Retail Day
Retail Week, today
Archive for August, 2009
Bank holiday blog
We seem to have had about four seasons in one day here in NW1, which is a sure sign if one were needed that it’s a Bank Holiday Weekend. Most of the office has been given half a day off but the Retail Week team is here as while it’s hard putting a magazine together in four days, it’s impossible in three and a half. We’re saying goodbye later to Rob Porter, who some of you may know as the very bright and hardworking producer of the Retail Week Conference over the past few years, but has now decided to return to his first love of academia.
Some interesting feedback on Nicola’s profile of Bill Grimsey, which appears in this week’s magazine. I don’t know him personally, but Bill divides opinion like no-one else in retail, some people saying he’s a good bloke and a turnaround specialist, others saying he’s no good. What is for sure is that his feud with Malcolm Walker is probably the most entertaining in retail.
Malcolm has posted some thoughts on Grimsey, Focus and Iceland’s “Dark Ages” on his company’s website, and it makes good reading. I happen to agree with Malcolm and the Daily Mail’s City editor that people who get CVAs through shouldn’t go round saying how many jobs they’ve saved, as in truth what they’ve done is legged over the creditors.
Anyway all entertaining stuff, and made me think, what are the other great retail feuds. I thought it might make a fun feature in the magazine. Anyone want to volunteer any suggestions to set the ball rolling?
In the meantime, have a great, and profitable, long weekend.
Tesco…..Alfresco
You bump into retailers in all sorts of places, but one place I’d never seen one was on the bus. But there I was on Saturday morning catching the number 36 home and I saw Gerry Johnson, the very amiable chief executive of Waterstones. He was off to the Oval to watch day 3 of the test, I was due to be going the next day - think I probably had the better deal!
Funnily enough I’d been sitting next to Gerry’s retail director, a very nice lady and former Retail Week Rising Star Awards winner called Cheryl Owen, at the Oxford Summer School the night before. Waterstones has lagged behind the recovery of sister company HMV, but has been quite rightly preoccupied with getting its desperately needed new supply chain hub into place. Once that’s sorted out, I think it will start motoring again.
Poor old Gerry gets a lot of stick from the notoriously sensitive people who run bookshops - read the comments on Sainsbury’s below this story on the Bookseller’s site for a brilliant summary of how they think - but someone has to do the job of dragging their mentality into the 21st century, otherwise they’ll end up like Borders.
Ahead of seeing England’s magical Ashes win at the Oval on Sunday - am trying to think of a retail connection but I can’t - I was lucky enough to be at the V Festival on Saturday, in Virgin Media’s amazing Louder Lounge. Seeing Myleene Klass there just being remarkably nice to everyone reminded me what a brilliant asset she is to M&S and Mothercare, the sort of ambassador any retail brand would like.
My favourite act was Lily Allen. A bit lightweight maybe but perfect for a Summer’s day and she’s obsessed with cricket, which is a rare but excellent trait in a woman. Moreover, she managed to get the words Tesco and alfresco to rhyme in one of her songs, which is the first example of a retailer being used in a hit single I can think of since Sainsbury’s featured in Rabbit by Chas and Dave. Unless anyone else can think of any others?
Dreaming spires
For those of us who spent our student years in more modest surroundings, a trip to Oxford’s Keble College is both an awe-inspiring treat and a reminder that we really should have worked a bit harder when we were studying for our A-levels. As I write, the college is playing host to over 200 up-and-coming retailers who are there for the 80th BSSA Oxford Summer School, and I was lucky enough to be there on Friday night for a dinner celebrating both the 80th anniversary and the retirement of the genial former Allders boss Stan Kaufman as chair of the summer school committee.
The Summer School has a great tradition of training the next generation of retail leaders. It is proud of its traditions and a wonderfully English occasion, with black tie dinners in the dining room they used as Hogwarts in Harry Potter, a Sunday morning church service and plentiful renditions of Jerusalem.
But make no mistake, it’s really hard work. The students are there for six days and barely leave the college grounds. Divided up into small groups they work on projects while hearing from big name speakers - this year including John Lewis Chairman Charlie Mayfield and Nick Robertson of Asos - and having specific days on key areas like marketing and finance.
They don’t get much of a chance to let their hair down until the traditional Thursday night ball, when they really do go for it in style, as Kaufman alluded to in his speech. Certainly when I last attended in 2005, by the time I was heading to bed after the ball there were more than a few pairs of students taking the notion of team bonding to its full extent in the nooks and crannies of the college quad, and why not?
I think to Summer School is a wonderful institution, and really valuable both to store managers and emerging head office stars. The pace of retail is so fast that there’s never the opportunity to step back and think about the business of retailing and how to develop their skills. Oxford allows them to do that in an extraordinary environment few if any of them are likely to have experienced before.
