Supermarkets are always in the news, and in the UK they're everywhere else too.
It's more than 10 years since Sainsbury's lost the"UK's biggest" title to Tesco which is currently three times its size and counting. Now in third place, they're making headlines again as a clutch of private equity firms consider a bid of around £9.0 billion.
Of course I'm not engaged to advise any of the parties, so I can offer a completely unbiased (and indeed thoroughly ignorant) opinion. The question is "How will they make money out of this?" and the answers focus on the property portfolio and operating margins.
Well, all supermarket groups like to keep great chunks of real estate on their books to prevent the competition building stores there if nothing else - but they'll need to retain that - while the advantages of sale and lease-back would probably be over-diluted by the new debt.
Margins? To get near Tesco they'd need to quadruple their performance without reducing the shopping experience to North Korean levels, but they must know that the Pyongyang strategy is already working brilliantly for Aldi and Lidl. And anyway, if they try to be just like Tesco and succeed, they'll become, well, just like Tesco, thereby removing any serious differentiation and destroying the brand.
But there is a way: with price, range and presence as given, they should concentrate on service. Currently, customer service consists largely of packing your bags at the checkout, but why stop there?
Why don't they go the whole hog and drive you home, stack your fridge, pour you a beer, make dinner and give you a full body massage? Why not send people round to mow the lawn, redecorate the dining room, clean the pool, wash the dishes and walk the dog? I'd shop there, wouldn't you?
Of course this is only the beginning: retail groups should stop offering loyalty points and start awarding their best customers free servants instead. The more you spend, the more (and better) servants you get. They live in your attic, call you Sir and Madam, wear uniforms, get up before dawn, clean things, make tea and spread malicious gossip about you - all the traditional stuff. All you have to do is buy everything from their store group.
Start saving the coupons.
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1 comment:
Watson,
vg. Gold star. Go to the top of the class. (Is that the southern equivalent of "Go to the foot of our stairs"? – a phrase so mixed in its potential meanings I suppose it is to be used only when a mixed meaning is required. Perhaps it needs updating though. How about: "Go to the mid-point of our alcove?" or "Desport yourself about our newell-post" or again "Rise to the apogee of our crenelations.")
Yours,
Roger
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