‘Writing the Rules of the Game’: Non-market Strategy, commercial interests and health policy

The UK Government has recently published a set of proposals and statements about restricting commercial activity as part of an approach to tackle obesity.  We have also seen the first stage of a ‘National’ Food Strategy be published.  In Scotland previous proposals to tackle ‘junk food’ and other promotions have had to be paused while the COVID responses become clearer. Health policy and restrictions on marketing, promotion and sales have become very topical.

I have covered some of the background to aspects of the broad context previously.  Our work for Food Standards Scotland three years ago provides some background to health policy and retail shops.  I have also discussed the role of retailers as social engineers, policy interventions for healthier diets, the  large store ‘health levy’ and its quick demise and the healthcare retail standard for hospital shops.  All cover what may be seen as a government ‘interference’ in commercial activities in an attempt to improve population health.

More broadly in intervention terms in Scotland we have seen the smoking ban, tobacco display legislation, plastic bag levy, minimum unit pricing on alcohol (and the long legal battle to stop it) and the deposit return scheme.  All (and not all are public health issues) have been challenged strongly, often under the guise of the ‘nanny state’ or interference in rightful business.  The fight over the Soft Drinks Industry Levy (the ‘Sugar Tax’) provides another example of this defence of entrenched profitable positions, as do the changes to the Public Health Responsibility Deal as it developed.  The long battle against tobacco (and its addiction and health damage) and plain packaging, visual merchadising and display control is another illustration (see one small example of practice here).

Market positions and companies that are challenged by public health measures erect defensive barriers to protect that position. That much is obvious; but how can we think about these practices?

SS&M

I am one of the co-authors of a paper, recently accepted for publication and available online in Social Science and Medicine.  The lead author, Elizabeth Eastmure, is currently completing her PhD (see her work with colleagues on the Public Health Responsibility Deal)  and is lead-supervised by Professor Steven Cummins (with whom I worked a long while ago in the health impacts of food superstores in Glasgow and who is an expert on aspects of public health, health interventions and food policy).

Our paper outlines the role of non-market strategy and its relevance to public health.  We define three broad categories of non-market strategy using examples relevant to public health and outline why understanding such activities/strategy are important for public health researchers to understand.

Businesses operate in the market through the development and maintenance of a range of products and services, supported by activities including advertising, promotion and pricing with the primary good of making a profit.  However the market does not exist in a vacuum and is not a neutral entity, being constructed by political, cultural and social forces, which can be collectively referred to as the ‘non-market’.  This too is maintained and developed by businesses.  While the ‘rules of the game’ are perhaps a given in the market, use of non-market strategy is about ‘writing the rules of the game’.  Our paper explores how these rules are written.  Understanding this is important for policy development as it helps understand how, why and where challenge to public health interventions might occur and some of the tools and methods used by businesses to protect their market positions.

Elsevier have provided 50 days free access to the article and you can get a copy (until September 25th 2020) by clicking on this link

Reference

Eastmure E.; Cummins S. and L. Sparks.  Non-market strategy as a framework for exploring commercial involvement in health policy: a primer.  Social Science of Medicine, Volume 262, October 2020

https://doi.org/10.1016/j.socscimed.2020.113257

A copy is also available via the University of Stirling’s research repository (STORRE): at http://hdl.handle.net/1893/31517

Posted in Academics, Alcohol, Consumers, Diet and Health, Food Retailing, Food Standards Scotland, Health, Healthcare Retail Standard, Hospital Shops, Large Store Levy, Markets, Non-market Strategy, Politicians, Profits, Promotion, Public Health, Public Health lev, Public Policy, Regulation, Retail Levy, Scottish Government, Sugar Tax, Uncategorized | Tagged , , , , , , , , | Leave a comment

“Retail sales surge close to pre-lockdown levels”

The retail headlines last week were interesting. Based on the latest Office for National Statistics retail sales data (for June 2020), the media packaged up a story about how UK retail sales had surged to pre-lockdown levels and were close to being normal (BBC, Reuters, The Grocer, Telegraph, Independent are amongst examples). The sense in many of the reports was of some return and stability/normality in retailing, now and in coming months. For obvious reasons, this is not an accurate reflection of the situation, nor indeed of the detail in the data that ONS presents in its report. Some of the media did manage to nuance the story but many people will have simply seen the headline/soundbite. As many retailers will readily tell you, “normal” and “pre-lockdown levels” are not the norm.

