Wednesday, 26 August 2015

The Millwall FC of British retailing

I have a sneaking admiration for companies whose approach to public relations mirrors that of Millwall football supporters: “No one likes us, we don’t care.”

It’s a bold strategy and obviously one that works best for businesses that offer some unique advantage – exclusive products, exceptional prices or outstanding convenience – that will keep the customers coming anyway.

I’ve yet to meet anyone who much likes Amazon, whether on the grounds of alleged tax avoidance, claims that they overwork their staff, or simply because of the way they sneakily keep trying to add an annual Prime subscription at the checkout.

Yet overwhelmingly we keep using them anyway because they are keenly priced, efficient, and it’s a whole lot easier just to click on their website than to re-enter all our information on someone else’s.

The continued survival of WH Smith is altogether harder to understand, in a world where high street bookselling is on the ropes, and news sales are declining.

I used to handle financial PR for Smiths 30 years ago, when it was a patrician company run by chaps who had been to top public schools and served in decent regiments. Said chaps included some scions of the founding family.

The company once treated me to a night on a newspaper train from Euston, on which I marvelled at the way the sorters grabbed handfuls of different papers to prepare the orders for individual newsagents, which were picked up by vans from the stations en route. This is a world that has now completely vanished.

On another occasion I took a leading investment analyst to the country house where Smiths honed their rising talent, putting them over military style assault courses to develop their management skills.

“Have you ever thought,” the analyst asked, “of just incentivising them according to the financial performance of their stores instead?”

The look on the HR expert’s face made it clear that this was just about the grubbiest and silliest idea he had ever heard.

How different it all is now, when Smiths is renowned in the City as a company that single-mindedly keeps profits moving ahead in a generally unpromising market place.

One of its weapons is the self-service till, of which they became an early and dedicated exponent. On several occasions I have abandoned shopping baskets out of sheer frustration at being compelled to queue to serve myself while staff lurk about chatting.

At least I thought the self-service tills would not try to offload a giant bargain bar of chocolate on me with a simple newspaper purchase. But no, they have programmed them to do that, too.

They also famously operate a network of stores in motorway service stations where everything seems an awful lot more expensive than one would expect them to be at a supermarket, though maybe quite compelling once one has factored in the time and fuel costs of diverting to a supermarket to buy them there instead.

Then there are the airport stores and the famous “show your boarding card” VAT scam which has attracted so much publicity of late. Smiths were asked to comment on this when they recently issued a trading update, but showed no such inclination. “No one likes us, we don’t care.”

Instead they attributed their continuing financial success to book launches, including the latest “Shades of Grey” pulp fiction, that thing from Harper Lee’s bottom drawer, and a craze for colouring books for grown-ups.

No, really. Who knew?

I’m planning to cash in on the best of both worlds by writing a tedious, mildly pornographic novel targeted at the “ladies who lunch” market, with the added bonus of outlines of all the climactic scenes that they can colour in with crayons.

I can see it doing very well in WH Smith, where I have belatedly realised that the self-service tills are not a cost-saving measure after all, but an attempt to spare the blushes of its soft porn-loving clientele.

How much simpler life would have been if only they had been around when I was a teenage buyer of Parade magazine.

I shall call my masterpiece “Would You Like a £1 Bar of Chocolate With That?” and sit back to wait for my royalties to flood in.

Originally published in The Journal, Newcastle upon Tyne.

Wednesday, 19 August 2015

The good old days of State monopolies and Michael Foot

We all love a good moan about how everything used to be so much better in the old days.

No one more so than farmers, who are currently up in arms about the falling price of milk.

To keep their PR pitch simple, they heap most of the blame on price cutting by British supermarkets, when the reality is one of global supply exceeding demand.

Milk production around the world has soared at the same time as Chinese demand growth has slowed and Russia has banned EU imports. To add to the misery, the natural reaction of many dairy farmers to lower prices is to buy more cows and increase output in order to maintain their income.

Once upon a time farmers were sheltered from the harsh realities of global capitalism by the existence of the Milk Marketing Board: a statutory monopoly that guaranteed the same price to the dairyman with five cows halfway up a mountain in the Lake District and his counterpart with several hundred beasts on the Cheshire plain.

In popular mythology this beneficent institution was abolished by the evil Thatcher, clearly not content with snatching milk from schoolchildren in the 1970s and closing all the coalmines in the 1980s.

In reality the Board was abolished in 1994, four years after Mrs Thatcher left office.

Still, some clearly see instructive parallels between those who feel a hereditary calling to milk cows and those communities where sons once followed their fathers down the pit to hew coal.

Only farmers naturally tend to get a better press because our idealised image of England tends to feature green fields, peacefully grazing cows, bee-filled hedgerows and farmhouses with roses around the door.

Despite the best efforts of the Pitmen Painters, this has rather more general appeal than blackened terraces, winding gear and slag heaps.

The British coal industry died because the stuff could be produced more cheaply elsewhere, and because of pressure from the global warming lobby to phase out its use.

The same fate is unlikely to befall the British dairy industry so long as we consumers stubbornly insist on buying our milk fresh, rather than as longlife UHT. This makes it impossible to import the stuff in sufficient quantities even when the Channel Tunnel isn’t under siege from would-be migrants.
It will help if we also read the small print on packets of butter, cheese and other dairy products, and prefer the British option; and ignore the calls of those who would rid us of flatulent cows to help save the planet.

We have the freedom and the power to do this. In Morrisons, we will soon also have the option of paying an extra 10p per litre (that’s 23p on the usual four pint bottle) to help out the farmers.

It will be interesting to see how many take this up, because polls showing overwhelming support for dairy farmers seem to bear some parallels with those predicting a strong showing for Labour at the last election.

In practice, we have a long-standing tendency to vote with our feet for the cheapest option, and to mark a cross for the safest and least radical one in the polling booth.

Not so long ago we could have fresh milk delivered to our doorstep every day in re-usable containers on an ultra environmentally friendly zero emissions electric float. The milkman also performed a valuable social service in keeping an eye on the elderly and deterring crime.

But most lost their jobs not because of the evil supermarkets but because you chose to buy your milk there in bulk, at a lower price. No one forced you to do that.

Perhaps all this is about to change as Labour makes a headlong rush back to the 1980s under the widely predicted leadership of Jeremy Corbyn. A man who is definitely in favour of mining more coal, though not of actually burning it, and is the best chance we are likely to get of bringing back state monopolies for agricultural produce.

As traditionally conservative farmers blockade supermarket depots with their tractors, I wonder how many of them have also invested £3 to vote for the Labour leader most likely to turn the clock back?

Originally published in The Journal, Newcastle upon Tyne.