Debenhams are saying that people are on the High Street, but they’re not spending any money on it. The general public, in their eyes, are merely loitering like lads not old enough to buy fireworks.
Debenhams, it turns out, have reported a 25% decline in profits.
“Talking to our customers it is clear that they are very aware of all the positive economic indicators in the press and on TV,” said chief executive Michael Sharp.
“They see all that and inflation starting to come off. They understand it but none of that is translating into how they manage their weekly or monthly budgets. We are very cautious about the strength of the UK consumer recovery over the rest of the financial year.”
These comments are in relation to the news that wages are actually start to outstrip inflation for the first time in years. However, people aren’t going to Debenhams with their winnings. Seems everyone is okay for pans and bedding. Of course, the retailer has been having a tricky time of it for a while and they issued a profit warning on New Year’s Eve.
Debenhams have failed to fully grasp online retail, where all the competitors are making sales. With this, they’re going to push the online retail and delivery angle. Within the year, they want a cafe or restaurant in every single store in the hope that consumers will spend longer in their stores.
Sharp also pointed at Mike Ashley’s Sports Direct (who have the option to buy a 6.6% stake in Debenhams), saying: “Our customers buy sportswear and we only have a small sports business so we are talking about any potential opportunities with Sports Direct.”
Are we going to see Debenhams stop being the dowdy lady of the High Street and turn into Soccer AM?
How on earth do you cock-up a business like Tesco? They’ve got all the suppliers in their pockets and own a terrifying amount of shops – all you need to do is make sure you have stuff people want and not rip them off. Surely they’ve done the hard part?
However, they’ve managed it and they’re all set to reveal a second year in a row of falling profits, which will heap untold pressure on chief executive Philip Clarke
Industry figures show that Tesco’s market share falling to 28.6% in the 12 weeks to March 31, which is down from 29.7% in the same period a year earlier. Of course, Tesco are still loaded with pre-tax profits around the £3bn mark, but that’ll be down by 15% for the full year.
Clarke is in the middle of a turnaround plan, which sees Tesco again focusing on the UK after failing to win over people abroad. The retailer is scrapping more than 100 major store developments and instead, concentrating on convenience shops and online sales.
Still, that hasn’t stopped finance director Laurie McIlwee quitting his post of 14 years, allegedly thanks to no confidence in Clarke’s strategy. He said that he’d hang around until a replacement is found, but warned that Tesco faces a period of “unprecedented change” in the supermarket industry.
Meanwhile, Aldi and Lidl are chipping away at the market share of the big supermarkets.
Looks like the big guns are weighing up whether or not they should have a dramatic change with their pricing strategy, sacrificing some profit to regain lost market share and slap down their rivals. Tesco had better hurry up and make a decision because it certainly looks like the supermarkets all have the same idea.
M&S have been in the wars of late, reporting wishy washy figures and falling sales over 11 consecutive quarters. Are other stores just doing it all better – or cheaper?
Whatever is wrong, they’ve reported that like for like sales fell by 0.6% in general merchandise over the last quarter, blaming heavy discounting over the last six months.
BUT, they’re also keen to point out that there’s a silver lining. Despite nobody knowing who those people are on the adverts, apart from that woman who may or may not be Annie Lennox, and a heavily airbrushed Emma Thompson who looks a bit like a bloke, M&S clothing sales are up by 0.6%.
M&S don’t normally separate their clothing figures from their general merchandise, so you could deduce that they’re desperately clutching at straws.
Still, they have to find a way to justify their million pound ad campaign and design overhaul somehow.
But there are other positives, too. Even though the British public seems to have gone cold on Marks and Spencer, internationally their rep is glowing, with overseas sales up 4.7%. And online sales aren’t too shoddy either – rising by a very healthy and un-Twiggy like 12%.
CEO Marc Bolland, waving his hands about and yelling ‘look over here!’ said that womenswear was showing ‘clear signs of improvement.’
Still, whatever you do, don’t mention the word ‘Next.’
Sainsbury’s have reported soaring sales in fresh produce as concerned middle class shoppers fend off imminent death by eating as many green things as they can cram into their gullets.
So how are we choosing to face down the Grip Reaper using the power of antioxidants? Well, green beans and celery top their veg list, with sales up by 116%, followed by onions, carrots, cucumber and red peppers.
