The sticky toffee pudding of retail !

I offer a confession. I love sticky toffee pudding, but it would not  need much to take me over the edge….and hate it . Well actually a lot would make me hate it,’cos’ it would me fat and very sick. Sick coming first, so it probably wouldn’t make me fat as I don’t like being sick.

But it is not the eating of it that is my real issue, it’s the proliferation on every other bloody menu in restaurants and hotels . No, correction every menu plus the assumption it is a traditional British dessert . It is not ! Unless, of course, you count it’s invention in the 1970’s as a long enough period to qualify as a tradition. In my books it has replaced the sixties ‘perfect menu’ dessert of Black Forest gateau, which at least dates back to the 1930’s. Still hardly a tradition.

Am I loosing you or have you  already gone ? Well, the parallel I am drawing is that Retailers seem to think that because loads of people quite like something they should all sell it . That might have worked twenty years ago but it ‘don’t’ work today . If consumers believe that they know what is going to be in store why would they bother to make repeat visits . This is a pattern repeated by many multiples and independents. There is a continuing belief in the need to stock the ‘must have’ brands. That’s all well and good but if everybody has them what is your point of difference ? It maybe price, and for the independent that is very difficult and costly direction of travel. It maybe service or range but it is not enough to keep the shopper coming to look as they will always think they know what you have and don’t need to come into look for anything new .

This is not only an issue for theRetail Store, the same problem contaminates online operators. I cannot begin to recount the number of times I have sat infront of a potential new account to be asked

what are your best sellers?

My teeth start grinding, I squeeze my car keys in my pocket until my hand starts to bleed, I start pull on clumps of hair with my free hand (all metaphorical but internalised nonetheless) . Yet, it is invariably , the first question asked. The consequence, of which, is the pursuit to the bottom (in terms of profit and price) . The potential, that online accrues and the Store doesn’t is that niche markets for online can still be big and certainly a lot more profitable. Yet it is seldom their first port of call. they dont like dsifferent (or at least most of them)

The irony ( I think this is the right word, never sure with ‘irony’) of the ‘The Sticky Toffee Pudding’ metaphor (crumble should also included ! Love it as well but don’t want it on every menu)  is very evident with Restaurant outlets. I believe the travails of operations such as Zizzi, Prezzo, Jamie’s Italian, Byron Burgers et al are all trying to serve up the same products in a variety of ways, but in a mediocre manner that makes the consumer look elsewhere. There are plenty of good ‘alternative’ desserts out there . Try them !

Rich retailers …are there such things in the U.K ?

A large chunk of this post comes directly from the 2018 Sunday Times Rich List. For which I make no apology. I have gone through all the 1000 in the list and extrapolated the U.K. retailers (online and bricks and mortar) plus relevant wholesalers as they are part of the retail chain.

Here’s the listy bit…in order of wealth ….the ranking does not reflect their ranking in the complete list. I have also omitted any who have either completely sold out or inherited their fortunes ie one the Ikea family lives in the U.K. but plays no part in the business . The Sainsbury family sold out long ago, no longer in the business. The Hoyle family founders of the Card Factory, greeting card chain , sold out no longer involved.

1. The Weston Family …Associated British Foods…empire including Primark & Selfridges, plus loads of leading brands as diverse as Twinings & Ryvita. £10.05 billion

2. Barclay Brothers….Shop Direct among many of their companies £7.4 billion

3. Tom Morris…Home Bargains..started with one shop , now over 500, Merseyside’s biggest employer £3.49 billion

4. Sir Anwar Perez…Bestway Cash & Carry..largest cash and carry operation in the U.K. serving over 100,000 outlets. The family crops up a number of times in the Rich List…. £3.02 billion

5. Mike Ashley…Sports Direct.. £2.44 billion

6. Arora Bros….B&M Stores….over 600 stores. They have sold a majority stock but are still significant shareholders…. £2.3 billion

7. Sir Phillip Green…Arcadia,Top Shop etc..reluctant entrant (is he really a retailer?)£2 billion

8. Chris Dawson….The Range….150 stores…£1.96 billion

9. The Perkins ….Specsavers…. 1846 stores (opticians) ..£1.7 billion

10. Adderly family….Dunhelm….£1.2 billion

11. Phillip Day….Edinburgh Woollen Mill amongst others…£1.2 billion

12. Kamani family ….Boohoo…fashion internet retailer…£723 million

13. The Fenwick family….Department stores….£730 million

14. Matt Moulding …The Hut … Internet retailing …£550 million

15. Chrissie Rucker & Nick Wheeler…The White Co & Charles Tyrwhitt shirts retail…£452 million

16. Nick Robertson..Asos …£372 million

17. Angus Thirwell …Hotel Chocolat….£130 million

18. Wilkinson family …Wilko’s ….£252 million

19. Rashid Tayub…discount retailer…Poundstretcher among others….£244 million

20. John Roberts…. internet retailer £257 million

21. Smyth family …toy shops…£182 million

22. Richer family…Richer sounds….£155 million

23. Dhameca family  …Cash & Carry wholesalers…£150 million

24. Michele Harriman-Smith- internet retailer of luxury kids clothes ….£110 million

25. Tim Steiner….Ocado…£120 million

26. Bruce Robertson-Trago Mills retailer ….£124 million

27. Wing Yip-Yip Cash & Carry £110 million

28. Joshua Stevens …internet …..£30 million

Listy bit done. Undoubtedly the accuracy of the numbers is questionable as the value of their share holdings frequently accounts for large part of total valuation and this, of course, can vary day to day . But the principle remains the same and generally so does the order.

What drew my interest was to see what the split was between bricks and mortar and online operators . With the intense pressure on the High Street , I was expecting to see a greater proliferation of internet entrepreneurs, yet this does not seem to be the case. An Internet entrepreneur does not appear until no 12. The figures will be a little cloudy as many of High Street operators are online as well. Yet in the first ‘eleven ‘ the online percentage of the businesses is relatively small.

Despite continuing store closures amongst the less successful, many of the top retailers in this are still highly successful and very profitable eg Tommy Morris, the Arora Bros, Mike Ashley, the Adderly Family, Phillip Day….on the other hand the internet entrepreneurs are not yet creating real wealth. For example Ocado, until recent years traded at a loss ploughing everything back into the business. Steiner’s wealth is much elevated by their share price. John Roberts of is struggling to make any profit , saying that their European operations won’t make a trading profit until 2021.

Whilst online is taking chunks of sales off the High Street, and consequently retailers margins and profits, many are creating revenues but struggling to turn this into a profit. There is much evidence to support this such as Tesco Direct being closed down. The fact that it took so long for Ocado to show an operating profit and the likes of AO yet to show a profit. Even the ‘beast’ Amazon, did not show a profit for many years. Jeff Bezos is fabulously wealthy by dint of the company stock value being so high. Yet I, also, believe there is a further rationale to the problem in turning a profit for online entrepreneurs . For many years Amazon ploughed back their profits into the development of the organisation. This, in itself, created a very high bar for competitors to attain. And still is. You will find many online retailers state their marketing cost are enormous and constantly rising.

So it is my belief that it will be some while before the internet ‘sales’ entrepreneurs will start to impact on the more traditional wealth within the world’s Rich lists. Furthermore, I suspect that the current members of the list will be very different in the next five years or so. The change will happen, of that I have no doubt. I just think that the interlopers are not currently among this list.

So there are a Rich retailers in the U.K. but I suspect it will be a very different picture within ten years.