So, what did the ONS data show? It is worth remembering that this is data to the end of June, and that not all of retailing had re-opened across the UK at this time. It is also probably noteworthy that this might have covered what could be seen as a “honeymoon” period as many consumers ventured out. They may well have stocked up but with little intention to  return quickly. There is some anecdotal evidence that July has not been as strong a retail month as June (though if the weather has been as bad with you as here in Stirling in July, I don’t blame anyone for not going out).

The overall series as shown in Figure 1 below does suggest that June has moved closer to pre-pandemic levels and that we have a “V” shaped retail recovery. But that does not replace the lost sales of April-May and looking more closely does not reflect a return to normal. It is getting there, but is not anywhere “back to normal”. And the “V” shape may or may not hold.

ONS JUly 2020 Volume

Looking below the overall fighure though, shows what we have known since lockdown commenced. Food retail sales have been very strong and if Figure 2 is anything to go by have settled down into a “new normal” pattern. Whether this will be sustained remains of course to be seen. This increase in food retail sales is attributable in no small part to the (until recently) continued lockdown and restrictions on food and hospitality places and also the new pattern of working from home. As was seen in the immediate inital phase of lockdown, a lot of food consumed outside the home had sudddenly to be purchased for in home consumption. This is only slowly altering and working patterns remian disrupted for many.

ONS July 2020 Food

The other great change that has been rather obvious has been the strength of internet sales and online and home delivery. This has been a lifeline for some and whilst Figure 3 below shows remarkable growth, the level reached was itself constrained by capacity (despite huge expansion in some quarters). There has been a massive rise in online sales. There has also been a consequent rise in demand for home delivery services, with Hermes recently announcing an expansion of 10,000 jobs (These jobs though may not be accounted for as retail in the national data).

ONS July 2020 Non-store

The final graph I have taken from the ONS though tells a slightly different story about online sales. Whilst the proportion of sales online has remained above 30% for June, it has fallen back from May. This can derive from more people being able to go to the shops and thus returning to physical stores and swtiching from online, but also a general expansion of retail sales physically as stores re-open and thus the proportion of sales being online falling, even if the volume remains high. This will be a figure that will be watched closely in coming months.ONS July 2020 Online penetration

There is far more to be gleaned from the ONS data than covered here and certainly covered by the media. There can be little doubt that we are still in strange and volatile times and that retail sales are going to be both heavily watched and variable in many ways over the coming months. One particualr thing did catch my eye though; the data report also shows that a reasonable proportion of retail stores (and it varied by sector) was not open in June. This begs a number of questions about what is happening. Will these stores re-open? With not all stores open and yet sales “back close to normal” does this suggest that some stores and businesses have, and are, doing very well (at least in sales terms)? We know this is true for food vs non-food, but variations exist both within and between sectors and locations.  In short, sales is one important measure, but the volatility and alteration is such that understanding the underlying reality is going to take much longer.

 

Posted in Consumer Change, Covid19, Data, Food Standards, Home Delivery, Internet shopping, Lockdown, Office for National Statistics, Online Retailing, Retail Change, Retail Sales, Sales, Shopping, Uncategorized | Tagged , , , , , , , | Leave a comment

Grocery Market Shares in the UK 2020

In July of each year I have recorded the  Grcery Market Share of leading retailers in Great Britain as shown by Kantar data. This has been going on since 1997 and I have mentioned this series in this blog before (e.g. last year)mentioned this series in this blog before (e.g. last year). As we have all commented, this year is like no other and as the July point is based on sales over the last 12 weeks, the July data this year, are especially interesting.

The first figure below shows the raw Kantar data for this year, by retailer and compared to last July. It is worth going to the original source and having a play around with the timeline.