Oxford kicked off a wonderful weekend of Englishness. More to follow later…
Supermarket sweep
I try to avoid the walk up Camden High Street as much as possible, but I had to at lunchtime and was amused to see the former Woolies still has a hoarding up saying ‘Sports Direct: Opening soon’ as it has for the past two months or so. How can it take so long to fit out a Sports Direct, if indeed the use of the words ‘fit out’ and ‘Sports Direct’ in the same sentence isn’t a contradiction in terms?
The TNS grocery market share data came out today and Tesco’s share continues to be nibbled away at by Asda, Sainsbury’s and Morrisons. No wonder Tesco has doubled the points on the Clubcard this week - the card is an amazingly powerful tool to have in the armoury and with its rivals having Tesco on the back foot for a change, it seems a very good time to deploy it to try to stop shoppers defecting.
Also interesting to see the hard discounters’ momentum really coming off. Although they’re remarkable businesses, I never bought into the ridiculous hype about them over the past two years, partly because the UK grocers do a very good job of offering value anyway. While there was a novelty factor about visiting Aldi or Lidl when the recession was at its depths, shopping with them is not an experience to warm the heart if you don’t have to.
It seems poor old Aldi boss Paul Foley paid the price for this slowing in growth, which is a shame because despite appearing to be something of an automaton on the surface, he was actually a very decent guy and really seized the opportunity for his employer to make the most of the downturn. With the economy improving and the PR benefits been and gone, his replacement Armin Burger will have a big job on his hands.
Workin’ in the Gherkin
There’s still a lot of gloom around in the retail world - not least in Barrow in Furness where thanks to the pathetic journalism of the local paper I seem to be public enemy number one - but we’re always keen to highlight the positive things which are going on in the sector. To that end my colleague Charlotte organised a photo shoot on top of the famous Gherkin in the City of London for some of retail’s success stories at the end of last week.
In particular, we wanted to pull together some of the niche retailers which target middle class shoppers and which despite the downturn seem to be riding out the recession. Along with the value players, this seems to be the part of the market where innovation and growth seem to be continuing through the recession.
While we didn’t quite get everyone we wanted with holidays etc, we were very happy with the group we got together. We had a lot of fun, the setting was amazing, and the piece should make for a good read. The photos will be nice too. Charlotte is exploring the reasons for their success in interviews with them over the next few days, but here are the things which seem to unite some or all of them from my point of view:
- They appeal to a social strata which is hard to define, but if pushed I would put as the yummy mummys. They’ve got money to spend, but only if its on distinctive product that they really want, and with retailers they feel an affinity with.
- They are largely metropolitan-based, although also work well in the big regional cities and the more affluent parts of the provinces, like Cheshire for example.
- A lot are pure play online, but those that aren’t have a good multichannel presence.
- Whether online or in physical stores, they all create an experience, with knowledgeable service combining with the distinctive product to lessen the importance of price and make them stand out above the more established multiples.
- A lot of them are run by people who used to work in the City but became disillusioned by it.
These characteristics don’t make them immune from the recession - I’d have loved to have had Lombok there but unfortunately they went into administration a few weeks ago - but they’re making a good fist of it. The feature’s out next week, well worth subscribing to Retail Week for if you’re not already a reader.
Barrowloads of trouble
I’m not a very popular man in Barrow-in-Furness. My comments about its town centre earlier this week have elicited a furious response from the local council and the local paper, who rang me yesterday demanding that I retract my comments. I can only conclude that there isn’t much going on there.
This morning I was on the sofa on BBC Breakfast talking to Bill Turnbull about older workers and why retailers and customers alike like them. By coincidence my collague Charlotte has written a feature on older workers in retail which will appear in this Friday’s issue, and she’s found some really great examples, including a chap who works in a B&Q store who’s 94! Make sure you read it, it’s a great piece.
Putting my shopper hat on, I find older staff in stores an absolute pleasure. I think it’s simply a generational thing - they usually have the basic good manners and courtesy which retailers struggle so much to persuade their younger staff isn’t an optional extra, and best of all, it comes naturally to them.
I’m not sure many of us are looking forward to working into our 70s, but maybe one of the pluses will be that we’ll get more great service from older store staff, and that their natural customer service skills will rub off on their younger colleagues.
The great VAT debate
There has been an almighty kerfuffle following a story in the Sunday Telegraph at the weekend saying that the Tories will put VAT up to 20% if (or more likely when) they are elected. They denied it, but not very convincingly, and there’s little doubt that the threat is genuine.
With the Tories looking odds on to win the next election this is really going to worry a lot of retailers, especially as it will come on top of the 2.5% increase at the end of this year when the current temporary cut in VAT ends and at a time when consumer confidence remains fragile.
I’m not expressing a view here, but would be interested to know how many retailers noticed a positive effect on sales when VAT was cut in December? I’ve never heard anyone say they did, although some naughty retailers did pocket the cut as a margin gain. So if consumers didn’t notice the cut on the way down, would they notice the 2.5% on the way back up?
No-one likes higher tax. But one retail and Tory grandee said to me a couple of weeks ago that a VAT rise to 20% wouldn’t affect consumers and would be the right thing for an incoming government to do, particularly given the awful state of the public finances. It’s not going to be a popular view in the sector though.
