‘It fills me with dread when I see good re­tail names go­ing to the wall’

The Hol­land & Bar­rett boss tells Ben Woods why the Gov­ern­ment needs to level the play­ing field for bricks and mor­tar re­tail­ers

The Sunday Telegraph - Money & Business - - Business - The Sun­day In­ter­view

Peter Aldis is not long into a tour of Hol­land & Bar­rett’s flag­ship site in Mar­ble Arch when things start to get per­sonal.

To ram home his point about the re­lent­less rise of the health-con­scious con­sumer, he turns the con­ver­sa­tion to­wards his wife.

“My wife loves a steak,” the 53-yearold re­tail vet­eran says with a wry smile. “She loves the type of steak that you walk past a can­dle. A good vet could bring it back to life.

“And yet, overnight she turned to a ve­gan diet. She had been lis­ten­ing, and read­ing, about it from celebri­ties and in­ter­net vlog­gers. It con­vinced her to change.

“She now has im­proved en­ergy and a higher level of fo­cus. The amount of peo­ple that are en­gag­ing in that life­style is ris­ing.”

If any re­tailer is well equipped to cap­i­talise on the healthy liv­ing boom, it is Hol­land & Bar­rett.

While some re­tail­ers have been thrust into an ex­is­ten­tial cri­sis by the bit­ter con­di­tions on the high street, Europe’s largest health food chain has qui­etly notched up nine con­sec­u­tive years of like-for-like sales growth.

Un­der Let­ter One, the re­tailer’s new Rus­sian own­ers, the firm is plough­ing in­vest­ment into its 1,000-strong UK store es­tate, launch­ing new sites in Saudi Ara­bia and Bel­gium, and eye­ing ex­pan­sion into Italy.

The in­vest­ment fund has bold plans to ex­tend Hol­land & Bar­rett’s reach be­yond tra­di­tional re­tail, trans­form­ing it into a health and well-be­ing ser­vices and whole­sale dis­trib­u­tor.

While the fu­ture ap­pears bright, there is no “I’m all right Jack” at­ti­tude from Aldis. The chief ex­ec­u­tive’s imp­ish de­meanour quickly fades when he turns to the woes grip­ping pock­ets of the high street. See­ing the likes of New Look, House of Fraser, Toys R Us, Car­petright and Deben­hams be­ing rushed into the re­tail ca­su­alty ward has left him con­cerned.

He lev­els some of the blame at the busi­ness rates sys­tem. The tax is based on prop­erty value, mean­ing high street re­tail­ers are lumped with a sig­nif­i­cantly higher tax bill than on­line-fo­cused firms with lit­tle or no stores. “I think the sec­tor [should] start flex­ing its mus­cles,” he says. “We are one of the big­gest givers to the tax take, so the Gov­ern­ment should be re­ally wor­ried about our on­go­ing suc­cess.

“They need to change the way in which tax is made up. It needs to be a level play­ing field be­cause it is heav­ily skewed to­wards bricks and mor­tar.

“It fills me with dread when I see good re­tail names go­ing to the wall and strug­gling. Ul­ti­mately, that is not good for the mar­ket.

“For those try­ing to rein­vent them­selves, there should be gov­ern­ment grants or tax con­ces­sions to help the ef­forts be­ing made to im­prove the re­tail ex­pe­ri­ence.

“Ama­zon are an amaz­ing busi­ness but they have set them­selves up in such a way that it’s not fair. I am not ad­vo­cat­ing a sales tax, but we have been talk­ing about these is­sues for eight years now.”

For Aldis, a help­ing hand from the state is not just about pro­tect­ing the Gov­ern­ment’s cof­fers. He also be­lieves a vi­brant high street is needed to cre­ate healthy com­mu­ni­ties.

Al­most 2.9m peo­ple are em­ployed in re­tail, mak­ing it one of the largest sources of jobs in the UK, ac­cord­ing to the Of­fice for Na­tional Sta­tis­tics. And yet, data re­leased last year shows the on­line rev­o­lu­tion has helped lay waste to 62,000 jobs.

Aldis says experts should con­sider the ben­e­fits of a pros­per­ous high street when air­ing their con­cerns about so­cial in­jus­tice, ris­ing youth un­em­ploy­ment and murder rates.

“I was in Rother­ham a few months ago and I had a look around the town,” he says. “Out of mor­bid in­ter­est, I counted up 10 book­ies, 17 char­ity shops and four na­tional re­tail­ers, in­clud­ing our­selves, Boots and Su­per­drug.

“That was 11am on a Tues­day morn­ing, and it was busy. For me, the so­cial im­pact should be a ma­jor con­cern for the Gov­ern­ment, let alone re­tail.”

Aldis ac­cepts gov­ern­ment in­ter­ven­tion is not the only means of pre­vent­ing pock­ets of the high street from hit­ting the buf­fers.

Re­tail­ers must also har­bour a re­lent­less ap­petite for in­no­va­tion in or­der to stave off fail­ure.

