Retail thrives on the new but the businesses that last longest are founded on principles that never lose their relevance, observes George MacDonald.
Grocer Morrisons is celebrating its 125th anniversary this summer. You wonder how many more recently established retailers will prove as long-lived.
Set up in 1899 as a market stall selling butter and eggs by its eponymous founder, and turned into a supermarket force by legendary retailer Sir Ken Morrison, the company joins a select group of retail centenarians.
Boots this year marks 175 years in business while WHSmith was established more than 230 years ago. Marks & Spencer is getting on for a century-and-a-half presence on the high street.
It was the renaissance of Marks & Spencer in recent years that prompted a conversation with an industry contact that turned to the chances of some contemporary retailers still being around long after we’ve gone.
“‘Can you imagine Asos or Boohoo being here in 100 years?’ came the question. We both looked at each other and said, simultaneously, ‘No’”
“Can you imagine Asos or Boohoo being here in 100 years?” came the question. We both looked at each other and said, simultaneously, “No”.
Retail thrives on the new – new products, new formats, the potential of new technology. But new businesses – or at least, ‘new’ when you’re talking a timespan of centuries − frequently seem to have more limited trips round the sun. And new has occasionally been fetishised, as during the tech start-up boom.
Such companies have their time in the spotlight as disruptors, the City falls for them because it always loves the latest, shiniest, and supposedly revolutionary businesses. But then, as with two former online stars, they seem to lose their lustre as a newer, new things come along, such as Shein – and how long will it be master of the fashion universe before a newcomer usurps its place?
Some of the big IPOs of recent years, such as Made.com which was only founded in 2010, soon crashed and burned as performance disappointed. Brands such as Superdry have taken off internationally only to shrink back to embattled, rump businesses.
“But the great retail businesses have typically stayed true to their original purpose no matter how much they have been transformed”
Investors may have short horizons when it comes to making a return, and the quarterly updates now expected of so many retailers don’t exactly encourage long-term thinking and investment.
But the great retail businesses have typically stayed true to their original purpose no matter how much they have been transformed.
Many of them have been through the mill, certainly. M&S stood still or slipped backwards for decades. Tesco nearly went the way of all flesh only 10 years ago. Morrisons has more recently lost its coveted big four position in food to Aldi.
Such crises have typically come when companies lose sight of what made them stand out in the first place. At M&S, complacency and a presumed right not just to exit but an automatic assumption that it was the best, contributed to its difficulties. Tesco took its foot off the pedal on core components of its proposition, notably value.
Morrisons too, bought by private equity house CD&R in 2021, found itself out of kilter on historic price appeal just as the cost-of-living crisis took hold and its own debt seemed more front of mind than that being shouldered by its customers.
“All are very different business from those that their founders could ever have envisaged – omnichannel, powered by loyalty schemes and customer data, foodhalls not market stalls”
But all ultimately recovered, or are in the process of recovering, when the original spark was reignited.
M&S refocused on guiding principles such as product quality and value for money and now adopts a ‘positively dissatisfied’ mindset that discourages taking success for granted. Tesco refocused, including on price, and Morrisons is doing the same. Its 125th birthday ads emphasise the threads of continuity that have underpinned its success from then to now.
All are very different business from those that their founders could ever have envisaged – omnichannel, powered by loyalty schemes and customer data, foodhalls not market stalls.
But the original inspiration and guiding lights are unchanged. For the most successful retailers, perhaps the more things change the more they stay the same.
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