‘AS SOMEONE rightly said, the customer was king, now it’s a superpower,” says British Retail Consortium director-general, Helen Dickinson. A little over two years into the job of heading the main lobbying group for the high street, Dickinson can reflect on the pick-up in the retail industry’s fortunes over the past 18 months or so.
“There’s more confidence in consumers out there,” she says. “Inflation and wage rises have crossed [the former coming down and the other going up].” But, in talking through the major changes in the sector, not least the customer stampede to buying over the internet, she says there has been a sea change in where the power lies. “In the 1950s the suppliers had the power, the retailer was just the middleman,” Dickinson says. “Move 30 or 40 years forward into the 1980s and 1990s, and that power had gone to the retailers.
“They were opening shops like billy-o as loads of people were buying things on credit. At that time you did not have to be a great retailer to enjoy a measure of success. But now it is the customer in charge and digitalisation is largely driving it.”
On that subject, typified by the Black Friday internet shopping splurge imported from America after every Thanksgiving Day, Dickinson says while her members have mixed feelings on that event they have no choice but to follow the electronic path.
“The digital revolution has had a major impact on the way consumers shop. It’s a game-changer,” she says. “Technology is giving rise to a pace of change that we have not ever seen before. For the customer it’s great. The electronic access they have is making it possible for them to buy virtually anything, anywhere, anytime and that is consistent across the UK, north and south of the Border.
“In Britain we have higher online sales per head than any other country in the world and the highest online sales in Europe. From an industry point of view we have not got a choice but to follow it [the phenomenon].
“Customers don’t care what shopping channel they use. It’s not a binary choice, people cross those channels regularly and it is not just a generation Y [people born in the 1980s and 1990s] thing. It comes back to the customer being a superpower again.”
She says it could be argued that “click and collect” was bringing customers back to the high street rather than destroying town centres. “It is a great opportunity for retailers as it provides small retail businesses with a shop window to the world, driving exports of British products rather than just being a physical place in the community,” she adds.
What of Black Friday, which critics say is a nice late autumn surge for retailers that cannibalises sales in the run-up to Christmas and leads overloaded retail websites to break down? Dickinson says the BRC’s members’ chief executives have mixed views.
On the one hand Dickinson says they welcome anything that “kick-starts spending in a highly competitive, deflationary environment”, but are wary about the extra investment needed to add capacity on the website and in the warehouse “for one day in a year”.
Of course, the BRC, which represents 200 of Britain’s 200,000 retailers but whose members have over half the country’s sales, has other fish to fry apart from digitalisation.
The vexed question of business rates is highly topical, with Westminster launching last week what Danny Alexander, Chief Secretary to the Treasury, said was the most comprehensive review for a generation. The BRC chief is pleased, but wary. “Structurally they realise there is a problem with business rates,” she says.
“The world of business does not relay on physical property like it did before. If business rates, which only ever go up unlike other taxes such as VAT and corporation tax, disincentivises businesses investing in property you have to live with the consequences.”
With useful timing for her argument, new data out last week showed shop closures on the UK high street rose in 2014 to almost 1,000 compared with a net reduction of 371 in 2013.
The government business rates review raises the prospect of a new system for levying a tax paid by 1.8 million properties in England (Scotland has its own system).
Dickinson says: “The worst outcome would be dabbling with the administration [of rates] rather than a fundamental look at the whole structure. We want the review to have the widest scope.”
Latest data from the BRC and researcher Neilsen earlier this month said shop prices dropped for the 22nd consecutive month in February, down 1.7 per cent, and the trend is accelerating. The fall was 1.3 per cent in January.
So is the BRC boss worried about deflation? She makes the same point that many economists have, that we don’t have “psychological deflation” yet, where it is both sustained and people are actually putting off purchases because they believe prices have further to fall. “I think we have more of a case of negative inflation rather than deflation at the moment. It is Europe that has deflation,” she says.
She adds that she would be “more worried if there were macro-economic pressures” on the UK horizon, such as a weakening pound or likely significant commodity price rises at the same time as we have deflation in the supermarket sector and more broadly.
Before joining the BRC, Dickinson was a career staffer at KPMG, rising to the head of retail at the accountancy and management consultancy giant. What is the main difference between the two roles?
“There was more process at KPMG, it was an international organisation with tens of thousands of people,” she says. “At the BRC I am in charge of 65, we are much more open in style, and a major part of the job is to shape debate on retail and influence governments (both UK and Scottish).”
She says it is often necessary to reconcile different views on the high street with a diverse membership, and, with echoes of a more military context, smiles when she says that her job is not infrequently about “building a coalition of the willing”.
Recent history, including last year’s Scottish independence referendum, the rise of Ukip and the coming UK election and debate about Britain’s place in Europe, have convinced her of one thing. Political uncertainty as it affects the high street is here to stay.
“As an industry we will have to get used to all this uncertainty for now. Just look at all the polls and the possible make-up of Westminster!”
Born: Surrey, 1966
Education: Schools in Devon and New Zealand. Kingston Polytechnic
Very first job: Sales assistant at high street chemist
Best professional advice ever given to you: To listen
Car: Not a car owner
Favourite holiday destination: Italy
Kindle or book? Kindle
Thing you could not do without: iPhone
What makes you angry? Rudeness
Best thing about your job: Dynamism and excitement of retail industry
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