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The retailer announced its first fall in profits for more than 20 years last month
My observation with Tesco is that brand propositions that are based solely on price don’t have longevity. Price is a hygiene factor. You have to be at the right price for the customer to consider you but that is not a winning formula.
Customers today want an emotional connection. We’ve moved away from just a tangible exchange with the consumer to something that asks does it feel right, do I buy into your story and is it making a difference to my life? It goes beyond fact – it’s emotional and intangible.
Having said that, I believe if there is one business that is capable of reacting quickly it’s Tesco. It’s a very strong business with a great set of people. Look at what it has done with clothing line F&F as an example – Tesco has built a business from nothing to become a force in fashion clothing.
Marks & Spencer
Revenues have risen fast but clothing sales have been down for seven quarters in a row
For me M&S moved away from its DNA. You used to utterly rely on M&S to give you the latest innovation, the best-fitting product and good service. It was never the very best at any one thing but it was never bad at anything.
I think it moved away from that because it got worried about messages that it was getting that it was not fashionable enough. Now I don’t know who it is and what it stands for – it sells stuff and it’s certainly not the quality it used to be or the fit it used to be.
First of all I’d go back to a range of core classics. If I think of clothing as an example: where can you find the best little black dress? Where can you find the best pair of black trousers or cream trousers? Best fit, best fabric, best price – that’s what M&S should focus on.
After going bust, the record shop was bought out by Hilco
HMV is more difficult in a way because a lot of what has happened there is a significant change in the market. A lot of the issues that have affected that business you can’t stop so it’s all about how you adapt and how quickly you adapt.
I’ve always wondered why it did not choose to become the Amazon of music and do it first. Why didn’t it try to be online what it was in stores? It was so innovative even 10 years ago and music is core to our society and to a young audience. Yes, the delivery mechanism has changed but the product is still the product. To a large extent I’d say it’s even more core now to what it was, so it’s a great shame.
If you see what [HMV’s new owner] Hilco is doing with HMV in Canada there must be a way forward and a way through.