All change on the high street

September 27th, 2004

Tesco threatens big names on the high street
Was the headline in the FT September 25/26 2004
This is what Chris Brown-Humes had to say

Tesco's stunning half-year end results were not just bad news for direct competitors such as J Sainsbury and Marks and Spencer. They were bad for a whole raft of companies that compete with the supermarket giant in the areas it is now expanding rapidly ? clothing, newspapers and magazines, toiletries and healthcare, electrical goods and DVD's.

It seems HMV, Boots and WH Smith are all taking a hammering, and one wonders if the game is up for them. Looking at the share prices of these companies what is reflected is their changing fortunes. WH Smiths shares have fallen 57.5%, Boots shares by 37.4%
Various efforts at diversification have stalled. Whilst the acquisition hungry Baugur group is looking for assets to add to its stable.
These retailers, if they want to survive have to rethink their business models and how they market themselves. They have to find a clear point of differentiation to attract customers to their stores.
It requires an approach which will engage their customers, and for these customers to have an experience which will ultimately attract their loyalty. Its not easy, but its also not impossible. But a siloed approach is probably not the answer.

Transformational strategies require transformational ideas.
Additional reading: How does a company reduce prices to a level lower than their operating expenses and still make money?

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