UK discount retailers


The UK discount retailers are booming, more to the point it is also seriously competitive.

Aldi store front
A typical Aldi store, and when you enter they are laid out on similar layouts.

Extremely competitive.

So much so, the UK discount retailers themselves continually have to evolve their strategies, just to keep pace with competition.

These days of course there are two halves to the story, online and bricks and mortar.

Online, the big players are becoming really big. ASOS was recently given a market value on the London Stock Exchange around £5 billion, similar to Marks & Spencer, a FTSE 100 Company.

M & S is bricks and mortar and not a discounter, they have been struggling to maintain market share in these times of online boom, and high street decline.

ASOS Grimethorpe
The main ASOS building is at Grimethorpe near Barnsley South Yorkshire and employs around 4,000 people Min wage is £8.45 and by the number of top class cars in the car park, many are paid a lot more.

The day the price was made news, ASOS had just opened a new 290 car overflow car park at their Grimethorpe distribution centre, to cope with the extra staff already recruited and also the extras that will be needed, for the Christmas rush. Their sales are also rather interesting as UK and Europe aside, they are selling into Hong Kong the China mainland, South Korea, Singapore and all points east, plus Australia and USA. Next are also on a roll, although just lately they have struggled to keep the large increases in sales, but this might be just the fact they are aiming more at the UK and European markets. Although that said, Shop Direct owners of Very and Littlewoods have managed to increase sales, however they came mainly from the site.

Wal Mart would crush its UK opposition

The UK discount retailers are of course dwarfed by Amazon, however it is worth making the note that Wal Mart stormed into the UK retail market by buying an existing supermarket chain, the Leeds based ASDA. At the time reports of doom and gloom came from the States saying that Wal Mart would crush its UK opposition. Well firstly Wal Mart entered UK at just the wrong moment, because WWW was just getting into swing. Plus they underestimated the very competitive nature of UK discount retailers, and also the different way UK does its shopping. In USA people have lots of storage at home, so will buy bulk, in UK it is less so. Yes we do on occasion buy bulk, but most of the time we shop for the week or fortnight. Shopping habits in UK continue to change just to add to this confusion. screenshot will have its work cut out as the UK market becomes ever more competitive.

Amazon appears to have a total control of online shopping, but as can be seen, this is not written in stone. Personally I might sell through Amazon, but I cannot recall the last time I purchased anything, Ebay is my preference, and it is because I can buy from smaller UK discount retailers, giving cut price bargains. Also although Amazon are big doesn’t make them better, but also the whole nature of retailing has always changed and will continue to do so. Competition forces this, is another online UK discount retailer that has had a big impact, lowering prices on white goods and big ticket items.

What all this adds up to is a healthy scene via online UK discount retailers.

relied on a limited number of best sellers

Now the bit you might have overlooked, is the so called bricks and mortar retailers. Firstly most are dispersed, they are on the high street, retail parks, or sole supermarket locations. Aldi and Netto were the first foreign supermarket discounters back in 1990 to open in UK, Lidl followed in 1994. At that time UK had Kwik Save which was very similar to Aldi and Netto, they all relied on a limited number of best sellers, the staff had to know the price of every item in the store. Kwik Save was set up on the same basis, the simple reasoning was that no individual item had to be priced, this cut down costs. For younger readers, there were no bar code scanner systems that were cheap enough to install back then, so limiting the number of items, allowed staff to remember the price of everything in the shop, so they could just punch the price into the till or cash register as they are known in US.

M & S interior display
Marks and Spencer always have clean unobstructed walkways

Aldi were the ones who took cost cutting to the extreme. If you go into M & S you will never see a pallet or any major delivery packaging on the shop floor. If you worked for M & S and placed a pallet on the shop floor, you would be given a verbal warning.

Go into an Aldi and, the chances are you will probably see a pallet or at least a large box with stock or waste, blocking at least ¾ of the width of an isle. They do not do night work, stocking the shelves. I started using my local Aldi at Sandal in Wakefield, back in 2004, Aldi had a policy of leaving checkouts empty until at least two people were there to be served and often three or four. It was all in the effort to keep down costs and raise efficiency, and efficiency pays wages, and as if to prove that Aldi wages were good, and the products were inexpensive.