Interestingly what he wanted to see the Tories do instead would be to reduce the tax burden on the lowest paid, that way getting them spending again. Doesn’t sound like a bad idea to me.
Cumbrian tales
Geographic isolation tends to lead to economic isolation, and that certainly appears to be the case with Barrow-in-Furness. Having spent some time over the weekend around Cumbria, I can safely say that the hour I spent between trains in this famous shipbuilding town was the lowlight, and it really brought home to me the scale of the job that faces local councils and landlords in trying to breathe new life into those towns worst hit by the recession.
In its compact central shopping area, Barrow seemed to have lost every multiple retailer that has gone bust over the past couple of years. New stores to fill their place seemed thin on the ground and there seemed to be more people hanging around the shopping streets than actually buying. My visit prompted me to write my property column today on the towns Marks & Spencer might come out of were it to take Goldman Sachs’ advice to close 15% of its stores, although from a personal point of view I really hope they don’t because it would be catastrophic for the towns affected, which I’m sure would probably include Barrow.
Just to prove I’m not biased against Cumbria however, my brief visit to Carlisle yesterday proved a lot more satisfying from a retail point of view. For a Monday afternoon it felt busy, and the city centre felt well-managed and with a healthy mix of multiples and independents.
I enjoyed visiting its House of Fraser store, which is definitely a worthy contender for my list of old-fashioned department stores, with floors on different levels and with walls down the middle. The escalators suddenly end on the first floor, with some tucked away staircases which feel like you’re in a provincial B&B leading up to the unsurprisingly empty furniture department.
Now before any Barrovians get in touch to say Carlisle is a much bigger centre than Barrow, I know that, but whether a town is small or large the principles of good town centre management are the same. In parts of the country with large rural catchments people are going to be travelling much further to shop, but their lack of choice doesn’t mean they can be taken for granted, because they can just as easily keep on driving to the next significant centre.
Wholefoods does a Ratner
Ever since it opened its white elephant of a store in Kensington High Street, Whole Foods has struggled with how the UK press works. It doesn’t help that above their store sit the offices of the Evening Standard (as well as the Mail and the Independent), but like a lot of American retailers, they seem surprised that business journalists don’t write exactly what they want them to do. And as for their attitude towards trade journalists…..
The Standard this week picked up on Whole Foods huge loss in the UK (which also includes the four small Fresh and Wild stores in London). The negative publicity clearly prompted Whole Foods boss John Mackey to think he needed to try to engage with the media, but all everyone has picked up on is the comment about them selling “a bunch of junk“.
He was obviously making a valid point about the unhealthy products we all buy here in the UK, but at Whole Foods prices, it has to be the most expensive junk you can buy anywhere. The company must know that the Whole Foods experience in Kensington is a pale imitation of the truly great stores in the States, notably at Columbus Circle and Union Square in New York.
The lack of parking at the Kensington store doesn’t help, and neither does that fact that mainstream grocers like Waitrose and M&S - both of which have stores very close to the Kensington Whole Foods - do organic food very well in a way its US rivals don’t.
It might not quite be up there with Gerald Ratner’s famous prawn sandwich gag (which not a lot of people know was originally told at the Retail Week Conference, to such mirth he tried it again at the CBI a couple of weeks later with the results we all know). But the headlines don’t make Mackey look too clever, and I for one am quite amused.
Whatever happened to Tom and Jilly?
Our good friend Lord Kirkham spends a lot of money on advertising DFS, and it’s fair to say that the company has developed its own distinctive style down the years. I remember when I went to university in York in the mid-1990s, when DFS had yet to make its debut in the south, and the adverts for what was then called Northern Upholstery in that part of the world were on Yorkshire TV all the time.
In those days they always featured a really cheesy mature couple called Tom and Jilly who stood in the car park saying “Hi, I’m Tom…and I’m Jilly” before walking round the stores flagging up the amazingly cheap sofas using exaggerated hand gestures. I’ve managed to find one featuring Tom on Youtube, although no sign of Jilly I’m afraid. The particular piece of music, presumably designed to get shoppers to hurry up and visit before they miss out on the bargains, was a regular feature.
Occasionally when a new store opened they would push the boat out, with Michael Aspel landing in the car park in a helicopter (presumably Lord Kirkham’s) and joining Tom and Jilly on the walkround.
They’ve jazzed up the TV ads these days, and they do a pretty good job of making the product look sexy as well as the price, (apart from the bizarre one set to Nickelback’s ‘Rockstar) but what prompted me to write about them today was seeing an ad on the tube on my way in, which was an unusual departure for the company but in the great tradition of corny DFS ads.
I’ve now found out how to put the picture up. As you’ll see if you double click on it, but what it is is a list of puns along the lines of “there’s Morden 50% off” and “you’d be Barking to miss them.” I think the worst offender though is “offers so good you’ll have to Clapham”.
