06 May 2008


Print	Email

srcg wake-up: taking Tesco head on is a waste of energy


srcg

Andrew Phipps, senior client director, srcg, on competing with the big boys in the retail league

Andrew Phipps: keep your eye on the ball

At this time of year many sports fans attention turns to the twists and turns in the race for premiership survival and championship promotion.

The challenge all the promoted teams face is to decide where to focus to retain the status they have strived for all season.

Do they invest in new players or do they stick with the players they have in the hope personal pride and team spirit will keep them up?

Making the wrong decision can be costly in this age of sponsorship and television fees.

According to newspaper reports, the Fulham chairman, Mohamed Al Fayed, has offered an unusual incentive to his players; a hamper full of caviar and Viagra if they can stay up.

As you’ll know the Competition Commission has just released the third full-scale supermarket report in eight years, and the findings will come as no surprise to anyone in the industry.

When the dust settles the big names emerge unscathed and continue their unassailable march to increased sales and profits.

It is obvious the smaller retailers cannot hope to challenge the supermarkets on having the best price, in the same way Stoke City cannot compete with Manchester United in the players it fields and the salaries it pays.

Both smaller retailers and Stoke City must compete in other areas where they can differentiate from their competition.

Two great examples of this can be found, firstly, in some of the independent Budgens stores that can be seen on our high streets competing, successfully, with the major supermarket chains.

While their aim is to keep prices competitive, the main focus is to drive footfall and spend through focusing on key categories in store and striving to deliver these in a more compelling, more targeted way than the corporate entities can.

Secondly, look at how Cardiff City has performed this year.

The odds of it winning the FA cup were 2000-1 at the beginning of the year. The odds of it beating Portsmouth are now 4-1.

How has it done this? It decided where to focus, bought a couple of experienced big name players and proceeded to frustrate the opposition and surprise them when the opportunity arose.

The parallels are clear; firstly, setting your strategies for the year, deciding to take on Tesco et al head on is a waste of energy; focus on something that has a chance of happening.

Secondly, not taking your eye off the ball, it strikes me the effort expended by certain parts of the industry on trying to channel the Competition Commission’s thinking would have been more fruitfully spent on improving the deliverables at a store level to truly compete.

The successful teams in football and retailing have excellent management that can deliver when needed.

If you have that you have a great chance of success. If not get into the transfer market and get the best team you can afford to deliver the success you want.

Email this to a friend