3 October 2008

Taking the easy way out

I don’t know how may of you heard Sir Stuart Rose, boss of Marks & Spencer on the BBC Radio 4’s Today programme in the week?

Marks & Sparks results had just been announced, and as you would expect in the hothouse climate of modern share dealings, the price had headed south.

Sir Stuart was asked if he was going to downgrade the quality of the M&S food offer in the wake of increasing competition from some other supermarkets, and with the increasing number of consumers on tighter budgets that were looking for less expensive ways to fill the supermarket trolley.

“No”, he replied. “If we reduce the quality of our food offer, we will lose the traditional M&S customer.”

Okay, there is a world of difference between grocers and KBB retailers, but there is a lot to be learned from them.

Most of the other supermarkets fight mainly on the price point rather than the product itself. When times get tough, some customers will go looking for who is offering the best deal and suddenly all of those ‘loyalty’ points aren’t worth a hill of beans – especially if the beans are a penny cheaper in the other supermarket.

This is why Sainsburys and Tesco are losing some of their customers to Lidl and Aldi.

Marks & Sparks has never promoted the price of its products to the same extent that they have promoted the quality of the merchandise. All of its food is own brand, which makes it slightly more difficult to compare like-with-like, and it has a number of lines that are exclusive to M&S.

Of course Marks & Spencer is suffering at the moment, Sir Stuart Rose admitted that business could be better, but cutting price or cutting quality would not help them.

Fast forward to the KBB sector where, if you are an independent, the temptation to cut prices must be tremendous. But there is scant evidence that reducing prices without reducing overheads is going to help and once the quality tag is lost, it is almost impossible to get it back.

Funny enough, it is often possible to increase service elements dramatically with little or no increase in costs. Tried and tested techniques such as a friendly greeting and offer of refreshments to visitors, good levels of product knowledge, smart brochures and leaflets and a clean and tidy showroom will all help to win the quality order.

This week saw the opening of the redesigned C.P. Hart showroom and it is a stunning presentation of bathroom products – possibly the best bathroom showroom in London. MD Paul Rowland and his team probably do not win an order from every visitor (as much as they would like to), but the quality environment will help them win every quality order they can.

And not a £149 three-piece bathroom suite in sight…

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