Yesterday’s interest rate cut was a welcome early Christmas present for retailers.
The screws have been tightened on shoppers for much of this year and crises such as Northern Rock have exacerbated the feel-bad factor.
Relaxation of rates will go some way to bolstering confidence again. Although more cuts will be necessary to really restore a mood of optimism, there were signs that there had been a near-instantaneous impact.
One very small example: my newsagent told me this morning that his customers had been talking about the rate cut and had already quantified how much they would save. He was looking forward to cashflow being a little better through his own, fairly marginal, business.
Whether confidence is strong or weak, on today’s competitive high street retail’s real winners will be those that genuinely understand their customers – a cliché, but true all the same and one of the hardest things to do rather than pay lip-service to.
So it was heartening to hear incoming DSGi chief executive John Browett pledge to put the customer at the heart of the business. In the fast-paced technology market, DSGi should be well-placed to be the first point of call for consumers eager to buy the latest gizmos, gadgets and computers and a highly regarded source of advice and services.
Browett has a strong base on which to build. DSGi has its problems, but it has not lost its connection with customers in the way that B&Q did a few years back.
Browett will need to sort out some problems internationally and square the circle of price deflation, but truly putting the customer’s interests first should go a long way to sustaining the core business and establishing growth platforms. It won’t be a surprise if that leads to DSGi being a quite different beast in five years time than it is today.
Putting the customer first is also the best way of delivering the results that will please the City. Yesterday, when Browett started at DSGi he was in charge of a FTSE 100 company. By this time next week, after the listings are recalculated, the likelihood is he’ll be running a FTSE 250 firm.
Whether retail is in for more good times or bad, it will be the customer who ultimately decides whether DSG and all its retail peers, are destined to grow or shrink. How well do you really know yours?