The bad news from retailers continues to roll in and the papers continue to pump it up. But is it so bad? Round here the shops looked as busy as ever. M&S and JL's report decent trading. So what does that tell us? That when things get a little tight, people look for quality. They do not want to risk their money with rock bottom retailers but want stuff that will last.
Those suffering are those that don't pay attention to this. Obviously Argos and Comet, but strangely Dixons too. Why, in their position would a company decide to ignore the evidence and pursue a rush to the bottom? Is it because they have a Tesco mentality? OK so they are not as cynical in dealing with their customers as 'the nations favourite grocer', but they do love the word 'sale'.
Personally, I probably get caught by the 'half price' tag that is routinely used as much as anyone, but then get really annoyed when it is half a price they made up and pretty much the same as everyone else charges. But me being annoyed doesn't register. If the con works sometimes then stick with it, they seem to be thinking. If the annoyed move away from that retailer, then something happens that they hadn't contemplated.
It appears that there is an entrenched mindset at Dixons and nothing will cause it to change. 'Well, we've always done it like that'. I see that part of the success at Dixons has been Dr Dre headphones, which are basically over-hyped, over-priced mediocrity, so how to explain the sales? Might be that brand image and suggestion of higher quality (they aren't crap, but you can get better sound cheaper -though not with the image admittedly!)? But Dixons move up market and address their core customers? Wow! What a lot for a retailer to take in.
No, the rudderless ship continues on its way, though hardly alone. The current breed of CEO's seem to be focussed on grand schemes for European expansion (without realising what a bad idea 'Europe' is), borrowing exorbitantly and rather less on raising their game as a functioning business.
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