Welcome to this week's round up of supermarket news that has caught my attention.

Morrisons set for online launch Morrison will start selling groceries online for the first time come next year. In so doing, it will compete alongside Tesco, Sainsbury, Asda and Ocado for people’s online spend. In the meantime, Co-Op is considering whether to begin trialling an online offering.

Supermarkets to benefit as mobile operators seek new revenue streams With mobile carriers’ revenues under pressure, carriers are looking for new streams of income. Sale of user data is likely to provide one such stream, and O2 owner Telefonica has set up a company to sell this data to retailers, thus providing opportunities to supermarkets to provide more relevant and personalised communications and offers. Read more here.

Waterstones launches new ad campaign Under continued pressure from online sellers, most obviously Amazon, Waterstones has announced an upcoming ad campaign stressing the value and experience of high street bookshops. They will feature statements such as: “Books you can’t put down are much easier to find when you can actually pick them up,” and “Even the most ardent reader will never reach the end of a good bookshop,”

Supermarket own groceries tend to be cheaper. So why do people continue to buy branded products? A quick survey of our Street members found that people continue to buy branded groceries partly because of routine, experimenting to see which brand is best for them, and perceived better taste and quality. I find the routine reason interesting, because it is often this that is most difficult to break.

Tesco to ‘start getting personal’ Tesco chief executive Philip Clarke has said that retailers need to “get personal” with their customers in order to stay relevant in a changing digital landscape, and create closer links with suppliers to develop innovation.

His message is vital, but also is the in-store experience, which explains why Tesco is investing huge amounts of money on new staff, training, and in-store design.

Supermarkets need to compete on more than price Many shoppers are bewildered by a massive array of supermarket promotions. This is set to continue unless supermarkets effectively compete around other features and experiences.

From 1,001 shoppers polled by IGD ShopperVista, 44% found it difficult to compare prices due to information overload. Supermarket chiefs have been talking change this week during an IGD convention. But it needs to be enacted for customers to notice the difference.

Sainsbury’s joins Tesco and Waitrose on scan and shop trials Sainsbury’s is trialling a new app through which customers can scan and shop with their smartphones. Shoppers will use a QR reader to ‘check in’ when they enter a store. They will then scan items as they go round. Once they are at the checkout, they will pay at a regular till without having to have their items scanned.

Gok Wan and Sainsbury’s in new Tu clothing deal We have an upcoming supermarket fashion study, so I was interested in news that Sainsbury’s has extended its partnership with Gok Wan for another year. Wan launched his first range with Sainsbury’s last year, and will launch five more collections over the next twelve months or so.

That's it. Have a good weekend.

Supermarket own brand groceries now account for 40% of all supermarket grocery sales in the UK, according to the FT. They are important to supermarkets for three reasons.

Firstly, they give supermarkets a firsthand understanding of the dynamics and consequences of changing commodity prices, to which they can respond accordingly.

Secondly, they provide differentiation. With nearly all supermarkets selling the same brands, private brand goods are significant points of product difference, which can be used to attract new customers.

Thirdly, they offer higher profit margins than branded groceries, whilst still being generally cheaper than branded groceries.

This last point raises the question, “Why do people continue to buy branded groceries if they are generally more expensive?”

I posted this question on our online community, The Street.

For some people, it’s about routine:

“I think that it is just force of habit really. We know full well that everybody in the household will eat a certain brand of bread, so we just tend to put that in the basket, without looking or thinking about other options, be they cheaper or otherwise.”

For many people, it’s about experimenting with different brands to find out what’s best for them:

“For us it's a case of trying the cheaper brands and if they're not very nice or of a decent enough quality, we stick with the brands we do like.”

“I will try anything that is own brand, then compare and decide whether to buy it again. I prefer to buy branded ketchup and brown sauce, cornflakes, washing liquid/tablets, cheese, coffee just because we prefer them and don't mind paying a bit extra.”

Some other people won’t even try supermarket own brands:

“I have a perception that branded groceries taste better / are better quality. I suppose I can’t be bothered trying a supermarket brand it there's a risk that it may be poor quality and I then have to replace it with my usual brand.”

Many Street members do buy supermarket own brand products, but these tend to be commoditised staples. One member looked in her cupboards for us, and listed pasta, rice, chopped tomatoes, herbs, spices, and baking ingredients such as sugar and flour as being groceries that are supermarket own brand.

Among groceries people often do not consider replacing with supermarket brands are: bread, squash, ketchup, beans, cornflakes, tea and coffee, spreads, yoghurt, washing liquid and dishwasher tablets.

A general rule of thumb in research is that you should not presume that people’s attitudes translate into actual behaviour. Often, attitudes can be a kind of ideal for people – “this is how I would like to behave in a perfect world”.

