Retailing is hard….but perhaps all is not lost…

Phillip Day , owner of Edinburgh Woollen Mill , has recently been quoted as saying the retail market is as hard as it has ever been. No doubt retailers  such as M&S , would not disagree, as they go through another shake up , trying to reinvent themselves yet again (I believe part of their problem is that they think they reinvent themselves, whilst in reality they paint over cracks and dint look much different to 20 years ago ). The problems are not confined to the UK , a retail analyst in the USA, birthplace of all things retail, has predicted that at least 50% of all shopping malls in the USA will close within 15-20 years.

Yet, Phillip Day currently goes from one success to another. Having completely restructured and revived the Edinburgh Woollen Mill, he has bought other ailing retailers such as Peacocks, Austin Reed and only last week Jaegers. Interestingly, he, rightly, turned his nose up at BHS, saying that there was nothing that could be done with it. 

Going back to the M&S situation, highlights the problem that many retailers, independent and multiples face( the Arcadia group was over 9% down on like sales at Christmas-might also be something to do with their boss) and that is the need to change and innovate. Yet don’t or can’t . The ‘can’t ‘ is invariably down to lack of funds or creativity. Which is why people like Day succeed as they appear to have both.

If the High Street was doomed why do the likes of Amazon, start to open stores ? Consumers still enjoy the experience of shopping . Retailers need to understand what that ‘enjoyment ‘ entails . The successful shopping centres are those that offer alternative experiences such as cinemas and restaurants. Many retailers feel that these outlets only take spend away from them and all that is left is a ‘browsing consumer ‘ with nothing left to spend . I suspect there is a lot of truth in that belief. However, on the flip side many stores are not much fun either. Poor service levels, low comfort levels ( I confess to not being a great shopper, but surely there can’t be a bigger turn off than over hot  department stores, both in winter and summer, lousy service and product selection) , lack of innovation and bad inventory control both in stock levels and product choice and innovation. Having personal experience of how long the ‘new product buying process’ can take (and that includes independents) , is it no wonder the consumer turns to their screens to buy . 

Another piece of recent research says that the age group 21-34 , still has intentions to spend but not on things but on experiences . Within our own industry i.e. Party, we are part of those ‘experiences ‘ and should be able to capitalise on that spend. In part this means enacting the retail cliche of creating ‘theatre’ . I beleive if a consumer walks into a retail outlet and comes out (even if they don’t buy the first time) and thinks I enjoyed going into that store they will be back and they will spend . Moreover, I firmly believe , they will return to that store before buying online. How can I be so sure? Cos I have seen it happen, and I know enough good retailers to know it works for them.

There are many other issues facing retailers, however, if they don’t get their own basics right, they have no chance and all will be lost.

Oy! you! Yes you know who you are….read this !

Dropped into a recent telephone conversation from an old friend (yes, you do know who you are) , he said…(there’s a clue, he must be male)

When I see your blog on Facebook, I read the first paragraph, and don’t go on any further because I say to myself , I am no longer involved in the business so I don’t need to know any of this 

Well what is ‘this’? Trying reading a bit more this time to find out.

With two months remaining for the current fiscal year to come to an end, the execution of the Finance ministry budget is at 96 per cent, according to Rwamuganza.

 Rwamuganza also said that Rwanda will continue to enhance savings and lending in the long term through treasury bonds.

As of February 2017, Rwanda had issued Treasury Bonds worth over Rwf190 billion since 2008, according to figures from the National Bank of Rwanda.

Rwanda NewTimes May 11th 2017

That has absolutely nothing to do with the Party Industry. So what has it got to do with ? Nothing(unless you are Rwandan) and everything.

We are all , to some degree, guilty of being judgemental. Everyone of us, at sometime makes an assumption about something or someone with very little information to support our beliefs.

All individuals and all societies, no matter where in the world, make judgement calls on the basis that they can’t be bothered, don’t have access to the resources , or just assume there is nothing more to know. It can stretch from Pacific Islanders thinking the Duke of Edinburgh is a god, to a native of these islands,who doesn’t want to travel abroad because they can’t stand foreign  food , yet they probably have a curry once a week ( is that foreign food?). 

