Tag Archives: retail

On Christmas Comes Early

There is a brass band outside my local department store paying Christmas carols.

I keep being reminded by people that Christmas is just eight weeks away. Less than two months to, er, buy the tinsel. Order the presents online. Buy the tree. Replace those ornaments that broke last year.

Choose and order the turkey. Do all those other things that are essential to ensure December 25 and 26 pass with that usual sense of slight disappointment .

Almost two months then. The sense of urgency is overwhelming. Or not. Every year the start of preparations arrives earlier. I rather suspect this year the retailers believe we are in for a bumper season, perhaps the best from their point of view, since the economic crisis began. So start shopping now.

I suspect, too, they are missing one factor needed for those cheery forecasts, that there is a shortage of must-have items this year to spur demand. (With the exception of those motorised skateboards that have a regrettable habit of bursting into flames and that you can’t ride anywhere legally anyway. Might have to do better than that.)

Anyway, we went to our local garden centre to buy plants, for the autumn planting season. The supply was limited and disorganised. Aside from a range of china Santas, each with a plant pot attached containing a succulent of decidedly short life expectancy.

And the most astonishing array, even bigger than usual, of plastic Xmas tat. Including a full-sized nodding reindeer. Where do you put it the rest of the year? Have you ever tried to get a full-sized sodding, nodding reindeer up a loft ladder?

It is going to be a very long two months. Time for the first bah humbug of the season.



Be honest. When did you last buy anything at BHS, or British Homes Stores, or whatever it is called these days?

If you want bland, middle market, fashion, go to Marks & Spencer. For something a bit racier, and probably cheaper, TK Maxx. Socks and knickers, your local grocery superstore, as you do the Saturday shopping. One sock is enough like another. Alternatively, for something fashionable, the usual expensive boutiques, probably conveniently located in a clump in your local high street department store. What, of the above, would you buy at BhS?

Yet an obscure bunch of investors have agreed to take BHS off the hands of Sir Philip Green, the at times irascible retail entrepreneur who has finally tired of trying to turn  the loss-making chain around. Two pointers to the future of BhS: I have known Green for two decades or more, and he is, ahem, not exactly crippled with self-doubt or one to give up on a challenge. If he can’t do it…

Second, Harriet Green, someone else I know from her time turning around Thomas Cook, has reportedly declined the chance to get involved. Thos Cook was on its deathbed when she took over; if even she doesn’t think she can rescue BHS…

Still, hope springs eternal, especially among the sort of private equity princelings who tend to get involved in such last ditch rescues and are constitutionally unable to accept that any task is beyond their innate genius. The shrinking in the high street since the start of the century has failed to keep pace with the growth in the amount of stuff we buy on line, which suggests there may be more pain, closures and bankruptcies to come among established retailers.

Some chains have no rational reason to occupy the space – remember the awful death throes of Woolworths, another chain whose entire raison d’etre evaporated some time around 1996, a decade or so before it finally closed its doors. Remember Habitat, still hanging on in there somewhere? We furnished our first home from Habitat. Mind you, it was 1985.

About the only sectors of the high street that are growing are the pound stores, where you can get a random selection of goods cheap if you are prepared to queue, and the charity shops. I give BhS three years.

On Supermarkets

It will not have escaped your attention that the big supermarkets are in trouble, most specifically the two in the middle, Tesco and Sainsburys.

We are shopping more carefully, doing more frequent forays for stuff as we need it rather than piling it up in a massive weekend shop and then throwing amounts away.

We have become accustomed to promotional offers, buy one, get one free, and there is a ratchet effect here. If those offers are not available, we are disappointed, and we spend less.

We are told that the discounters, Aldi and Lidl, are taking market share away from those supermarkets in the squeezed middle. A few years ago, only chavs and those stretching their welfare payments shopped there; the papers are today full of middle class commentators enthusing over how cheap everything is.

It is probably no coincidence that both Tesco and Sainsburys have new bosses, the two most successful chief executives at each in recent years having timed their exits to perfection.

Two personal observations.  About four years ago I sat in the office of a Very Senior Executive at one of the big supermarkets, not one of those two departed bosses mentioned above, while he laid out its plans to expand by building hundreds of thousands of square feet of new megastores.

As we were well into the economic downturn, and the market was at best static, I wondered why this was such a good idea. People were no longer increasing their spending on groceries. Why did we need more retail space to sell the same amount of goods? No, you see, you don’t understand. There were still parts of the country where his company did not yet have a store.