Gb Grocery Market Share 20192020

It is worth noting some obvious points about the sector. The last few months have seen a big rise in food retail sales (Kantar says up 17% over the last 12 weeks). Online sales within that have grown remarkably, such that Ocado is the fastest growing retailer in this series (and the M&S tie-up is yet to come). Online grocery market penetration (proportion of total sales) has almost doubled from 7.4% to 13% since March, and this growth has been limited by capacity constraints. We are also well aware of the focus on local and convenience during the lockdown and whilst there is some evidence of this now trending down, over the period reported here, the Co-operatives are up 31% year on year and symbols and independents are up 60%. Frozen food, and here Iceland is notable, has also been a very strong performer.

The figure above thus shows the leading players all losing market share (and this includes Aldi but not Lidl) with the growth being in the Co-operatives, Iceland, Ocado and symbols/independents. Asda performed the poorest of the big 3, probably due to its lower exposure to the small convenience sector.

The second figure below provides the long-run data since 1997 for the big 3 and more recently the discounters. The decline of Asda and the reversal for Aldi are the newer stories here. The long-term trends remain the same broadly, but Asda and Aldi must be hoping this current period is a blip. Certainly for Asda, the decline is not great news at a time when they are looking to be sold off by Wal-Mart. Conversely, those strong in local markets may be hoping that this localisation “sticks” and that their performance in store and in home delivery may cause some consumers to rethink their pre-pandemic behaviours.

GB Grocery Market Share 2020

Finally, and as also done last year, I present the CR3 percentage i.e. the percentage of the UK market taken by the top 3. In 2007, this reached a peak under this measure of 64.3%. This year it is 55.7% – a large decline from 57.4% last year and continuing the recent sharp downward trend – and is now getting close to where it was in 1997. Concentration has been reversing, and the “remaining” 45% is now more diverse than it was in 1997.GB Grocery Share 2020 CR3

 

 

 

 

Posted in Asda, Cooperative Group, Cooperatives, Covid19, Discounters, Food Retailing, Home Delivery, Independents, Internet shopping, Kantar, Lidl, Localisation, Lockdown, Market Shares, Ocado, Online Retailing, Retail Change, Retail Sales, Retailers, Retailing, Tesco, Uncategorized, Wal-Mart | Tagged , , , , , , , , , , , , , , , | Leave a comment

Scotland Loves Local

SLL banner

People across the country are being urged to think local first and help fuel the nation’s financial fightback from coronavirus by supporting local businesses whilst still being aware of the public health guidelines.

On the 20th July Scotland’s Towns Partnership launched its Scotland Loves Local campaign – in association with the Scottish Government – encouraging everyone to support the businesses which are at the heart of their home communities. The campaign seeks to remind all those living in Scotland that town centres aren’t just a series of buildings and pavements – they are made up of people – and harness the compassion and solidarity that was shown by communities during the coronavirus outbreak to help fuel the recovery.

Details of the campaign can be found at the Scotland Loves Local website.

The campaign follows publication of new polling figures which showed two thirds of Scottish residents intended to shop locally once their high streets reopen post-Coronavirus and that the successful future of town centres depends on support at a local level.

Businesses across the country have been working with Business Improvement Districts, Local Authorities and others to put in place arrangements which mean people can shop locally, but safely. These arrangements include the use of screens, distance markers and signage, the provision of hand sanitiser in-store and capacity limits.

It comes at a time when the need to safely and responsibly support town centres has never been greater following the disruption caused by the Covid-19 pandemic.

Many traders – some of whom have been at the heart of community response campaigns during the crisis – have been forced to temporarily close throughout lockdown, with customers instead turning to large internet retailers.

In launching the campaign, Communities Secretary Aileen Campbell MSP said: “It is now more vitally important than ever to consider shopping, eating and drinking locally as we all have a role to play in Scotland’s economic recovery. Simple steps like choosing to visit a nearby shop or café, or buying goods or services from a business in your own community, helps support jobs and goes a long way to fostering the vibrant selection of products and services on offer close to home.

“By following the public health advice, we can all make exploring what the neighbourhood has to offer as safe as possible. I would encourage everyone who is able to head out and discover for themselves what living locally can offer them – I know that business owners at the heart of our communities will appreciate it immensely.”