Even on a more mundane level, don’t watch news, cos it is always bad….don’t watch telly cos it is rubbish….don’t read books, they’re boring….aubergine? Naah, foreign muck….I can almost guarantee that we will have one conversation, every day, in which either party will make a call on something or someone, which is completely unsubstantiated.

Occasionally, we won’t have access to relevant information (as with the Pacific Islanders!) to make the correct judgment. But that is not what this about . This is questioning our proclivity to making lazy judgements. Regrettably, we all loose out because of this tendency. We don’t eat things , see, hear or read things, engage with particular individuals , go to places, because we can’t be fagged to investigate.

These are a few examples of common ‘judging a book by its cover’ or alternatively, ‘ you don’t know until you tried it’ :Japanese food, Manon des Sources, Mary Beard, The Wire, War and Peace, and of course the French.

Now here a few things I wish I had been judgemental and knew less about…Trump, macaroni (hate it with a passion and I have eaten it a lot , a long time ago ), Richard Branson , Campari (even though it looks nice),  Towie, Lassie, and any biography of anyone alive under 40.

Does it matter ? Yes and sort of no. Yes, because we all miss out making inaccurate decisions and inevitably miss out on somethings that we like. No, because History is littered with horrendous events where decisions have been made on assumptions and little knowledge and there is no reason to think that will change.

So back the Rwanda NewTimes. I have seen this article (or rather I found for my idle mate) and I assume it has no relevance to me but I shan’t take the time to find out. And my friend, well if he did not read on he will not find out he is an idle git.

Chicken or egg…egg or chicken….

The latest retail figures indicate that there has been a fall in retail spending in the last quarter. My personal findings reflect this, in so much as many of the retailers within our industry have experienced a very flat March and April. This, in itself, is a milestone as my findings rarely tally with those of the professional analysts. 

There are many reasons for this, such as creeping inflation, static wages, confidence in the future , Brexit (who said that ?), late Easter, too cold, too hot, wrong type of dry weather, poor English wine harvest, lettuce shortage and the list goes on. With so many influences, it comes as a bit of a surprise that anyone is buying anything .

The fickle finger of flippancy could , rightly, be pointed, fairly and squarely, at me. Whatever the reason, the consumer is not spending. But then why should they. I blogged before on how I think many developed economies are at a point where constantly increasing retail spend will be difficult to achieve as the consumer maybe reaching a point of they don’t need anything more (this, of course, precludes essential spending such as food and replacement clothing).

What to do? One of the basic principles of a good retail business is  controlling cash flow . Consequently, when spending falls you have to scrutinise and manage your stock positions . Scrutinise and Manage being the operative words. It does not mean you don’t buy new product. Without new stock, particularly when you are retailing non essentials, there is an even graver risk of experiencing further declines.

There is an old story about a man who had an apple stall in the market. It went something like this..

An apple sellers son came back from business school and said ‘ dad haven’t you heard there is going to be recession? Buy less stock.’ So the man does. And sure enough the following week his takings are down, so he buys even less stock the next week. Eventually he rings his son ‘ Son, you were right business is so bad I have had to close stall…’

It is a bit of an over simplification but I think it illustrates my point, what comes first the chicken , in this case the apparent recession, or the egg being lack of stock.Even if you reduce your stock levels, there must be new product or else the customer will simply stop coming into the store. There are perfect examples throughout the High Street. One example is  M&S. Though it is more an example of the wrong new product plus it always looks the same and doesn’t appear to have anything new.

BHS and Woolworths were perfect examples of not changing quicker enough. The bigger the ship the harder it is to turn around.  However for independents, if you let your stock get too stale it becomes increasingly difficult (costly) to refresh it. 

As politicians are constantly telling us the immediate future could be bumpy. Possibly after the election, and assuming their are no shocks , confidence may rise, then there maybe a dip , if there is some leak from the press that the EU insists that the negotiations are continued in French. Then another boost as it turns out to be untrue, then its leaked that Trump is planning on draining the Atlantic and so it goes on…but we all still have to trade and be better than our competitors. By offering less of your old stock and nothing new . It is both chicken and egg.

And why am I saying this ? Regrettably, I see a lot of tired old stock both as a consumer and travelling around the U.K. in a ‘professional ‘ capacity. It is not a good look but more importantly it does not augur well for the future of those stores.