Multiple Retailers - Good or Bad?

When I was just a tender lad of 16 years, right after "O" levels, I took a "grand tour" of Europe on my bike. This explains the photograph, but now I need to tell you a little about the bike. I built it myself from components, so I knew everything about it. Even though I was touring, I used special lightweight racing wheel rims and tyres, known as "sprints and tubs". The tyres were tubular in section, a very light inner tube being completely enclosed by the tyre, which was sewn together using silk thread. On the third day, which was Stamford to London, I suffered a puncture. Having stupidly set out without a spare tyre, I had little choice but to sit cross-legged on the grass verge, unstitch the tyre, repair the puncture and re-sew the tyre. Once under way again, I naturally decided to detour into the nearest town, which happened to be Corby, to purchase a spare tyre. So much for the background, this is where the story really starts.

Arriving in Corby, I cruised along its main street looking for a cycle shop. Failing to find one, I asked a passing pedestrian who looked puzzled, but tried to help. Several passers-by later, and I had learnt that the only two cycle shops in town were Curry's and Halford's. Even with the inexperience of youth, I was slightly reluctant to try either of these two shops. In any case, the unenthusiastic and half-apologetic manner with which people directed me to the two stores served as a forewarning that I should not expect resounding success in my mission. So it was to prove. I forget now which I found first, although there was not much to choose between them. Nobody in either shop had heard of what I wanted, although I was careful to ask for "tubular tyres for a pedal cycle" rather than "tubs", they were not in stock nor even available. What I also learnt was that there had used to be a "proper" cycle shop, according to the locals, but that it had closed down shortly after C&H had opened, because it couldn't compete with their low prices on cheap bikes at Christmas. As a result, there was no proper cycle shop in town, nowhere to take cycle repairs, nobody who knew anything worth knowing about bikes. About half the people I asked volunteered some or all of this information. It became clear to me that ordinary people knew the reason for the demise of the "real" shop, and seemed to think that it was a regrettable and sad state of affairs. Having wasted a few hours, I returned to the A43 and continued on my way, towards the next town, Kettering, and another detour.

You can probably guess what comes next, in Kettering I learnt that there used to be a real cycle shop, where the owner was a keen cyclist, an expert, and an enthusiast, and where one could get repairs done. Yes, you would be right in thinking that it had closed down some years previously because it couldn't compete with Curry's and Halford's. More time frustratingly wasted, and I headed further South, this time to a larger town, Northampton. Surely here there would still be a real bike shop?

No! Not a chance, the last real bike shop had closed down a few years ago, not long after Curry's and Halford's had opened. In one of the three towns, I had called into the police station to ask, but heard the same consistent story. In each town, I had tried both the Curry's and Halford's branches, and had very quickly come to share the pessimistic view of the burghers about the levels of knowledge and expertise which I would encounter. In one of the stores, I really can't remember which, I was confidently and expertly informed that there were no such things as tubular tyres! Why do ignorant people in many walks of life choose to attempt concealment of their ignorance by adopting a self-assured manner? I attempted to persuade this person that I was not stupid, misinformed or ignorant about my own cycle which I had built, or about the tyres which I had fitted (and laboriously repaired), but he could not be convinced. What could I, a mere 16 year old know about tyres that he, a fully trained manager of a branch of a nationally famous multiple High Street retailer, did not. His training had not told him about tubular tyres therefore they did not, could not, possibly exist. He probably never gave another moments thought to why somebody should feel compelled to enter "his" shop and ask for something so ridiculous and unlikely-sounding that his company had never thought to mention to him the possibility of its existence. Come to think of it, he had probably never owned or ridden a bike. Managers of multiple retailers which sell bikes aren't required to have any experience or expertise gained from using or owning a bike. All they need to know is how to make a sale, where to put the money, and which forms to fill in at the end of each day and week. The owner manager of an independent shop may have gone home thinking that perhaps he had sent away a disappointed customer, and should try to fill the gap in his knowledge. Of course, the obvious reason that the real bike shops had closed down was not because they could not compete with the low prices of the multiples, but because they insisted on trying to sell non-existent products such as those I had been seeking. It's also true that they could not compete with the awful levels of ignorance and arrogance which were the most apparent attributes of the staff of the multiple retailers.

Eventually I arrived in London where I spent a few days before continuing the journey. I very easily found a real bike shop which stocked a considerable selection of the non-existent tubular tyres, and managed to buy one. A week or so later, I found that during negotiation of a steep alpine pass under a blistering sun, the adhesive tape which helps to fix the "tubs" onto the slightly concave wheel rims had become rather too hot and runny. My front tyre had started visibly to twist round on the rim so that I was riding on its delicate side wall. Heavy persistent braking coming down alpine passes overheats bike tyres just as it used to overheat car brakes. Before long I was fixing another puncture, and having to refix the tyre every half hour. I limped, if that's possible on a bike, into the famous City of Basle on the French Swiss, German border. I pessimistically assumed that if a tyre was difficult to get in England it would be much more difficult to get in a foreign country, but this was largely due to the inexperience and chauvinism of youth. The very first bike shop, which I easily found right in the town centre. The selection of "tubs" was incredible, there must have been at least fifty different types available. My lack of German was no disadvantage, I can't remember whether the shop staff spoke any English, but communication was no problem, certainly much easier than in the Northamptonshire shops.

