Retail Bites

Friday 15th January 2016

In case you missed them, a round-up of interesting retail related stories from the last fortnight or so.

Marks and Spencer chief executive Marc Bolland to quit

Things change in January, or April when Marc Bolland steps down and Steve Rowe replaces him. There are no surprises about the appointment of Rowe. Rowe has been the favourite since John Dixon quit in July. But is he the right man for the job? I don’t think the market will think so. Yes, he has experience in general merchandise, at M&S, but can he transform M&S’ clothing business? Marc Bolland struggled with that transformation and he probably lacked experience. Bolland came from Heineken and Morrisons, albeit having done excellent work, particularly at Morrisons.

Diet debate: Are diet drinks a no-go?

Ok, not a huge story but an interesting twist on the sugar debate.  The meat of it is that if people switch to diet fizzy drinks, from regular fizzy drinks containing sugar, they are more likely to lose weight, because there are fewer calories. But, at the same time, individuals switching to artificial sweetened fizzy drinks are also more likely to consume a greater quantity of food than those drinking drinks with sugar in them. So, the calorie balance does tip towards artificial sweeteners but the logic in a sugar tax is diluted. The pressure to reduce the sugar content of food may not be the solution on the basis that manufacturers may increase the of use artificial sweeteners in its place and the effect of that might be that people still consume too many calories.  Perhaps the answer to obesity is that it is cyclical. That is, are consumers now, slowly and reluctantly, moving away from convenience foods and seeking out healthy alternative foods? If that trend, predicated by many for 2016, has a wide reach then maybe, and I do mean maybe, obesity/diet related illness figures will fall in the coming years.

Sainsbury’s makes £1bn bid approach for Argos owner

What does Mike Coupe intend to do with Home Retail Group? Put Argos into more of Sainsbury’s stores, put Sainsbury’s into Argos’ stores. Share logistic costs, benefit from click and collect? Increase the products the two businesses offer online and use one platform? If the two businesses are to integrate, it will take time and be painful. If that pain is shared by customers, a great deal of damage could be done. As to Homebase, from the looks of things, Homebase would will be sold by the time Sainsbury’s did a deal.

Amazon urges hoverboard buyers to ‘dispose’ of must-have Christmas gift amid safety fears

Andy Brian, Retail Partner was recently quoted in an Independent article about Amazon warning customers to throw away non-standard hoverboards after a watchdog called on retailers to remove them from sale over safety concerns. Andy said “Under the Consumer Rights Act, retailers are required to offer a refund if a product is shown to be faulty within 30 days of purchase. Customers are entitled to a full refund for a further six months after this period if a fault develops and a repair or suitable replacement is not available – which would appear to be the case with many of these products.”

Black Friday deals: worth the fuss or marketing gimmick?

Andy Brian was also quoted in an article for The Telegraph commenting on the growing consensus amongst retailers that Black Friday is unprofitable and unsustainable. Andy said: “For many it seems the net benefits of Black Friday simply do not justify the extra pressure on the business.”  Research undertaken by Gordons before Christmas said that 86% of retailers questioned would reduce or end their participation in the pre-Christmas promotion this year.

Next time in Retail Bites we’ll take a look at the latest results of the Big 4 Grocers.


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