UK retail’s top executives are meeting in London over the next two days to discuss how the sector is performing amid the most turbulent economic conditions for a generation. Tesco, Sainsbury’s, Morrisons, Spar International – as well as a number of non-food firms – are outlining how their businesses are navigating the downturn, as well as how they see shopper behaviour during the recession. Here are some of the best quotes from day one of the Retail Week Conference 2009.
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“The words “down-trade” conjure up the image that, one morning, someone wakes up and they stop shopping in Harrods food hall and they start shopping in Aldi. That’s not what people are doing. They are sticking with the shop they are used to shopping in – provided it’s doing a good job for them – and they are changing what they buy. It’s not about down-trading; it’s more subtle than that.” – Justin King, CEO, Sainsbury’s
“If 5% of your customers swap [stores], it’s a real issue. A small drop in turnover has a massive impact. If John Lewis’s turnover drops by 10%, their profits are wiped out. Small changes have a massive, massive impact on the market.” – Joe Morris, operations director, TJ Morris
“In some cases, the brands are sometimes slower to react. There are some branded ranges where there’s been so much value-add over the years, that the product has got very expensive and that to a certain extent has left a gap that you expect people to flow into that vacuum. It’s also healthy competition. We support and work with brands, sometimes it gets a bit tense but that’s life.” – Carolyn Bradley, UK marketing director, Tesco
“When well-executed, the middle ground can be a great place to be.” – King
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By GlobalData“If you still have a job, your household budget today is under less pressure than it has been for a very long time. Confidence I slow but perhaps the reality of households is not reflecting that.” – King
“Food actually is a relatively small part of the household budget. On average, it’s about 10% of household budget, so food is not the place that people are going to go to deal with big challenges in the household budget.” – King
“Doing promotions is not the same as being a value retailer. You’re either a value retailer, or you’re not.” – Morris
“If you look at value, it is all about price, it’s how much somebody is willing to pay for something and whether you are the cheapest in the market with that product.” – Hussein Lalani, commercial director, 99p Stores
“There is no doubt the consumer is putting a strong focus on price. We have to respond with promotions [and] with private label. We have to do the basics of the business but we musn’t get sucked into a spiral of low price. I’m firmly convinced that the key of our success will in the future lie in innovation – store design and layout, innovation in merchandising, innovation in technology and introducing new product categories.” – Dr Gordon Campbell, CEO, Spar International
“This is a time where leadership and vision are more important than management process.” – Debenhams chairman John Lovering
More to come…
