Ever heard of a home insurer that pulled cover if a storm was forecast? Didn’t think so. But that’s the way credit insurers work.

And these faceless and unaccountable companies are fast emerging as the key players in most of the retail collapses Retail Week is reporting on every week.

The names of Euler Hermes, Coface and Atradius won’t mean anything to the average shopper on the high street. But time and again it is their actions that are precipitating a chain of events that ultimately ends in the failure of a retailer, most recently Woolworths.

The insurers need to manage their risks. But they have gone too far, most notably by cutting cover for DSGi and Comet, businesses with robust balance sheets that no one in the industry thinks are in any danger of going under.

These three companies control 80 per cent of the credit insurance market and their decisions have profound implications on both retailers and their suppliers. But the market is opaque and controlled by a small clique to a degree no retailer would ever be allowed to.

Regulation of this market is required. If not, many more retailers will be dragged under, some which would have survived if the insurers had held their nerve.

Tesco on the back foot

Many retailers would kill for a 2 per cent like-for-like increase right now, but while Tesco’s share price soared on its trading update this week, there’s no doubt it’s finding the going tougher than its three big rivals.

The Discounter range may be selling, but it’s selling to customers trading down within Tesco. And while the grocer seems to have focused on bashing its suppliers, its rivals are reaching out to customers.

Tesco’s success has been built on it being all things to all shoppers. But on both value and quality, its messages have been stolen by rivals who, at this point in time, are conveying them better. Tesco isn’t doing much wrong, but reconnecting with customers and rediscovering some warmth wouldn’t do any harm.

tim.danaher@retail-week.com

Visit retail-week.com today to watch Tim Danaher and George MacDonald discuss the week’s retail news in TGi Friday