Member Article

As January closes, it is worth reflecting on what has been a turbulent few months for UK retailers.  The travails of Tesco are well documented (and seemingly never ending), whilst Marks and Spencer must have been mightily relieved that it’s own continued decline (food excepted) was slightly overshadowed.  That’s before you add in the departure of the CEO at Morrisons and some fairly major surgery that’s underway at Sainsburys.  It’s not just the supermarkets either, the introduction of Black Friday into the UK seemed only to cannibalise the January sales – what a surprise!!!

So what is really going on – the UK consumer has ever more pounds in his pocket, so why are our household retail names struggling so hard to take advantage?

Value – There has undoubtedly been a polarisation in buying habits.  The recession encouraged a value attitude that is hard to shake.  This is most evident in the growth of the food discounters but is equally seen in the continued growth of other value retailers.

Online – The UK consumer is a voracious online shopper.  In December 17% of all non-food purchases were made online (BRC).  This is a truly staggering proportion when you consider the relative infancy of the market. In food Ocado has finally posted its first ever profit this week.  Overall a successful online strategy is no longer a nice to have – its crucial.

Multi-channel – What is becoming clear is that online is actually now being surpassed by the need for a truly integrated, customer centric, multi-channel strategy.  Mobile technology and the relentless growth of tablet computers mean that UK retailers have the opportunity to operate on a truly global scale.  The need for platforms and infrastructure to back up this front end capability is ever more critical.

For UK retailers the consumer backdrop is as favourable as it has been for many years.  For the SME or entrepreneur technology means they can launch truly disruptive brands and services with far less investment than has ever been the case before.  For the larger players the good old days are long gone and it is time to deliver for an ever more demanding consumer.

It is still about the detail – that detail just isn’t all in one place!!

 

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