The effect on UK supermarket shopping was electric, these foreign discounters soon started to gain market share. For the first eight to ten years they had been a nuisance, now as the new millennium dawned they were starting to gain traction. Also one leading UK supermarket chain Safeway was struggling. Safeway UK went into liquidation, many of the stores were taken by Morrison’s who were primarily a northern concern, this gave them a larger southern foothold. Then came the crash of 2008, the UK big four, Tesco, Sainsbury’s, Asda (WalMart) & Morrison’s, now all looked vulnerable UK discount retailing was in crisis.

they could not cut costs to meet Aldi

The European discounters were in the ascendancy, the Big four were scrambling around looking at ways to compete. In fact the first casualty was one of the discounters, Netto, which dropped out of the market, their model of brand names at low prices had failed. Lidl and Aldi with home brand goods went from strength to strength. Tesco, Asda and Sainsbury’s had been opening ever larger stores, more like hypermarkets, they affected bottom line costs. A large Supermarket open 24 hours has to be lit, heated and staffed, 24 hours, they could not cut costs to meet Aldi and Lidl’s cut throat prices.

Shoppers were looking at ways to cut their weekly bills, and one thing they did was reduce how much they bought in their ‘Big Shop’, bulk buying was out. Subtle changes were happening with UK shopping habits, buying fresh and often was back in and UK discount retailers were looking to cash in.

Tesco Daily Mail pic
Fill up with fuel and grab those essentials. I went into my local Asda(WalMart) supermarket one time for a single item. If I had been in the scouts, I would have been awarded a badge for orienteering and 6 mile hike combined. Nip in and out at a petrol station?

Tesco were first out of the blocks by buying up chains of filling stations with the potential to stock the necessities like milk and bread, but also very high margin goods, like flowers. So the bloke dashing in on the way home, tops up with fuel, buys his milk and picks up a bunch of flowers for his loved one. Fuel is wafer thin on margin, but that bunch of flowers suddenly made a 1% to 3% gross profit on the fuel, into a 15% net profit for the shop. Result. Tesco put on hold all its large supermarket building programme, likewise so did all the others.

Oddly at the same time, where possible, Aldi was making all their older stores 50% larger, still very small compared to the average ‘Big Four’ supermarket stores

And ten years later there is another change going on, quietly through all this the UK discount retailer scene has been changing again. When all the large chains were grappling with falling sales, there were a number of shops springing up on retail park locations, they were housed in sheds, they had lots of parking, but were also surrounded by other specialist retailers, like Pets at Home, Maplin, or the specialist furniture stores.

B & M is listed in the FTSE 250

So how many of you have shopped at Range, B & M, or Home Bargains, these are the names now coming to the fore, and Aldi and Lidl need to beware, they are as cheap and often even cheaper. I was in Home Bargains the other day, deliberately because there were five or six items I wanted, I had been to a specialist shop nearby, so called in. Kitchen roll less than half the price of Aldi, shampoo that knocked Lidl prices into a cocked hat. While I was there, I checked out the NEW grocery section, they need to improve, but I suspect they will. B & M is listed in the FTSE 250, and its Chairman (he steps down on 31st December 2017) is none other than Terry Leahy former head of Tesco. B & M have a large presence in Germany, and their latest shops are top notch, groceries are given prominence when entering the stores, but it is the sales of other items, that make their profits, UK discount retailers are back. Home Bargains have a philosophy of ‘Luxury shopping experience, with a budget price tag’ it is working.

All in all the UK discount retailers are more competitive than ever before. For those thinking #Brexit is going to be a disaster, it is overseas who are going to have to look to their laurels, UK shopping is on the move, and UK plc is too small to contain it. For all those overseas, you have been warned.

Blueprint for Serfdom

Blueprint for Serfdom

In 1972 there was a special edition of the Ecologist magazine printed, called, “A Blueprint for Survival”, virtually everything it contained, was fantasy, much of this fantasy was seen as fact. Perhaps a better title would have been “A Blueprint for Serfdom.”

