The Growth of Online Grocery Shopping is Slowing Down, says Mintel

With more customers worried about problems with their orders, delivery costs, and increasingly preferring to choose fresh produce themselves, online grocery shopping is set for slow growth in the UK, analysts from Mintel have revealed. It seems many consumers remain reluctant to order fresh produce online.

In a survey of 2,000 internet users, the private London-based market research firm also found that at least 42% of older internet users have never bought groceries online and had no intentions of doing so, at least not in the immediate future.

Nick Caroll, the associate director of retail research at Mintel indicated that alongside food discounters, online grocery shopping is one of the fastest growing sectors in the overall grocery sector. But research now shows that the number of online grocery shoppers is plateauing, and that retailers are struggling to entice new customers to use their services.

Mintel revealed that online grocery deliveries comprised around 7% of the whole sector, valued at £12.3 billion and with a projection of 10% by 2023. According to the forecasts, sales were expected to rise to £19.8 billion. However, if the research is anything to go by, this is unlikely to materialize. 45% of consumers polled said they had shopped for groceries online, down from 49% in the previous year.

Mintel found some evidence of disparity between the younger, more enthusiastic people and the older more sceptical shoppers who regarded online grocery shopping with suspicion. Only 35% of shoppers aged 45 and above had ever used online shopping for their groceries. It is now emerging that the older shoppers are getting more reluctant to join the online grocery shopping revolution, and that their reluctance is now growing. The number of UK shoppers aged 45 and above who have never bought groceries online and have no intention to do so has now increased from 34% in 2015 to 42% in 2018.

Customer Concerns

But there may be other potential issues as well. About 1 in 4 reluctant shoppers thought the delivery charges for online shopping were too high. 18% quite disliked being subjected to minimal order quantities or values, a common requirement for most online stores. Further complaints revolved around missing products, receiving goods that were so close to their expiry dates, incorrect substitutions, and late deliveries.

According to the research, online shoppers in the UK (63%) said that they have had at least one issue with an order in the past one year. For online stores who also operate traditional brick and mortar stores would not be too worried about this because grocery shoppers are likely to go back to the store if they run into challenges with their orders.

Mintel’s research indicated that a great majority of shoppers (73%) said they just preferred heading out to the store and picking out fresh groceries for themselves. This might be a great concern moving forward given the thin margins that traditional brick and mortar stores now provide.

High Street Retailers

Big food retailers have increasingly relied on online grocery shopping as an important element of their business strategy. Most notably in recent days, Marks and Spencer £750 million deal to acquire a 50% share of Ocado’s retail business. It was a clear indication that Marks and Spencer, which has struggled in recent times, wanted an immediately scalable, rough and ready platform to strengthen its online business and grow its sales.

High street retailers will for the first time get at home delivery service. Overall sales in the high streets have fallen in recent times due to the overall challenging conditions. The lack of a reliable online delivery system has been chief among the challenges. This is hardly surprising as Mintel’s research revealed that more than two thirds of online shoppers in the UK have had an issue with at least one of their orders in the past year.

However, Mintel now points out that not all retail shopping trends are working in favour of the internet. Online shopping services are best suited to some of the traditional big basket weekly shopping routines, especially at a time where many consumers are shopping on a top-up basis or as-needed basis.

Large, basket-style shopping, which online grocery shopping best supports does not quite fit with the current shopping habits. Other innovative service offerings such as same-day delivery targeted towards immediate meal solutions could drive growth in the sector. Once hailed as a growth area for many retailers, online grocery shopping may be losing its shine after all, at least in the UK.         

Is The EU Scrutinizing Google’s Tax Arrangements in Ireland?

Paschal Donohue, Ireland’s minister for finance, has declined to comment on emerging reports that the European Commission is taking a closer look at Google’s Irish tax regime.

Sources familiar with the matter indicated that the EU is now scrutinizing how the technology giant uses its operations in Ireland to help cut down its corporate tax obligations within the trade bloc.

Sources close to the matter say the review was only preliminary and may not necessarily lead to a full-scale investigation into the firm’s Irish operations. An EU investigation, it seems, is not quite imminent and Irish authorities are bullish that the preliminary conversations are sufficient to avoid a more in-depth probe of Google’s tax arrangements.

Google declined to issue a statement on the matter as did the European Commission. But a source revealed that Margrethe Vestager, the EU Competition Commissioner, discussed a potential issue with Pascal Donohue, Ireland’s minister for finance. “I can’t comment on any matters in relation to any particular company. That is the role of the European Commission to comment on any investigations they may or may not be considering,” said Mr. Donohoe.

