The Backing UK Retail campaign has laudable motives. Our sector’s importance to the economy is indisputable.
But it is not the time for self-pity or self-congratulation. Retailers should be wary of introspection; the campaign must also cut the other way – “Retail backing the UK”. Many retailers, for example, believe that the reduction in VAT is ineffective, but this should not exonerate them from passing it on to their customers. Some sadly disagree.
As Wal-Mart chief executive Lee Scott told the NRF Convention in New York last month, retailers that strengthen their companies strengthen their country. “Does how you want to contribute to societal issues fit with your mission and culture so that all parts of your company are engaged?” he asked.
Backing UK Retail cited “the role the sector plays in the lives of people who work on the shopfloor” and lauded “the profound effect retailers have on people’s quality of life”. Again the telescope should be flipped. What about the contribution of colleagues to the quality of the retail companies that employ them?
These 3 million people, 11 per cent of the UK’s workforce, are also a large microcosm of the country’s consumers. Employees, real shoppers in their own time, get closest to real customers in the company’s time. They are thus doubly well-qualified to know where the offers are falling short.
Scott also told the NRF: “People still have money but it’s very targeted to the specific things they want. And when you are 1/32nd of an inch off that, you don’t have any sales.” The entire retail chain has to go the whole inch but those at the point of sale form a big part of the equation.
The credit crunch has created some common priorities in businesses and individuals, and a unique opportunity to transform the relationship between them. Consumers need to deleverage their own balance sheets as urgently as corporates must theirs. We are all well aware how swiftly cash flow turns to cash ebb.
The US chain Kroger, in a timely initiative to teach staff about their own store’s P&L, avowed in a presentation at the NRF: “If you train your people to understand it and how it works, they can help you impact the bottom line.” (Convention Daily, January 12, 2009)
Not them and us. All of us.
Michael Poynor is chief retail adviser to PricewaterhouseCoopers