Hol­land & Bar­rett is eye­ing its own shake-up, draw­ing on in­spi­ra­tion from our Nordic cousins. In a bid to cut costs, and an­tic­i­pate the shift­ing pay­ment habits of con­sumers, the re­tailer is tri­alling its first cash­less store in Ca­nary Wharf. “The re­tail grave­yard is full of peo­ple who didn’t worry about the fu­ture,” he says.

“I have been with the busi­ness a long time and I can re­mem­ber when it didn’t make any money. It was not nice. We ask our­selves ques­tions about the fu­ture all the time.

“What will stores look like in 10 years? You bet there will not be any tills. That is al­ready hap­pen­ing. I was in Swe­den re­cently and I made a bee­line for this big or­ganic su­per­mar­ket. I brought three or four prod­ucts to take back to our buy­ers and the woman be­hind the counter said ‘we don’t take cash’.

“It wasn’t a prob­lem for me be­cause I could use my credit card, but it made me ask the ques­tion, what is our split be­tween debit cards and cash? After all, it costs a lot of money to man­age cash.”

En­sur­ing Hol­land & Bar­rett keeps step with the chang­ing habits of con­sumers is just one plate the re­tailer has to keep spin­ning.

Un­like some of its ri­vals, the re­tailer also has a laser-sharp fo­cus on the en­vi­ron­ment, heap­ing pres­sure on the

wider in­dus­try when it be­came the first ma­jor group to ban plas­tic bags.

It also stopped sell­ing prod­ucts us­ing en­vi­ron­men­tally dam­ag­ing mi­crobeads be­fore they were out­lawed in the UK ear­lier this year.

The re­tailer’s causes are no­ble. A cynic would also point to the PR ben­e­fits of such moves.

How­ever, set­ting the eth­i­cal bar so high has been both a bless­ing and a curse for the firm.

Hol­land & Bar­rett was re­cently handed a high-pro­file dress­ing down by Green­peace for stock­ing prod­ucts con­tain­ing krill.

The en­vi­ron­men­tal cam­paign­ers say the krill fish­ing in­dus­try, which in­volves catch­ing the tiny shrimp-like crea­tures for prod­ucts such as Omega-3 tablets, poses a se­ri­ous threat to wildlife in Antarc­tica. Aldis says he per­son­ally re­ceived 45,000 emails in one day over the furore.

“Our modus operandi was to go into de­fen­sive mode,” he adds. “After all, we were buy­ing sus­tain­able krill. How­ever, I stopped and as­sessed the sit­u­a­tion.

“I am not some­body who rolls over be­cause we be­lieve in what we sell, but within 24 hours I made the de­ci­sion to delist.

“It is one ex­am­ple of the day-to-day changes we make. We are also get­ting rid of gelatin.

“This is im­por­tant to us be­cause we are a veg­e­tar­ian re­tailer. It means some of our prod­ucts take four times longer to make. But if we don’t do it we are alien­at­ing com­mu­ni­ties. A cow is sa­cred in parts of In­dia.

“We op­er­ate in Saudi Ara­bia and In­dia, and our cred­i­bil­ity would be out of the win­dow if we got that wrong.”

The chal­lenge is one of many Aldis has faced in nearly 10 years at the helm. His first job in re­tail was a trainee man­ager for elec­tri­cal re­tailer Cur­rys in Che­sham, Buck­ing­hamshire, but it was su­per­mar­ket gi­ant Asda that made him. Hol­land & Bar­rett came seven years later, but not with­out some re­sis­tance.

“I was asked to join as an area man­ager. I knew some­one who worked there and spent six months tak­ing the micky out of him.

“I saw it as a re­tailer for the beans and san­dals bri­gade, but I slowly fell in love with it.”

Aldis ran the prop­erty arm, be­came the mar­ket­ing man­ager, and was el­e­vated to man­ag­ing di­rec­tor, be­fore be­com­ing chief ex­ec­u­tive in Oc­to­ber 2008.

In the first few months, the global fi­nan­cial cri­sis ham­mered the UK econ­omy.

Now, times are bet­ter, but the sec­tor is not with­out its haz­ards.

The con­sumer love af­fair with eat­ing healthily may be a boon for Hol­land & Bar­rett, but other play­ers are keen to get in on the party.

Su­per­mar­kets are of­fer­ing their own healthy eat­ing ranges and low prices, pos­ing a threat to Hol­land & Bar­rett’s mar­gins.

“When I joined the in­dus­try you couldn’t buy a packet of herbal tea in a su­per­mar­ket,” Aldis says.

“But now if you go down the su­per­mar­ket aisles there is prob­a­bly more space de­voted to green teas and fruit teas than to black teas.

“That used to be one of the front sec­tions of our stores, but we have had to be­come more spe­cial­ist.

“To­day there is a trend to­wards ve­g­an­ism. We are work­ing on a ve­gan-only store. It is our space and we should be in it. When you do some­thing like that, it is an im­pos­si­bil­ity for a su­per­mar­ket to fol­low.”

‘Ama­zon are an amaz­ing busi­ness but they have set them­selves up in such a way that it’s not fair’

Hol­land & Bar­rett boss Peter Aldis is keen to fo­cus on ve­gan prod­ucts in a bid to serve dif­fer­ent cus­tomers

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