Will Lockie

RETAIL MATHS | BUSINESS VIEW Over the years, I have realised that some of the biggest retail decisions eventually come down to fairly simple maths. The maths isn't difficult. The assumptions behind it are. Let's talk about INTAKE MARGIN today In most mature retail businesses, intake margin isn't negotiated in isolation. It's derived backward from a target channel contribution. Which means every buy is only as good as the assumptions underneath it. Take a 65% intake margin. MRP ₹1,000 | Buy Cost ₹350 AT THE BUY | 30% Discount Net Sales ₹700 | COGS ₹350 | Gross Margin ₹350 Commission + Logistics (25%) ₹175 Warehousing + Fulfilment (5%) ₹35 | Marketing (4%) ₹28 Refinishing + Packaging + Consumables ₹20 | Markdown Provision ₹7 Contribution → ₹85 | 12.1% Now assume six months later, the product needs a 40% discount. SIX MONTHS LATER | 40% Discount Net Sales ₹600 | COGS ₹350 | Gross Margin ₹250 Commission + Logistics ₹150 Warehousing + Fulfilment ₹30 | Marketing ₹24 Refinishing + Packaging + Consumables ₹20 | Markdown Provision ₹17.50 Contribution → ₹8.50 | 1.4% Almost 90% of the contribution is gone. The buy didn't change. The assumption did. So how do you GOVERN this? 1. Stress-test before you buy. If the planned discount is 30%, run the economics at 40%. If contribution doesn't hold, correct the buy cost before issuing the PO. 2. Govern through Sell-Through, not Markdown. Set weekly STR triggers. Correct inventory early through redistribution, bundling or liquidation. Markdown is a late signal. Sell-through is the leading one. 3. Track Contribution Drift. Plan vs Actual contribution by Brand × Category × Channel, and identify which assumption moved—Discount? Returns? STR? Commission? Marketing? That's where the management conversation should happen. The buying question therefore isn't “What intake margin are we getting?” It is “What contribution are we underwriting, and how resilient is it if our assumptions move?” Every buy is ultimately a set of assumptions converted into inventory. "Intake margin gets you the PO BUT Assumption & governace discipline protects your P&L." Would love to hear your thoughts!! #RetailMaths #BusinessView #Merchandising #RetailPlanning #Ecommerce #QuickCommerce

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Morrisons is making its electronic shelf labels flash. A shopper searches in the app, gets the aisle, and the label on that product blinks until they reach it. Over 200 stores by the end of November, the rest of the chain through 2027. Most of the coverage filed this under wayfinding. It is worth reading as something else. The shelf label has stopped being a price tag. It is now an addressable endpoint taking instructions from systems that have nothing to do with pricing. On Morrisons' own numbers, the product finder driving it was handling more than 50,000 searches a day at peak. And the labels were already flashing for a different audience: online picking teams have been using them to locate stock. So one surface at the shelf edge, and three things now writing to it. Price and promotion from the pricing pipeline. Pick instructions from fulfilment. Wayfinding from the app. In-store retail media will want it next. That is a publishing question before it is a hardware one. Someone has to decide what wins when two instructions land together, whether a wayfinding flash can interrupt a price that is mid-update, and whether any of it gets logged. In most retailers that decision has never been written down, because until recently there was only ever one thing to publish. If you run an ESL estate, the number that matters is not how many labels you have. It is how many systems can address them, and what happens when those systems disagree. So, a real question: in your stores, when something other than the price takes over a shelf label, who signs that off, and is it recorded anywhere? #RetailTechnology #ElectronicShelfLabels #StoreOperations #RetailPricing #RetailMedia