But his rivals did. Plonk yourself down on their turf, become too competitive, and the consequence would be that everyone would have to cut their prices. And, thus, each other’s throats.

This, of course, is exactly what happened, made worse by the arrival of Aldi and Lidl. Those grandiose expansion plans, drawn up by expensive consultants, will have been quietly tucked away in a desk somewhere.

We went to Aldi once. Daughter was just starting the next term at college, and it was the nearest supermarket. We stocked up on dried goods, rice, pasta, tinned food, as parents do, trying to ensure she ate something, anything, once we had left.

It was a surreal experience. It was very cheap, and not a lot of thought had gone into the lay-out, or into making it a rewarding shopping experience. The shelves appeared to have been stacked at random with whatever had come to hand.

At the end of one aisle was a pile of boxed industrial air compressors. About four of them, I recall. I am not sure how many Aldi shoppers, wandering around with their trolleys, will have thought, now, that’s just what I need, an industrial air compressor. Presumably they were very cheap.

I detect signs that the Aldi/Lidl backlash may have started. Several of those middle class commentators have penned sniffy pieces about how tacky it all is, and how it’s not actually that good value. But I am sure there will be more Aldis and Lidls in a decade’s time. And rather fewer branches of Tesco and Sainsburys.

On Retail (Again)

Figures for December from the British Retail Consortium suggest something I had already suspected: it was not a good Christmas for the high street. From my experience, the West End was packed with tourists shopping. There were queues at the big out of town retail parks.

But the high street was relatively empty. There were no queues to endure in each of the three shopping trips I made locally, and few shoppers frantically throwing their money around. It looked like normal trading.

This means that some of our best loved chains will come under further pressure in the New Year, and some well known names may disappear. There is the assumption that this is down to economic hard times, and the growth of the Internet.

It is worth looking at this a little more carefully, though. Online shopping really began at the start of the last decade. But the amount of shopping space, including at the big supermarkets, continued to grow through that decade.

One would have thought that, as the Internet grew over that period to account for ten per cent or more of sales – it now stands at as much as a fifth, by some measures – some of that shopping space would have contracted. It didn’t.

The answer, I suspect, is that too many chains were kept open, often by their banks, well beyond when they should normally have contracted or even gone out of business entirely. This was because no one thought the long, debt-based boom would ever end. The long death throes of Woolworths, a chain that lost its reason to exist some time around 2000, would seem to bear this out. The eventual reckoning for retail, once it finally came, was therefore worse than it needed to be.

We hear a lot from economists about so-called “zombie firms” kept artificially alive by low interest rates. And zombie retailers, too?

Not So Happy Christmas

It is the day before Christmas, and it is not looking good for the high street. Yesterday was supposed to be the busiest this year for shopping; travelling into town for work, and it didn’t feel like it. The supermarkets are apparently discounting like mad, but the real damage, I suspect, will be done to specialist retailers.

Two of them have already turned up their toes in recent memory, HMV and Game, though they are still trading. Woolworths is a sad memory.

The villain in all this, if I can put it thus, is Amazon. People mourn the loss of HMV et al, then order their DVDs and CDs online there. This is exactly the same process that sees communities uniting against the arrival of a new Tesco superstore, which would kill the butchers and bakers on their high street, and then slinking shame-faced to the supermarket when it finally opens.

This year I have decided not to use Amazon. I don’t particularly appreciate their cavalier attitude to paying tax, and I would prefer to support my local bookshop. And pay more as a consequence. (The exception is Amazon’s outstanding second hand book service, which is made up of independent booksellers.)

The problem is sourcing CDs, because HMV’s stock is so limited and hit-or-miss. Its Fopp chain is excellent, and mind-bogglingly cheap, but there are too few outlets. Tricky. I have my principles, but my taste in music is sufficiently outré that it is almost impossible to find what I want anywhere but Amazon. So Amazon it will have to be in future. But with ill grace.

It never used to be a problem. But Virgin, RIP. (I actually used to visit the original Virgin store, a hippie hellhole above a shoe shop on Oxford Street. There used until recently to be a good store in the City, but it made way for yet another overpriced boutique.) Tower Records, RIP. Even the old Harlequin chain now but a happy memory.

Perhaps Choices Direct? Or “Buy it Now” on eBay?