Kingfisher / B&Q feeling the pinch?...

On Sun, 18 Sep 2005 00:15:18 +0100, ":::Jerry::::"

It does to the retailers and other businesses. If they cared out universality of reach with their products and merchandising, there wouldn't be detailed analysis of each carried out by market research firms. As it is, there are shed loads of data and businesses certainly do try to target their activities to maximimise return and profit.
If those on line don't represent a significant business opportunity for them, why would they bother?

Well.... I didn't say that it was a good thing to have a section of the population disenfranchised from access to more choice of products and price competition, but that's the way it is.
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.andy

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wrote:

it
No it doesn't, the fact is that people are not using online commerce, the reasons why and the solutions are beyond the retailers control so they should be worrying about other thing that they can have an effect on.
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On Sun, 18 Sep 2005 11:58:03 +0100, ":::Jerry::::"

To a large extent, they are beyond the retailer's control, although some retailers do offer better prices for buying on line.
However, we do know that a large proportion of those not on line are in the lower income and expenditure groups and the remainder are those who don't see the value or just don't want to use E-Commerce.
The lower income groups are not so likely to be spending money on the higher value and margin items anyway, so this leaves those who choose not to be on line - perhaps 15-20% of the adult population max.
Then the question becomes how to reach them through the bricks and mortar stores and indeed whether they are susceptible to marketing anyway.
Small market share increments in retail are significant, but this group would be the hardest to reach. Given that situation and declining sales of existing products, altering the product mix to include higher margin items that will appeal to those with more disposable income and offloading some cost as well is a fairly obvious choice.
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.andy

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wrote:

commerce,
commerce,
so
They may well do, but if 'X' percent of people will not or can't use online comerce it's more or less irrelivant.

are
those
Your point being what exactly, other than to suggest that those lower down the income level don't spend money - which they clearly do.

the
choose
Can you cite a reference as to how you come to that conclusion, why do you assume that those on a lower income don't buy higher value and margin items - they might not buy so often granted.

Of course they are just as susceptible to marketing, ISTM that you really don't 'know' the people you are talking about, you seem to be making some wild and wide open assumptions. Do you really think that those in the top 1/3rd of the income scale would even bother with places like B&Q?

obvious
Only as long as those people use the stores.
As it is, having been into my local B&Q today, and seeing how they have dragged out every odd bit of tatty stock from all the corners of the store room, I suspect that their problems are very deep...
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:::Jerry:::: wrote:
|| As it is, having been into my local B&Q today, and seeing how they || have dragged out every odd bit of tatty stock from all the corners of || the store room, I suspect that their problems are very deep...
Exactly the same in my local one as well, piles & piles of complete tat in the main.
Dave
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On Sun, 18 Sep 2005 19:53:57 +0100, ":::Jerry::::"

Only for those people, not for the retailer.
If the retailer chooses not to address these people because the market opportunity is too small and there is lower hanging fruit, then that's his (calculated) choice. There doesn't have to be universality of supply.

Of course they do. The question is on how much, what, how and where. If that correlation is poor for the retailer, he can simply choose to put his efforts elsewhere.

One can look at family expenditure figures from the ONS.
In the 2003 data (last available), the spend as a percentage of income on household goods and services (closest to what a DIY store sells) is 7-8% almost regardless of income.
However, taking the lowest 3 deciles, the expenditure is 11, 12.70 and 17.60 respectively on a weekly basis.
For the top 3 deciles, it's 36.70, 44.40 and 71.90
National average across all income groups is 30.20.
Not surprisingly, across a range of consumer durable product types there is much higher market penetration of some in higher vs. lower income groups. For example:
Over 80% of the lowest and highest decile income groups have a washing machine, central heating and a telephone.
However, it's 90% vs. 20% for home computers, 90% vs. 35% for tumble dryers and 70% vs. 10% for dishwashers, 90% vs 10% for internet connection......
These are national figures and of course there are regional, age and other factors in them.

Not at all. The figures are there.
From the marketing perspective, you have to be able to reach your target customer. It's a little difficult to reach somebody who doesn't have an internet connection with a marketing message delivered via a web site. My point was that somebody who goes out of their way to avoid a major form of communication but does not have economic limitations on access has an agenda for doing so.

I do. However, the only reason is for convenience and likelihood of getting everything in one place when I haven't had time to purchase in advance from an on line source.

Well..... There was a 10% reduction on everything weekend. That's enough to get people into the store. Having done that, it's the perfect opportunity to clear stock.
This seems to me to be a reasonable way to address excess and slow moving lines. I would be more concerned if they kept it in stock for an extended period.
--

.andy

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<snip>

market
that's
of
Whilst, in the case of people like B&Q, loosing sight of their base custom...
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Andy Hall wrote: Given that situation and

    Sainsbury's and M & S tried this, the results can be seen in their share price. It takes a few years to show for a big operation, but it really is the best way to wreck a company other than purchasing an American operation! I have a golden investment rule of always selling any British company's shares when it buys a US one. I've on average saved myself losses 2-3 years down the line 90% of the time!
    Regards     Capitol
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On Sun, 18 Sep 2005 21:00:21 +0100, Capitol

I know. I didn't say it was a *good* idea, but it does appeal at first sight to bean counters.

