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Retail Week LIVE 2023: Tesco CEO calls for massive change in Apprenticeship Levy; Boots UK managing director declares ‘Up yours Sephora!’ as competitor launches in the UK.

Retail Week LIVE (28 – 29 March 2023, InterContinental London – the O2) has kicked off today with around 1,000 delegates from nearly 200 retailers, plus nearly 150 speakers from the industry’s biggest household names, who have gathered to debate how retail can overcome a backdrop of inflation, rising costs and the cost-of-living crisis.

Tesco CEO Ken Murphy: “We need a massive change in the way the Apprenticeship Levy is constructed.”

Keynote speaker Ken Murphy spoke about the support needed from government with regards to the Apprenticeship Levy and business rates, while Boots UK managing director Seb James declared “Up yours Sephora,” when talking about the competitor’s recent opening.

Ken Murphy told Retail Week LIVE: “[Supermarkets] are really important, particularly in the most deprived areas of the country; they offer people a start in life. But we’re not able to offer as many opportunities as we’d like because of the outdated rules of the Apprenticeship Levy. We need a massive change to the way the Apprenticeship Levy is constructed; our apprenticeships have fallen by 70& since it was introduced.

“Tesco has contributed £100 million to the Apprenticeship Levy and, to date, we’ve been able to access £14 million of that money. This year, more than £600 million of unused Levy funds were returned to HM Treasury, stopping thousands of people missing out over 60,000 apprenticeship opportunities.

“The government needs to make the Levy much more practical to reverse the decline in entry level apprenticeships and stop thousands of people from missing out. Let’s be flexible on how funds are invested in shorter, higher quality courses to enable employers like Tesco to offer more tailored and sector specific training: the skills needed to support the future of our economy and our industry.

“We need to recognise the full cost of apprenticeships and investing in people beyond just the training. If they funded additional store working hours while an apprentice is at college, this would enable smaller businesses and employers to significantly expand the number of apprenticeships they offer by over 50% resulting in an additional 8,000 opportunities across the retail sector.”

On business rates, Ken Murphy added: “The current system places a huge burden on shops of all sizes, putting thousands of high street jobs at risk and stifling investment into new stores, particularly in the most deprived areas of the country. Let’s make the bill sustainable for a start. It starts with freezing the tax rate. This would reduce the upwards pressure on the cost of living for retailers of all sizes who pay this tax.

“We [also] need to speed up the appeal system. Three years is crazy. It’s holding up hundreds of millions in cash flow amongst the retailers who need it most and could invest that money in local community investments.”

Boots UK managing director Seb James: “We’re suddenly seeing a total change in the dynamic of how we compete against online players.”

“It’s particularly good for Boots.” James added. “In beauty, we’ve grown 200 basis points of market share in one year by using one simple rule: in the nicest possible way, if your competitors are struggling, put the boot in. We had one recently in Westfield, and our whole team lent into the idea of making that launch a disaster. As a result, a whole flock of new customers came to Boots. It was very exciting. We grew 85% on the day. ‘Up yours Sephora!’”

Roisin Currie: ‘We’re trying to help the consumer make their money go as far as possible.’

Retail Week LIVE was opened by Roisin Currie, CEO of Greggs, who shared insights into the brand’s growth strategy and how it has successfully navigated the challenges facing the retail industry, achieving 23% sales growth and growing its estate to 2,300 shops last year.

Reflecting on her first year as Gregg’s chief executive, Roisin Currie said: “If ever there is a time that you have to work at your value credentials, it’s the last year. And we truly do believe that we mitigated costs as far as we could while still keeping costs low for the consumer, and really start to give them the reasons to shop more and more at Greggs.

“We launched our Greggs app. A number of years ago, we would have questioned ‘would Greggs go digital’? The pandemic accelerated all of that and we’ve got 1.1 million active customers now and we talk about it as a 10% discount so again it’s about offering value.

“It’s just a mindset of how much can you save structurally by making changes in the way you deliver services to your customers or in the way you manage your supply chain. We’ve gone down a very accelerated automation journey in the last number of years. For example, we’ve introduced a new pizza line in the last year that triples capacity for production at a much lower cost.”

Leaders from brands including New Look, The Body Shop, Pets at Home, Wilko, Trinny London and Nespresso are still to speak at Retail Week LIVE later today and tomorrow (29 March 2023).

Tomorrow’s session will feature Helen Connolly, CEO of New Look, who will share how she believes retail can thrive in a post-pandemic world. There will also be a whole morning of reverse mentoring tomorrow, with Grace Beverley, CEO of Tala and Shreddy, among those sharing some of the secrets of their success. The 26-year-old generated sales of £6.5 million within one year of launching her sustainable fitness brands.

Meanwhile Luke Howarth, head of retail at Nespresso, and Lisa Miao, COO of Pets at Home, will explore the role of the store when it comes to creating experiences that keep customers coming back.

And thinktanks across the two days, chaired by British Retail Consortium CEO Helen Dickinson and attended by brands like Boohoo, John Lewis Partnership, and Amazon, will debate the current state of sustainability and diversity & inclusion across the retail industry and what retailers need to do to drive further change.

Retail industry charity the Retail Trust has also designed the retail staffroom for the future within Retail Week LIVE’s people and wellbeing zone: an immersive multi-sensory room designed to reduce stress and calm the mind, with a workplace wellbeing map to help uncover what shapes happiness at work.

Retail Week’s editor in chief, Charlotte Hardie, launched the event this morning by championing the retailers succeeding against difficult trading and economic conditions. She said: “Retailers are still thriving amidst a backdrop of inflation, rising costs, a consumer cost-of-living crisis, post-Brexit bureaucracy and recruitment and retention problems, and there are four reasons why.

“It’s about strong leadership, with a purpose-led vision and teams that are empowered to deliver on it, it’s about understanding your customers of today and tomorrow, it’s about driving digital transformation and tech innovation that delivers efficiencies and ROI, and finally, it’s about creating a strong workplace culture that ensures that people both want to work for you, are happy working for you, and can see a career path.

“We’ve taken those themes and brought a new approach to Retail Week LIVE with specific zones that reflect excellence in retailing today.”

Retail Week LIVE comes ahead of the highly anticipated retail industry ‘Oscars’, the Retail Week Awards, on Thursday 30 March, which will see Aldi, Ocado, Sainsbury’s and Tesco vie for ‘grocer of the year’, while AllSaints, New Look, Primark are among retailers in line to win ‘fashion retailer of the year.’

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