Reading the various comments of the bosses of the big food retailers, in conjunction with the publication of the latest set of financial results, one message comes through clearly it’s tough!
Of course, this is nothing new. I worked for the Gateway Foodmarket chain from the 1970s to the 1990s and learned that in a tough economic climate you have to work to build sales. And years later we’re still talking about the same remedies: price, quality, value, even exclusive value brands a faithful old favourite.
Now, without wanting to sound like a grumpy old grocer, I think there is one area the main retailers might want to focus on. They should ask themselves a simple question. When is service and availability weakest in our stores?
When I worked for Gateway it was an effective and successful business. Sure, it was criticised for its garish point of sale, its sometimes corny marketing and its dump bins in the middle of the aisles, but under the management of Keith Edwards, it was a six-day-a-week business. Keith expected all management, at every level, to cover the whole trading period. The emphasis was on ensuring management was focused on maintaining supply and service.
Today, the challenge is much greater. Longer trading hours are the norm and we have Sunday opening. I recently worked with a marketing retail support company looking at product availability in key trading periods. The work focused on the period from Friday evening to Sunday afternoon, which probably accounts for more than 30% of weekly sales. Results were dire, with poor availability on promotional products and fresh foods.
Further work on the same subject asked consumers about their experience shopping in those periods. Feedback was the same, many customers commenting on poor product availability, especially on fresh foods and promotional lines. Wine kept getting mentioned. So when I read that the percentage of promotions is now reaching 35% to 40% of a week’s sales, you have to ask why are these key sales-driving components being ignored? Is it, as some customers have suggested, a ploy to control the amount sold at low margins? Surely not!
I know from my own experience that when you discuss with senior management the issue of covering late nights and weekend trading hours, the response is always the same: “I already work long hours” and “it is impossible to cover the whole trading period”.
I would suggest you will find more senior management cover in the business Monday to Friday than you will Friday to Sunday, and if that is where the problems are, (I feel another retail cliché coming on) “what gets measured gets done”.
When I worked at the Co-op we focused our business on convenience retailing and, in doing so, recognised that good availability across key trading periods was the essence of the concept. It’s good to see that the convenience sector has taken this on board. Convenience chains are far better than the major multiples at ensuring high levels of product availability on weekends.
So come on retail and manufacturing/supplier executives, look at stores over key trading periods. You might spot some easy sales!
Malcolm Hepworth, former COO at Co-operative Retail and CEO Co-operative Buying Group, runs his own retail consultancy and holds two non-executive directorships.