Phil Prentice, Chief Officer of Scotland’s Towns Partnership, said: “The impact of coronavirus has hit our town centres and local businesses hard. Now is the time for us all to support them to get back on their feet in a way which recognises that we still need to stay safe and follow the public health guidelines.

“By thinking local first, we can help Scotland’s economic recovery from its grassroots, supporting our town centres within all of the public safety guidelines. The impact we can have by doing this should not be underestimated. The breadth of businesses in our town centres is vast. Whether you need a book, a pint of milk, a night out and a meal or some garden furniture, please think local first”.

“Scotland Loves Local is all about getting people back to their roots and recognising that our town centre businesses and the people who run them are part of the fabric of our communities. Sometimes for generations these people have been there for us. Now it’s time for us to be there for them. One of the great positives of the terrible times in which we have found ourselves has been the greater appreciation of localism. We must now harness that to keep our communities vibrant and lay firm foundations as we work to ensure our town centres are fit for the future.”

SLL Banner 2

As part of the launch, I wrote a guest column for one of the campaign’s partners, The Herald (see full list at end) and reproduce it here:

Herald 1

Herald 2

The Herald, 19th July 2020

Scotlandloveslocal partners

Scotland Loves Local Partners

Posted in Bids Scotland, Campaigns, Community, Consumer Choice, Consumers, Covid19, Government, Independents, Internet shopping, Local Authorities, Local Multiplier, Local Retailers, Localisation, Places, Retailers, Retailing, Scotland's Improvement Districts, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Scottish Grocers Federation, Scottish Retailing, Town Centres, Towns, Uncategorized | Tagged , , , , , , , , , , , , , , , , , | Leave a comment

Lockdown Reading: Welsh Saints on the Mormon Trail

Mormon 1

When we were living in the USA in 2000-1 we flew to Jackson Hole in Wyoming via Salt Lake City.  That last flight to Jackson Hole was the most unpleasant flight I’ve taken before or since, shaken and bounced over mountain thermals in a small plane.  Other than that, Northern Utah and Salt Lake City are not places I know.

On another trip to Wyoming we visited Independence Rock and at Guernsey, the rutted trails through rocks of the Oregon and the Mormon Trail.   From these visits, and to forts on the trail, combined with long forgotten black and white films, I had some vague knowledge of the movement of people east to west in the USA in the 1850s or thereabouts. But what I was not aware of was the role of Welsh settlers in Salt Lake City and the Mormons or of the experience of the Welsh emigrants on the Mormon Trail.

At the start of the lockdown though, I came across a new book (strictly an English translation of a book from a couple of years ago orginally publioshed in Welsh) by Wil Aaron, telling the story of this Welsh emigration.

For anyone interested in Welsh history the book is fascinating and informative.  It draws on various sources and diaries (often in Welsh) and tells a story of suffering and endeavour over 15-20 years or so of difficult emigration on the trail.  It is an incredible story.

I found the book interesting and enjoyable, but accept this may be a minority interest.  There is though a retail link as well. I was taken by a retail story in the book around a pioneer Mormon called William Ajax, originally from Llantrisant in South Wales (a few miles from where I was born).

In 1869 he opened a store in Salt Lake City but came into competition with Brigham Young and the Mormon Church when they set up the Zion Co-operative Mercantile Institution (ZCMI) aiming to defeat non-Mormon businesses profiting from Mormons.  Brigham Young told Mormons to only shop at the ZCMI and apparently banned the faithful from Ajax’s shop, excommunicating him for good measure.

The book reports that Ajax moved to a remote area and then quietly opened up another shop – this time underground.  The book says this is due to the heat and dust, but one does wonder.  The underground store was at least four tennis courts in size, from where he sold a wide range of goods, and the store came to be known as the ‘eighth wonder of Utah’.

Mormon 2

Following William Ajax’s death in 1899, the store declined, as competition from catalogues, the decline of local mining and the increase to access to the city brought about by the railway coming, all combined to end the shop and the village. Nothing remains today. (A YouTube video of the site and the historical marker is available here)

Having visited a small part of the trail, and seen trading posts and shops in historic ghost towns, one can only marvel at the fortitude of these emigrants and wonder at how supplies were obtained, delivered to the stores and then sold.  Many stories and aspects remain untold.

