Retail Week On The Road: North West

For most tourists arriving in the Lake District by train, the next step from Windermere station is the short journey down to the lake of the same name. The retail tourist has less far to travel.

Within sight of the station’s lone platform are two retailers that exemplify how regionally based, family-owned businesses can prosper in some of the most competitive categories of retailing.

On the left, in the old station building, is Booths, of which more later.

On the right, occupying a converted former barn, is the head office of Cult homewares retailer Lakeland, with its flagship store adjacent.

You probably don’t know what a Scrudle is. You almost certainly don’t know that you need one. But the homes of Lakeland’s loyal army of customers are full of items they never knew they needed until their favourite retailer introduced them.

A Scrudle, explains Lakeland’s customer ambassador Wendy Miranda, is a cross between a ladle, a scraper and a scoop, designed to scrape food, such as soups, from the bottom of the pan. Like so many other of Lakeland’s products, the idea came from a customer.

Miranda has an unusual job title, but she has an unusual job. Her desk is full of letters from customers, asking advice about how to use products and suggesting new ones. There are photos, and there’s even a poem from one customer about how much she loves Lakeland. Each letter gets a personal reply, which isn’t just courteous, but makes good business sense. “There’s nothing a customer tells us that doesn’t have a seed of something in it,” she says.

The business is owned by three brothers, Martin, Sam and Julian Rayner, and like so many successful retail businesses, it was born out of one ingenious idea. It was 1963 and the Rayners’ father Alan had a business selling grain feed to farmers around the Lake District. He noticed that many farmers were buying chest freezers at the time, but were unable to buy plastic bags to freeze meat in.

So he started buying them in bulk and selling them on his rounds. It was a success, so he placed an advert in Farmers Weekly, and that was how Lakeland Plastics, as it then was, became a mail order business.

Alan Rayner ran the business for over a decade, but when he split up from his wife, the Rayner children found themselves running the business. “I would have been 16 or 17 at the time,” says Julian Rayner, youngest of the three brothers. “We were very young, but starvation is a great motivator. We had to carry on the business or it would fold.”

At the time the business was focused very much on the rural market, with silage sheeting and boat covers being the main categories alongside the freezer supplies. In the early 1980s the first shop opened on the Windermere site, alongside the mail order warehouse. “It went extremely well,” says Rayner, “and I said to my brothers if we can take money in Windermere we can take money in other places.”

Other stores followed in Chester, York, Guildford and Stratford-upon-Avon, and were equally successful, with the penetration of the mail order catalogue proving a useful way to assess where there would be a customer base to open stores.

Today Lakeland has 55 stores, now not just in market towns but in top shopping centres like Meadowhall too. Rayner is confident this number could double. It is opening in Westfield Stratford, and has franchise stores in the Middle East with Jawad.

But it remains a fundamentally Cumbrian business, employing 700 people between its head office, call centre and store in Windermere and its warehouse in nearby Kendal. “If you sliced us in half, it’s in our DNA,” says Rayner. “We’re very proud of where we are. We’ve built a business up here and have a great team who work for us.”

It may be one of the few retail head offices where you can see a field of sheep outside the window, but Rayner rails at any suggestion that just because a business is based in an out-of-the-way location, it can afford to be anything less than a top-notch retail operation. “People sometimes have this impression we’re some hick company from the sticks, but we have to benchmark ourselves against everyone else.”

While the business is family owned, the brothers faced a problem; none of their total of seven children was going into the business. “A few years ago we could see the writing was on the wall. They weren’t coming in to the business, and if we carried on this way we’d all die at our desks,” says Rayner.

So the company created an operating board, bringing in marketing, buying, finance and operations directors from outside the business. Recruiting them threw up some interesting challenges, but not in the way the Rayners expected. “We thought we’d struggle to get quality people to come and work in the Lakes, but actually it’s about the quality of life up here,” before joking “you’ve got to be careful that you’re not just recruiting fell walkers”.

This combination of the brothers on the board alongside directors from outside seems to be working well, with new directors from companies like Marks & Spencer and Vodafone working closely with the family. But while the next generation might not be joining, ownership of the business is firmly staying within the family despite overtures from investors. “Sam will get a call from someone every few weeks,” says Rayner. “But what else would we do with ourselves?”

Life in the slow lane

Cumbria and Lancashire are, as the signs in store remind you, ‘Booths country’. Booths is that rare beast, a thriving regional supermarket chain, and the cliche goes that the 26-store chain is the Waitrose of the North. But as trading director Chris Dee tells me “we prefer to say Waitrose is the Booths of the South”.

While Booths has a fine store in Windermere, the next leg of my Northwest retail tour has taken me to the appealing market town of Garstang, midway between Lancaster and Preston, where the grocer has its flagship store. Booths has been a fixture in these parts since Edwin Henry Booth set up his first store in Blackpool in 1847, and I’m here to find out from Dee the pleasures of life in the slow lane.

