As I write this, it has just been reported on the radio that Marks and Spencer has announced the closure of 100 stores by 2022, accelerating its plans to safeguard the business for the future. 21 stores have gone since the closure programme was first announced at the end of 2016 and a further 14 have now been unveiled as being for the chop.
On top of that, its plans to increase the number of Simply Food outlets by 40 stores this year has been reduced to 25 outlets. The reason for this dramatic announcement? Sales across all its sectors (food, clothing and home) showed decline for the last three months of 2017. Its share of the clothing market at 7.6% is half what it was 20 years ago, and the company is in real danger of becoming the UK’s number two clothing retailer (behind Primark) after decades of being the go-to place for clothes in this country.
Now we all knew it was having clothing problems, losing out to the likes of Primark and TK Max, but who would have thought this giant of the UK high street would find itself struggling so badly? Surely food was its real strong point, great quality at premium prices – perfect for the inhabitants of middle England who want reliable, high quality, perfect ready-meals that pass for home cooking from a thoroughly British institution?
Not anymore. Enter our continental cousins, Aldi and Lidl. Once the butt of jokes, they are now a very serious force to be reckoned with. Aldi launched here in 1990 and is opening stores at the rate of one per week, with 600 open in 2017 and the aim to have over 1000 by 2022. Coincidentally the same deadline M&S has put on reducing its 1000 stores to 900. Now Aldi and Lidl are the darlings of middle England, clearly threatening M&S and also the likes of Waitrose and Booths (a reference there for our northern friends!).
“What’s this got to do with hi-fi?” I hear you cry. Frankly not a lot, directly, but the overall trend is an interesting one that we need to be wary of. The changing landscape of the high street is affecting all walks of life, from clothing, to books, to cameras, to furniture and to hi-fi. And of course, a lot of that is down to the internet and the way in which it has changed our shopping habits. But high street shops still have a place in the internet age, how else will people try the clothes on before purchasing, learn about the features of the new camera they’re thinking of, select the fabric for their new sofa or audition the pair of speakers they want to buy; before buying it online for 10% less? It’s called ‘showrooming’ and is the bane of many a retailer’s life, wasting their time and getting up hopes of a sale that is then lost to a box-shifting company with no interest in personal service, the products or, frankly, the customer.
Yesterday I took my parents’ car in to the local garage so they could investigate a metallic rattling sound coming from under the car. The garage has serviced their cars for years and kindly fitted us in at a moment’s notice – I needed to make sure the car was safe and roadworthy. “Just give me five minutes. If it’s what I think it is then I’ll sort it now.” said the garage owner. And, true to his word, he came back and reported it was the heat shield around the exhaust and that he’d tightened it up. “I’ll just take it for a road test and then it’s all yours.” Being in a bit of a hurry we said we’d leave the car overnight and collect it in the morning and promptly left in my car. Returning the next day, he said the problem had been cured and there would be no charge for the work. How refreshing to be served by a company that understands the value of these little gestures and the powerful effect they have on long-term customer retention. The garage will, of course, get the job to service the car next time it needs it.
It is the same for the hi-fi shop that helps the customer with loading the products into the car, or offers to pop round to sort a radio tuning problem etc. It is little things like this that differentiate the two high streets – the one that cares and offers personal service with a familiar touch and the one that is purely about the bottom line and doesn’t care who does the shopping. The local shoe shop will measure foot length and width; the tailor will ensure sleeve lengths are correct; the camera shop will take you through the menu functions before you leave; the furniture shop will let you see fabric samples in different lights; the hi-fi shop will spend five hours auditioning different speakers. You don’t get this from large, faceless organisations or online retailers, but they are cheaper for the customer. The question is, and this is where the M&S announcement is important, “Are we prepared to pay a little more to retain a vibrant high street?”. M&S has stated it wants a third of its business to be online and every other major retailer appears to be heading in the same direction. But without their continued bricks and mortar operations, to bring people into town centres, the high streets will become ever more deserted and that is not good news for the independents.
None of this is new of course – many analysts and ‘experts’ have been predicting the demise of the high street for years – but when the bastion of the UK town centre, Marks and Spencer, makes such a statement, maybe it really is time to take note.