Mr. Donohoe was speaking in Washington where he was attending the World Bank Spring meetings. He indicated that the Irish government has had a good relationship with the European Commission and that and that it was up to them to determine what kind of probes they feel are required across the EU.

Last year, Bloomberg reported that officials from the European Commission had held in-depth talks with Irish authorities on whether Alphabet Inc, Google’s internet-search unit complies with rules limiting tax perks provided by individual governments of member states in the trade bloc. 

While no formal investigations have been launched as yet, the report comes amid a clamp-down at the EU and OECD level on some of the tax practices of digital companies. Mr. Donohoe indicated that the issue of tax was something that was always contested and that Ireland was also engaging in the debate. “It is a debate we are participating in,” said the minister for finance, adding that he expected to see “further change take place in relation to the taxation of the digital sector.”

Mr. Donohue particularly pointed out OECD’s forthcoming work on digital taxation. The intergovernmental economic organization headquartered in Paris will, by the end of the year, publish its roadmap on taxing the digital economy. It is also expected to come forward with more details of its plans before the summer.

The EU had previously made unsuccessful attempts at introducing EU-wide digital tax policies. According to the finance minister, the move could have resulted in reciprocal measures from other parts of the world if the European Union had acted unilaterally.

Several big technology giants, including Apple, Google, and Facebook, have their European operations’ base in Ireland which provides a lower basic corporate tax rate as compared to other EU member states. Ireland has continually resisted efforts by other EU member states to align tax rates and tax calculations across the trade bloc.

Therefore, Vestager’s probes have opened up other avenues for the EU to intensify pressure on low-tax member states, including Ireland, Netherlands, and Luxembourg. The risk is that these states may lure firms away from other member states.

Until recently, Google has seen little scrutiny of its Irish operations, and whether they violate the EU’s state-aid arrangements. The EU has also targeted Amazon.com for its tax deals with Luxembourg. However, Apple has received more scrutiny in recent times, with the technology giant ordered to pay around €13 billion for its deals with Ireland that helped reduce its effective corporate tax rate. Ireland and Apple have appealed the decision.

Google’s European is in Dublin and its sprawling campus, which is dubbed Googletown, is located close to the south docks. Google landed in Ireland back in 2003, and with only 100 employees. The firm now employs about 7000 people in Ireland.

According to company records, the firm recorded a profit of €1.2 billion from revenues of €32.2 billion. Therefore, it paid about €167 million in corporate tax.

Ms. Margrethe Vestager, EU’s competition commissioner, has been at the forefront of Google’s regulatory woes in Europe. She even stepped up an anti-trust probe as soon as she took office back in 2014 which her predecessor had been willing to bring to an end.

Mr. Donohue is due to present an update to his cabinet counterparts on the latest economic forecasts for the country when he returns to Dublin on Tuesday. He will also outline the Department of Finance’s projections for both this year and the coming year.

Face-to-face Chats are Required in The Digital Age, Says President Higgins

Even in the modern era of tablets, laptops, and smartphones, the president insists that human contact is still critical.

President Michael D. Higgins called out to people to make the time to meet up talk if they were to tackle Ireland’s crisis of loneliness. He spoke about the crucial need for physical interactions and “human connection” in the digital age.

The 9th president of Ireland, who is also a poet, was speaking at Dublin’s Convention Center on April 13, 2019, during a celebration of 175 years of the Society of St. Vincent de Paul. Higgins pointed out that human contact was now more crucial than ever since society was now dealing with a huge loneliness problem.

“How we meet and speak with each other matters a lot,” said the president and that “we live at a time where more and more of our interactions with others are encountered in a digital space, be it laptops, tablets or phones,” said the president. Indeed, more than ever before, we now have more opportunities to connect through technology. However, even as we are in the most interconnected period in human history, we are also lonelier than ever before.

Higgins pointed out that despite all the great technological advances, human contact is still something that defines us as a race. Whether it is through conversations, face-to-face interactions or simply just taking the time to have a chat with someone, human contact defines us as a people.

In his speech, the president highlighted the positive impact of technology, most notably the internet, but then also indicated that a purely digital life presents challenges. He further agreed that there is no denying the practical and positive contribution of the digital world, particularly for those who constantly struggle with balancing work and family commitment on a daily basis.

