Category: Market Conditions


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By Russell Adams, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development

Reading through the latest hospitality report from the Caterer.com job website released this week unfortunately doesn’t make particularly happy reading. Whilst the Governor of the Bank of England talks about signs of recovery, it is clear that the Hospitality sector is still having a challenging time which naturally impacts on the people that work within it.  So what are the numbers telling you about the sector and your employment prospects?

Looking at the numbers from the Caterer report there is a clear decline in the number of vacancies with a fall of some 10% on the previous year. Unfortunately for job seekers, this was matched by a 4% increase in the number of job applications. This reinforces what we are seeing in the market, that the job market in hospitality remains extremely competitive. In fact, looking at the previous caterer report we can see that in fact the decline in roles has actually accelerated from an 8% decline to a 10% decline and that the increase in applications has also accelerated, moving from a 2% increase to a 4% increase.  Such dramatic falls can be reconciled by a number of factors, firstly that due to the on-going economic uncertainty people are “sitting tight” which is actually reducing “churn” in the market.  However it can also be attributed to the continued economic challenges that are causing businesses to remain cautious about their investment in people.  Without doubt though over the last four years, many businesses have chosen to invest in developing and retaining their existing staff as the most cost effective people strategy.

Across the sectors, there has been mixed performances. Some sectors have fared better than others with the Pub sector continuing to face very challenging times. According to figures from the Office of National Statistics, over the last 5 years there has been a 14% decline in the number of pubs.  Interestingly according to those statistics in 2011 5,505 new pubs opened but some 6,115 closed indicating the significant churn and instability in that sector.   This also reflects the changing nature of the market as pubs adapt to trends in the market with many now diversifying into more food-led operations.

However, there are some good news stories out there and reading the M & C report each day certainly gives me some hope. As expected, there are always winners and losers and in this highly competitive sector, those businesses that have their proposition right and are able to communicate this effectively to their customers are prospering.   Whitbread for instance recently released some stellar results with like-for-like sales up 3.7% and yesterday The Restaurant Group’s shares reached an all time high on the back of the strong results they released yesterday showing a 4.5% increase in their like-for-like sales.

The Hospitality sector continues to be an incredibly dynamic and exciting industry.  Trends and customer needs are constantly changing. New concepts, designs and formats are constantly being designed and launched and those that satisfy and capture the needs of the market will reap strong rewards.

So what do these statistics say about your career in Hospitality?

Firstly, it shows the sector continues to face challenges and that the competition for roles remains as intense as ever. This reinforces the need for candidates to prepare effectively for their job search and to ensure that, when they do secure an interview, that they are able to perform exceptionally well. By conducting thorough research into the brand including site visits and SWOT analyses when appropriate, ensuring that you are able to provide tangible examples of your achievements and by giving evidence that you possess the capabilities required for your target role, you will have an edge over your competition.

It also shows that different sectors are performing better than others and within each market there are clear winners and losers. With rapidly changing customer needs, businesses need to change, adapt and evolve and those that do will outperform the market strongly. By keeping in touch with developments in the sector as a whole, you will be able to assess where the growth areas are likely to be and which businesses will offer you the most career development. Industry publications such as the Caterer and the M&C report are invaluable however, keeping in touch with your personal network of contacts is also hugely effective in keeping tabs on what is happening in the industry and what opportunities this could present for you.

To be successful in your job search in the current market, you must focus on those roles where your skills are most transferable and where your experience is most relevant. By doing this, you will maximise your chances of success when a precious vacancy arises.

For further advice on your job search, please read our blog “How to look for a role in 2013

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By Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

The retail sector has continued to take a battering over the last twelve months, not least with a number of high profile company administrations. This has resulted in a large influx of candidates coming on to what was an already an overcrowded and highly competitive market. It can be a heart-breaking situation for many candidates who have developed an excellent skillset and still have the passion and drive to grow their career. However, if you are flexible and open to new ideas there are a wealth of opportunities out there. Retailers tend to pick up a broad and highly transferable skill-set. Indeed, there are few other industries that could better prepare you to move to a different sector. If you are keen to consider options outside of traditional retail, the first step to understanding what you could do next is first identifying what your transferable skills are:

  • Leadership & People Management

Clearly this is a broad and complex subject but in my experience, the two core skills that are often in demand are; the ability to motivate direct reports, indirect reports and other stakeholders and; the ability to manage performance in a formal and structured manner. Retailers generally learn how to do this both on the job and in the classroom – an option not always available in many companies. This skill is perhaps in itself the single most important as it really does allow retailers to move in to virtually any industry where people management is the key requirement.

  • Profit & Loss Management

Most retailers offer varying levels of accountability however broadly speaking, most have a strong understanding of the key lines in a P&L and what pulleys and levers they can operate to drive a result.

  • Business & Project Management.

Again, this can cover a multitude of things but in this case I believe that retailers have an excellent ability to manage a broad range of objectives. The skills employed will be time management, priority identification and ensuring task completion.

