‘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
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