The Welsh on the Mormon Trail is a niche interest, but I found it fascinating and testimony to complex societal, religious and personal struggles.

Aaron W (2019) Welsh Saints on the Mormon Trail. Y Lolfa, Talybont.  ISBN 978-1-912631-20-9.

Posted in Ajax Underground Store, Buildings, Catalogues, Cooperatives, Department Stores, Emigration, Historic Shops, History, Mormons, Places, Retail History, Retailers, Retailing, Uncategorized, USA, Wales, Zion Co-operative Mercantile Institution | Tagged , , , , , , , , , , , , , | Leave a comment

Build Back Better: Bill Grimsey and Covid

When Mary Portas produced her report for the UK Government on high streets, Bill Grimsey was quick to posit an alternative and to focus on leadership and technology for places.  His report and its follow-up a few years later have become important contributors to the discussion of the need for change in towns.

In his follow-up report he made a number of references to Scotland and its Town Centre Action Plan, the role of Scotland’s Towns Partnership and its partners and broadly pointed to the need for similar actions elsewhere in the UK.

His reports, agitation around towns and retail change and his willingness and availability to debate the issues has seen Bill Grimsey have a sustained influence on the discussion.

Grimsey Covid

So it was no surprise that he (and his team) have produced a ‘Covid supplement for town centres’.  Covid is a disruptive event and an accelerant to the changes already underway. Thus, in this supplement Grimsey asks if we have too many streets, what a post-Covid town looks like, how we empower local communities, what should replace rates, how we build green and amenity space into towns and fundamentally who are towns for?

These are good questions.  His responses to them are focused around three key ideas – location, leadership and fewer cars, more green space – and 27 recommendations under 7 headings – power to communities, leadership, taxation, post retail planning, property, planning and transport.

As in the previous reports, there are interesting ideas and thoughts in this supplement and the underlying sentiment and realities are important.  There are numerous small examples of where change has had a positive impact. There is a danger though that it is a bit of a wish list and the ‘how’ question is left too unresolved, despite these examples.  The examples help in answering how, but beg the question over the barriers to doing this, locally and more generally. As Neil McInroy said in a different discussion about place and communities, many of the examples we cite exist “despite the current system” and not because of it.  We need to understand what more do we must do and how can we refocus and rebalance our entire system to meet economic and social needs. This is a bigger moment than we have ever seen.

So my question is whether “build back better” is likely to produce the same solutions at the same pace as before and return us to where we were pre-covid?  Would it be better to be bolder and to think about more than the solution to high streets and retail and about how we want to be different and changed by the pandemic, and not simply survive it?  Bill Grimsey’s report has components of this, and is a starting point for more systemic change.

We need to grasp the moment and work out how to do what we must do, at pace. The risk otherwise is that our responses to the pandemic become inhibitors to the changes we need and not the catalysts for change required.

Posted in Bill Grimsey, CLES, Community, Consumers, Covid19, Government, High Streets, Leadership, Local Authorities, Mary Portas, Places, Proactive Planning, Public Policy, Regulation, Reinvention, Retail Change, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Social Justice, Town Centre Action Plan, Town Centre Review, Town Centres, Uncategorized | Tagged , , , , , , , , , , , , , , , | 2 Comments

Lockdown 1990s style

I am one of the fortunate ones, living in a large house with a garden.  I’ve always grown fruit and veg and have been making my own bread since 2007.  I also spent nearly 10 weeks locked-in in the house and garden a couple of years ago, after almost destroying my knee. That was interesting preparation for this lockdown. I have continued to work from home and have been able to cope, but I am acutely aware that that is not the case for so many others.

Like many people in similar situations working from home, I have been relying on some local facilities, but mainly home deliveries of online purchases (not only food and from a wide range of companies and organisations) and filling a rugby-shaped void by exploring the catch-up feature of satellite TV.  Barring a panic about yeast, the things I take for granted have continued, though often in different forms and ways. That is not the case for so many others.

A couple of things have also made me think about how my behaviour during lockdown has been based on particular capacities that I now take for granted.