A Blueprint for Survival
The Original Ecologist magazine, was in blueprint blue with the words outlined as if it was a Blueprint, somehow the people at Penguin thought they could do a better job. No it isn’t, and lacks the distinctive feel of the ‘sensational’ magazine . I worked at WH Smith at the time and we couldn’t keep up with the orders. But then Erich Von Danniken’s load of fiction Chariot of the Gods had the same effect?

The thesis for A Blueprint for Survival, was the forth coming end of the world, except it forewarned that this booklet was not the end of the world, it merely foretold of one who would come and save you from the end of the world. So just like John the Baptist, it needed a Jesus and Christianity. The Jesus and hence modern Christianity is the Green movement?

Around early 1970s various ‘Scientists’ were forecasting the next Ice age, and this was taken up by the media, who are always on the look out for a sensational story to run, when the real news is thin. So having a real bogeyman in the form of A Blueprint for Survival, was like gold dust, except it was really a Blueprint for Serfdom.

Actually what these Scientists were doing, was furthering their careers, by being alarmist. Some had already published other papers saying CO2 could cause a rise in temperatures, and that pollution was the main problem for the future?

Graph showing oil running out by year 2000
Oil was predicted to run out by 2000. There were only 30 years of reserves, and these would be gone because of exponential growth. It is wrong on 2 counts, usage of Oil exceeded exponential growth, due to the like of China etc. And there is now a glut of oil, and about 30 years of reserves. But to top it off, ways of saving oil are being found all the time, plus now vegetable oil substitutes are available.

And here we come to the nub of the problem, there is now a total confusion between pollution and global warming.

To make things clear, CO2 is not a pollutant, it is as necessary for life as H2O, water. Yes there is a limit to how much CO2 should be in the atmosphere before it becomes a problem, just like having too much water, can cause flooding or other problems. However the current levels, at around 404 Parts Per Million (PPM) are way too low.

Indeed back in the Triassic period they went to around 3,000 PPM, CO2 levels in Triassic period
and sub mariners sometimes breathe air with CO2 levels in the region of 15,000 PPM. Greenhouses are usually around 1,200 PPM which is quite favourable, because this allows greater crop yields.

Here is one of the problems, the so called greenhouse effect is so named, because greenhouses have higher amounts of CO2 than the natural atmosphere. The higher CO2 levels, thus provide a better environment in which to grow plants.

Blueprint for survival graph
Here is a graph showing how nearly ALL the Earth’s resources would be exhausted by 2020.
Copper was supposedly all gone by now, again odd how we have around 20 years of reserves, not to mention ways of recovering slag from old exhausted mines. Copper was again a product that between 1980 and 2010 was consumed in higher amounts than predicted.
This is of course Capitalism at work, just what this book said was causing all the problems, but came up with the solutions, Socialism said it couldn’t. meanwhile it was Socialism failed to deliver any good whatsoever.

Now one of the arguments the so called ‘Green’ movement use is that, CO2 levels going up will be disastrous to life? Except history and science says otherwise, during the 10th to 12th centuries England grew its own grapes for wine, okay according to the French it was not very good wine, but none the less England produced its own wines, all through from the Saxon King Aethelstan to Plantagenet Henry II. Why because of what is known as, the Medieval Warm Period. MWP

There is also another problem for the so called Greens, CO2 levels don’t always follow temperature changes.
Why Clarkson upsets the greens, he’s done a little research?

More to the point, higher CO2 levels result in higher crop yields, which is why people grow Tomatoes and such like in Greenhouses? The book, Blueprint for Survival is looking increasingly shaky, which is why the so called Greens are shrieking ever louder. Hence the Bonn Climate Change Conference, virtually screaming at the world the end is nigh. No it isn’t, this Conference is just a bunch of Socialists and hence fantasists. They long for a Blueprint for Serfdom, so they can claim Capitalism is the evil baddie. The only evil baddies are the so called Greens, a nasty set of fascists, who want to starve the world.