  • Strategy and tactical development.

The degree of exposure and therefore capability will depend on the level that you have reached but retailers learn from very early in their career, at the very least, how to develop a tactical plan on a daily, weekly, monthly and annual basis.

  • Sales & Business Development

Not every retailer is given the opportunity to ‘sell’ or indeed develop their business on a wider context, however those that do are able to develop a highly transferable skill. This, coupled with people management ability is in high demand currently as many companies are looking for an additional edge in a stagnant economy.

  • Coaching

Arguably this could sit under general people management. However, retailers will often develop this skill in matrix management structures whereby they are coaching individuals that are not direct reports.

  • Customer focus.

There are very few industries where managers are exposed to customers directly in such volume and regularity. Retailers have to react to market changes at pace and with a high degree of accuracy. Balancing customer focus with profit is not always straightforward.

  • Operations Management.

Depending on your retail background the experience you have here will vary. By operations management I am referring to the management of the supply chain and the store operation. Food & ‘big box’ retailers tend to have the most advanced skill-set in this regard. Understanding the cause & effect of moving units from one place to another may sound simple but in high volume environments it can be incredibly complex.

  • Relationship management.

Retail Managers up to Director level will generally develop the ability to manage multiple relationships often with stakeholders with varying agendas. The ability to balance the needs of multiple stakeholders is often overlooked but is in high demand in numerous industries and job families.

  • Change Management.

Given the scale of change that the Retail Industry has faced and continues to face, the ability to manage change has become essential for most senior retailers. Change management is often a combination of the aforementioned skills with a set of behaviours that allows for a successful delivery.

I have generally found that it is a combination of these skills that most attracts employers to ‘fish from the Retail pool.’ I would love to hear from people that have changed industry and what enabled them to make a successful transition.

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Previous blogs:

How to avoid joining the wrong business

What the numbers tell you about your future career in Retail

Retail: my tale of faith, love and survival

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By Russell Adams, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

In a market where organisations are increasing their proportion of direct hires, do you still need to be talking to recruiters and what are they actually doing for you?  Are they really adding any value and what are they doing that you couldn’t do yourself? Indeed with LinkedIn it is now easier than ever before to be found by organisations looking to hire. So are recruiters really adding any value? The answer to that question will definitely depend on who you are talking to. Sadly the industry is lightly regulated and with no formal qualifications it is very easy for poorly trained individuals to operate without much scrutiny or redress. As we are all aware, the market is still tight. With strong competition for most roles it is likely that you will need to engage the services of recruiters in order to try and access the best opportunities in the market.

So what should a good recruiter be doing for you?

Career Advice

A specialist recruiter should be able to give expert career advice and both challenge and assist you in your career goals and objectives. They should be highly knowledgeable in your field and very well connected.  Your recruiter should be a career partner and not just an agent that will place you in a role.

Recruiters can and should provide impartial career advice. When paid commission you need to appreciate that some may have a short term attitude and advise what is best for them and not for you as the candidate. However, the best recruiters will take a look term approach, appreciate that people will remember great advice and certainly never forget bad advice. Although in the short term they may lose out on a fee, longer term if they do the right thing then you are much more likely to engage them when you are looking to recruit. So look out for the signs that they are thinking long term.

Recruiters can if they are willing provide advice across a range of areas including advice on CV’s and Interviewing. They typically do not change for these services but do it as a way of adding more value to the candidates. Again they are likely to only provide in depth advice to those individuals who they have built a relationship with.

Job Search

In addition to some of the added value areas, fundamentally you want your recruiter to give you access to the best jobs in the market. So, do plenty of research and ask plenty of questions; what roles are they recruiting? Who are their key clients? Are they recruiting the types of roles you are interested in? The competition out there is fierce and through building a strong relationship with key recruiters in your sector you can try and ensure you gain access to these roles. A good recruiter should always call you back. In the current market, recruiters are incredibly busy, there are large number of candidates on the market chasing relatively fewer roles, however if you agree up front how to communicate and how frequently then you should be able to find a way that works for both parties.

 Process Management

A good recruiter should “coach” you through the recruitment process.  They should be using their in depth knowledge of the client and the individuals within it to guide and advise you on how to position yourself. They should be able to give you a strong insight into the culture and how you will fit.  The are also likely to get in depth feedback from the client after each stage so make sure they are sharing this information with you, so you can understand what you may need to do more or less of.  In fact a really good recruiter will always think long term. The better ones will coach you through a process even when they aren’t representing you but it is with a client they know. They will appreciate the long term benefits of doing this and the potential for the future.

