Between 1994 and 2004 , operating costs for retailers rose 19.4%. Between 2004 and 2014 , they rose by 33.4% , whilst retail consumer spending only increased by just over 2% in the same period. Whereas in the 1994/2004 period consumer spending rose by 5%. These figures are from research carried out by the British Retail Consortium. What is worse, is that  they have also commissioned a report called Retail 2020, which indicated that with a combination of the national living wage, business rates and apprenticeship levy , the equivalent of another 20% of  current margin, will be added to the cost base over these five years.

None of this makes good reading, however, it is a reality and one in which retailers need to address to survive. I have never operated a retail store nor even worked in one, but I have spent a long time working with retailers and feel a shared responsibility in trying to look for solutions, to help retailers. Regrettably, as yet, I have failed dismally. But I have seen others that are looking at ways and means that are achieving some success. 

The consumer scene has much changed in recent years , to state the blindingly obvious. But it is not all about tough economic times plus the onslaught of the Internet . There has been a change in consumer spending habits . The consumer is looking to spend more of their ‘dosh’ on experiences. 

Waterstones, the bookshop chain, which was on the verge of bankruptcy five years ago, appears to have turned the corner. In its London West End store , it has incorporated a bar and cinema in the store. Great idea, that seems to be working , but most, if not all, the stores in our industry would struggle to find space for a bottle of wine and a TV. However, the point is they have looked for associated ‘experiences’. What is more relevant is that they have invested large amounts into staff training focusing on engagement with the consumer, something I have been bleating on about for some time. For Waterstones, it is working and they are now returning to profit. 

There a number of parallels with book stores and party shops . Both sell product that is easy to buy online, if the consumer knows what they want. But when they don’t and look for advice the retailer should always win. When I say ‘win’,I mean  ‘win’ over a web site. I have talked about this in previous blogs. The upsell potential of staff engaging positively with the ‘in store’consumer offers major opportunities for every good retailer. The example of Waterstones could not  illustrate it better. There is probably no other form of retailer who has suffered more from online competition .

However, there have been announcements in recent weeks that underline the changes we are experiencing.

WALMART – in the USA announced the closure of 260 stores. They are opening some new ones but only around 60. The world’s largest retailer closing stores is not to be overlooked.

IKEA – have announced consumer saturation. What they mean is that in the areas they are trading it is very unlikely they will achieve much growth because consumer doesn’t need anymore…it is a point of saturation…

Forgive me for the laziness of taking chunks of wisdom from elsewhere, but I think the following chunk from Forbes, is very poignant . The article was about not expecting continuous growth in retail spending at Christmas.

……The idea that we will forever increase our annual spending on holiday gifts suffers from the same sort of shortsightedness. Why should holiday spending rise every year? It turns out there is no good reason.

It is certainly true that many people and families choose to spend more on the holidays when they see their incomes rise. As you move from starving college student to young professional to upper middle class family, your gift buying likely increases. However, this is not without limit. At some point, most families simply reach a natural gift spending limit.

I believe this applies to all consumer spending in advanced economies and is backed by a lot of current research . Consequently , retailers , with the many other challenges they face , are faced with two formidable ‘book ends’, dramatic increase in their cost base at one end, and at the other, the end of natural growth in the consumer spend. Innovation and creative thinking will be needed, but the retailer cannot do it alone. For those suppliers who wish to maintain a presence in the High St , must help and support with that innovation and creativity . That said , I don’t think within the party market, that we are anywhere near saturation. 

One final point brought about by seeing something twice in one week. It relates to contactless payment. In one incident , I saw an elderly lady berating a retailer for not accepting contactless payment and with the other a woman walked out of a retailer because they did not accept contactless.

And ‘proper finally’ think  on this , if you don’t yet have contactless . The quote below (Financial Times) includes Apple & Android payments.

Richard Koch, head of policy at the UK Cards Association, said: “It took almost eight years for monthly contactless spending to reach half a billion pounds — now it’s grown by the same amount in just four months.

It maybe another cost, but going forward, it is cost worth considering.

Women ….that’s what. I am not going into whether Brexit is a good or bad decision, as currently nobody has a clue and anyway that is not the point of this blog.

One immediate consequence (amongst many others) is that the UK now have a 2nd female Prime Minister. Not bad when many European nations have not yet had one. 

The leader of the Scottish Parliament is female, as is each leader of the major Scottish political parties. The head of the Northern Ireland assembly is a woman, as is currently the front runner for the UK Labour Party  and the leader of Plaid Cymru(not forgetting the Greens) Oddly the liberal democrats are seem somewhat isolated in  the equality stakes. Oddly, because they are supposed to be what it says on their tin ‘Liberal Democrats ‘. Oh, and we have a Queen, not that anybody had a say in that but we can lay claim to a ‘full house’.

What I am not here to discuss is as to whether they are good or bad at what they do. What I do want to reflect upon is that whilst an element of the leave campaigners wanted to take us back to the 1950’s , they have, inadvertently , brought UK politics into the the 21st century and way ahead of a lot of our democratic neighbours throughout world. 

This is not to infer that women are perfect or always right,  far from it but they are equal. History does suggest that they can bring aspects into ‘statesmanship’ that men can’t or don’t . Whatever their politics or beliefs Indira Ghandi, Benazir Bhutto, Golda Meir, Eva Peron, Margaret Thatcher, made their impact upon the world in a way that was beyond the reach of many men. The impact was not always to be considered beneficial , but that is not my point . The point is that women are equally as capable, and sometimes incapable as men. Other surprising nations who have had female pm’s are Sri Lanka and Bangladesh. These two plus Pakistan and India are not known for equality issues, whereas the EU is but falls down when it comes to Premiers, with I beleive only Germany, Denmark,Finland, Latvia and Croatia having female leaders in the last 30 years. The USA , of course, has as yet had none.

We are facing some huge changes , and in order to have any chance of succeeding we need to approach our future in a new and creative way. This is a good start. There is one major political difference between the sexes , woman don’t have an ‘old order’. There is no ‘old boys club’ and whatever political cliques that may exist, it would appear our new PM does not belong to any. Whatever our future holds it promises to be different, we just have to ensure it is ‘good’ different.