Impact of Comet Administration

Both John Lewis and Dixons have reported benefits from Comet going into administration. John Lewis saw a 17.9% increase in total sales in the seven days to 3rd November, based on the same period last year – with electricals up a massive 28.9%. The newly launched iPad Mini tablet was the best seller, and vision products also did very well. In its turn, Dixons shares rose almost 20% to 24.7p between 31st October and 8th November.

In other news, Dixons Retail has offered job opportunities to Comet staff facing redundancy. It is looking to recruit 3,000 temporary members of staff, including 2,000 in stores, in the run-up to Christmas, and has invited Comet staff to apply.

Booths for Better Service in push on headphones

Cromwell customer, Booth for Better Service, which is the largest independent in the north of Scotland, has opened a “headphone store” inside its Inverurie superstore to push top-end products such as Skullcandy, Dr Dre, and Ferrari. If you “like” them on their Facebook page you can get 10% off any headphone: http://www.facebook.com/pages/Booth-for-Better-Service/201390799875139

Mobile Christmas

A new study from IMRG and Capgemini predicts that around £4.6bn will be spent online in the UK in the first two weeks of December. Of that, around £920m is expected to go through mobile devices. The percentage of all online sales being made via a mobile device will rise to 20% by the end of December (from 8.2% in Q1 of this year). Consumers are increasingly sitting in front of their TVs and browsing online stores on their smartphones and tablets. EBay has announced that it expects 30% of all purchases made on its site this Christmas will be via mobile devices, making mobile-enabled e-commerce sites a must have, not a nice to have.

A report from retail analysts Verdict and SAS UK, “How Britain Will Shop For Christmas”, also suggests that online sales will be strongest amongst retailers able to offer click and collect and m-commmerce options, with websites optimised for both smartphones and tablet computers.

October retail sales slow online and offline

The British Retail Consortium has admitted that slowing online and offline retail sales are a reminder of “difficult economic realities”.

Online sales grew by just 7.3% in October – the second lowest in four years (this August saw growth of just 4.8%). Stephen Robertson, director general of the BRC, said: “That’s partly about disposable incomes being squeezed and people holding off making major purchases but also it’s inevitable growth will slow as online retailing matures and becomes established practice with a bigger proportion of shoppers… There is good news. Click and collect services are continuing to grow well. But retailers will be hoping that autumnal weather and thoughts of Christmas will start to translate into much stronger online spending soon”.

Across retail, footwear was the fastest growing category, followed by food, clothing, furniture and flooring and house textiles and health and beauty. But other non-food sales fell, while the home accessories category was also down.

Internet & mobile sales predictions to 2022

The Economist Intelligence Unit has predicted that at least a third of UK retail sales will take place online by 2022. The report, “Retail 2022″, also suggests that mobile commerce will by then be a mainstream way of making purchases.

Report author Jon Copestake, chief retail analyst at the EIU, said: “The opportunities for retail over the next decade and beyond are enormous. But where the future markets will reside and the way in which we will buy goods will change dramatically. Retailers will need to evolve to adapt to this new landscape.”

A multichannel approach to shopping will also mean the rise and proliferation of the convenience store: “By 2022, bargain-driven technologies such as Groupon and mysupermarket will have merged and expanded into sophisticated sites tailoring and personalising the best offers for consumers.” This will create a polarised market where consumers buy staples from discounters and save up for luxury purchases.

What now for Comet?

With Comet now in administration Chairman John Clare must be regretting his belief that the key to success for the business lay in low prices. Not only that, the company had a tragic lack of focus on online and multichannel retail.

Jon Copestake of the Economist Intelligence Unit said: “Not only has Comet faced deflationary pressures thanks to stiff competition and cheaper production costs but core audio visual products are being undermined by combined platforms on smartphones and tablet computers. The fact that OpCapita obtained the chain for a nominal £2 last year highlights the challenges faced by specialist electronics retailers.”

Record losses at Panasonic

Panasonic has reported record losses of £5.4bn for the second quarter of 2012. In its consumer electrical division sales decreased in the six months to September by 24% to £5.5bn, down from £7.1bn in 2011 – attributed to a sharp fall in sales of flat-panel TVs, Blu-ray recorders and digital cameras. Reuters has reported Kazuhiro Tsugo, Panasonic’s president, as saying the company will move away from TV and consumer electronics. It is performing better in appliances: sales of (mostly) refrigerators and washing machines increased 2% to £6.3bn. Losses have been partly attributed to the European financial crisis, the slowdown of Asian economic expansion and 2012 company restructuring costs.

DPD investing for online boom

Parcel firm DPD has announced it will invest £175m in additional capacity to meet growth in online retail – creating 1,500 full-time jobs in the process. It will build a new £100m parcel sorting hub in the East Midlands and refurbish two other hubs. The company has experienced unprecedented growth since it launched its Predict service in March 2010 – utilising the latest GPS tracking technology to provide customers with a one-hour delivery window.