Research consistently shows that loneliness can lead to various illnesses and a 50% increased risk of early death. Research has shown that simple acts, such as holding the hand of a loved one, cuddling, or visiting friends and family are just as important to our well-being as drinking more water and exercising. Some research indicates that loneliness is even more dangerous than obesity or smoking 15 cigarettes a day.

The Society of St. Vincent de Paul had a day of thanksgiving to mark its foundation anniversary in Ireland. Other guests at the function included Regina Doherty, Minister for Employment Affairs and Social Protection, and Brian Cody, hurling manager for the Kilkenny senior team.

Mr. Higgins said that people were facing a myriad of challenges in Ireland and that their lives are affected by “low income and the effects of debt, unemployment, educational disadvantage, poor health, relationship breakdown, bereavement, addiction, violence, loneliness, disabilities, overwhelming caring responsibilities, and other challenges.”

He also pointed to the growing rich and poor income inequality gap and said that “Despite the measures that may suggest an improvement in our economy, there are still too many people in Ireland struggling, too many living in consistent poverty.” The president insisted that this has to change.

In 2018, the World Economic Forum highlighted Ireland’s soaring wealth inequality, placing it eighth out of 30 countries in its Inclusive Development Index. According to the report, Ireland was still facing “high income inequality and soaring wealth inequality” even though the median living standards had risen moderately.

Just last month alone, the number of homeless people crossed the 10,000 mark for the first time in history. The Department of Housing revealed that there were about 6,480 adults and 3,784 children and dependants who accessed emergency accommodation during the week of February 18th, 2019.

The Fr Peter McVerry Trust even disputes these figures and says they are quite modest. The Dublin-based charity trust, which was set up to reduce homelessness, drug misuse and social disadvantage, points outs that these figures did not even include the people sleeping rough, the ones couch-surfing, homeless people in hospitals and prisons, those in direct provision centres, and domestic violence refugees.

President Higgins indicated that there was a great need to continue to make Ireland a more equal place to live and work in where caring for each other, our children, older people, and people with disabilities is a core value and one that is equally supported. “We need to make Ireland a place where individuals, families communities can participate fully in work and society, and where a strong economy helps to support the kind of society that we wish to live in,” the president said.

The president’s overall message seemed to propose that, even in an increasingly digital age, we can beat loneliness, one conversation at a time.

Facebook head visits Dublin

Facebook head visits Dublin

Mark Zuckerberg the CEO of Facebook met with a number of TD’s this week to discuss the regulation of the internet and the safeguarding of kids and the vulnerable from online issues. The meeting was hailed as a success and a failure in equal measure.

The company has come under scrutiny in recent weeks. In part due to the streaming of the NZ terrorist attack and a class action lawsuit taken by former employees in the US. This may be followed by a similar lawsuit in Ireland.

Zuckerberg has been meeting with regulators across the world in recent weeks and is trying to put a face to Facebook and its policies. He has recently voiced his approval of the involvement of regulators and government bodies in the issues of free speech and information across the numerous platforms under the Facebook umbrella. He wrote recently, “Lawmakers often tell me we have too much power over speech and, frankly, I agree,” he wrote in the ‘Sunday Independent’ and ‘Washington Post’ last week. “I’ve come to believe that we shouldn’t make so many important decisions about speech on our own.”

The main focus of his meeting in Ireland was to discuss regulatory issues and to discuss Facebook’s position in regards to misinformation and recent scandals which have impacted trust in the company. Of course, there was issues and positions he took which did not sit well with many, including Facebook’s position on GDPR regulations brought about by the EU.

Facebook in Ireland

While a meeting between Zuckerberg and regulatory bodies in Ireland was welcomed it will hardly affect the continuing expansion and operations of the company in Ireland. As one of the largest employers in the silicon docks and with plans for further expansion, the visit by Mr Zuckerberg could be viewed as nothing but a press trip to bolster the companies reputation.

Only in January did Facebook announce plans to lease the ground of the current AIB HQ. This expansion will coincide with a recruitment drive aiming to bring in or hire a further 1000 people bringing the companies number to just over 5000 in the Dublin region.

With such strong ties in Ireland Facebook, whille listening to the regulatory bodies will still be under the umbrella that is Zuckerberg and Facebooks.

Controversy

One area that was a hot topic was Facebook’s move of over 1.5 billion of its users away from Ireland so they would not be affected by the EU’s GDPR introduction. This is while he is now on a tour highlighting the need for more regulation.