First, a tweet from a few weeks ago (and I have mislaid the source) simply asked how we would have coped with lockdown before the internet (which is shorthand for a lot more).  Secondly, as a relief from the computer and work, I have decided to read the Ian Rankin Rebus novels in the order in which they were written (I have read them before but through circumstances in a random order). I have some way to go, but the early books bring home our current reliance on phones and computers, as opposed to paper systems, payphones and faxes to the local shop. Whilst fictional, it does show accidentally how much has changed.

So, if this pandemic had occurred in say 1990 and we’d had to lock the country down in the same way,  what would be different and how would we have coped differently?  There are some things that would not have yet been invented including:

  • the smartphone (and its computing power)
  • the internet, the web and all that
  • satellite and streaming TV/music
  • twitter and other ‘news’ feeds
  • YouTube, Facebook, Instagram, WhatsApp etc
  • most non-local home delivery services (and click and collect)
  • Teams, Zoom and all other connection tools
  • Computers that can do things.

Lockdown c1990 (a generation ago) would have been very different.  Could so many people have acutally worked from home? Or would so m uch mor ehave to have shut down completely?  In the absence of connected devices how would we have obtained goods, services, news and so on?  How would we have survived with the 5 TV channels and limited radio choices? What would our shopping patterns have to have looked like?

You put all these together and I suspect that lockdown would not have been anywhere near as effective (or of course comfortable for some). The rate of infection and disease transmission might well have been higher as more of us would have been “forced” out.  Even more people would have had to be laid off or ‘furloughed’.  Much more work would not have been possible and our reliance on key workers in various sectors would have been higher.  Some elements could have been completed using the telephone rather than the computer (and indeed that is how our local garden centre initially moved ‘online’ in March), but the capacity (bandwith not really being invented then) would be limited.

It is often said that our technology, and its use makes us lazy, or that we have become slaves to it.  In reality it has probably saved lives. But it also points out that so many of us take these things for granted now, but that during this pandemic, so many people have not had access to the technology, the space or the finance to do the things they want.

Whilst “community” and local have been clear themes of the lockdown, access to the tools and finances to make these work for all have not been equal, as of course they were not prior to COVID. “Build, build, build” or “Build back better”  imply that we should focus on the physical facilities, and “rebuild” or “recover” and whilst that is part of the future, we must also focus on the social and people and the access to resources that so many take for granted. For many people, lockdown may well have felt like living in the past.

Posted in Click and Collect, Connectivity, Consumers, Covid19, Home Delivery, Internet, Internet shopping, Localisation, Lockdown, Online Retailing, Orkney, Social Inequality, Technology, Uncategorized | Tagged , , , , , , , , | 3 Comments

Scottish and Online Retail Sales in Lockdown

I am catching up on some of the recently published data about retail sales. This short post has graphs from two sources (a) the Scottish Retail Sales Monitor, published by the Scottish Retail Consortium and (b) Internet sales as a proportion of retail sales published by the Office for National Statistics.

Both have featured in this blog before but I am reporting here on the recent sales figures in these series as they show the changes that have been underway during the pandemic lockdown.

SRSM May 2020 Scotland

In the graph above, the last 18 months or so are shown in order to emphasise the recent data. The decline in the non-food sales (and thus in total sales) in Scotland is unprecedented in the 20+ plus years of this series. The depth of the decline, due to the closure of “non-essential” stores is notable. But, what is interesting is the beginnings of an improvement in May 2020, as some stores re-opened and some confidence returned. Most shops remained shut however so the decline is over 50% on last year. In food retailing, there was some growth, with other evidence pointing to a sustained switch to local community focused convenience stores.

With Scottish retailing coming out of lockdown on the 29th June, we can expect another report of a month of weak sales overall (June), but then a sense of recovery may take over.

The second source looks at the shift to online sales and again records a record. Two graphs are shown below; a longer run and a more focused shorter term picture.

ONS May 2020 Online sales

ONS May 2020 Online Sales Close up

The top graph shows the long run switch to online that has been underway, with the annual Christmas peaks apparent. The figures for April and then May (almost 33% of sales online) show the dramatic boost to this channel that the pandemic sparked.

