A new computerised scheduling system, to be launched by Safeway in seven weeks, will cut the number of trailers running empty after delivering to stores. The new software will use data from Safeway's central Paragon system, which takes store orders, creates pallets and assigns them to vehicles, takes into account what supplier pick ups and deliveries are scheduled for the day.
By feeding into global satellite positioning technology every trailer is tracked to ensure peak efficiency on distribution. Safeway has already been able to reduce the size of its tractor fleet by 7% to 723 and its trailer fleet by 10% to 1,460. So far it has reduced its kilometres travelled by 4%.
Safeway supply director Mark Aylwin said, "These projects give an immediate benefit and are worth investing in, even with Safeway in the situation it is in at the moment. A buyer is also likely to value them".
Should Morrisons be successful in their takeover of Safeway then it will pave the way for a government regulator of supermarkets, according to Jeremy Baker, senior lecturer in marketing at the London Metropolitan University.
"If the government allows the creation of a permanent Big Four (and it will be permanent) then this group will be so powerful that the government will only have one option. It will have to set up a permanent supervisory system" says Baker.
His comments come as the Competition Commission confirmed that it was still on target to hand over its report to the secretary of state for trade and industry, Patricia Hewitt, on August 12. According to Baker the industry will never go back to normal if Safeway is won by a trade bidder. The gap between the Big Four would be inpenetrable by smaller players like Somerfield which in turn would mean that any competition between the major supermarkets would be cosmetic in nature.
The competition commission is tomorrow expected to deliver its report on the future of Safeway. It could change the structure of Britain's grocery market and start a five-way bid battle or stand in the way of the ambitions of some of Britain's top supermarket bosses. Talk is that only Wm Morrison will clear all the competition authority's hurdles.
Safeway investors are hoping, however, that the commission allows enough leeway for a number of competing bids to be made so that an auction can take place and push up the price for their shares. But being forced to sell off too many stores in line with competition rules, could make launching a formal bid uneconomic. This is most likely to have an impact on Asda, Tesco or J Sainsbury who will need to decide the extent of any disposal programme before deciding at what level, if any, to pitch a bid.
The outcome of the commission's report is also expected to be the factor that determines whether Philip Green, owner of the Bhs and Arcadia chains, decides to enter the bidding war.
Asda has nearly doubled its sales of Scottish potatoes as it has focused on a local sourcing initiative. The local sourcing policy has meant that Ayrshire potatoes have benefited from being promoted and clearly identified as Scottish in all of Asda's 34 Scottish stores with clear labels and Scots flags of packaging.
A local sourcing trial in Cornwall also produced similar results and local sourcing projects are also running in Wales and Cheshire. Just last week the store also appealed for local Yorkshire suppliers to enable it to roll out a local sourcing initiative in the UK's largest county and it also hopes to extend the scheme with a local produce range in Kent stores.
"Local sourcing makes good business sense," said Karen Todd, the store's local sourcing manager. "Not only does it mean we can reduce food miles, but it also enables customers to support produce form their local community. We have seen a dramatic uplift in sales as more and more customers buy into local produce which is also great news for farmers."
In related news, Phase II of Waitrose's The Potato From Plough to Plate website has been launched to the public. Traceability of both conventional and organic potatoes is the key focus of Phase II and allows consumers to get closer to the products origin. By simply entering the traceability number printed on the packaging, consumers are able to find out where their potatoes were grown along with details and a photo of the farmer.
Supermarkets continue to be heavily criticised for failing to pass on the full benefit of increases in retail prices to farmers.
The Liberal Democrats have released figures revealing that retail prices of eggs, chicken, tomatoes and potatoes have risen by 47% since 1985 but during the same time farmers have received a mere 12% increase in farm-gate prices. Lib-Dem rural affairs spokesman Andrew George said this trend proved that the Supermarket Code of Practice intended to improve relations between retailers and their suppliers just wasn't working. It was no more than a public- relations exercise, he said.
In the light of such sharp criticism it would have been reasonable to assume that when supermarkets recently increased their retail milk prices by 2p a litre they would insist it should be passed back in full to dairy farmers struggling to make ends meet, but it now appears that the middlemen - the processing co-operatives which make so much of their close ties with the farming industry - are refusing to pass on the full 2p. The major processors are passing on as little as 0.8p and none of them is shelling out more than 1.03p.
