Can Britain do better, no-frills frills & Bricks n’Clicks

posted in: Uncategorized | 0

Did you really expect The Opposition to come up with a sure fire plan to reboot he economy at the Labour Party Conference?

Of course not. But I did expect more than a fleeting reference to the budget deficit and austerity. Ed Milliband claims his speech wasall about the economy, because he talked about the rising cost of living in Britain. He pledged to freeze gas and electricity bills for 20 months if he wins the 2015 General Election. This could indeed prove to be a vote-winning tactic. After all, the consumer group Which? has said that flaws in the energy market had forced consumers to pay £3.9bn over the odds since 2010. Anyone would relish the chance to save a few bob. But business won’t like it and going after Big Business is a mistake. Don’t forget he has also said he wants to hike corporation tax if elected in 2015.

I agree with the director general of the CBI, John Cridland who sees these proposals as a setback for Labour’s pro-enterprise credentials. He said “rising energy bills are tough on families and businesses. But the proposed energy price freeze will deter much-needed investment and is at odds with Labour’s pledge to decarbonise the economy and create a million green jobs.” As for that elephant in the room – the bulging budget deficit – we got a muted warning to the party faithful that an incoming Labour government would face a “tough” climate and would have to keep a grip on the purse strings, especially in the first year of the next parliament.

My warning: just because he didn’t talk about it much, it doesn’t mean it isn’t there.

In business, as in life in general, it is the quiet ones you have to watch out for. So it wasn’t brazen, noisy Ryanair who topped the list for charging extras inflight.  In fact, it is the big name national carriers that have been really raking in the cash. Airlines made a stonking £18bn last year according to a report by analysts IdeaWorks from charging passengers for ancillary revenue – from airline sponsored credit cards to onboard food to baggage fees. IdeaWorks study the revenue records of the 53 airlines which disclose how much they make from those optional extras.  The biggest earner was Aussie-based Qantas which earns £37 per passenger, with big up-sells like flogging extra airmiles, upgrades or commission on car rentals and hotels. Ryanair ranked sixth, earning a more modest £11 per customer.

Any frequent flyer is resigned to it. These days it is how most airlines work. They lure us with recession-friendly low-fares, but need to make a profit to stay in business. Ancillary revenue has become a crucial component of airline income, especially when fuel costs remain sky high (no extra charge for the pun).

You may know that my interest in the retail sector has always been pretty keen. Just a glance at my credit card statements would tell you that much. Yet I am taking an even keener interest than usual in the retail sector, gearing up for my role on stage at the World Retail Congress in Paris in a couple of weeks time. One theme that is bound to come up is whether technology is moving faster than the pace at which retailers can catch up. The High Street is changing beyond recognition and some pundits reckon they could soon all just be places to eat and drink, rather than all-round shopping destinations. A new report found that in the first half of this year, 3,366 stores closed between January and June this year – a rate of 18 a day.

Astonishing. Blame the Internet. But retailers are responding to that, with new and clever ways to embrace the digital revolution. I think we will see more moves like the Argos-Ebay “click and collect” tie-up. Shoppers will soon be able to order selected goods from eBay and pick them up from any one of about 150 Argos stores. I am big on shopping online, but the receiving end of it can be pretty inconvenient. I have lost count of all the missed deliveries, I have over-burdened my neighbours and I’ll bet that for many of you too, workplace deliveries are too awkward or frowned upon by employers.

So this kind of compromise makes sense. You get the benefits of online shopping, like big ranges and keen prices, but can pick up  when it suits. And that gets you out onto your high street, so it could also be a small way to keep businesses bubbling there too.