Way back in 2014 Eddie Reid wrote a piece taking aim at Black Friday and the crazy notion of giving away margin at an important time of the year.
Five years on as we approach the festive period and the shadow of Black Friday looms large it’s worth repeating the message as the points made are still valid and extremely important for retailers.
‘A supermarket price war is being blamed for a sharp rise in the number of food producers going bust.'
'So far this year 146 food producers have entered insolvency, up from 114 last year, according to research by accountancy firm Moore Stephens’. – BBC News.
What’s that got to do with the price of fish? Or golf products for that matter?
Well, we are all servicing the same consumer with the same ‘wait for the sale’ mentality. Not only that, we are now feeding that frenzy!
The problem is the tail is now wagging the dog. Take Black Friday and Cyber Monday, the latest retailing imports from the USA. Black Friday is the day following Thanksgiving in America, with Cyber Monday quickly following and traditionally kick-starting the US Christmas sales period.
UK retailers have adopted these policies because their market is dictated now by multi-national brands.
So, as far as I can see, this is how it now works – Black Friday, followed by Cyber Monday, then the pre-Christmas sales period, followed by January sales!
Remember the days when we had an ‘End of Summer Sale’ knowing the next sales period following that was January?
This leads me to one question…where on Earth is a small retailer supposed to make his margin? Obviously in the supermarket business they squeeze the supplier, which is fine if you’re a huge multinational chain, not so good for the small guy.
Dairy farmers are currently lobbying parliament on milk prices. In 1997 it cost us all £2.49 for four-litres of milk. In 2014 it costs 32p to produce a litre of milk, with supermarkets retailing that same four litres for as little as 99p.
How does that affect golf? Over the years we have been driven by the consumer demand for price point over price point – a £40 sweater, a £199 driver, a £299 power trolley. These demands are all well and good, but they are built around the consumer’s needs on price NOT the manufacturer or retailer’s need to run a profitable business.
They show no understanding of the economics of business, buy, mark up, sell = profit. Pay overheads and make a living. It’s time we stopped this madness and educated our consumers to know what the real value of products and service really is. No one can sell at a discount constantly, we need long periods of sales at full retail to subsidise the demand for more frequent sale periods, which should become rare, rather than the norm.
Now this may sound a little anti-consumer, it isn’t, we are all consumers after all. However, our industry could be described as ‘niche specialist’, which dictates that we do not have the volume sell-through to adopt many of the retail protocols used by the high street and internet companies.
So let’s all get back to proper retailing with proper ethics with a view to making some money and more importantly, let’s all play our part in educating consumers on the real value of products and services.