One of the other positives of higher global temperatures, is the fact that more water is evaporated from the seas, and higher temperatures means the atmosphere can hold more water, which falls as rain.

Here’s an interesting Graph, from the Appendix, it correlates world Production with US usage, and subsequent disaster. Of course the two are unrelated, and hence no disaster. Just green shit propaganda.

Now let’s not get carried away with the idea everything will be rosy, the downside of higher water content in the atmosphere, is floods, and also hurricanes and typhoons. The Hurricanes and Typhoons are hard to combat, indeed the best way is just to batten down while they happen. But concrete is a wonderful product, as the Romans knew, and building concrete houses and places of safety is a realistic approach.

Flooding can usually be obviated, but guess what, the most flood prone places, are also the most corrupt, so will anything be done. No. Nothing to do with Democracy or Capitalism, but the so called Greens will blame Capitalism and Democracy just the same.

Corruption is the major reason for poverty, followed by Socialism, as witnessed by Venezuela, which has both. Meanwhile Bangladesh which has a totally corrupt Government and Institutions, is one of the countries most prone to being flooded

Also there is much confusion over pollution, this is usually obfuscated by blaming Capitalism for all waste? And waste is destroying the planet, this last is not quite accurate, waste is messing up the planet, yes, but destroying it, no. Having been brought up in a household where my Mother believed the WWII slogan, ~waste not want not~ was enshrined in Law, (I’m fairly certain she till thinks it is?) I have always been one for recycling where possible, and certainly I hate wastage.

Wastage is inefficient, and so to be avoided at all costs, because efficiency pays wages, so inefficiency reduces profit, and that is bad for incomes.

Micron production line
This is a pic taken from the Micron Corporation website, showing a production line. Courtesy of Micron, and they own the rights.

As a child, the chap who started Micron Corporation, the Chip manufacturer, bought some pigs and fed them on waste from local restaurants. His feed came free, and he was able to resell the fatted pigs at a handsome profit, because his overheads were nearly nil? He was saving the restaurants money by reducing their refuse removal charges, so they let him have the waste food free.

The Green movement have commandeered the idea of ‘waste not want not’ a WWII slogan used to help the UK get through its darkest hour. Energy saving was already on the agenda in the mid 1970s due to the Unions continually going out on strike, and the oil crisis, which was merely Free trade working its magic, and distributing wealth to poor nations. But also the need for efficiency, or productivity as it is more generally called. So the Greens make themselves appear on the surface to be correct, in all they say, to such an extent, they vilify any none Socialist groups as being against recycling or green policies, even when those people introduced them and fully endorse them. I am avoiding using the term left and right because that is French Politics and doesn’t translate, to UK politics in the same way. Namely Socialists are extreme right wing and left wing at the same time.

Is there a way out of all this, yes ignore Socialist and Green parties and just get on with life, and hope the CO2 levels do rise. Certainly a rise to 500PPM or even 600PPM will, on the whole, be beneficial.

The Blueprint for Serfdom won’t materialise as fact, but that won’t stop people damaging the world trying to make other people see it is true.

In the Medieval Period, the vast majority of the populace believed that God would destroy the world. Today it is merely human activity which is being blamed but still the belief is strong, and that dear reader is all it is, belief, there is no Scientific evidence that holds up to scrutiny.

Those believing in God, had and probably still do have, a much stronger argument, than the so called Greens about the destruction of life on Earth, don’t hold your breath awaiting the Blueprint for Serfdom, it ain’t going to happen anytime soon.

Nest egg


The Bank of England Monetary Policy Committee will be meeting later today. It will also be releasing the quarterly Inflation report. The general expectation is, that the Bank will raise Interest rates, by a quarter of one percent, to half a percentage point. Let’s hope it does, but don’t hold your breath. They don’t like the idea that the poor have a nest egg to fall back on, and to increase the interest rates would encourage savings, and the poor having a nest egg.

Bank of England Monetary Policy Committee November 2017
They don’t seem to like having a group shot? This is the current Monetary Policy Committee, a screen shot clipped. Taken from the BoE website.