Tyre-wise, the rest of my journey was uneventful. Over six weeks, I toured about two thousand miles through France, Belgium, Holland, Luxembourg, West Germany, Austria, Switzerland, and Italy. There were other incidents such as attempting to cure a saddle sore by applying surgical spirit, being stopped by a Belgian police motorcyclist who didn't seem too impressed at me cycling along his motorway, feeling shocked when my front wheel dropped down the gaps between concrete blocks on a Dutch level crossing, for a few seconds, I thought I had been hit by a train, when I came to my senses I jumped off the bike, picked it up and ran off the crossing, only then did I find a hole in my chin where my chin had collided with the handlebar stem nut. But, perhaps I can find a more suitable time and place to digress into the memories of that journey. Two thousand miles is quite a distance to ride with non-existent tyres. Apart from admiring the magnificent scenery, and observing the slow changes in the countryside as its rolls by, hour after hour, solo cycling allows the rider many pleasant hours to philosophise.

Specialist shops mainly exist because the owner is an enthusiast, a user, or has some other expertise in the goods which he sells. Because of his expertise, his business is successful enough for him to carve a living, so the business continues, and the shop stays open. Multiple retailers, although possibly once owned by a specialist, expert or enthusiast, are successful because they have strong buying power, economies of scale, can economically employ specialist staff with expertise in administration, accounting, advertising, display, and other skills. The benefits of being a multiple are so strong that it is possible to run the shops with relatively low grade staff. The owner only needs to know how to make profits, he can do this by buying cheap and selling dear, it hardly matters what he buys and sells, he doesn't need to know much about any of the products he sells. Manufacturers and other suppliers will be queuing to offer him excellent terms to secure big orders and repeat business. All he needs to know is how to buy cheap, plus some basic shopkeeping skills. None of his staff need to know much about the goods either, head office or the supplier label everything with product information, and provide posters, and point-of-sale material. It's a very efficient way to run a business. Cheap labour in the form of school-leavers, and part-timers can be employed; when they get older, have learnt something about their products, and command a higher rate of pay, they can be replaced with younger cheaper labour.

Multiples Displace Independents
Because multiples ar more efficient at making large profits, they tend to grow and breed. They can afford to join the "auction" to rent the prime retail locations. This tends to further marginalise the independent retailers. Owners of prime retail properties want to maximise their profits and share prices. Strangely enough this sometimes leads them to accept lower rents, from profitable financially secure multiples than they would accept from a small independent, they consider what is termed "strength of covenant". Looked at from a different perspective, if an independent and a multiple were interested in leasing the same property, the independent would always have to offer substantially more than the multiple. This means that the competition created by the multiples is to maximise profits, and to compete for the best sites, rather than competition serving to reduce prices. Once multiples have a stranglehold on the market, consumers get less choice especially over prices.

Is There Anything The Consumer Can Do?
Yes, there is a very simple solution for the consumer who wishes to get a better deal than is offered by the multiples with their monopoly, and that is to shop intelligently. By using a modest amount of brainpower, or taking some effort to find where the best deals lie, consumers can get a far better deal. One way to approach this is to ask others for recommendations, another way, only just opening up, is to use the power of the internet.

Are All Multiples As Bad?
I am sure they are not. I quite happen to like Tesco and Sainsbury's, but am concerned about the enthusiasm they can show for genetically modified foods, or the disregard for food additives and pesticides, until there is an advserse media or public reaction, then they seem to backtrack very quickly. Being slightly cynical, I suspect that consumer well-being and health only starts to matter when it could adversely affect sales and profits.
Certainly, I would avoid shopping at Dixon's or P.C. World, which they own, I have heard too many bad stories, and seen adverse criticism by consumer groups.

Are All Independents Better?
Sadly, I have to say no, they are not. It may be that in order to survive, the remaining independents have had to adopt sharp tricks and practices. There are certainly many independent shops which I would want to avoid. The solution is the same as for the multiples. Consumers should learn to shop more discerningly, and they would get better shops!

How Can The Internet Help?
The internet presents a fantastic opportunity for small specialist businesses of all kinds to market their products to consumers world wide. A one-man business, perhaps hand making a high quality specialist product, can promote his business, and advertise his goods through the internet for a very small outlay. Consumers can benefit by buying specialist products more directly from their producers, at the same time getting a wider selection, higher quality and lower prices. All it requires is a little more thought and effort.
We believe that our business provides an excellent example of this.
The coin dealing side of our business is highly specialised. We can now sell to a world wide market.
We design and create diamond rings. Via the internet, we can show our range potentially to millions of consumers throughout the world.
The gold jewellery ranges we sell are not necessarily exclusive, so we just concentrate on selecting goods which are high quality and well made. Providing we can buy them competitively, we can make fair profits at the same time as undercutting the High Street retailers by large margins. This combination of high quality with modest prices provide the reason why consumers will find it worth while dealing with us by mail order.
For 35 years, we have found that we get a high proportion of repeat and recommendation business.

I just hope that Halford's, Curry's and Dixon's don't decide to sue us. Even though everything we said about them is accurate, they have got so much more money than us, that it would make life very difficult. We have some experience of this, because one of Britain's largest jewellery retailers set their expensive London solicitors on us recently. We stick our necks on the line to help you to get a better deal. We hope you will support us by buying from us rather than the faceless High Street giants. We don't expect you to support us out of sympathy though, but because the deal and the value we offer you is far superior.

As usual, we welcome all comments and feedback:-

You may like to use this form