BRC calls for freeze on business rates

Retailers face £175 million business rates bill if next year’s increase is based on September’s RPI according to a warning from the British Retail Consortium. The Office for National Statistics has announced that that the RPI fell to 2.6% in September – down from 2.9% in August. The BRC has warned that the retail industry already pays 28% of all business rates and argues that the rates have already increased “significantly” with cumulative increases in both 2011 and 2012 amounting to more than £0.5 billion.

It is asking the government to freeze business rates in 2013, to honour its commitment to review the mechanism for setting rates increases, and to introduce a fairer, more sustainable formula for the future based on the annual average of the Consumer Price Index.

BRC director Stephen Robertson said: “The retail industry is the UK’s biggest private sector employer, providing crucial first jobs to a million 16-24 -year-olds. Expecting retailers to bear a huge rates hike for the third year running can only lead to fewer chances of work, less investment and more troubled high streets…The government must recognise that retail has already contributed its fair share to the Exchequer and freeze business rates in 2013. It also needs to reform the mechanism for setting future increases so that it is fairer and less volatile.”

Getting to Know Jack Warden

Jack Warden

We persuaded another of our staff to submit to a quick Q&A – so here’s what Jack Warden, who joined us in June 2011 as a trainee Programmer, said to our interviewer:

Q. How did you get into the software industry?
A. I did ICT and Electronics at A Level and was really keen to find a job in which I could use those skills.

Q. What do you most enjoy about working here?
A. It’s a really supportive and friendly place. I had a holiday job in a factory one summer and no-one spoke to me at all, so I had a horrid feeling that’s what work was like. Thankfully, it’s totally different here.

Q. What have been the biggest challenges at Cromwell?
A. This follows on a bit from what I said about the factory job. I didn’t know what to do when I first started here. Not on the technical side, but more about being in meetings. I didn’t know what was expected of me in terms of joining in or keeping quiet. Now I understand about making a contribution and know how to behave in a professional business environment.

Q. If you weren’t in your current role what would you choose to do?
A. The same as here – but in the games industry.

Q. How would you describe yourself?
A. Geeky, outgoing and quite loud. That’s a total contrast to when I first joined, as I was quite shy then. I’ve really got a lot more confident.

Q. Who, or what, makes you laugh?
A. Everything. I really do find life amusing, and I’m a really happy person although I’m not completely insane and do try and treat some things seriously.

Q. Anything about yourself you’d like to change?
A. The ability to grow a proper beard. I have serious goatee envy. Why can’t I grow one like Derren Brown?!

Q. Favourite food and drink?
A. No-one’s allowed to touch my secret stash of orange & pineapple squash. Plus I have a drawer full of sweets and chocolate. As addictions go, it’s pretty minor stuff though.

Q. Biggest regret?
A. Renting a room in a house owned by a completely weird Frenchman. He never spoke to me, and did bizarre things like tape over the switch on the bathroom heater so it couldn’t be turned on. It would make a good sitcom.

Q. If you ruled the world for a day what would you do?
A. I’d make men dress up in top hat and tails, and women wear ball gowns, so we could all have a really good laugh.

Q. What’s your pet hate?
A. “Keith’s” new blue Mazda!

Q. What’s your greatest achievement to date?
A. Coming out of my shell in the last year or so – it’s much more fun being a confident person.

Q. Who has had the biggest influence on your life?
A. My Mum. What can I say? She’s just always there for me.

Q. Who or what would you consign to Room 101?
A. All the rubbish, synthesised pop music around at the moment from talentless, synthetic bands.

Q. All-time favourite TV programme?
A. Lucky Star. It’s a Japanese animation based on comic strip manga.

Q. What’s your favourite piece of kit?
A. My ancient Samsung flip-up ‘phone. It’s not smart, it doesn’t make me coffee in the morning, but it still makes calls and that’s all I need a ‘phone for believe it or not.

Q. Where do you see yourself in 5 years’ time?
A. How can I possibly plan that far ahead? It’s a tough call to plan next weekend.

Q. Surfing or Safari?
A. Surfing. I don’t fancy a safari at all.

Q. What surprises you?
A. Interviews like this.

Q. Do you have any hidden talents?
A. I speak and write a bit of Japanese, and would love to visit the country one day. But I have a long way to go before I could make myself understood. The language has some interesting peculiarities – like it being spoken differently if the speaker is a man, woman or child, or depending on the relationship you have with the other person. Still, I like a challenge.

Q. If you were stranded on a desert island who would you most want to land on the beach?
A. Dylan Moran. He’d be able to see the funny side.