TAKING LESSONS FROM OZ?
Know your market is first rule of business
by Chris Biddle, Consultant Editor
 
Chris Biddle

Far be for me to stick up for the ‘enemy’ - but sometimes you should feel sorry for those affected by extraordinary ineptitude

 

Back in the day, when Service Dealer (or Garden Machinery Retailer as it was then) first crept onto the scene, all the talk was of the ‘sheds’. Through the 1960s and 70s, garden machinery dealers had things pretty well all to themselves. Then in 1969, Mr Block and Mr Quayle met, converted a furniture warehouse in Southampton and started selling houseware, hardware and garden stuff, trading under their surname initials.

 

By 1980, they had twenty stores and attracted the attention of F W Woolworth who bought them out in 1982. At the same time, Sainsburys together with a Belgian retailer opened the first Homebase store in Croydon. The sheds were in business. Names like Payless, Do-It-All, Texas, Focus soon joined them in bringing mass retailing to the DIY and garden market. Opening 7 days with massive sales floors, large car parks and even larger advertising budgets, specialists were soon under the cosh in those pre-internet days. The sheds were Public Enemy No1 to most dealers.

 

And when the going got tough for the sheds, they embarked on eye-catching promotions. The most memorable (and far-reaching) came in 1992 when B&Q marketed a petrol walk-behind mower at £99, virtually cutting in half the perceived value of such a machine. Yes, it was a side-discharge machine more suited to the US, and of questionable quality, but heck . . it cost under £100. And of course, when the early season went sour weather-wise, the sheds slashed prices to clear the decks for BBQs and garden furniture, again distorting the market.

 

But as we got deeper into the Noughties, the internet began to become influential. Dealers found a tool whereby they could compete for customers attention without having massive advertising budgets. The sheds themselves had to evolve, some disappeared, and the likes of B&Q and Homebase altered their strategy. B&Q went more ‘blokey’, attracting the pros and semi-pros, Homebase softened its image, brought in concessions like Laura Ashley and Habitat to attract the family audience.

 

That is until Australian meg-retailer Wesfarmers (owners of the Bunnings DIY chain) came on the scene – and decided they knew the British public best. Bunnings enjoy cult status Down Under, primarily due to its ‘sausage-sizzle’ barbecue events and aggressive pricing. Out went the UK management, out went the concessions. In came ‘every-day pricing’, pile-it-high displays and amateurish hand-written price signs. The stores soon looked like a giant jumble sale.


Wesfarmers had paid £340m for Homebase in 2016, made a loss of £54m in the first year and soon discovered that their strategy at home didn’t fit the UK. This summer they sold the chain to company restructuring outfit Hilco for £1. Hilco immediately announced that over 40 stores were to close.

 

Now I’m not crying in my beer over the decimation of this once powerful competitor to the specialist network, but the people, the staff, the suppliers are those that suffer. Our Homebase in Salisbury is on the closure list, the staff are distraught.

 

Of course, retail is undergoing a massive wake-up call, stores in all manner of sectors are closing. But that is mainly down to changing market conditions. A slimmed down Homebase may have a second-wind but it has been brought to its knees because of woeful management, poor execution of a strategy and a sheer lack of ‘knowing the market’ which would be inexcusable if undertaken by any retailer, large or small.

 

So if you are looking for new showroom down this way, can put up with the occasional rogue Russian, you know where to look.

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In this issue
EDITOR'S BLOG
TAKING LESSONS FROM OZ?
NEWS
VINCENT TRACTORS EXPAND
RTM'S SHOW CELEBRATES ROYAL WARRANT
WEATHER HITS HUSQVARNA
RIGHT TO REPAIR RULING
STRIPES GALORE
TURF PRICES TO RISE SHARPLY
TORO SITEWORKS APPOINT ORANGE PLANT
RICHARD KNIGHTON JOINS TONG
POLARIS SUPPORTING PIONEERING FARMING SCHEME
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