Retail expert warns of hard times ahead

Retail expert Leigh Sparks warned conference that 2009 will be a “cathartic year” for UK retailers.

Prof Sparks (pictured), Director of the Institute for Retail Studies and Dean of the Faculty of Management at the University of Stirling, told delegates: “The industry will keep the best, but lose the rest. The difficult trading conditions will continue at least into 2010 with discretionary spending affected most.

“The prevailing conditions will create a rebirth of service excellence and there will be excellent opportunities to acquire prime quality sites.

“Even if the Co-op isn’t in the market for these sites, its competitors will be.”

Prof Sparks, who spoke at the inaugural National Consumer Conference three years ago and offers an ‘outsider’s’ view of the Co-op, said the Movement had improved its position significantly since 2006.

“At that time co-operatives were a minor player, fragmented, defensive and the Movement seemed to be relying on the Competition Commission to sort its problems out.

“But when the Commission’s report was published, its conclusion was that competition was delivering good outcomes for consumers and that, in reality, there was nothing that Tesco was doing that could not, over time, be challenged by competitors.

“Tesco’s market share has declined a little since 2006, but it’s still around 30 per cent and you don’t get that kind of market share by being wrong — it’s because they are a better retailer than you.”

However Prof Sparks said the Movement had experienced a major renaissance and was benefiting from its emphasis on community and convenience plus the trust factor in uncertain times.

“Maybe you are seen as the good guys; you have a set of values and beliefs and stick to them,” he said. “That shouldn’t be underestimated at the moment. You have energised the brand; membership has increased dramatically and you have seen financial service growth. You should be pleased and proud — but why wasn’t it done earlier?”

While there were many positives for the Movement, there were also some negatives and Prof Sparks said there was a legacy to be overcome in terms of modernising and rebranding stores, and he expressed concern that too much emphasis on issues could confuse shoppers.

Prof Sparks said he found the Co-operative Group’s current ‘Blowin’ in the Wind’ ad “inspiring” but questioned whether the use of a 45-year-old song would attract young people.

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