 Offer Negotiation

Whilst there are a multitude of reasons for moving jobs, increasing your salary and benefits is often an important aspect.  Your recruiter should be instrumental in negotiating the right salary for you.  They should know the client well and will have a real feel for what the client may be willing to pay for someone with your skill set.  But make sure they are clear about your parameters because as much as you want to receive the best offer you also don’t want to put yourself in a situation where you are jeopardising a potential offer because the recruiter is demanding an unachievable  salary on your behalf. Also make sure you understand the full package. The benefits on offer may vary considerably from your current role and other roles you are considering and it is wise to look at the package as a whole. This will both influence your thoughts around basic salary but also may give you some leverage. Make sure you have this information early in the process. Like any negotiation the Recruiter will be aiming to find middle ground that is acceptable to both you and the client. It is ok to push but get a feel for where those boundaries lie.

Post Placement

A good recruiter won’t just place you and collect their fee, they will support you through your notice period and then though your induction into the business. They should provide you with an insight into the key players in the business you are joining, the culture and advice on how to integrate into the business. They should keep in touch and ensure that your induction runs smoothly, feeding back to the client where appropriate.

Conclusion 

Identifying and then building a relationship with the right recruiters will be critical if you are determined to make the best career move possible.

So how can you ensure your recruiter is doing all these things for you? Firstly please choose wisely. It is best to get recommendations and check their credentials.

Secondly to gain this level of advice, support and opportunity you need to invest time in building a relationship with the recruiter. This is easier said than done when working in a demanding and consuming role, so select a small number of well connected recruiters. For some additional advice on job hunting please read our recent blogs Looking for a job in 2013and How to avoid joining the wrong business.

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By Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development

15 questions you need to ask before accepting an offer.

This year we have seen a significant increase in the number of candidates returning to the job market, albeit relatively passively in a lot of cases. Surprisingly, while the reasons can be poles apart such as redundancy or a lack of career progression, it can often drive similar behaviours amongst candidates. I have commented previously that a significant number of candidates have made the wrong decision about a career move because they have not completed their due diligence. While this list is not exhaustive, considering the following points before accepting an offer may help you in your decision.

Why is there a vacancy?

Ask this question when you are briefed by an agency, ask this question in your first interview and ask this question in your final interview.

How often is this position recruited?

This is a very difficult question to ask in an interview but you need to know the answer. Linkedin provides a good opportunity to do some research and it is worth making contact with a couple of past employees to informally ask them about how often the role has been / is recruited.

Why do people leave the business?

Ask everyone!

How many people have been promoted internally at my proposed level in the last 2-3 years? Who was the last person to be promoted and what did they do to achieve this?

How is the business performing financially?

Check out the last set of company accounts. This is particularly important if the business is small and relatively unknown.

What is my prospective Line Manager like to work for?

It is crucial you work hard to informally reference your new boss. Speak to people you trust to seek their opinion. Check out their Social Media (Linkedin/ Twitter) profiles.

What does your Sponsor(s) think?

It often takes someone without prejudice to give you some simple and much needed honest advice.

What was the average bonus payment in the last financial year and what was the average pay rise?

Do I fit the company culturally?

Look at the company’s values and working culture. Do you like what you see? Does the reality match up with what is described in their marketing material? Again, talk to employees past and present.

Why do they want me?

This is a difficult question to ask as you will want to believe it is because you are the best candidate. However, are there other reasons, for instance your inside knowledge of one of their competitors?

Does my consultant sound convinced that he/she is recruiting for a great business?

It is worth working hard to build a good personal relationship with your consultant as they will provide the odd snippet of information that could help you to make your decision.

Does the offer of employment and/or contract match what I have been told verbally?

Don’t be afraid to dig deeply in to the Terms &Conditions of the contract however be careful how you position your resulting queries.

When did the company last restructure and are there any plans to do so in the future?

Look for a pattern, you will be amazed by how often retailers restructure from one working model to another.

What impact will this move have on my personal brand or future career opportunities?

Am I taking this job because I want it or because I think I have to take it?

Think about the longer term implications of taking a job for the wrong reasons.

This is of course not an exhaustive list, and would welcome any thoughts and additions to the above.

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By Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

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By Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

Last year I wrote about the lost generation of middle managers in retail whom face limited progression opportunities as a result of the recession. Since that article the redundancies have continued to flow thick and fast with all sorts of rumours about which retailer is going to collapse next. One might think that with all the doom and gloom in the market that the opportunities to develop your career are few and far between. However…

If you are ambitious and do want to avoid this scenario you have two very simple options, either ensure you are promoted in your current business or move to another organisation where there is genuine opportunity for advancement.