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Welcome to this week's carefully curated rapid retail round-up, your weekly guide to The Good, The Bad and The Ugly in retail 🛒 𝐓𝐡𝐞 𝐆𝐨𝐨𝐝 ☺️ On the back of improved profit outlook for FY26, The Works Stores Ltd has shut down its ecommerce operations with immediate effect as it looks to simplify its business model and double down on its store-led strategy. 𝑪𝒍𝒊𝒏𝒕 𝒔𝒂𝒚𝒔: 𝑪𝒐𝒖𝒍𝒅 𝒕𝒉𝒊𝒔 𝒃𝒆 𝒕𝒉𝒆 𝒇𝒊𝒓𝒔𝒕 𝒕𝒊𝒎𝒆 𝒂 𝒓𝒆𝒕𝒂𝒊𝒍𝒆𝒓 𝒉𝒂𝒔 𝒔𝒉𝒖𝒕 𝒅𝒐𝒘𝒏 𝒂𝒏 𝒐𝒏𝒍𝒊𝒏𝒆 𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏𝒂𝒍 𝒐𝒑𝒆𝒓𝒂𝒕𝒊𝒐𝒏? ☺️ DPP – Digital Product Passports are coming. The EU-backed initiative embedding detailed data into products, from material composition to repairability, accessible via a digital link, most likely a QR code. This information can then be used across the product’s lifecycle, from resale to recycling. 𝑪𝒍𝒊𝒏𝒕 𝒔𝒂𝒚𝒔: 𝒌𝒏𝒐𝒘𝒊𝒏𝒈 𝒕𝒉𝒆 𝒑𝒓𝒐𝒗𝒆𝒏𝒂𝒏𝒄𝒆 𝒐𝒇 𝒂 𝒑𝒓𝒐𝒅𝒖𝒄𝒕 𝒄𝒂𝒏 𝒐𝒏𝒍𝒚 𝒃𝒆 𝒂 𝒈𝒐𝒐𝒅 𝒕𝒉𝒊𝒏𝒈 𝒇𝒐𝒓 𝒕𝒉𝒆 𝒄𝒐𝒏𝒔𝒖𝒎𝒆𝒓, 𝒕𝒉𝒆 𝒓𝒆𝒕𝒂𝒊𝒍𝒆𝒓 𝒂𝒏𝒅 𝒕𝒉𝒆 𝒑𝒍𝒂𝒏𝒆𝒕. 𝑰𝒕 𝒊𝒔 𝒂 𝒃𝒊𝒈 𝒔𝒕𝒆𝒑 𝒕𝒐𝒘𝒂𝒓𝒅𝒔 𝒆𝒎𝒑𝒐𝒘𝒆𝒓𝒊𝒏𝒈 𝒕𝒉𝒆 𝒄𝒐𝒏𝒔𝒖𝒎𝒆𝒓 𝒕𝒐 𝒎𝒂𝒌𝒆 𝒈𝒐𝒐𝒅 𝒄𝒉𝒐𝒊𝒄𝒆𝒔. ☺️ Kingfisher plc has struck a multi-year partnership with Google Cloud to deploy AI-powered shopping tools across its banners, as the DIY giant looks to position itself at the forefront of “agentic commerce”. 𝑪𝒍𝒊𝒏𝒕 𝒔𝒂𝒚𝒔: 𝒕𝒉𝒆 𝒂𝒈𝒆 𝒐𝒇 𝒂𝒈𝒆𝒏𝒕𝒊𝒄 𝒄𝒐𝒎𝒎𝒆𝒓𝒄𝒆 𝒊𝒔 𝒘𝒆𝒍𝒍 𝒂𝒏𝒅 𝒕𝒓𝒖𝒍𝒚 𝒉𝒆𝒓𝒆. 𝑳𝒆𝒕’𝒔 𝒉𝒐𝒑𝒆 𝒕𝒉𝒂𝒕 𝒕𝒉𝒆 𝒎𝒊𝒔𝒕𝒂𝒌𝒆𝒔 𝒐𝒇 𝒕𝒉𝒆 𝒆𝒂𝒓𝒍𝒚 𝒅𝒂𝒚𝒔 𝒐𝒇 𝒕𝒉𝒆 𝒅𝒐𝒕 𝒄𝒐𝒎 𝒃𝒐𝒐𝒎 𝒂𝒓𝒆 𝒏𝒐𝒕 𝒓𝒆𝒑𝒆𝒂𝒕𝒆𝒅. 𝐓𝐡𝐞 𝐁𝐚𝐝 🤢 According to the Office for National Statistics, the UK retail sector could be at risk of creating a “jobless generation” after employment in the industry fell to its lowest level on record. Retail employment averaged 2.81 million roles in 2025 on a four-quarter basis, down 68,000 year on year and 383,000 lower than a decade ago. 𝑪𝒍𝒊𝒏𝒕 𝒔𝒂𝒚𝒔: 𝑻𝒉𝒆 𝒓𝒆𝒕𝒂𝒊𝒍 𝒊𝒏𝒅𝒖𝒔𝒕𝒓𝒚 𝒄𝒐𝒖𝒍𝒅 𝒂𝒏𝒅 𝒔𝒉𝒐𝒖𝒍𝒅 𝒅𝒐 𝒎𝒐𝒓𝒆 𝒕𝒐 𝒑𝒓𝒐𝒎𝒐𝒕𝒆 𝒊𝒕𝒔𝒆𝒍𝒇 𝒂𝒔 𝒂 𝒗𝒊𝒂𝒃𝒍𝒆, 𝒆𝒙𝒄𝒊𝒕𝒊𝒏𝒈 𝒄𝒂𝒓𝒆𝒆𝒓 𝒐𝒑𝒕𝒊𝒐𝒏. 𝐓𝐡𝐞 𝐔𝐠𝐥𝐲 😡 UK consumer confidence fell sharply in March. According to GlobalData Plc’s latest UK Consumer Sentiment report, future consumer sentiment dropped by 8.2 points month on month, representing the steepest decline since the first UK Covid lockdown in 2020. 𝑪𝒍𝒊𝒏𝒕 𝒔𝒂𝒚𝒔: 𝑻𝒉𝒆 𝒅𝒂𝒎𝒂𝒈𝒆 𝒃𝒆𝒊𝒏𝒈 𝒊𝒏𝒇𝒍𝒊𝒄𝒕𝒆𝒅 𝒐𝒏 𝒕𝒉𝒆 𝒈𝒍𝒐𝒃𝒂𝒍 𝒆𝒄𝒐𝒏𝒐𝒎𝒚 𝒊𝒔 𝒖𝒕𝒕𝒆𝒓𝒍𝒚 𝒖𝒏𝒘𝒂𝒓𝒓𝒂𝒏𝒕𝒆𝒅. 𝑺𝒂𝒅𝒍𝒚 𝒂𝒏𝒅 𝒔𝒉𝒂𝒎𝒆𝒇𝒖𝒍𝒍𝒚 𝒕𝒉𝒆𝒓𝒆 𝒔𝒆𝒆𝒎𝒔 𝒏𝒐 𝒑𝒓𝒐𝒔𝒑𝒆𝒄𝒕 𝒐𝒇 𝒂𝒏 𝒆𝒂𝒓𝒍𝒚 𝒓𝒆𝒔𝒐𝒍𝒖𝒕𝒊𝒐𝒏. 𝑬𝒙𝒑𝒆𝒄𝒕 𝒕𝒐 𝒃𝒆 𝒑𝒂𝒚𝒊𝒏𝒈 £2 𝒂 𝒍𝒊𝒕𝒓𝒆 𝒂𝒕 𝒕𝒉𝒆 𝒑𝒖𝒎𝒑𝒔 𝒗𝒆𝒓𝒚 𝒔𝒐𝒐𝒏. #kingfisher #consumerconfidence #theworks #retailjobs

