Poundland’s interrupted acquisition of 99p Stores shows how futile it is when institutions seek to determine which shops compete with each other.
They will tell us that a pound shop is not just in competition with other pound shops, but with all the value retailers in its locality – be they small formats of big supermarket chains, bargain stores from Liverpool or Blackpool, say, or limited assortment discounters from abroad.
“The market’s truest barometer is what people spend and where. Hot air from theorists and ideologues only distorts the readings”
The functionaries from the Competition and Markets Authority, whose edicts can only be described as academic, have the wrong thesis. They really must learn what retailers already know by heart: that the customer is always right.
The market’s truest barometer is what people spend and where. Hot air from theorists and ideologues only distorts the readings. EU politicians should concern themselves more with consumer activity, both within and across national borders, and less with doctrinaire politics.
They might then see why Descartes, were he to return today, would likely revise his famous adage to “consumo ergo sum” as his philosophy for our times.
Take little old England for example, where a loud minority of voices is urging us to turn our backs on Europe.
These self-same sirens are more than happy to do their domestic food shopping at German or Danish discounters. At private dinner parties in the Shires, given or attended by UKIP supporters and/or their Tory Eurosceptic bedfellows, many a hostess will proudly trumpet how her Specially Selected Aberdeen Angus Cottage Pie was bought for a snip at Aldi (ditto Vitacat Gourmet Supreme for her kitty).
Few British grocers abroad
What a shame British grocers aren’t repaying the compliment in Germany and distributing English delicacies to every discerning hausfrau.
It’s the same story with fashion. The Spanish titan Inditex, to name but many, is ubiquitous throughout the EU (and most of the globe) and operates five of its brands in the UK. But why do British fashion multiples not reciprocate such a presence in Spain?
Where is Next, for example? (A store in Gibraltar is as close as it gets). Primark is a notable exception, but this Irish subsidiary of a British conglomerate is hardly flying the Union flag – let alone the cross of St George.
England’s patron saint is Catalonia’s too and Sant Jordi’s feast day (April 23 as well) is an occasion of great celebration. It’s also a retail bonanza as everybody buys a book and a red rose for his or her nearest and dearest.
Hundreds of thousands of citizens thronged the streets of Barcelona last Thursday, not on a political rally but a spending spree. 1.5 million books and 5 million roses were sold in Catalonia in just one day.
There have been more British visitors to Spain this year than any other nationality (10% up year on year). Maybe many bought books and roses last week. I certainly did. As consumers we’re not turning our backs on Europe. And neither are all British retailers.
Poundland, for example, is building a business in Spain. At least any acquisition ‘dealz’ over there will not be subject to the purblind scrutiny of the CMA.
- Michael Poynor is the founder and managing director of Retail Expertise