How to progress your career within your current business:

  • Does your Line manager, Head of Talent, HRBP know you have ambitions to progress? Sounds simple but don’t assume so. Be explicit about your career targets. Clearly you will need to judge when and how to position this conversation but it really is the starting point.
  • Are you getting the results? You know in your heart of hearts if you really are delivering, if you are not you need to address this.
  • So, you are doing well…does everyone else know that? It is all well and good if you run the most profitable part of the business but if the board / functional heads don’t know this you will have few sponsors when the next round of restructuring starts. I have met a lot of candidates with relatively modest results but who were fantastic self-publicists and as a result they were promoted!
  • Seek feedback. The old 360 appraisal can be painful but it will do two things; firstly it will highlight what you need to do to improve and secondly it says a lot about your focus on self-development. This is a competency that is being increasingly measured in assessment of stretch potential.
  • Work harder, it sounds old fashioned but to be blunt it makes an enormous difference to your senior stakeholders. Admittedly there has been a societal push towards work/life balance (and rightly so) but once again those who do more…achieve more.
  • Get involved in project work. If you are Head office based get in to stores, if you are operations based get in to Head Office. A key determinant of progression is breadth of experience. Your Operations Directors, Managing Directors and other board members will have done this at some point in their career. This will also expose you to other stakeholders and will give you a chance to self-publicise!
  • Socialise. Get to know the senior team on a more informal basis. Once again, the people whom are liked by the board tend to get the better jobs.
  • Identify sponsors, people whom have a vested interest in you doing well and will fight your corner / put a good word in when necessary. It’s an ego boost for the other party and you will also get good career advice.

You need to look elsewhere…what do you do?

  • Put together a ‘campaign’ plan with short, medium and long term objectives.
  • Identify what you want to do next. It is worth sense checking with your contacts that this is realistic. A major salary increase and a promotion are highly unlikely.
  • Call your contacts in the recruitment firms. While we recruitment consultants are often grouped together with estate agents, double glazing salesmen and those chaps whom knock on your door to kindly inform you they have just tarmacked your drive and you owe them 200 quid… However, we do on occasion add real value. There is an art to working your relationship with consultants – in short, what you put in you will get back. Behave transactionally or with contempt and expect a mirrored response. Similarly, if you want to get the best out of a consultant, treat him like a human being and they will do the same.
  • Speak to your sponsors. If you have built a few up throughout your career they should be able to put you in touch with their contacts, hopefully with a recommendation.
  • Call old bosses. If you did a good job for them before they will be inclined to give you another go.
  • Fire up your Linkedin profile. It is beginning to position itself as a job board these days and most internal and external recruiters use it as a secondary database. While you are there delete any old profiles on the job boards – they are very much aimed at the junior end of the market. Bear in mind that this is your shop window and as every Operations Director will tell you, customers won’t go in and buy if it isn’t well cared for.
  • Don’t be afraid to invest in some external support and advice this may be as simple as a CV rewrite or career/life coaching. A good quality CV rewrite will cost between £300-£500…roughly the same amount as a new set of wheels for your car…
  • Finally, do your research before accepting an offer. A large number of candidates have found their CVs becoming very patchy over the course of the recession as they have hopped from one business to another. The one factor that generally underpins any mistake in a career move is a lack of due diligence. Would you buy a house without having it surveyed?

Good luck…

Jez Styles

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By Sophie Mackenzie, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

William Morris, the designer, famously said “have nothing in your house that you do not know to be useful or believe to be beautiful”. It occurred to me over Christmas that we could apply the same sentiment to the changing face of British Retail. If a store isn’t fundamentally useful or temptingly beautiful then it simply won’t survive long term.

Beauty is in the eye of the beholder but what I mean by a ‘beautiful’ store is somewhere that offers an experience that you simply can’t get elsewhere, not least of all online. Somewhere that is exciting, where you can touch, feel and try the product, somewhere which is inspiring to look at and where you are made to feel special. Brands like Apple and Hollister and shopping centres like Westfield have created retail experiences and product so desirable that people are simply compelled to leave their homes to visit.

Useful is somewhat harder to define. To be really useful in retail terms, customers firstly need to have absolute clarity about what it is you sell and what makes you the specialist in that market. They must have confidence in your ability to deliver the product or service quickly and efficiently. You must deliver great service consistently. Lots of retailers may think they are specialists, however do their customers agree? To me, the perfect example of this is Timpsons. There is no ambiguity about what they do – they are true specialists and they offer a useful and good old-fashioned service along the way.

Like many people, driven by lack of time and pure convenience, I did most of my Christmas shopping online. I was lucky, all my purchases arrived promptly, making the whole process very efficient, however I couldn’t help but feel a little sad at having missed the frisson of excitement from actually visiting a shop and looking at tangible product. However, without the ultimate ‘useful’ option of online shopping, I would really have struggled to get the job done. Not all online retailers get it right, however they are fundamentally ‘useful’ in that they save us time – so critical in today’s pressured world and this is why they are becoming so dominant, at the expense of some of their bricks and mortar competitors.

However, when we returned to the office in the new year, I compared notes with my colleagues about our positive retail experiences and the following stood out.