Sainsbury’s fresh produce robot Charlotte Rhodes said:
‘We’ve long been committed to helping customers to eat their five a day and it seems that this new study has sparked some new enthusiasm for the challenge. They are certainly taking full advantage of our new 69p promotion which we’re running across a range of different produce from every day carrots to more exotic aubergines.’
(Aubergines are EXOTIC? Since when?)
Still, it’ll be interesting to see how long this lasts before everyone realizes that a life spent eating celery is a life wasted. In about two months time, they’ll probably be reporting an upturn in sales of Mr Kipling.
Everyone’s favourite tax dodging mobile provider, Vodafone, is planning a £100m expansion – opening 140 new stores, which will in turn create 1400 jobs.
It’s all part of the sinister sounding ‘Project Spring’ [ironic, given their part in the Arab Spring - Ed], which sees the company trying to move away from their reliance on third party provider Carphone Warehouse, and strike out on its own. Vodafone UK’s CEO Jeroen Hoencamp said: ‘We want to take this company back to growth.’
And where are the first buds of this Vodafone spring? Well, erm they’ve just opened a new store in… Ilford. It’s already worked out where the other new stores will be, but it’s also looking for retail space in other areas where it thinks existing customers are currently poorly served. Everywhere, then.
Vodafone’s presence on the high street has not been that impressive in the past, with fewer stores than its rivals. EE has 600 stores, while Three, who have 8 million customers to Vodafone’s 19 million, boasts 345 stores. This expansion will take them to over 500, and says Hoencamp, will create ‘a seamless customer experience.’
So now the next thing they’ve got to sort out is their rubbish 4G. And that (ahem) ‘seamless’ customer service. But at least now you’ll be able to go into a store near you and shout at them face to face.
Marks & Spencer just can’t cut it when it comes to selling clothes. Consumers don’t like their clothes and aren’t connecting with the M&S adverts, wondering who all those women are in the commercials. Everything about it is a bit fusty and pointless.
So with that, M&S are making eyes overseas, hoping that foreign people might like clothes that remind them of the kind of clobber you see worn in life insurance adverts.
M&S are looking to boost overseas profits by opening 250 new shops outside the UK. They’ve already got 455 on the go, but they want to make a serious move in places like India, China, Russia, the Middle East and Western Europe. They’ll also be flogging their food too.
“M&S Food is in much demand globally. From toasted crumpets in The Hague to red wine in China, our international customers are very quick to tell us what their favourite M&S products are. This is why expanding our fresh food offer presents us with a strong growth opportunity,” Steve Rowe, M&S Executive Director of Food, said.
You may recall that M&S tried something similar in 2001, which failed miserably. The plan thus far, is to open 100 stores in India, sell knickers and that to Saudi Arabia and in China, they’ve got no idea, but there’s a lot of people there so it is always worth trying if you can afford the gamble. Concerning the latter, Tesco are currently struggling to make any impact at all.
It might be the fun go-to place for T-shirts with burgers on them, corsets, pleather playsuits and all manner of frivolous ‘youth’ clothing, but online giant Asos has reported a 22% slide in profits in the first half of the financial year, after it invested more in logistics and technology.
The group profit fell by £5 million to £20.1m in the six months to February 2014. This was despite retail sales climbing by 34% overall. In the same period they also managed to gain a 36% rise in new customers.
So people still love the cheap thrill of cheap, ever changing, fun, fashionable, made in China Asos. But is all this new investment – which includes a new warehouse in Shanghai, a new IT platform, a start up in China and something called a Eurohub in Berlin – going to derail its success?
Asos’ CEO, Nick Roberts, said it was all part of the ‘journey’, and added: ‘This increased pace of investment has reduced our profitability in the period, but will deliver significantly increased capacity as well as efficiencies in the longer term. ASOS is not and has never been about the short-term; the scale of the global opportunity remains as exciting as ever and we are investing for the many opportunities ahead.’
So it’s OK. We’re not going to see a collapse in online fashion retail, because Asos isn’t about the short term. Apart from their clothes, which last about twenty minutes until they either fall apart or become laughably uncool.
The chief executive of Morrisons is giving up his bonus. This follows a disaster of a year for the UK’s fourth-biggest supermarket chain, wherein they issued two profit warnings and 100,000 staff member’s bank details were posted online by badmen.