I agree and have done exactly the same on several occasions.
The opposite way around seems to work rather better on average.
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.andy

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Andy Hall wrote:

    Very false reasoning. Any customer with cash is a better proposition than one with either a credit card or a cheque. The best customer is one with no money, because you can sell not only the goods, but also the money to pay with! As a retailer you need any customer you can get over your doorstep. Higher income customers are frequently not the best margin generators. Tesco's and Dixons grew to their present size by selling mainly to low income customers.
    Regards     Capitol
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On Sun, 18 Sep 2005 20:50:58 +0100, Capitol

That depends on what you are selling in what volume and with what margin.

That's certainly true.

That depends on whether they are buying what you want to sell.

That was the early strategy. For a long time Tesco have taken a lot of trouble to match stock profile to customer base geographically and demographically. This has been responsible for much of the growth in recent years.
--

.andy

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Andy Hall wrote:

I have to agree with you here. For many years I was happy to shop at Asda. This was at the time it was run and owned by Associated Dairies. As soon as they sold out, the store went downwards. Very soon, I learned that they were selling what they wanted me to buy, but not selling what _I_ wanted to buy. They would move goods from aisle to aisle, drop goods that I wanted to buy etc. It took me just a few weeks to stop shopping there. These days, if you look on an aisle devoted to prepared foods, you will find that they only sell their own brands. Choice? What choice?
Moving on to Tesco, they look like losing the plot as well. My local one has just been expanded by giving it an upstairs area. They are also brassing me off with them dropping lines that I like. (I am a green shopper and like organic things) If it continues any further, I reckon that I will move on to Sainsburies. At least the financial pages are saying that they are rising from the ashes at last. Apart from that, they do tend to have better totty roaming the aisle ;-)
Dave
Rant over :-)
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Dave wrote:

Tell them so, by e-mail to as many contacts in the organisation that you can find.
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Chris Bacon wrote:

OK I'll try that and see if it makes a difference
Dave
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Dave wrote:

If lots of people did, it *would* make a difference - "don't waste your complaint - use it".
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wrote:

I've taken the trouble to 'demand/request' to see a 'manager' [they wear suits] at my local Tesco and asked why they've dropped items that I purchase from their shelves ? I'm referring to small low value items ... after a while the items have reappeared on the shelves ... adding "I only come here because you stocked XXXX and now that you no longer stock it I'll go to Sainsbury/Asda ' seems to invoke a response.
The stores only exist to satisfy customers ... no customers .. no stores!
--

Brian



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wrote:

Unfortunately not true. The stores exist to satisfy shareholders (as with all businesses). The more customers and profit, the more shareholder satisfaction so they will work on that. If they could produce the results with less customer satisfaction they would (as you have seen) -drop service until they squeak then crank it up a bit. Look at the piles of crap left in the aisles of Tesco 24hr stores late at night because they have to stock shelves when customers are there - doesn't make me satisfied but they are open and I'm still there (occasionally)!
I'm not particularly a Tesco basher (otherwise I wouldn't shop there) but the most malign influence of global food retailers is their effect on the supply side - customers get an advantageous deal overall - the suppliers pay the price.
Bob Mannix.

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big snip

I'll repeat; no customers ... no stores -> shareholders lose all their 'investment' -> Directors/Managers/Staff lose their jobs/bonus et.al.

That sound like a feedback mechanism to ensure the 'management' react (quite quickly) to customers' demand.

I read the words ; in fact I understand what they mean individually ... but I can't quite grasp what point you're trying to make.

You don't have to shop there - unlike when I was growing up, and my mother was required to _register_ at a food store to obtain 'the rations' - you can purchase food from other (bijou) retailers -OR- purchase Fair-Trade goods from ... ta,ra ... Tesco.
Do you _always_ choose to purchase the Fair-Trade coffee/tea/sugar/ bananas et.al. ....?
--

Brian



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I'll repeat: they are there to satisfy shareholders - that doesn't make what you said about "no customers no stores" untrue.

There's a deal of difference between "unsatisfied" and "complaining" or shopping elsewhere. If they were wholly concerned about customer satisfaction they would be trying to ensure this anyway, without waiting for complaints, was the point I was trying to make (admittedly I could have just said that ;o) ).

No I don't, but I was talking about cutomers in general, some of whom shop at Tesco because it's cheaper (in some areas). The influence of the large chains on the supply side would be unaffected by the presence or lack of my custom. Tesco have a huge market share and use it.

Not pertinent to the argument as I was talking about the general customer but FWIW: coffee - yes, tea - no, sugar - hardly ever buy any, bananas: usually> --
Bob
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On 17 Sep 2005, :::Jerry:::: wrote
Re:

I'm amazed that retailing never seems to cotton on to this: it's not as if it's a new phenomenon.
Wunceponatime, when British Gas -- as a monopoly -- had high street stores, you could go to the back of the shop and pay your gas bill to someone sitting behind a teller's wicket.
The front of the shop was used to flog cookers and other stuff, and this (obviously) made a way higher margin than some poor shmuck sitting behind a wicket taking payments that were going to be made anyway.
So they abolished the wicket -- because it underperformed -- and pointed you to the Post Office to pay your bill, so that they could deploy their staff to sell cookers instead. To punters who no longer bothered to come into the shop: they couldn't pay their bill there any more, and there was no reason to go inside. And then they wondered why the shops were losing money....
It's not a complex equation, and I really don't understand how retailers still get it wrong. (M&S is another example. Don't get me started on the hunt for patterned long socks.)
Do the advisers at B&Q really think I'll make a special trip to check out their selection of home furnishings if they're no longer stocking the mundane stuff that I need to get? (If I'm going to make a special trip to look at MFI- or IKEA-like shmutter, why on earth wouldn't I just go to MFI or IKEA instead?)
--
Cheers,
Harvey
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