RETAIL THERAPY
Does The Sector Need Some?

WORDS: Liv Morgan

“It is not the strongest species that survive, nor the most intelligent, but the one most responsive to change.” Charles Darwin

There are over 20,000 food and non-food retail enterprises in Ireland employing 240,000 people. Since 2008 it is estimated that 50,000 former retail employees have gone on the Live Register. Retail sales have plunged over the past three years at record rates making huge losses. More than ever, the industry needs to have the right people in the right place with the vision and leadership to take it through these
difficult times. WMB interviews women in the industry working to secure its future.

Fifteen years ago Michelle McBride was in the pursuit of happiness and as with most women she found it in Butlers Chocolates. Being a manufacturer of women’s weakness it is not surprising that the company has many females in senior or managerial positions. This is however unique in the overall industry.

The retail sector employs more women than men, yet still it is rare for women to make it to the top jobs once they have reached a senior level. According to the UK Retail Gender Agenda Report just under two thirds (60%) of women work in customer service roles, whilst 13% work in managerial roles. Yet just under half (47%) of men work customer service roles and 25% in managerial positions.

For Michelle, who within a few years became Retail Director of Butlers Chocolate Cafés, the reason is rigidly apparent. “Flexibility just doesn’t work around retail. It requires a lot of time, effort, attention and it’s not really a role that you can do part-time. If you are an owner/manager in a business you tend to work weekends. Some retail businesses are not Monday to Friday, they’re not always nine to five, so I think that’s probably a barrier to females. Part of the thing with women once they get to a certain level or age is they
prioritise their family over work.”

Some commentators have nodded towards a ‘glass ceiling’ or even a ‘glass cliff’, which is impeding women progressing into more senior retail roles. This is not to say that women are not leading some highly successful retail companies, namely Jacqueline O’Neill of Tesco, Mairead Sorenson of Butlers, Margaret Heffernan of Dunnes Stores, Allyson Russell of Avon
Ireland & UK, Jacqueline Gold of Ann Summers.

“I certainly think women are better in retail than men,” says Michelle. Biased in her opinion she may be, but she lists a multitude of undeniable vantage points; “Women are shoppers and we shop more than men so automatically we have an advantage because we buy things and we know how we like to buy them. We’re more discerning than male customers for a start. Even if you are a male customer who shops a lot you’re not as fussy of a customer.”

“Also women are better at multi-tasking, they tend to have a better attention to detail and retail is about detail. Depending on the structure of the organisation people can lead things without being there all the time… I think not wanting to work fulltime or certain hours restricts women at store management level but I don’t think it should restrict them beyond that in any other kind of function in retail.”

Michelle is a mother of two, one 3year old and a 15 month old. She works a four day week and travels at least once a month: “I need to travel overseas as that’s required of my job, some women aren’t willing to do that. It’s a requirement, you can’t have international
stores and never visit them.” Butlers Chocolate Cafés account for 15 domestically, one in the UK, three in New Zealand and three in Pakistan.

New Zealand and Pakistan are franchised stores explains Michelle: “As opposed to those being strategic markets for us they’re really more about us finding the right person and that person being in those markets. Both partners approached us, we had decided to franchise and we were looking for partners but you can look in a lot of markets and not find the right people.”

Most will be acquainted with the Butlers Chocolate Café located in Dublin Airport since 2001. It gave the brand immediate visibility with international customers that helped in securing product listing overseas, particularly the UK. “The Cafés have made a phenomenal impact on the overall Butlers brand” says Michelle, “They’ve brought the brand to a lot more people, they’ve brought the experience to people, they’ve given the Butlers customer a place to really connect with the brand and the chocolates, they’ve given people the opportunity to try the chocolates who would have never tried them before and they’ve given an identity and a personality to the brand.

“Apart from Facebook and our website it’s our only direct communication we have, and as a manufacturer we’re very lucky to own our own retail stores. Very few manufacturers have that direct relationship with their end consumer.”

Analysis of previous recessions by McKinsey shows that companies who increased their brand building spend in a recession were the only ones whose profits rose substantially when the economy recovered. The value of brand building now will pay back.

As a premium brand, that strategically does not discount, Butlers is catering for tighter purse strings through constant product development at lower price points. “Whilst we do feel we’re positioned at the higher end of the market we do pride ourselves on our accessibility. I think that people may not have the same amount of disposable income but they still like to have a treat and they see us as an affordable treat.”

What retailers are finding most crippling in these times of adversity is rent. “The fact they’re not going down is a major issue. Retailers all over the country are paying excessive rents and the logic seems to be that it’s better for a tenant to go bust than to reduce the rent. Obviously turnover is down across the industry in general and there’s big inflexibility. The big issue is the legislation, though about to change, the upward only rent reviews is a major barrier for retail in Ireland.”

Social Media is currently cited as the best vehicle for opening up new markets and building new customer bases. It is also an area that customers have mastered ahead of retailers. “Smaller retailers have been slow about social media but we see Facebook and Twitter as very important and we’re active with both. A lot of our customers are communicating with
us through social networking so definitely it’s going to be more and more important. And not just through a certain age group. There’s a massive representation of the over 55s in social networking and even the over 40s through Facebook. When it started there was the perception it was for a younger generation but in Ireland there’s a lot of older people using it now too.”

Moving away from chocolate albeit remaining in the food market Geraldine Casey, Store Director of the Tesco Extra format stores, agrees technology is certainly making its mark on retail. For Tesco, this is particularly through the integration of online shopping, self service checkouts and mobile technology. In the last year, Tesco’s online grocery sales grew by
14.9%, and now represent 1.6% of total sales. “I think a lot more people are a lot better technology wise. You see the amounts of people on Twitter and on Facebook so I think every household is now more advanced. I think certainly kids are putting everyone else under
pressure because they’re so eager to learn it.”