Dalton Philips thought it best to forego his cash-and-shares package of £374,000, seeing as the group lost their market share, and warned that 2014′s underlying profit would be half the £732 million expected.
However finance director Trevor Strain is having none of it, and accepted his £211,000 bonus and probably made it rain all over Dalton Philips’ office, just to rub it in.
Morrisons recently posted an annual loss, after investing in an online platform and a rollout of smaller convenience versions had taken up most of the group’s profits.
Despite the shares falling 20% over the past year the remuneration scheme still managed to trigger a bonus for Philips. His reward was linked to three different measures, with 60% related to profit.
Philips is understandably a bit embarrassed to take his bonus, after being under pressure from losing market share to discounters. He’s also made analysts nervous by announcing plans to join the price war, investing £1billion in cuts to compete with Aldi and Lidl.
Laura Ashley, with its chintzy homewares and flowery clothing, has been struggling– and posted a 0.4% fall in like for like sales in 2013. Profits were up by 2% to £20.5m, but total sales fell by 1.4% to £294.5m.
Laura Ashley’s chairman mumbled something about the retail environment being ‘particularly challenging’, adding: ‘We are confident that the quality of our product ranges, the enduring appeal of our great British brand and the loyalty of our many worldwide customers will enable us to make further progress in growing the business.’
But in Blighty, could Brits have fallen out of love with this most British of brands? Are we simply tiring of swags, tails, ruches and cushions that cost a bloody fortune? After all, we’ve got John Lewis now. And Laura Ashley is something of an ageing Brit relic, like the Emmanuels and Jane Asher and Hannah Gordon from Watercolour Challenge. In fact, their range of middle aged florals makes Cath Kidston looks like a rebellious polka-dot punk upstart.
However, there’s been a 4.2% upturn in sales abroad, which means that the world still loves a bit of Downton-esque English country garden décor. And despite their losses, sales in the summer of 2013 were higher than they had been since 2006. So maybe there’s life in the old girl yet.
Not the actual Laura Ashley, though. She fell down the stairs and died in 1985.
Ah, BhS. Home of ugly clothes and haunted looking post-menopausal women, sitting alone in the bleak cafe. A place where retail dreams go to die. Yet it keeps going, buoyed by that most buoyant of billionaires, Sir Philip Green, who is probably at this very moment lounging on his yacht playing Solitaire on his iPad and eating quails eggs out of an ivory bucket.
Since last year, Sir Phil has been banging on about introducing a food department into his stores, and now he’s ready to launch BHS Food in two stores in glamorous Staines and Warrington. His plan is to undercut Tesco by 10%, thus leading a budget department store supermarket revolution – or something. If his discounted Bisto gravy granules and fizzy drinks are a hit, BHS Food will be introduced into 140 stores around the UK.
Sir Phil is taking a gamble on this – after all BHS suffered losses of £71million last year and nobody in the industry has any confidence in it. But he seems unperturbed about it in the way that only billionaires can be.
‘On the basis that everyone is going into the high street and convenience maybe it’s an opportunity.’ He shrugged. ‘If you don’t buy a ticket you can’t win the lottery.’
While it’s doubtful that BHS Food will become the new cheaper version of M&S Food, if all goes well, a large supermarket could buy into the deal and take advantage of BHS’s 180 locations. But if it fails, Sir Philip might have to sell the business completely.
When you see a large queue, what do you imagine would be at the end of it? A potential record contract with Syco? The Beatles circa 1965? Free chips?
Well one such queue snaked around the block in Bridgnorth in Shropshire on Friday as a staggering 1,500 people lined up for a chance to…GET A JOB AT ALDI.
*sound of deflating balloon*
Yes, despite interviews for 40 positions not starting until 1pm that day, the queue of desperate/enthusiastic prospective Aldi employees started to form at 10am.
Aldi were staging an open day of mini-interviews, asking people to turn up and hand in their CVs, but so many came that staff were forced to start seeing candidates 20 minutes ahead of schedule.
Candidates for the stock and store assistant positions, which began at 20 hours a week, ranged from mums to school leavers. One woman said: ‘I need this job to keep paying the bills and keep everything ticking over, including feeding my two children and getting them new school uniforms.’
More proof, if needed, that this country is effed.