The lower graph takes a shorter run period and shows again the same effect. But interestingly it shows what looked like more of stagnation in online sales in the latter part of 2019 and the earlier part of 2020. The dual Black Friday and Christmas peak of Nov/Dec 2019 is also interesting. The pandemic though has disrupted the channels and boosted online as opposed to fixed store retailing. This is clearly to be expected with the closure of many stores, and the reduction in total sales also helps this proportion. June will be an interesting figure to watch in terms of a return to “normal” or the initial signs of  the sustaining of a “new normal”.

Posted in Black Friday, Consumer Change, Consumers, Covid19, Data, Food Retailing, Internet shopping, Lockdown, Online Retailing, Retail Change, Retailers, Scotland, Scottish Retail Sales, Scottish Retailing, Uncategorized | Tagged , , , , , , , , | 1 Comment

Confidence, Cash and Friction: Shopping in Scotland

Primark

So, shops (well those not cooped up in an indoor shopping centre) in Scotland are now open. The long road back to re-opening the economy has taken another step forward, and one result is a gigantic queue outside a city centre clothing shop hours before it opens. But, after the honeymoon, what happens?

The key for retailers in this next phase will be the interaction of confidence and cash. The same is true of town centres and indeed of all economic activities. Many of the places we are thinking about are (as Ojay McDonald (@Ojay) said in a seminar last week) congested by design, whether products or customers, and so getting people back into these sites will require a major effort in instilling confidence. Yes, confidence is rising about defeating the virus, but it is not over yet, and the gains remain fragile. For many, the (perceived) risk factor remains high.

So what can retailers and town centres do to instill confidence? We have all seen and become used to the presence of hand sanitisers, more visible cleaning, queuing systems, face coverings, signage about spacing, plastic screens and visors and the abolition of cash. We have seen the growth of online and the rise of click and collect. Developments in queue management, traffic light systems, click and collect, pre-booking of appointments and other such mechanisms are all about instilling confidence that your experiecne will be as safe as it can be and that your fears (albeit these vary enormously) can be assuaged.

And the evidence is that this is working; consumer confidence levels are increased, if not by any means “normal”.

But what retailers can do little about is the economic “feel” that consumers have. Different consumer groups have fared differently during the lockdown and for many it has been tough. Others have saved cash and/or got used to spending it online. But the ending of furlough in due course, the sense that the next phase of the pandemic is an economic one as well as a health one and a rising concern about future levels of unemployment and job security all point to a tightening of consumers’ spending. This might not kick in for a little while, but there is a nervousness about how this will go.

Retailers can do little about this. They can kick start spending by discounting the piles of stock they may have. They may get temporary relief as people replenish or simply buy products, because they can. But the need for retailers is in knowing there is sustained activity, and that is very much out of their hands.

There is also another factor that links confidence and cash. The steps to instill confidence often introduce friction into the retail situation – as I found out queuing for 45 minutes (at least in the sunshine) to use a building society the other day – and the more friction there is, the less consumers can window or impulse shop. Delays and slowness are built into the system; it is likely that spending will be reined in as a consequence. The shopping experience will be more measured and planned, and probably take a longer time. Yes, we have confidence, but at what cost and to whom?

So if this has to persist – and it is likely to for some time – then how will consumers react? What frictions are they likely to be willing to put up with, and what will turn them off? What frictions, on the other hand, are some consumers willing to pay to minimise and for which retailers may be able to charge? We have got used to differential pricing for delivery to the house; so what about access to the store?

The opening up of Scotland’s shops from today heralds the next phase in the pandemic. It is one though that is a step into the unknown. We do not know how consumers or retailers will react initially and then as things develop. Have the last three months (and the thought of what may be to come) made consumers reconsider how and with whom they spend their money? What will consumers now value? And what will retailers start to offer to build confidence for consumers to shop with them?

We will be finding out in the next few months. It is also a breathing space in which we can re-imagine how retailing and town centres operate. And in which we can begin to think how as a country and a society we should construct such activities. At the moment we have to get things moving again as best we can; but after that there needs to be a rethink about what we want and need.

