Retail’s challenges are not new. How managers meet the challenges will separate winners and losers in the new year, argues former Asda boss Andy Clarke.
It’s always a pleasure to be invited to write a column for Retail Week, but my heart sank a bit when I was asked for my thoughts on what attributes will single out retail winners from losers in 2018.
That’s because I’m still recovering, not from the New Year celebrations but from reading the Mystic Meg musings of a raft of well-informed retail commentators.
Ashley Armstrong of The Telegraph found 698,000 results when she Googled “high street gloom” – and that was just in the first paragraph of her excellent article on 2018 prospects.
Veteran consultant Richard Hyman predicts a shocking year for everybody, and analyst Nick Bubb appears to have turned his predictive talents to tipping racehorses.
“The cold wind blowing though retail, as online eats more and more of bricks-and-mortar’s lunch, continues to gather pace, but it’s nothing new”
But I always like to look on the bright side, so my natural question is: how bad can it be?
It’s not the first time the industry has started a new year with a background of tightening economic conditions, falling real incomes and the prospect of a further squeeze from interest rate hikes.
The cold wind blowing though retail as online eats more and more of bricks-and-mortar’s lunch, continues to gather pace, but it’s nothing new.
And Brexit is increasingly looking as if it will come out as something we can all live with and, if you believe in Tony Blair or the fairies, it could even go away.
So what will be needed in 2018 is what’s been needed every year for as long as we can all remember: great product, excellent service and first-class execution. A link with the customer that offers value, quality and competitive prices. And an understanding of what people are spending their money on. The tougher the background, the more careful people are with their cash.
The retail reporting season has hardly started, but so far it hasn’t told us anything we didn’t already know.
Slashing your prices in December to clear unsold autumn stock doesn’t fool anybody these days. Black Friday doesn’t add to the merriment of Christmas, it just takes a bit away from what people have to spend later. And if a retail business has structural problems, Christmas will highlight them, and every year it gets tougher to trade through them.
The winners and the losers will be determined by how well management identifies and deals with these challenges.
The spotlight will be on retailers such as Archie Norman, Dave Lewis and Roger Burnley, along with Sergio Bucher and Alistair McGeorge.
They all took their jobs knowing there is work to do on structure and the crafting of a consumer offer that wins back the love and affection of today’s very choosy customer.
Part of that will require some other skills. There may have to be a shake-up in a number of sectors and picking the right deal, disposal or downsizing option will play a big part in what, to quote another cheery New Year commentator, could be a “watershed year” for retail.
Happy New Year to all…
- Andy Clarke is former chief executive of Asda and chairman of Spoon Guru