Garstang isn’t a big place, yet here Booths competes against both Sainsbury’s and The Co-op. It’s illustrative of the scale of competition a small grocery chain faces in a world dominated by the big grocers. Yet while Dee admits the current environment is challenging, Booths is holding its own and more; it’s looking to the future.

The concept of the slow lane might, in some situations, seem a derogatory term. Not when it comes to Booths. The slow lane is what makes Booths different. In Garstang it runs around the perimeter of the store, and encompasses those areas where Booths offers something different, where it wants its shoppers to spend time.

That means fruit and veg, that means the meat, fish and cheese counters, that means the beers, wines and spirits assortment and – surprisingly – it means frozen. It means working closely with upmarket suppliers like Neals Yard and Cook to offer something different to its affluent customer base. The displays on the counters are impressive, the service authoritative, and the merchandising promotes provenance and seasonality. Fruit and veg is generally loose, while 50% of the beef sold in the store is on the meat counter, much more than would be typical in a big four supermarket. “The whole point is not to end up like the other supermarket chains where counters are a token gesture,” says Dee.

By any measure, the store has a lot of staff for its size on what is a relatively quiet Thursday afternoon. But that’s what makes Booths different. “We have people who are very focused on our target market – Waitrose, JS, M&S – but we’ve worked out what works for us. We’re probably not as efficient as we should be, not as bottom line focused as we should be, but that means there’s a lot more focus on the customer. We see it as entirely positive.”

Booths can take this unusual approach because of the stability of its family ownership. Executive chairman Edwin Booth is the fifth generation of Booths to run the business. “I’m the new boy – I’ve been here 16 years,” laughs Dee. And while local produce is at the heart of what Booths does, there’s nothing parochial about it – indeed the founding Edwin Booth travelled Europe to bring back exotic new products to the people of Lancashire.

It’s not easy though. “People will start shopping with us for the slow lane, but the challenge for us is getting them to shop the rest of the store, and getting those £100 trolleys,” says Dee. The fast lane of the Garstang store – the middle of the store focused on ambient lines – features typical grocery concepts, such as the £10 meal deal and a Booths Everyday range modelled on Essential Waitrose. Its buying power relative to the multiples is clearly going to be a challenge, but Booths has also looked to the vertical integration model employed by Morrisons to develop its own – and therefore higher margin – ranges.

But while Booths Country is being targeted by national rivals – Booths has found itself up against Morrisons’ debut convenience store in Ilkley for example – the retailer is doing some expansion of its own. Later this year its first store in an urban setting will open, as part of the Media City development in Salford Quays – the new home for many of the BBC’s operations.

“We know that the model works in market towns and within the national park,” says Dee, “but this is the most urban location we could possibly pick. It should give us the confidence to open in more urban and suburban locations,” he adds, saying that there are several other sites in the Manchester area where it is hoping to open. And at a time when diversity of retail offer is an ever-increasing issue, Booths is being courted more by developers and councils keen to persuade it to open a store and provide something different in an increasingly homogenous retail world.

Preston dead end?

It may be only a 40-minute ride on the number 40 bus, but you couldn’t get a more different environment to the very English pleasures of Garstang than Preston’s bus station, surely one of the most inhospitable city centre environments in the UK.

Despite boasting an extensive and busy market, Preston’s bricks-and-mortar retail is uninspiring. While the retail offer in other Northwest centres like Liverpool, Manchester, Blackpool and Bury have had the benefit of new schemes over the past five years, ambitious plans to transform Preston’s retail offer have languished.

It has two shopping centres, both rather lacklustre, and the prime retail pitch is stretched out along the main drag of Fishergate meaning the offer has no real focus. There can’t be many major cities where the M&S store has a large YMCA charity shop next door. “Preston is very linear,” says John Pal, senior lecturing in retailing at Manchester Business School, who says it will have been affected by the new Houndshill development in nearby Blackpool. “Preston had the whip hand over Blackpool for a number of years, but Houndshill has consolidated the retail offer there.”

Coincidentally, on the day of my visit, the Lancashire Evening Telegraph featured a supplement celebrating 125 years of publishing, highlighting significant stories over that period. A story from 1999 was headlined “Anything is possible” and promised that the city would be transformed by developer Grosvenor within 10 years.

12 years on, with the plans now in the hands of Lend Lease, and nothing has happened, and last Thursdays headline “Back to the drawing board” won’t have enthused Prestonians. John Lewis says it may still be interested in coming into a smaller scheme, but locals won’t be holding their breath.

The sorriest retail sight in Preston was the TJ Hughes department store in the Fishergate Centre. The store is in the throes of its closing down Sale, and on the evidence of this branch, it’s not hard to see where things went wrong. It feels like it belongs in Life on Mars, with a shopfit untouched since the 1970s and an assortment that doesn’t look much more recent.