B&Q – not the obvious place for a delightful shopping experience – but it was just that. I was greeted on arrival by not one, but two employees, one of whom helpfully explained that I could sign up online to receive special offers. While browsing around their Christmas decorations, I received a jolly “Good Morning Madam!” from the Manager, leaving me to wonder whether I had, in the manner of Marty McFly, inadvertently been transported to the 1950’s! When I asked for assistance in finding a product, I was cheerfully escorted to the correct aisle and on my way to check out, I passed a group of children doing an early morning arts and crafts workshop, their Dads hovering nearby. It felt vibrant and inclusive, despite the fact that my purchase of lime-scale remover (?!) was in fact, completely mundane.
John Lewis – here I was genuinely inspired by the range of products, all displayed beautifully. The store was packed and everywhere I could see staff buzzing around, often in dialogue with a customer. This was the retail we know and love – a busy, exciting store with lovely brands, an ambiance which encourages browsing and if needed, helpful and knowledgable staff. Here I was genuinely tempted to part with more cash to supplement my online purchases.

And finally Kiddicare which my colleague described as “functionally brilliant”. It was easy to park with wide aisles (big enough to accommodate a double pram). The range was amazing with clear signage and pricing and the service was exceptional with staff being customer-focused rather than task-focused. They have a reasonably priced café and soft play area which resulted in significantly increased dwell time, despite having lively 20 month old twins in tow!

In my opinion, in years to come we will see one of two things in our high streets and shopping centres. Either businesses selling a useful product or service (and doing it with a genuine affection for the customer) or beautiful stores where you can spend time and where you are made to feel special. As ruthless as it seems, the market is ‘de-cluttering’ and I can’t see that there will be latitude for those retailers who fall within the middle ground.

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By Sophie Mackenzie, AdMore Recruitment- Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

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By Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development. 

The most challenging, and by it’s very virtue interesting recruitment is often when you are resourcing for an employer whose brand does not quite match up with candidate perceptions. This can work two ways. A business may have a great employer brand but in truth be a difficult to place to work and develop a career. Conversely, there are many businesses that have a poor employer brand but are actually a great place to work. This mismatch often arises for two key reasons; firstly businesses change – a company may have had a high staff turnover previously but due to a change of CEO/HRD the underlying problems have been removed. The second reason is that many people confuse the customer brand with the employer brand. Yum! Brands (The parent company of KFC) are a great case in point. Potential employees think ‘fried chicken?’ but do not necessarily know the fantastic, employee- focused career opportunities they offer.

So, what can you do to educate candidates?

I was recently invited to a Retail networking event at Harrods. I’ll declare my hand early; I used to work in Harrods. It was an amazing experience and I can honestly say that it was the most theatrical and exciting place to ‘retail.’ However, it would seem that many candidates do not see Harrods as being an employer of choice. Following a period of change at Harrods (click here for more information) the Resourcing team have decided that now is the time to win hearts and minds.

The event was by invitation only (thanks to Linda Treen for the invitation!) and was aimed at attracting the top talent from retail that had thus far declined to attend a formal interview. It was typically Harrods – held in the Georgian restaurant where we were offered some beautifully crafted bacon rolls served with coffee and tea. The Retail Director, Paul Thomas, kicked off the day with introductions. This was perhaps the most powerful part of the day. There were 8 Harrods employees present; they came from Asda, Zara, Tesco and a collection of large and small retailers. Not the typical luxury backgrounds one might expect. They also had interesting career paths; it would seem that the path from Operations to the Support functions was well travelled. I guess that is the benefit of having the core of your business and its supporting Head office within a few miles of each other.

Following the introductions, a chap by the name of George Hammer talked about his own experience of setting up the Urban Retreat salon concession in Harrods. George is a classic entrepreneur and was quick to cut to the chase. Harrods is not an easy place to work quite simply because the standards and expectations are so high. As he put it, if you want to work somewhere spectacular you will have to take a risk. This is an interesting point, as this is absolutely about confidence. If you are confident in your ability then why would you not be successful? His most memorable quote being; “be exceptional, do not be average.” George is clearly an extremely successful entrepreneur, he was the founder of Aveda amongst many other concerns, however he seemed to connect with the audience and many of the candidates present were clearly impressed by his honesty and his passion for Harrods.

Paul Thomas went on to talk about his own career path (Asda – Saturday boy to Store Manager, Sainsburys, Harrods Food Hall) and then fielded some questions. Paul was candid about his own decision to join Harrods with the admission of a wobble during his notice period prior to joining – had he made the right decision?  He was keen to tackle the negative perceptions within the room. A few candidates opened up and to Paul’s credit he dealt with these in a way that encouraged others to raise their own concerns.  He talked about the operational roles being narrower, yet deeper, than normal. He discussed perceptions around a more mature workforce and the ‘stuffy’ stereotypes. He noted that in the four years since they have started measuring employee engagement, they have seen a marked improvement in scores. This willingness to meet these questions head on certainly engaged the audience.

I noted with interest the number of candidates that were keen to formally register their interest in Harrods following some further informal conversations. I suspect that the Resourcing team were slightly surprised to get such an immediate result. Jenny Parry, Head of Resourcing, told me that she was primarily hoping to get the message out there that Harrods is evolving.  Judging by the reaction from the candidates attending, I think they certainly achieved this. It would be interesting to know what other retailers are doing to actively manage their employer brand in what is proving to be a period of intense change in the retail industry, comments below please!