H.M Treasury isn’t against a little bit of inflation, it reduces the National Debt, without the need for the Treasury to do anything, either positive or negative. H.M. Treasury has deliberately encouraged the Interest Rate to remain low, in the belief that raising it, would hit investment.

what a load of Balderdash

I’m afraid I shall have to get technical here and say, what a load of Balderdash. I have continually banged on about the fact that raising interest rates, and more substantially encouraging savings, would increase investment into trade and commerce. It would be especially beneficial to home grown UK businesses, many of which are short of cash when they first start out, individuals don’t have that large nest egg, the Japanese and many other foreigners have.

Warehouse and Fork lift truck
Stock costs money and so is Capital invested.

This has a knock on effect later, as a business tries to expand. It can either remain smaller than it would like and build its own Capital reserves, or try and raise funds for expansion, relative to its current situation, which was probably from a low point to begin with, a small nest egg, means small savings.

At some point there will be a recession, especially if there is a hard #Brexit. This can be made easier, if savings ratios are higher than at present.

people of Britain lack that Nest egg

One of the problems is perception, the perception that recession is always just a hair’s breadth away. It is a load of nonsense of course. And the low savings ratio is due to the UKs continual short term vision, so the people of Britain lack that Nest egg, to fall back on. There is this perception with Politicians that any recession is bad. Well yes it is, so why exacerbate a bad situation by having low savings. Like a larger nest egg, in the form of money, this benefits the poor more than the rich. Past a certain point and high amounts of savings do not really achieve much. But no nest egg, can be devastating, so if a person or family has the cushion of money in the bank, when the real hard times hit, they can get through it, better than those without any savings.

Charles Dickens sums it up succinctly with Mr. Micawber, “Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six pence, result misery.”

Those who continually spend everything they earn, are those hardest hit when a downturn in the economy hits, or more important, when a downturn in their own circumstances hits, they have no nest egg to fall back on.

Savings as an institutional idea are loathed by Labour, they are like the late Pools winner, Viv Nicholson, who famously said she was going to Spend, Spend, Spend. And then did precisely that. However there is a little known back story to her life, before she spent a penny of her winnings, she set up a trust fund for her children to get the best education they could. All four of her children, did very well in life. Indeed in a local documentary made in the 1990s, One of her daughter’s rocked up in a top end Mercedes Benz, one of her sons drove a similar car. Viv may have spent, but her kids all saved, and as a result could rejoice.

hold and rejoice sell and repent
This print is entitled Hold and Rejoice

I have scanned a print I have in my Office, hats cut off alas, but it depicts two Liverpool Cotton traders, and it does sum up very neatly, the effects of lack of a nest egg.

The Chancellor of the Exchequer will shortly be getting on his hind legs and giving his Budget speech.

Japan has lower unemployment

You can be sure savings will be low on the list, it is a disgrace in the UK, that saving is viewed with such contempt. In Japan, they have had 25 years of low and negative growth. Yet despite this, most Japanese have savings, that could see them through at least six months with no income. Many have two to five years of savings, and although the Japanese economy has suffered a severe blow with the earthquake in 2011, which devastated production, they still export more than they import. Japanese setups, still invest in high technology like Robots and Artificial Intelligence, and as a consequence, Japan has lower unemployment then most of the rest of the world. Japan has a very high cost of living, and yet they sell more to the rest of the world than they buy. Why, because they all have a nest egg to fall back on, and so when companies are starting up, there are lots of people falling over themselves to invest a small amount of this nest egg in, a new venture.

Here is the key, because they have such high savings, individuals, even the poor, can spread the risk of their investments. So they have bank savings, they have shares, they have Bonds, and foreign investments. They have the safety net of a nest egg, built up from when they start working.

The UK is heading to lower investment, because we have lower savings. Neither Chancellor Hammond nor the Bank of England Governor Mark Carney, have any intention of helping the poor, by encouraging the idea of the nest egg. And as for Labour they are despicable, they not only despise people saving, they positively demand people spend other peoples money as well, it’s called Socialism.