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What’s been happening in retail this week? · Etsy agreed to sell Depop to eBay for $1.2bn (£1.0bn), with Depop generating $1.0bn (£0.8bn) in annual gross merchandise sales and serving 7m active buyers. · Morrisons began a sale process for dozens of in store pharmacies after losses hit £381.0m, with borrowing cut from £3.5bn to £3.1bn following a 2025 restructuring that included 300 job losses. · BEAUTY BAY filed a notice of intention to appoint administrators on 17 February, securing 10 days of creditor protection. · It’s been reported that Hobbycraft owner Modella Capital is considering a sale of the retailer after receiving a takeover approach. · QUIZ Clothing administrators increased clearance discounts across 40 UK stores after entering administration on 5 February. · Activewear brand NOW YOU LIVE launched through direct to consumer, with wholesale to follow at Harrods, Selfridges and Harvey Nichols, offering gymwear, tailoring and loungewear. · ASOS.com launched a virtual try on tool across 10,000 items, powered by AIUTA and loading within seven seconds as part of its turnaround plan. · Uber plans to expand food delivery into seven European markets, targeting $1.0bn (£0.8bn) in extra gross bookings over three years, alongside acquiring Getir’s food delivery business in Turkey. · Just Eat Takeaway.com trialled autonomous delivery robots in Bristol and Milton Keynes across 10 restaurants, following nearly 1,000 robot deliveries in Switzerland. · John Lewis Partnership is investing £108m in staff pay from April, raising hourly shopfloor rates by 6.9% to £14.80 inside M25, with full time frontline staff receiving £1,600 a year. · SharkNinja has promoted James Kitto to senior vice president for Europe, the Middle East and Africa, expanding his role from UK managing director to leading the EMEA region and commercial strategy. · Chris Conway, managing director of Co-op’s quick commerce division, has left the retailer after eight years with the business. · Flying Tiger Copenhagen has appointed Jens Aarup Mikkelsen as its new chief executive, taking over from Martin Jermiin. · ASOS.com is set to bring its Face + Body category to life with an immersive pop-up experience in Bloomsbury, London. 💥 💥 💥 Webinar: Retail Economics and NatWest Business Outlook for UK retail and leisure When: 5 March from 10:30am to 11:30am Register now: https://lnkd.in/eBh2Vc_w I can’t wait to discuss our latest ‘Outlook for UK retail and leisure 2026’ report with David Scott, Head of Consumer Industries at NatWest Business. Topics covered will include: ▶️ Key macroeconomic expectations – inflation, labour market, wages, 'K' shaped confidence and growth ▶️ Category analysis across clothing, grocery, restaurants, holidays and more ▶️ Analysis of ongoing impact of cost of living pressures (still the #1 concern) ▶️ Forces reshaping the retail landscape – AI, circular economy, social commerce and more. Secure your place now.

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