to position Botany Creek as the leading choice for consumers looking for a lower alcohol fruit flavoured wine suitable for any occasion.

Botany Creek is a still wine and is available in two flavours; a fresh crisp white with a hint of citrus and tropical fruits and a soft delicate rosé with strawberry tones. Both have an ABV of 7.5%. Both variants are ideal partners to food, especially lighter dishes such as fish and chicken.

Botany Creek will be packaged in a 75cl glass screw top bottle which will retail between £2.69 and £3.29 in the Take Home channel and around £5.00 per bottle in the On Trade.

Richard Clark, Head of Innovation at Halewood International comments: “We have an opportunity to become category leaders with the launch of Botany Creek in a category that is growing rapidly as Supermarkets are now adding lower alcohol wines to their portfolios.

“We have created a great tasting fruit flavoured wine that appeals to the original generation of consumers that discovered RTDs and have now broadened their repertoire as well as women who are looking for an alcoholic drink that does not necessarily have the stronger alcoholic taste found in some higher ABV products and in many cases these consumers are simply looking for a product with a lower ABV.

“This type of consumer is often looking for a product that bridges the gap between light wines or RTDs and traditional higher ABV wines and we believe Botany Creek delivers meets this consumer need.”

The survey was answered by 694 employers, which together employ over 2.4 million people and represent companies of all sizes and sectors.
Half of employers (51%) are concerned they will not be able to fill posts requiring the right graduate level or higher skills in the coming years, and a third (32%) don’t believe it will be possible to fill intermediate level jobs, requiring skills equivalent to A level. A third (30%) of employers predict the need for lower-level skills will decrease, while just 17% say it will increase.

Despite the recession, nearly half of employers (45%) say they are already having difficulty recruiting staff with skills in science, technology, engineering and maths (STEM), with manufacturers and science-related businesses having the most difficulty finding highly-skilled people to fill their posts. Even more companies (59%) expect to have difficulty finding STEM-skilled people in the next 3 years. Richard Lambert, CBI Director-General, said: “Our survey shows businesses want tomorrow’s workforce to be at the top of the new government’s policy agenda. As we move further into recovery and businesses plan for growth, the demand for people with high-quality skills and qualifications will intensify.

“In the future, people with qualifications in science and maths will be particularly sought after, and firms say it is already hard to find people with the right technical or engineering skills. The new government must make encouraging more young people to study science-related subjects a top priority. Businesses can help by showing that these skills lead to exciting and rewarding careers, helping to tackle the big challenges, such as climate change and energy security.
“Employers across all sectors recognise there is a need to improve the calibre of leadership and management skills, and this is particularly marked in the public sector.”

High-level skills needed for the future
Employers were asked which A level subjects boost a young person’s job prospects. Most said young people should choose subjects which improved business ability and knowledge of science and numeracy – namely, business studies (42%), maths (21%), English (13%) and physics or chemistry (9%). The A levels employers rate least in terms of employability are psychology (3%) and sociology (1%).
 
Studying science to degree level also helps to boost employment prospects. Many employers (42%) do not require a particular degree subject, but a third (34%) say they prefer recruiting people with a STEM-related degree. There is an immediate return to studying STEM at university, with new engineering graduates earning an average of £22,000 and new science graduates earning £21,000. This is more than those entering finance, IT, sales or human resources earn on average, and only graduate managers and lawyers earn more in their first role.

Total sales (inc VAT, inc fuel) were up 5.1 per cent to £21,421 million (2008/09: £20,383 million) with     total sales (inc VAT, ex fuel) up 6.7 per cent.

Like-for-like sales (inc VAT, ex fuel) were up 4.3 per cent and underlying operating profit up 8.9 per cent to £671 million (2008/09: £616 million)

Profit before tax was up 57.3 per cent to £733 million (2008/09: £466 million) 

This is also good news for Sainsbury’s staff as 127,000 colleagues will share a bonus of over £80 million. 

The company has opened 51 new convenience stores and online grocery sales are up just under 20 per cent. There was also 1.1 million sq ft of gross new space added, including 38 new supermarkets, creating over 6,500 new jobs.