A final point: in some retail sectors many shop workers have been working throughout the pandemic. They have experienced a very different work place. Those returning today will see enormous differences. All are doing their jobs, and serving people. They deserve to be treated with respect. They are also affected by the issues of confidence and cash and are not personally responsible for the friction customers are experiencing. Respect them.

 

 

Posted in Cash, Click and Collect, Consumer Change, Consumers, Convenience, Covid19, Employees, Friction, High Streets, Home Delivery, Internet shopping, Lockdown, Online Retailing, Opening Hours, Queuing, Retail Change, Scotland, Scotland's Town and High Streets, Scottish Retailing, Shopping, Shopping Centres, Social Distancing, Town Centres, Uncategorized | Tagged , , , , , , , , , , , , , | Leave a comment

Shopping with Confidence?

Three months on and the great unlocking has begun in earnest.  No more testing your eyesight, it’s now about testing your bank balance – in Northern Ireland and England to begin with, Wales today and then Scotland.  “Non-essential” stores are now open for business, but certainly not in a pre-COVID form.

Northern Ireland began the move with re-opening on Friday, 12th June; England followed suit on Monday, 15th JuneWales starts today, the 22nd June and Scotland will be a week today (29th June).  This is begining to feel like a very different phase of the pandemic and something akin to trying to get back to normal.

And yet, it is not, nor should it be.  Where we are now is a very different place from early 2020 and what we then took for granted was “normal”.  For a start, the UK has one of the highest death rates of any country in the world and the over 60,000 people who have died from this need to have their deaths explained.  There should be no consideration of things being normal until we have held to account those responsible for our failings, and we have stopped the pointless deaths.

Secondly, the sense of ‘return to normal’ by ‘going shopping’ suggests that the world in early 2020 was a fair and good one, and that things have not been changed during lockdown.  They have.  We have re-discovered community but have also had to confront the inequalities that COVID has exposed in its impact and the differential experiences it has created.  We can not simply return to previous ways as though nothing should alter; things must change.

There can be no doubt that retailing has suffered; the data is absolutely clear.  But in going back to shop, we need to consider very carefully what it is we want our consumption to support.  Retailers need the support of consumers, but it can not be unthinking.  Support those good businesses who did the right things by suppliers and employees over the last three months.  Support local and independent, small retailers who need every penny to survive and who put back to the local economy through their actions.  Support the local towns and high streets who provide more equitable and more sustainable places. Support the local producers and retailers who provided a lifeline during the lockdown (and in the case of the former are still not getting their “normal” markets back).

At this point retailers are nervously looking for how consumers will react to the new shopping experience.  Will there be a honeymoon period or a sustained return?  Will the experience (or the thought of it) put off prospective consumers?  Will the relaxation lead to a large increase in COVID cases in a couple of weeks (as seen elsewhere)? We simply don’t know.

The early evidence from England is that footfall is down on last year, but surely this is only to be expected? We have lived through a major national trauma, and are still in the throes of a pandemic. Not all shops and other facilities are open (cafes, restuarants and public toilets being key components), the shopping experience is a very changed one, and many still lack confidence and experience in the new settings, with their new rules and constraints.

But however fast or slow it goes, this is but the first (of several phases) in the reopening and then resetting of our retail-consumer relationship (and the retail-landlord-property relationship). We are only at the beginning of this and those who see the re-opening of shops as an end to a situation or process, are going to be mistaken. There is much to be done to get these relationships to where they need to be for a sustainable future.

Scotland has taken a more risk averse and cautious path on many things through the pandemic. The siren calls to be “more ambitious” are very much at odds with the approach that produced the realities of the lower R number and the death rates in Scotland as opposed to many parts of England. There is a different calculus here between economics and deaths and the risks of a re-emergence of the virus generally or in a second wave. This pace is tough, especially for the retail and other businesses so adversely affected, but the long-term need is for consumers to have confidence in retailers’ and their own safe shopping. Rushing this for what may prove to be short-term relief may not be the success that many think.

Posted in Consumers, Lockdown, Non-food retailing, Rents, Retail Sales, Retailers, Retailing, Scotland, Towns, Uncategorized | Tagged , , , , , , , , , , | 2 Comments