Social Report
2005
The retail environment
We work in close partnership with retailers. It is vital that we understand the challenges our retailers face and work with them to seize new opportunities.
Retailers are critical to the success of The National Lottery. They play a crucial role not only in selling tickets but also in delivering our commitments in areas such as player protection, player accessibility and customer service. We are committed to building mutually rewarding relationships with retailers because we want them to be key advocates for the lottery. If they are going to be lottery advocates they need to relate to Camelot as a genuine partner and not just another supplier.
It's essential that we provide them with the guidance, information and support they need, but also that we involve them in the development of relevant policies and plans, and consult with them on the issues that really matter to both of us. We do this through the Retailer Forum and regular retailer visits, which are at the heart of this partnership. See Stakeholder engagement.
We also need to understand better the pressures retailers face if we are to work together successfully. The retail environment is constantly changing as consumers become increasingly discriminating and demanding, particularly where their time, money and convenience are concerned. Deflationary prices, inflationary business costs and increased consumer promotions put additional pressure on retailers. The retail sector is also seeing rapid consolidation. In 2004/05, 14% of our terminals changed ownership.
We work with around 28,000 retailers throughout the UK and value the diversity of size, type and location. They range from large supermarket chains such as Tesco and Sainsbury's to the independent corner shop. There is a greater opportunity to generate sales from larger retailers, but our commitment is to maintain a fair balance between independent and multiple retailers in line with retail trends. At 31 March 2005, 61% of terminals were allocated to independent retailers and 39% to multiples. Commission to retailers from selling lottery products and paying out prizes amounted to an average of £10,800 per store for multiples and £6,700 per store for independents in 2004/05. This income is especially important to smaller retailers.
| Ratio of independent to multiple retailer outlets | ||||
| Target | Any variation below 60:40 (Independent : Multiple) to be in line with national retail trend | |||
| 2004/05 | 61% | Independent retailers  Multiple retailers 39% |
Key: = Independent retailers = Multiple retailers |
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| 2003/04 | Independent retailers64% | Multiple retailers 36% |
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| 2002/03 | 66% | Independent retailers Multiple retailers 34% |
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| 2001/02Independent retailers | 66% | Multiple retailers 34% |
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Community outlets
It's important to us that all communities, no matter how isolated, have access to The National Lottery. To achieve this we have created the concept of "community outlets" with "protected" status. Community outlets must still meet our standards of performance but their sales don't need to meet the minimum weekly sales target of £1,400.
A community outlet is defined as one where there are no other draw-based lottery outlets for two miles, and where, if the "community outlet" didn't exist, there would be an increase in the number of households more than five miles from the nearest lottery outlet. When determining a community outlet, we also consider factors such as:
- The opportunity for players to support their local shop
- The age profile of the population and car ownership in the area
We have committed to maintaining up to 1,000 community outlets. As at 31 March 2005 we had 918 community outlets (same as the year before) mainly in rural areas. As a result, 97% of the UK population live or work within two miles of a lottery terminal and 85% within half a mile.
These retailers do not only improve the accessibility of The National Lottery. Lottery sales improve their revenues and profitability, and make some stores viable which would otherwise close. Communities across the UK therefore benefit from having goods and services available in their neighbourhoods which may not have otherwise been possible.