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By Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

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Russell Adams – Director, AdMore Recruitment

Over the last few weeks much has been written and discussed about the future of Britain’s High Streets and retail generally. It has dominated the news channels, the papers and even Question Time.  Clearly the sad plight of Comet, Jessops and HMV has crystalized in many people’s mind the changing retail landscape and the headwinds many retailers face. Such a period of publicity and scrutiny form the wider public has not been this intense since the demise of Woolworths. Many opinions and predictions have been voiced over the last couple of weeks but in contrast to some reports this is a highly complex issue, driven and influenced by a multitude of factors with no easy answers for retailers, the government or indeed landlords.

Many people point simply to the growth of online retailing over the last decade and the changing patterns of consumers as the major cause and decline of the high street. Without a doubt this has been a significant factor and pure online businesses with a lower cost base have been able to undercut the traditional Bricks and Mortar retailers.  However, this issue has not happened overnight and businesses like Amazon haven’t suddenly appeared.  I do think that this argument at times is still overstated. Firstly, according to some reports, approximately 90% of products are still purchased in a physical retail environment, with, according to the British Retail Consortium 43% being spent on the high street. No one questions that this figure will decrease over time but it still doesn’t justify the statement that the High Street is dead. Secondly, everyone acknowledges that much of the future is in multi-channel or Omni-channel and where businesses have got it right, such as John Lewis, it has delivered fantastic results. Further innovations such as Click and Collect are needed to respond to the change in customers’ behaviours.  Looking back over the last few weeks a number of businesses have shown the benefit of this multi-channel approach with much improved results from the likes of Argos.

Another suggested factor affecting the failing High Street is the poor management of a number of retail businesses. With the businesses that have entered administration, many fingers have been pointed but I personally would like to defend these executives. These were often well run businesses with Boards made up of experienced and successful retailers, who in many circumstances have joined the business to try and support its turnaround. I do wonder if it was more to do with whether shareholders were prepared to forego short term gains to ensure long term success. As has been seen, being a quoted company can be challenging when a major change in strategic direction is required.

There are also certainly challenging times ahead for landlords. Indeed one in ten shops on the High Street currently lay empty with demand focused on the large and successful shopping centres.  While this shift is not new, as multiple retailers look to reduce their store footprints this will only lead to less demand on the high street and a greater need to be innovative with property uses.  Many have called for tighter planning regulations to prevent more large shopping malls being built but this really isn’t a long term strategy. Fundamentally customers want to shop in a convenient and enjoyable way and we must give people a reason to visit the High Street, whether that be better parking or a better range of local products etc.  In the short term there is little hope that the leisure and restaurant sectors will snap up some of these units as they themselves struggle against the economic headwinds causing more people to stay at home. Much debate has been made around what should be done however we are seeing some form of renaissance for the independent retailers. It is difficult to argue that there is just overcapacity on some High Streets and thought must be given as to how property is reclassified and used. Going forward it is unlikely that retail demand will match the supply and it may be that residential use and the reshaping of the high street is inevitable.

Clearly the economic slump has been a major factor affecting the high street. After 5 years of negative or little growth, GDP is still 3% below pre-recession levels. I do believe though that in some cases it has just sped up the demise of businesses who faced structural changes to their market. HMV, Jessops and indeed Woolworths are all businesses described as “walking dead” or “Zombie”. Many of the businesses may have survived a little longer in more buoyant times but would still have inevitably faced a bleak future because of the changes to the marketplace and sectors in which they operated. Retail history is littered with consolidation and administrations as the sector rapidly evolves and develops. As always there are winners and losers and the ability to anticipate and adapt to the changing needs is essential in delivering long term success.

Many people have looked towards the government to take more decisive action, whether that be to cut rates or to support Portas or other initiatives, however no action will ultimately change the underlying trends and headwinds for the sector.  There are no easy solutions. Portas and other initiatives are important but change needs to happen and it will be painful.

The last few years have been extremely challenging for the High Street and as times became tougher, costs have been cut which has reduced the level of service and the attractiveness of the environment giving consumers less reason to visit physical locations. Although not the only solution, service, product knowledge and in-store theatre will provide a greater incentive for people to shop both physical stores and the High Street in general. Businesses need to invest where possible to create and deliver this environment. I wish I had another example but I am afraid like many others I cannot help but admire Apple. Unlike most other businesses they have been investing in their store portfolio and can boast some very impressive sales per square foot. I do appreciate part of their success is the desirability of their products but to be fair they can easily be purchased on-line like so many other products. The reason for their success from a store perspective is they have successfully created a retail environment that enhances the purchase experience but perhaps critically, the customer service and product knowledge offers real value to the customer and gives a genuine reason to visit the store.