A case in point is a question posed in a poll by The Grocer, in which it asked 532 supermarket shoppers how environmentally friendly they are. Forty one percent said being environmentally friendly was more important to them now than it was 12 months ago, and a whopping 94% said that being environmentally friendly was important to them.

Well of course, most of us want to be environmentally friendly. It’s the right thing to be, right? But when asked which products they would be prepared to pay more for if they were produced using environmentally friendly processes, 39% selected “none of the above” from a choice of twelve categories.

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The UK was once ahead when it came to emerging mobile behaviour, but in more recent times has fallen behind. A major reason? Continual delay of 4G rollout. But at last, 4G is nearly here. On Tuesday, the heads of mobile operators Vodafone, O2, EE and Three and regulator Ofcom met at the Trafalgar Square offices of Culture Secretary Maria Miller, with the result that 4G can finally go ahead.

The company formerly known as Everything Everywhere (the parent company of T-Mobile and Orange), but now known unimaginatively as EE can now go ahead and use some of its existing spectrum over the next few weeks without the threat of a legal challenge from its rivals.

Vodafone, O2 and Three, which don’t currently own any airwaves suitable for 4G, conceded their position because Ofcom has agreed to bring forward its much-delayed auction of new spectrum to January.

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This is also the week in which Tesco and Sainsbury released their preliminary sales data for their most recent reporting periods.

Sainsbury reported sales rose 1.9% from stores open at least a year during in the 16 weeks to 29 September, which was slightly higher than analysts’ forecasts. Store extensions added 1 percentage point of the like-for-like sales growth. Like-for-like sales in the first half were up 1.7 per cent.

Sainsbury’s sales were boosted by the grocer’s official sponsorship of the Paralympic Games, which saw it increase its media spend in the seven weeks ending September 10th 2012 by 98 per cent year-on-year to £3.8 million.

In contrast, Tesco reported a profit before tax drop of 11.6% to £1.66 billion, its first profit decline since 1994. Nevertheless, Tesco’s second quarter, which covers the three months to August 25, saw UK sales rising 0.1% over the same period a year earlier (excluding store openings, sales tax and petrol purchases).

During Tesco’s press conference, Tesco chief executive, Philip Clarke, stressed, “The UK [plan] is on time and on track.” But he continued, “This is only the start of a long journey; a long journey to come to a very different Tesco.” In two years, Tesco aims to have 20,000 extra staff. A total of 8,000 additional staff are already in store while over 230 stores have been refurbished over the first half of 2012. High quality global journalism requires investment.

Clarke also claimed that the supermarket is leading the market in customer service innovation, especially around digital, such as click and collect. Tesco is also aiming to reduce its electrical and general merchandise offer, and plans on decreasing the space devoted to non-food by up to 20% in some stores.

Tesco's decisiveness, online shopping services, and focus on improving customer experience so dramatically should concern its rivals. The cost of these changes initially worried investors, but they should expect improvements in the coming quarters.

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Meanwhile, in other retail news, a sofa store 'robbery' was foiled after Laurel and Hardy duo forget to close van's doors: video

Welcome to this week’s retail round up of news. This week is mostly about Waitrose, and starts with the imminent launch by the supermarket of the nation’s first purely food-related set of online video channels. It will feature six channels dedicated to food, drink, health, ethical sourcing and events such as Christmas.

Waitrose will launch the channels later in the Autumn, providing recipe ideas from Delia Smith and Heston Blumenthal, The Fabulous Baker Brothers and Sam Stern, and how-to guides and interviews. Our supermarket social media research shows that Waitrose did very well last year at achieving engagement on its online Christmas content, due largely to its Facebook video recipes featuring some of these chefs.

Demonstrating the importance of interactivity, Waitrose will provide a ‘buy ingredients’ button which will link people through to purchase ingredients and related products. People will also be able to share and comment with friends on Facebook and Twitter. Again, our research shows precisely the value that can be attributed to such activities to Waitrose and other supermarkets.

Waitrose’s food online video channel is preceded by figures which show John Lewis and Waitrose sales soared in the week to September 22 thanks in part to impacts of BBC Two’s The Great British Bake Off. Overall bakery sales rose by 6% and egg sales up 9%. Cake coverings and decorations soared 46%, and cake mixes 47%.

This is a great example of how brands can take advantage of BBC content, and reminds me of how brands such as Samsung have used Zeebox and sponsored tweets to leverage BBC programmes.

Bakery and cooking related sales may be up at the John Lewis Partnership, but Dunelm Mill has knocked John Lewis off the homewares top spot. The homewares market is worth £11bn, and whilst Dunelm now has a 6.9% share (up from 6.1% last year), John Lewis has a 6.8% share, according to Retail Week. This is the first time in ten years that a retailer has overtaken John Lewis.