For a while now, the OFT has been investigating furniture and carpet companies for running false promotions and artificially inflating prices so they can slash them and sell you a hideous kidney coloured pleather corner sofa that looks like a tumour.
Now though, the shamed companies – which include SCS (shame on you Martin Kemp!), Carpetright, Dreams, Bensons for Beds and Furniture Village – have agreed to stop making up prices willy nilly and only offer genuine discounts.
The OFT found that the original, reference prices of furniture before they were ‘discounted’ had never actually existed – they were just arbitrary, and unfairly pressurised customers into buying at so-called bargain prices.
The stores haven’t accepted any liability, but they’ve all pledged to stop messing around and price things clearly and fairly. And if they do have discounts to offer, the sofas/beds/wardrobes have to have been on offer for a higher price first.
So if you need to replace your existing sofa with a reclining, wipe clean bouncy castle, at least now you know how much it actually costs.
Mums, eh? In reality they’re all drinking too much and wishing they could ditch the kids and be rock stars. But in the world of retail, they’re benign fluffy wuffy ciphers in Emma Bridgewater aprons, making Bake-Off style goodies and smiling happily while holding brightly coloured spatulas.
Some women are obviously buying into it, though, because John Lewis has topped a Mumsnet poll to become the favoured brand of Mums. That’s followed by Waitrose (because we’re ALL about making the dinner!), Amazon (steady on, ladies, reading books can lead to ideas), Apple (wait, you’re not WRITING A BOOK ARE YOU?) and M&S (phew).
John Lewis targets Mums more effectively than a cannon containing George Clooney and a cupcake. And as it’s Britain’s most trusted brand, Mums are going mad for the My John Lewis loyalty cards, which target prospective parents with offers and discounts in their nursery section.
‘Mumsnet members are rightly picky about brands,’ said Rachel Swift from John Lewis. ‘Our customers have busy lives and a huge amount of choice about where they spend their money, so activity through My John Lewis has been focused on giving new mums in particular a really tight edit of what we think they need, to make this special time in their lives as hassle-free as possible.’
BLAH BLAH BLAH. Is it time to open Mummy’s Special Wine Box yet?
That big orange glowing beacon of supermarketness, Sainsbury’s has reported a 3.1% drop in like for like sales in the first three months of 2014. And despite having had Jamie Oliver on board for years, it’s the first time in nearly a decade that sales have slumped.
Sainsbury’s boss Justin King said that the grocery industry has slowed right down, and it had absolutely nothing to do with him or the fact that Sainsbury’s is loads more expensive than Lidl.
He said: ‘Although some economic indicators are showing an improvement in the health of the economy, we expect the outlook for customers to continue to be challenging for the coming year.’
He’s still confident, however, that their Brand Match (a little ticket that says ‘IOU 22p’ that nobody ever gets round to cashing) alongside the data they gather from Nectar cards, will see Sainsbury’s through this slump and make sure they’re ‘outperforming their peers’.
With Morrisons on its knees and waging a price war, Tesco desperately trying to turn stores into soft plays and cafes, and the budget shops ruling the roost on both price and quality – will the Premier League supermarkets soon end up in the McCain Oven Chips retail division, alongside Londis and the 50p Shop?
Middle of the road retailer Next has unexpectedly won the nation’s hearts to become the most successful clothing store in the high street – it’s now worth £10.2bn, compared to just £7.5bn for M&S.
Christmas was good for Next, who probably spent a lot less on bells, whistles, Magic, Sparkle and Twiggy than their upmarket counterpart. Their sales went up by 11.9% during the festive period, while everyone else flailed around slapping pre-Christmas discounts on everything from trainers to slow cookers.
This quiet usurping of M&S is one of the strangest retail stories in a while – especially when you consider how BORING Next is. Their clothes are so dull your retina barely bothers to process them. But it’s a great place for er…pants and work clothes for Linda in accounts.
Next, which is run by Conservative peer Lord Wolfson (who is apparently a fiendish financial control freak) is now looking to expand, promising a bigger range of homewares and larger out of town stores with in store garden centres. In fact, rumour has it that they plan to take on the emperor himself – John Lewis.
It would appear that on the high street, boring is the new interesting. Don’t all rush out to buy a pair of ill-fitting chinos at once, Britain.