There are certainly many challenges ahead but I am not sure it is as apocalyptic as some suggest – there is a future and it is about adapting to that future to meet the needs of changing consumer behavior. Many retailers need to adjust their store portfolios and this will cause short term pain. High Streets are and will continue to be an important part of the retail mix but in a different format to what we see today.  People still love to shop, people love to see and feel product in certain categories but they need to be able to shop in a convenient, enjoyable and engaging way.

Russell Adams

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By Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

You will have read this morning that HMV has entered in to administration with the potential loss of over 4000 jobs. This is deeply sad and on the back of the collapse of Comet and Jessops in recent weeks it is perhaps the worst period in retail since the demise of Woolworths. Much of the commentary on HMV would suggest this is a result of structural failure, that the model simply has no place in modern retail. In my view this is rather simplistic. The reality is that HMV has faced a set of unique (in their combination and complexity) challenges that have served to paralyse the business over a period when change was crucial.

HMV’s demise can be traced back to the original stock market flotation in 2002. There is a conflicting argument as the reality is that the funds generated from the float served to fuel HMV’s expansion and competitor acquisitions. This expansion allowed HMV to build the best economies of scale in their market and to be the last man standing (Our Price, Virgin/Zavvi, Woolworths, Silverscreen, Sanity, Borders, MVC…the list goes on). However, being a PLC also presented the Management team with significant barriers to future proofing the business.

At the same time HMV was floating in 2002, BT had just 136,000 Broadband subscribers and additionally Apple’s IPOD had recently launched in October 2001. There were some predictions about how these two products would affect the market but in truth very few people predicted just how quickly they would be adopted. Broadband offered consumers an opportunity to not only browse products in a different way but also to consume them differently. Many critics of HMV have suggested that they should have launched a download service earlier however in reality there was stiff resistance within the wider industry. The Wild West days of the noughties and the plethora of pirate websites where you could download unlimited amounts of content for free initially pushed music and film companies to further retrench their position (on providing official channels). By the time they had realised the tide was against them, Apple amongst others had taken up the mantle (Apple were not really associated with music/film consumption before 2002). HMV have been playing catch up ever since and the brand had been severely compromised as a result.

The pirate websites also revealed an unsavoury insight in to our own cultural acceptance and views on theft. Unfortunately many people did not see illegal downloading and CD/DVD pirating as morally wrong. How often did you see individuals selling pirated product, unchallenged in pubs or street corners? I suspect this cultural acceptance is entrenched in the mix tapes of the 80’s and the romanticism that this still evokes. This created two major issues for entertainment retailers – lost revenue and erosion of what consumers were prepared to pay legally.

In 2002 it was not uncommon to pay £13.99/£19.99 for a Chart album or film and much more for older back-catalogue products. Today you will often see the same products on sale for £7.99/£13.99 respectively, or less. This is quite a dramatic price deflation when you consider that over the same period a loaf of bread (800g) has risen from an average of 60p to £1.30 today. The price deflation was deepened by competitors running loss leaders in a bid to survive, the market entry of the supermarkets and finally internet shopping.

During the same period of price deflation there has been a very real increase in costs. Payroll has continued to rise and unfortunately HMV has an expensive supply chain model. The cost of getting products on the shelves is much more expensive than it is for a Supermarket with employment-as-a- percentage-of- sales being close to double that of the Supermarkets. A typical HMV store has significantly more SCUs (product lines) than virtually any other similarly sized retailer. Each SCU has to be processed and put on shelves individually, a time consuming exercise but an essential one if you want a wide selection. The only way to have reduced this cost would have been to move this back-catalogue purely on-line.

This however was also extremely problematic. In the early days online retailers were making very little money. Amazon ran at a loss for many years…without paying much tax. HMV were in a tricky situation on two counts.  Moving their online business off-shore would attract negative press, a consumer backlash and a legal minefield. This coupled with a reluctance to under-cut the physical retail pricing model meant that the website failed to gain momentum. By the time that ‘perceived’ consumer sentiment had begun to soften, HMV had fallen too far behind. This is clearly a huge mistake but to some extent an understandable one.

The stock market- fuelled expansion brought further issues. Growth was fundamentally underpinned by store expansion with over 100 stores opened in a 5 year period. The dynamics of the market dictated that expensive leases were signed and for long periods.

The way in which we consume entertainment has changed dramatically over the last 5 years (Permira bid over £800 million for the business in 2008). I myself use SKY+ to record TV series to watch at a more convenient time while I download films directly via Apple TV. I download and play the occasional game on my smart-phone and stream music via Spotify. I still buy CDs, I love browsing and physically selecting products but not in the same quantity that I did in the past (having children hasn’t helped to be honest). The market has also changed significantly. The music industry is continuing to move towards singles rather than album releases while Hollywood is not producing blockbuster films in the same quantity that they did prior to the recession.