Justin King, Chief Executive, said: “Sainsbury’s has outperformed because we continue to lead on providing healthy, fresh and tasty food with universal appeal. Total sales, including VAT, excluding fuel, for the year were up 6.7 per cent and like-for-like sales were up 4.3 per cent. Like-for-like sales have grown cumulatively over five years by nearly 25 per cent. Customers recognise the progress we have made in ‘Making Sainsbury’s Great Again’ and we now serve on average over 19 million customers each week. That’s one million more than last year and nearly five million more than five years ago. 

Andy Bond, who stepped down as chief executive last week to become Asda’s part-time chairman, admitted that its first-quarter sales had been disappointing.

Andy Clarke, who replaced Mr Bond as chief executive, said: “It’s clearer than ever that the second half of this year will be challenging [for shoppers]. High petrol prices and the prospect of tax increases from the incoming Government are weighing heavily on their minds.”

Despite Asda’s sales performance, 15,600 of its staff will earn £47 million as part of the share save scheme operated by parent Wal-Mart

Market research from Kantar shows that Asda has been falling behind its chief rivals Tesco, Sainsbury’s and Morrisons. Earlier this month, Morrisons reported a 0.8 per cent rise in underlying sales for the 13 weeks to 2 May.

The April trading period included only Easter Sunday and Monday this year, but all of Easter in 2009. Total sales in April were 0.7% up on a year ago, when Easter had boosted growth to 8.2%.

Easter distortions and consumer caution meant like-for-like sales performance was the weakest since March 2000 and total sales growth the worst since April 1999.

Food sales growth dropped markedly, against a strong Easter boost in April 2009. Non-food sales also fell back, hit by consumer caution and pre-election uncertainty. Clothing and footwear, homewares and furniture all suffered, with discretionary items worst affected.

Like-for-like sales fell less than they did in the UK, but they had picked up less in March. UK sales were 2.3% lower than in April 2009, when they had risen 4.6%. Fragile consumer confidence in Scotland, especially about public sector job cuts, made shoppers cautious about spending.

Halfords is paying £73.2m in cash for Nationwide, which has 224 outlets across the UK. Nationwide will be rebranded as Halfords Autocentres. Halfords intends to boost the size of the chain by a further 200 centres over the next few years.

‘This doubling of scale provides a strong growth opportunity, requires low capital investment and generates working capital inflows. The expansion programme will be funded from the group’s net cash flow,’ Halfords said.

David Wild, Chief Executive of Halfords said “Our expansion into the adjacent car servicing and repair market is an exciting and logical move for Halfords.  Car maintenance is a large and highly attractive sector where there is increasing demand from motorists for reliable service at affordable prices. Nationwide is a high quality business and represents an opportunity for significant growth.”

Poor winter weather drove UK retail sales down by 1.8% between December and January, the sharpest drop in 18 months, official figures have shown.

The fall was more than three times faster than analysts had forecast.

However the figures were weighed down by the inclusion of petrol in the official figures for the first time as drivers stayed at home in the snow.

The data, from the Office for National Statistics, adds to concerns about the fragility of the UK economic recovery.

Sales by value were up 0.9% from January 2009.

Fuel sales slipped by 11.1% on the month. When the impact of car fuel sales was stripped out, overall retail sales fell by 1.2%.

Food sales fell by 2.4%, but the ONS said the cold weather had boosted sales of clothing.

‘Double-dip’ risk

The period covers the first month since Value Added tax (VAT) returned to 17.5% after a temporary drop to 15%.

This is thought to have brought some sales forward to December, thereby hurting the January figures.

The data follows on from news that UK inflation had accelerated to 3.5%, that the government borrowed another £4.3bn in January to plug the growing hole in the UK’s finances and there had been an unexpected rise in people claiming Jobseeker’s Allowance.

“January’s retail sales figures round off a pretty awful week for news on the UK economy,” said Jonathan Loynes, chief European economist at Capital Economics.

“Of course, we knew the January sales figures would be bad after the VAT rise and bad weather. But the drop is even worse than the retail surveys had suggested.”

He added that sales could bounce back in the coming months - but that as people’s wages grew only slowly and prices roses, spending growth was likely to slow.

“At the very least, these numbers provide a very weak platform for sales in the first quarter of this year and therefore raise the chances that the economy may succumb to a double-dip (recession),” Mr Loynes said.

The so-called ‘double dip’ refers to an economy in recession returning to growth, then quickly contracting again.