Along with this his defensiveness and sometimes apparent aloofness to the impact of regulations on the platforms he heads, Mr Zuckerberg did not seem at odds with the regulators. As a company owner, he is free to do as he chooses, it is his sometimes contradictory approach which has caught some people off guard.

What he said about GDPR “GDPR is as important for what it doesn’t do, which is require companies to localise data and store systems data in a given country,”.

“We can take this for granted in a country like Ireland or in the US where there’s a strong rule of law and respect for human rights. But in a lot of the places around the world, those aren’t a given. What we see is that there are some competing visions for how the internet goes and what the future of that will be. We see a lot of pressure in a number of countries localising data in a way that could put people’s data more accessible to governments and in harm’s way.”

This can be taken as both a warning and a threat as he is correct in the fact that there are far less scrupulous entities who would use the information the Facebook controls.

Opinions

Adrian Weckler commented on the visit, “He also wanted to shore up morale among Irish staff, often in the firing line in successive, unending PR scandals and privacy crises”. This is most likey party due to the recent CPL scandals. Staff have voiced their disapproval at inadequate training and preparations in regards to some of the material they view online.

Overall Mr Zuckerbergs visit was seen as both a charm offensive and also a step in the right direction in regards to regulations. Progress can of course not be made without the input of one of the worlds towering tech and information figures.

Boeing reduces production of troubled 737 model

Boeing reduces production of troubled 737 model

Boeing has been forced to cut production of its troubled 737 airliners, at least temporarily that is. This is a knock on effect of recent crashes in Ethiopia and Indonesia and the emerging possibility that it may have been a software fault in both airlines.

Boeing announced that it will reduce production from 52 planes a month to 42 by mid-April as reported in the Irish Examiner.

This is a response to banning orders issued by various countries and a halting of deliveries of the 737 Max, the plane involved in both crashes. Recent reports from Ethiopia have ruled out pilot error putting the model under increased scrutiny.

A report from the Ethiopian authorities issued on Thursday said the pilots of flight ET302 “repeatedly” followed procedures recommended by Boeing before the crash.

Boeing chief executive Dennis Muilenburg said in the statement “We now know that the recent Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents were caused by a chain of events, with a common chain link being erroneous activation of the aircraft’s MCAS function. We have the responsibility to eliminate this risk, and we know how to do it”

He went on to say that Boeing is in the process of updating its MCAS software and finalising new training for Max pilots.

This has been given as the reason for the reduction in production of the aircraft he said, “As we continue to work through these steps, we’re adjusting the 737 production system temporarily to accommodate the pause in Max deliveries, allowing us to prioritise additional resources to focus on software certification and returning the Max to flight,” he said.

The crash in Ethiopia on the 10th of March caused a worldwide reaction with the EU, China and others banning the use of the aircraft. Boeing at first criticised the move but later backtracked as it emerged problems may be apparent within the aircraft.

There were no survivors of the Indonesia Lionair or the Ethiopia airlines crashes.

The pilots of the Ethiopia airlines crash have been commended for their efforts in averting a disaster. Boeing has issued an apology to those effects but it was little consolation to many.

The chief pilot’s father, Dr Getachew Tessema, told the BBC the apology was “too little, too late”.

“I am very proud about my son and the other pilot, both of them,” he told the BBC.

“To the last minute they struggled as much as they could but unfortunately they were not able to stop it.

The crashes

Flight ET302 crashed after take-off from Addis Ababa on route to Naoribi crashed minutes after take-off killing 157 people.

Last October, Lion Air flight JT 610 crashed into the sea near Indonesia killing all 189 people on board.

The initial reports from Ethiopia have not laid blame, but have noted that the pilots were fully qualified and followed all the procedures that should have prevented the crash.

The report that there may be an issue with the MCAS system which must be rectified before the aircraft can take to the air once more.

The MCAS software is designed to top the plane from stalling, the sensors activate when the plane is believed to be climbing altitude to fast. It is believed that this may have malfunctioned on both aircraft. Forcing the pilots to try and prevent the plan from nose diving.

Although the software wasn’t named, from the recent announcement by Boeing it is believed to be the same issue. The same system is believed to have caused the Lionair crash.

The pilots of Ethiopia airlines may have been notified of the potential issues. It is believed that they followed the instructions provided by Boeing but that these still did not prevent the plane from going down.