When I visit an HMV store I get the sense that they have lost touch with who their core customers are and could be by trying to appeal to everyone. They desperately needed to radically overhaul the product offering. They have made some inroads into the technology market but this is a relatively low margin arena and is not enough to sustain stores of their size (neither big enough nor small enough). The appetite to pursue this further has not been there and this has been driven by a Management team with either limited vision or who are constrained by the PLC ownership model. Had HMV been owned by a rich benefactor I genuinely believe the brand was salvageable. I don’t think there is a place for a specialist CD/DVD retailer for all the reasons stated but there is a place for a retailer that celebrates popular culture. A combination of fashion, technology and yes, some quirkily packaged entertainment products. Had some brave decision been made earlier HMV might not be in the position it is today.

The truth is that HMV has suffered a long and agonising death, by a thousand cuts. I can’t think of another retail market that has faced the same set of challenges and in such a short space of time. I sincerely hope that someone with a passion for the brand, and some spare cash, comes forward to save what is a truly iconic institution. Just as I was finishing this blog I received the following email from a contact that I suspect sums up what many feel about this sad news:

“It really is – I’ve just been reminiscing with my boss – things like; the first tape/LP we ever bought, all the presents we bought and were given from HMV, the cool posters i used to spend hours leafing through. Of all the casualties of the current retail market, this has hit me the hardest.”

On a final note, a by-product of HMV and the overall physical entertainment market’s demise will be an increase in costs elsewhere. Expect your broadband cost to continue to rise (if you can only download your music you are a captive customer) and your satellite TV package costs to continue to rise…

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By

Jez Styles, AdMore Recruitment– Specialists in Retail and Hospitality Recruitment, Search & Selection, Talent Management and Career Development.

 

Photo Credit: Comet

Sadly the last couple of weeks have been somewhat of a chilling reminder of 2008 when we witnessed the collapse of Woolworths. With store closures announced the outlook for whole group looks very bleak and as was the case with Woolworths, the collapse of Comet really couldn’t have come at a worse time for all those involved, so close to Christmas. As I drove into work this morning I started to think, from a recruitment perspective, about how it may be different for those Comet employees coming to the market now, in comparison to four years ago.

Actually, I believe for many reasons those people involved with Comet are in a stronger position than in 2008. Firstly the retail recruitment market, whilst challenging, is more active than late 2008, a time when many businesses were going through redundancy programmes simultaneously and the market was flooded with applicants. Secondly, the future is looking more positive. Whilst the news streams change daily about the level of growth we can expect in 2013, we are at least talking about growth and this a much more positive picture than in 2008 when we were heading into deep recession.

I think for many reasons the recruitment market is much better prepared to help and support those coming to market than they were back in 2008. Sadly one reason is experience. Both recruiters and other prospective employers have seen a number of retail businesses collapse and are more proactive and systematic in accessing this pool of talent. It was great to see the response that Dixons gave in trying to provide employment opportunities wherever possible and this is an example of how retailers often react to the closure of these large businesses.  However, for the volume of store staff it is going to be particularly challenging to find alternative employment. Whilst a number may be able to secure temporary roles over Christmas, come January, the competition will be intense for a limited number of roles. For Head office staff, it will be dependent on their area of expertise and the extent to which their skills are transferable.  Natural competitors of Comet like Dixons, John Lewis, Amazon and Argos all have their head offices within striking distance of Rickmansworth and hopefully they will represent an opportunity for some of the Head office staff to find other employment.

With much of the headlines dedicated to the way in which the business had been run over the last year I think the market is also very sympathetic to all of those involved. Unfortunately it is still going to be incredibly challenging as the competition for roles is as intense as ever. For many of the long standing Comet employees, they will be experiencing the recruitment market for the first time in many years and the market has changed dramatically. Their ability to quickly get to grips with the market and understand the many tools and routes available will be the key to finding another position.

When I look back over my 15 years in retail recruitment, the methods have changed substantially. The days of paper applications and pages of advertising in the press are long behind us. The growing use of social media, large in-house recruitment teams and a large and fragmented recruitment consultancy market reflect the current landscape. The market is vast and confusing and knowing how to access roles and who to talk to is the first step in finding a new position. For Comet employees unfortunately it is not a case of one size fits all; where you sit in the market will determine the best strategy for you to employ.

In the mid to senior market where AdMore recruit, LinkedIn is a critical tool in assisting people in their job search. Both agency and In-house recruiters use it as a major sourcing tool and so having an up to date and accurate profile which will allow individuals to be “found” is critical.  The use of Twitter for posting vacancies is also on the increase. It is certainly a case of using every avenue available including your own network and contacts as well as those around you. Certainly with the collapse of JJB, I know a number of the Senior Managers were very proactive in supporting their teams with recommendations and introductions to their network of contacts. I cannot emphasis enough how important it is that candidates understand how the market works and how to get the best from it.

A few useful tips can be found here

Overall, whilst the market is still tough out there, it is arguably not at the depths it was in 2008, with a brighter future hopefully ahead. However, as the economy continues to struggle, with consumer spending under pressure and the on-going structural changes which continue to affect retailers as they become more multi-channel focused, my fear is that unfortunately, this won’t be the last major retailer to collapse.

Russell Adams

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