Laggards should pay up
BRITISh s upermarket chains offer an antidote to the despondency about the future of shopping after the insolvency procedures at Arcadia and Debenhams. With much of the high Street closed in November the grocers made hay, with consumers spending £10.9bn on food and drink, a rise of 11.3pc.
By getting their holiday ranges out early, they were able to steal a march on lockeddown competitors. The winner among the big four supermarket chains was Morrisons, with sales up 13.7pc and an increased market share.
But the largest two players, Tesco and Sainsbury’s, also managed double- digit increases. Among the specialist operators, Ocado, now firmly in the Marks & Spencer camp in the UK, reported an eye-popping 38.3pc rise in sales.
By its historic standards Asda is a laggard. It faces fresh uncertainty with the Competition & Markets Authority disclosing that it will review the proposed £6.6bn takeover by the Issa brothers and private equity firm TDR.
The scale of the advances made, at the expense of other struggling players, explains why so many retailers followed the example of new Tesco chief executive Ken Murphy and refunded to the Government some £2bn of business rate relief.
The speed of response from firms as diverse as no-frills general stores B&M, Pets at home and B&Q owner Kingfisher shows a degree of good corporate citizenship often missing from our national life.
Not everyone has stepped up to the plate as yet. The Waitrose arm of John Lewis is having a good lockdown and increased its sales by 13.2pc in November and gained market share. For decades, the John Lewis Partnership has been held up as the shining light of right-minded ownership.
But while Waitrose has been fine, the department stores are going through a costly restructuring and may well need cash. Nevertheless, it seems odd that John Lewis, the Co-op and Marks & Spencer, all of which have reputations for being a cut above the rest, have not joined the rush to give back.
The biggest beneficiaries of all from the pandemic are the Silicon Valley giants, with Amazon the ‘go-to’ for almost everyone and Google fixing the odds about where we buy goods and services by layering choices and prominence on the basis of advertising spend.
They also represent unfair competition in that they operate out of campuses and warehouses, rather than shopping sites, so don’t attract large-scale business rates.
Successive governments have pledged to stem their monopoly power but the clicks tax remains on the drawing board.
The latest plan to curb online power, through a code of conduct to be enforced by a newly- created UK Digital Markets Unit, sounds frightening, with its powers to tax up to 10pc of global revenues should firms seek market dominance.
In theory that’s terrific, but what happens when the regulator runs up against realpolitik, such as a threat by one of the Silicon Valley champions to withdraw from its new campuses in the UK?
We have seen Amazon, among others, flexing political muscle in the United States over the location of a second corporate headquarters. Good citizenry can be in short supply.
Bad call
AS BT chief executive, Gavin Patterson may have been better known for his luxuriant locks than his management prowess.
he expended billions of investor money on football rights, rather than rolling out fibre broadband, battled with regulator Ofcom over separation of network provider Open Reach, and failed to notice that £500m or so went walkabout in Italy.
Small wonder he is finding life more agreeable as European boss of £155bn Silicon Valley behemoth Salesforce, which is buying messaging site Slack for £20bn.
he does no favours to his successors at BT by describing his former job as ‘impossible’. his assertions that the UK is not a great place to list growth businesses and that he would choose the US because of ‘better access to capital and talent’ is not a good look for someone who owes his education and rise to the upper echelons of the UK.
If he flicked his hair out of his eyes, Patterson might notice that R&D and big pharma are at the forefront of the battle against Covid-19, Ocado is revolutionising grocery logistics around the world and Britain is the home of AI and fintech.
he must have lost the script.