But for the 4,000 or so staff caught up in the demise of TJ Hughes – and indeed Life & Style, the recently failed son of Ethel Austin – that’s little consolation. Both companies were Liverpool-headquartered institutions, and their failures will have done nothing to help what is one of the unemployment blackspots of the UK.

One of the bright spots

Not that you’d know from a Thursday night visit to Liverpool One, where it feels like the recession never happened. There are crowds watching street dancing performances, a busy funfair and the restaurants are all doing good business. And people are spending – not all the stores are busy, and some stretches of the development feel quiet, but nevertheless the overall mood is encouraging.

Grosvenor head of asset management for Liverpool One Miles Dunnett says that footfall has increased 2% and sales by 10%. While a few units have proved tough to shift, such as the former Zavvi store, most of those that have been affected by failures have re-let quickly, and Dunnett is confident that a deal will shortly be announced for the unit about to be vacated by Habitat. Last week it was announced that Lego is to open a store, while Harvey Nichols is opening a pop-up foodstore.

No part of retail has been worse affected by the downturn than home furnishings. So last November’s launch of the Home Quarter in Liverpool One – a second scheme by the owners of the successful Redbrick Mill furniture development in West Yorkshire – couldn’t have been worse timed.

But on the night I visit, it’s busy with the cream of Liverpool society. The reason is a shopping night in aid of a breast cancer charity run by the wife of Liverpool manager Kenny Dalglish. King Kenny is present and dealing cheerfully with the requests for photos.

The Home Quarter houses a cluster of upmarket furniture retailers including Natuzzi and Feather & Black. Redbrick Mill managing director Alastair Bailey admits it will inevitably take time to establish the Home Quarter as a destination, but that events such as the one with Dalglish will play a key role.

Home of home shopping

The Northwest is intrinsically associated with home shopping. For decades the giants of the industry like GUS, Littlewoods and N Brown slugged it out with their portfolios of heavyweight catalogues. It was traditional, downmarket and some might have thought, a form of retailing whose day might fast be approaching.

Yet both Littlewoods – now known as Shop Direct Group and incorporating the GUS home shopping business – and N Brown have used their customer insight and experience of non-store retailing to become pioneers of the online age. Both are innovating – in Liverpool One a store is taking shape for N Brown’s Simply Be brand, a new foray into physical stores. Meanwhile down the road, in a former aircraft hangar in Speke, a quiet revolution is taking place.

The first thing you see when you arrive in Shop Direct’s headquarters is the Greenhouse. The Greenhouse is a room devoted to the latest technological developments that are going to affect how Shop Direct’s customers shop. On the day I visited it had been holding an event focused on using Facebook for social engagement while it also showcases the latest gadgets, which are available for staff to borrow.

“Normally, developers are hidden away, but this is deliberately very visible,” says ecommerce development director Neil Preece. “The website is our shop and that’s why everything has to be focused around it.” Technological innovation has played a big part in Shop Direct’s revival, a key factor in helping it to beat more obvious internet success stories like Asos and Ocado to win Non-store Retailer of the Year at this year’s Oracle Retail Week Awards.

Inspiration came from looking at best practice in other industries, such as Microsoft and sister company the Telegraph Group. The Greenhouse not only has the role of helping everyone in the company understand the impact of technology, but also help the wider world see what the business is about today. “As a buyer, if you’re trying to woo someone like Ted Baker ,who might have seen us as a bit old-fashioned, we can bring them in here and show them what we’re developing,” says Preece.

Next door is the Lightbox, a state-of-the art imaging studio opened last year where photography and video for the catalogues and websites are produced. It feels more like Soho than Speke, and already it has saved £1m in its first year. Meanwhile the ‘street’ – which runs through the former hangar – is used for events and balcony briefings, or even the previous week a 75ft inflatable commando course for charity.

It may not have the Littlewoods name any more, and it is now owned by the Barclay Brothers rather than Liverpool’s Moores dynasty, but Shop Direct remains a Liverpudlian business. Indeed it was known as so Liverpudlian that one of the challenges of the takeover of Manchester-based GUS Home Shopping was, according to retail director Gareth Jones, overcoming the traditional rivalry between the two cities.

“The two companies had spent the last 100 years trying to put each other out of business, and the customer bases were very Manchester and Liverpool centric,” says Jones. Only now are some of the former GUS brands being integrated into the Littlewoods ones, and the focus is on growing the customer base beyond the strong share the group holds among the C2DE demographic, especially in the Northwest.

That’s happening thanks to new brands like Very, for a younger customer, and Isme, for an older one. For both, the internet is the dominant medium for selling and also for socially engaging with the customer. And both are very prominent around the former aircraft hangar. For the close on 2,000 people who work on the Speke site  head office is the embodiment of what has become a thoroughly modern business.

• Read more from Retail Week on the Road.