In other news around retail, eBay’s shopping apps have been downloaded 100m times since the launch of its first app in 2007. A full quarter of these have been downloaded in the last six months.

Demonstrating how mobile is helping to change the online retail world, eBay expects this Christmas to be its most successful mobile Christmas ever. EBay predicts that 30% of eBay items will be bought via smartphones. More broadly, one item is sold in the UK every second via a mobile device, the highest proportion of mobile sales in Europe according to Retail Week.

After too long a break, Retail round up of news is back.

Primark opens second Oxford St Store; coincides with Morrisons’ announcement

Fashion retailer Primark opened a second store on London’s Oxford Street, and one of its biggest stores in the UK.

The new 82,400 sq ft store is spread over four trading floors and features large screens displaying products and promotions throughout. Opening ahead of the Christmas trading period, the store will create 1,443 new jobs and has a capacity for almost 2,500 shoppers.

Source: Retail Week

Primark has a strong reputation for good quality, stylish fashion and basics at very competitive prices targeted principally at the under 35s – assets on which the supermarkets need to compete in the fashion market.

The opening coincides with Morrisons’ announcement that it will launch its first clothing range next March. The initiative follows two years of planning, and the supermarket aims to challenge rivals Tesco, Asda and Sainsbury’s.

Tesco’s Philip Clarke calls an end to the space race

Tesco’s Group Executive, Philip Clarke, has said that the supermarket has called time on the old retail ‘space race’. In this new world, retail will not be about buying large swathes of new real estate, but about how supermarkets relate to its customers and their communities.

In a comment piece in Retail Week, Clarke insightfully argues that apps have become the new high street. He added: “Digital does not just offer smart new ways to shop. It gives us the opportunity for a warmer, more meaningful conversation with our customers, local communities, our colleagues and the suppliers who we work with.

In an additional piece in the FT, Clarke calls on the government to address both the problem of squeezed household budgets and the opportunities for consumers created by the digital and mobile technology.

Tesco stresses service by ‘Making Moments Matter’

Tesco has launched a new campaign - ‘Making Moments Matter’ - to stress the improvements it plans to make to customer service. It coincides with the end of a conference this week in which store managers from across the country learned more about the Making Moments Matter programme, and follows major increases in staff numbers, staff training and ongoing store revamps.

Our spaceID research which looks at the values of supermarket shoppers shows that ‘pleasure’ is a key battleground for supermarkets. Even amid tightening wallets, the research shows that more enjoyable shopping and ad experiences are becoming even more important

Lidl launches its first TV campaign

Lidl has launched its first national TV ad campaign aimed at converting top-up shoppers into full weekly ones.

The German discounter has looked on as rival Aldi has boosted popularity and sales through its well-received series of ‘Like Brands’ TV ads. Lidl has stuck to its traditional press ads.

But it is currently touting its advertising account, thought to be worth around £18m, to agencies to create a concept to rival Aldi’s successful TV campaign.

Online retail sales down during Olympics

Contrary to expectations, internet retail sales dropped during the Olympics, devoting their time instead to watching sport.

Data from Office for National Statistics show that internet purchases fell from 9% of total retail sales in July, to 8.1% in August.

This is not to say people were not dual screening. Our Olympics Twitter research shows that the Olympics were a huge success in terms of online interactions. It does show however, that if people enjoy TV content sufficiently, they are less likely to be doing unrelated activities online.

Waitrose Twitter gaffe? No...

Waitrose recently asked its Twitter followers why they shop at the supermarket, starting with the phrase "I shop at Waitrose because" and using the hashtag #WaitroseReasons.

The result? A wave of jokes about the supermarket’s upper crust image, including gems such as, "I shop at Waitrose because I once heard a 6yr old boy in the shop say "Daddy does Lego have a 't' at the end, like Merlot?", "I shop at Waitrose because Tesco doesn't stock Unicorn food #waitrosereasons", and I shop at Waitrose because the butler's on holiday. #waitrosereasons".

Do these mean the event was a disaster? Social media demonstrates how brands cannot control what people are going to do with content. People have interacted with the brand, they’ve had some fun, and it's resulted in praise from some quarters and good feedback. Doesn't sound bad to me.

Sainsbury’s launches venture with Nectar owners

Sainsbury’s announced on Thursday a joint venture with Nectar owners Aimia, to allow its suppliers to advertise across all of its communication channels.

Insight 2 Communication (I2C) aims to provide a ‘one-stop shop’ solution to suppliers across both targeted and non-targeted channels and will allow suppliers to showcase advertising material through in-store displays, direct mail and online and in magazines.