perspective
find a spare warehouseman’s coat sit huddled by the radio at lunchtime
Discount Divas
and Recessionistas
By Brendan Dorrian
Time is the only distance between us. My retail journey
began on the morning of August 18th, 1980 when I found
myself standing, suited and booted, on the doorstep of
Woolworth’s, waiting for the store manager to arrive. And
arrive he did, shuffling up to the front door, placing the
key in the lock, turning it, before turning towards me.
‘What do you want?’ he asked. ‘I’m the new trainee manager,
Mr. Murray’ I replied, stretching out my hand to shake his;
he ignored the gesture.
76 . images retail . july 2009
in the absence of iTunes and other
and start work, I’ll tell you when to
come down.’ Eager to plan my day,
and work out when I might get some
lunch I asked ‘When will that be Mr.
Murray?’ ‘February’ came the reply.
My world was about to change, and,
in reality, since then, during the last
quarter century, change has been
the only constant. Everything has
changed, and nothing has changed at
all.
For the first three months in my
new role I would arrive at work in my
suit, feeling important, and go straight
to the stockroom to move boxes and
manage stock. I was only allowed
on the sales-floor after the store had
closed, and even then, to clean up
after the customers had gone. Only
later did I realise that those long
months in the stockroom, through the
winter and with no heating, taught
me about product, gave me a valuable
insight to what I was selling, and,
more importantly, what wasn’t selling.
I have always remembered those
lessons.
There are important parallels and
equally important differences between
then and now: After three months
in the stockroom I was trusted to
‘Run the Record department’. This
included stock ordering and I, along
with hundreds of others across the
UK, used to
Who sent you?’ he asked. ‘I’ve
a letter here from Mr. Collins in the
Personnel Department, Mr. Murray’
offering him the letter, which he also
ignored. ‘Bloody Personnel!’ was
his response. He pushed open the
door and motioned for me to follow
him, which I did. He opened the
electrical cupboard door, pushed on
a few lights, and turned towards me.
‘Look down there’ he said, pointing
towards the back of the store, ‘There’s
a door leading to the stairs that go up
to the stockroom. Go up the stairs,
on a Monday, listening for the new
Top 40 singles chart to be broadcast
on Radio 1, from the BBC. Once we’d
made a note of who was in and who
was out the chart, we’d then all ‘call
the distribution company and place an
order for whatever records we wanted,
and they’d be delivered Tuesday.
No email, no central allocation, no
downloads, just 7’’ singles and LP’s.
Then, one day, everything changed.
On a typical Tuesday, 9th December
to be precise, news arrived that John
Lennon had been shot. ‘John Lennon,
shot?’ This was too incredulous to
believe. I rushed to the phones to
bulk order ‘Happy Christmas’ as a
single and the album ‘Imagine’. Mr.
Murray told me I was crazy; I told
him he was old. The effect on music
sales, on retail sales and newspaper
headlines was immediate. In the
two weeks following John Lennon’s
death, he made the charts with five of
his own recordings: Imagine, Happy
Christmas, Woman, Give Peace a
Chance and Watching the Wheels;
not to mention the immediate uplift
in sales of music by the Beatles. It’s
taken 29 years, and Michael
Jackson’s
similarly
untimely death,
for those events
to be repeated.
So what’s
changed? Well,
for a start, we
have mobile
phones now.
In 1980,
perspective
digital downloads, the only route
to market for recorded music in the
UK was through retailers, such as
W H Smith, or Woolworth’s and
the plethora of independent music
stores, all of which have long since
disappeared from the UK High Street.
This meant that Lennon’s death
offered a useful fillip to customer
flow and average transaction values.
Jackson’s popularity will overshadow
everything that we experienced
through Lennon. Expect that, during
the remainder of 2009, Jackson will
On a typical Tuesday, 9th
December to be precise,
news arrived that John
Lennon had been shot.
‘John Lennon, shot?’ This
was too incredulous to
believe. I rushed to the
phones to bulk order
‘Happy Christmas’ as a
single and the album
‘Imagine’. Mr. Murray told
me I was crazy; I told him
he was old. The effect
on music sales, on retail
sales and newspaper
headlines was immediate.
become the biggest selling artist of
our time. Expect also that through the
sales of Jackson’s recordings alone,
e-commerce growth trends will be
enhanced. What hasn’t changed?
Customers still seek out and enjoy a
shopping experience, look to HMV
Group for the evidence. Arguably the
market sector most likely to be hit
by e-commerce, HMV is dominating
where others have gone to the wall.
Last week the HMV Group reported an
11.5 per cent rise in pre-tax profit to
£63m in its full year results.
july 2009 . images retail . 77
 perspective
And for the year to April 25, HMV
UK & Ireland, Total group sales were
up 4.4 per cent. To be sure, HMV has
benefited from the collapse of music
rivals Zavvi and Woolworth’s, but a
rival’s decline does not, on its own,
guarantee success. Reporting that the
UK music market was more resilient
than expected, with volume decline of
approximately three per cent last year,
the retailer said HMV UK & Ireland
outperformed the market with unit
sales up five per cent. Music is 28
per cent of sales, down from 30 per
cent in the year before. The next-
generation store format has also been
rolled out to 15 shops in the UK. It
also opened its first cinema store in
Wimbledon, and said further cinemas
may follow. Chief executive Simon
Fox said: “At the end of the second
year of our three-year transformation
plan the group has delivered further
profit growth, despite the challenging
retail environment. We are continuing
78 . images retail . july 2009
to adapt to meet the changes in our
markets and, whilst there is still much
to do, our plans for the third year of
our programme are on track.”
So, in Simon Fox’s words, ‘Adapting
to meet the changes in the market’
while innovating a delivering change
of their own can offer retailers and
service providers differential within
the market.’
Is the ‘Flight to value’ a one-way
trip or a return journey? Since October
last year, much has been written
about the ‘Flight to value’, as though
it is a paradigm for the future of
retailing, as though value has only
existed in the intervening period. It
should be referred to as ‘Flight to
market share’ as retailers seek to
secure existing customers who are
shopping by price, rather than by
end-use, brand or quality. Waitrose in
the UK, regarded as a premium grocer
recently launched the first ever value
range sold in the store, branded as
‘Essential Waitrose’.
Waitrose sales have been lifted
by its value range as cash-strapped
shoppers seek out lower prices in
the recession. Mark Price, Waitrose
managing director, told the Financial
Times that sales were running ahead
of projections, and that purchases of
the 800-line range now account for
13 per cent of sales. With a target
SKU count of 1400, he also said that
Waitrose expected Essential Waitrose
Discount diva’s and to account for 15 per cent of sales.
Recessionistas are Around the same time, figures from
threatening retailers’ TNS Worldpanel shows sales at Aldi
margins and market- growing by 21 per cent year-on-year
and by 13 per cent at Lidl for the
share like never same period.
before: Thrifty Discount diva’s and Recessionistas
mothers shopping for are threatening retailers’ margins and
the family and canny market-share like never before: Thrifty
single girls are doing mothers shopping for the family and
canny single girls are doing us all a
us all a good service. good service. Brand loyalty has been
Brand loyalty has consigned to the past. Buying off-price
been consigned to the has become a cause célèbre. Or is it
past. Buying off-price simply the case that traditional margins,
has become a cause like traditional retailers, who cannot
célèbre. identify the need for change will, like
the music of Lennon and Jackson,
become a thing of the past?
ABOUT THE AUTHOR
Brendan Dorrian is CEO, Global Retail Network.