The flexibility, freedom and immediacy that the Internet provides is countering the longer work hours and busier lives of consumers today, Geraldine says; “It’s convenient timewise, people can control their spending a lot. better, and it’s reliable down to the specific time you
want the items delivered to your door.”

Geraldine has lived her entire career with Tesco having joined as a Commerce graduate “hungry for opportunity”. Unaware of the career path she had stepped on, the Kerry native escalated through the ranks within months. She describes the company as an opportunistic place for those eager to get up the ladder. “I was only with Tesco in Killarney Park four months when I was moved to a second new store to open as Trading Manager. I was probably with Tesco nine months when I was put forward for Store Manager Academy and it went from there.”

Tesco Ireland has been a familiar fixture on our grocery scene for 14 years. Since 2001, however, it has heightened consumers expectations of what a grocer should provide with the first Extra store — a one-stop destination store offering more than your typical food lines, ranging from electrical equipment to homewares, clothing, health and beauty, and seasonal
items such as garden furniture. Tesco had finally put the ‘super’ in supermarkets.

Now there are 18 of these aptly named‘Superstores’ under Geraldine’s management spanning Cork, Kerry, Dublin and Waterford. “Opening new stores is quite a big challenge, probably the biggest achievement for me was when I was appointed to this position last year,” she says.

“I travel quite a lot. With the nature of the business no matter what you’re looking at you generally will have to travel. How often depends on what initiatives we’re doing, or where the stores are, but generally once every three weeks.” Initiatives range from energy
saving and waste disposal days to giving old season clothes and confectionary back to the homeless in the community. For the next two years Tesco intends to raise a million euro’s for The Cancer Society between all the stores.

As mum of 18 month old Tadhg, Geraldine acknowledges the support of her self-employed
husband and the flexibility Tesco provides. “I’ve also got a good group team working for me and some great leaders in the stores; Every store has a store manager which are very senior and experienced so it’s about empowering them to deliver for me.”

With the retail industry notoriously split 60:40 between women and men The woman’s touch
is certainly apparent. “A lot of our customer assistants are female. We have about 380 females in management positions such as line managers, trading deputy managers, trading managers but at the level I’m at we wouldn’t have as many.”

Despite times remaining challenging, Tesco seems to be recovering nicely from the downturn, holding its own and expanding significantly in 2010 with new store openings; A total of 760 new jobs were created during the year (ended 26th February 2011) Investment during the year amounted to E176 million, bringing total investment since 2005 to over E1.5
billion. Sales of E2,987.9 million were reported this year, an increase of 5.1% on sales of E2,843.7million in the previous year but still not on par with 2009.

Each year a “Global Powers of Retailing” report is compiled by Deloitte Touche Tohmatsu and STORES Magazine, ranking retailers from all over the world according to total revenue. In 2011, the 14th annual list was released, ranking 250 retailers from 32 different countries. Tesco UK came in 4th.

On a positive note for the retailer, statistics show that households are switching to larger retailers — looking for better value. “Competition is definitely healthy and it’s great to have it. I think we’ve used the opportunity to make sure we’re bigger, better and much stronger operationally-wise. We’re ensuring our staff are much better equipped to look after our customers. We certainly haven’t sat back and left it all happen and we know we need to make sure that we help our people through these really tough times.”

According to Bord Bia’s ‘Feeling the Pinch’ study the business and consumer landscape of today represents the “new normal” — a reality that will last for some time to come. After falling by 4.5% in 2009 as the recession intensified, consumer prices are expected to grow by approximately 4.0% this year, which will likely make consumer budgets feel even
more stretched as pressure on wages appears to be downwards.

Brands are also under pressure as private label goods now account for 10% of sales. Tesco currently carries a wide variety of own-brand ranges such as Value, Tesco, Finest, Healthy Living, Light Choices, Free From, Organics, Wholefoods and Kids. Rumour has it that we can expect a new label from Tesco that is not as obviously own-branded. In true ‘every little helps’ fashion, 98% of Tesco customers now purchase at least one own-brand food item as part of their weekly shop; The most popular items being milk, bread, sugar, butter and eggs.
This innovative step toward brand variation will sync nicely with the three distinct types of
consumers revealed by the Bord Bia study.

• The ‘Plain Sailing’ group has been the least
affected in real financial terms. Lower debts and
steady income means the impacts are largely
psychological.

• The ‘Choppy Waters’ group are getting by and
cut-backs have been inevitable. Bigger ticket items
like foreign holidays have gone but other luxuries are
still accessible with careful money management.

• The ‘All Hands on Deck’ group are fighting to
keep their heads above water. Only the most valued
parts of their spending remain protected — often
those to do with their children.

Respectively, 45%, 57% and 65% regularly use comparison websites to save money. The use of coupons is a key strategy used by all three types and the comparison of food products, before deciding which is best, now relates to functional over emotional value. “There is definitely a switch in products. Marmite and that kind of stuff is back on the radar” says Geraldine, “Probably the most remarkable change is home baking especially around
events like Easter or Christmas. Certainly in the past 12 months we’ve seen a lot of people back baking their own cakes, going back to our old traditional ways.”

The retail sector is most certainly in need of therapy. Despite consumers remaining cautious these ladies have the power to loosen purse strings and with passion they strive forward.

Retail Therapy is in the Summer 2011 issue of WMB, on newsstands from June 1st!