Both crashes have had a major impact on Boeing market value and the trust placed in the company by the aviation industry and potential passangers.

The price of Boeing fell dramatically in recent weeks due to the crashes and subsequent banning orders issued by countries around the world. These recent developments which, while not categorically placing blame with the company does not look good.

Airlines around the world have been waiting for orders of the new model 737, which have not been stalled. It is still too early to say how public opinion will be moved by the recent findings in both crash investigations.

It is likely that civil action may be taken should the fault be laid at Boeings’ feet. As one of the world leading commercial aircraft providers this definitely a tumultuous time for the company.

SMMT report on the viability of Autonomous cars

SMMT report on the viability of Autonomous cars

A report from the Society of Motor Manufacturers and Traders (SMMT) has suggested that the UK is in a prime position to be one of the leading producers of self-drive vehicles. The report cited that due to investment from industry leaders and the government, Britain has placed itself in a good position for the future. That is as long as there is some form of withdrawal agreement from the EU.

Mike Hawes, the chief executive of the SMMT, said  “The opportunities are dramatic – new jobs, economic growth and improvements across society. The UK’s potential is clear. We are ahead of many rival nations but to realise these benefits we must move fast.”

However, this was followed by warnings over a no-deal Brexit, “No deal is not an option and would be catastrophic for this industry, and the UK’s position globally would be undermined.

“While we are devoting a huge amount of money to Brexit it is sucking up time, energy and investment we would rather be devoting to technology challenges.”

The report, named-“Connected and Autonomous Vehicles: Winning the Global Race to Market” anayleses tghe societal and economic impact of innovation in this area. The report was produced by SMMT and Friost and Sulluvan nad has been both welcomed and critiqued by those within the industry.

The report highlighted the fact that more than £500 million has already been invested in the areas of CAV R&D and testing. Autonomous trials have already taken place in major towns and that the UK is already home to a number of test centres. All attributes which SMMT say has put the UK in a prime position.

The report ranked the UK above competitors such as Germany, US, Japan and South Korea as a destination for the production of self-drive vehicles. This is due to the investment in the industry, a skilled labour force and at the moment, connections to an open and eager market

The report also credited the UK’s motorways and urban and rural road infrastructure which would be suitable for self-drive cars. The UK  is also the first country in the world with legislation for insurance on autonomous vehicles.

However, other industry leaders have called in to question that viability of autonomous vehicles, at least in the reports time frame. Andy Palmer chief executive of Aston Martin believes that we will not see autonomous vehicles in the next 20 years.

The Guardian reported that Palmer said “You’re going to see robotaxis in geofenced areas as early as 2021-22. I don’t think you’ll see the commercial distribution of level-four vehicles until the mid-2020s. I don’t think you’ll see level five in my career. To drive up a mountain or a Delhi or London street – I think we’re dreaming if we think it’s going to be around the corner.”

Worries within the Industry

As we have displayed in earlier publications, Brexit along with declining car sales and manufacturers moving or slowing down production has affected the car industry within the UK. The SMMT report comes at a time when Brexit is no clearer than it has been some months ago. This has exasperated an already troubled industry.

Car production for the UK and export markets dropped by 11% and 16.4% year-on-year to trigger a 15.3% overall decline during February.

Brexit

Shawn of SMMT said of a no-deal Bexit, “A managed no deal is a fantasy. Uncertainty has already paralysed investment, cost jobs and damaged our global reputation”.

“Business anxiety has now reached fever pitch and we desperately need parliament to come together to restore stability so that we can start to rebuild investor confidence and get back to the business of delivering for the economy.”

“Meanwhile, production for the EU – the UK’s biggest customer – declined by 14.9%.”

The SMMT said that, although exports have declined in recent months, overseas demand continued to drive output and still accounted for nearly eight-in-10 cars produced. Highlighting another reason for the UK to maintain its position in the production of autonomous vehicles.

It said: “This underlines the importance of securing a truly free and frictionless future trading relationship with our most important trading partner.

“The motor industry has been unequivocal about the impact of no deal, which would have an immediate and potentially irreversible impact on cost, productivity and competitiveness.”

Even with the report’s critics, it has been welcomed by many in the industry. It is hoped that should deal be struck with the EU that the development of autonomous vehicles could inject up to £62 billion in the UK economy by 2030 relayed the Guardian.

For an already struggling industry such reports are going to cause a lot of people to take notice of the potential impact of changes in the future.