So what have they done and can you copy them? They have refocused their range to increase gross margin this has been done by reducing their lower margin product like CDs and DVDs.  They have also relentlessly looked at how they operate centralising tasks to reduce branch cost and staffing levels. This clearly has changed the customer experience, but as their results show their efforts have produced a significant increase in net profit year after year. They have also looked at store layout with higher margin product, greetings cards and stationery being moved near to front of their stores. They also chase the extra sale both in what they display to customers in the till queue and with their till staff offering an extra ‘opportunity’ to every customer. Interesting. So what can you learn from WHS? Look at your product range, is it fit for purpose, which categories are failing to deliver, which products are falling to sell? Look at how you operate, does your staffing roster match your customer demand, are you undertake tasks that were needed in the past but are no longer appropriate, do you buy services that you can do yourself? Look at where your profit comes from. Do you plan your shop to maximise profit, do you train your staff in ‘conversational selling’? If you look at the WHS survival and recovery programme since Kate Swann became group chief executive and the annual accounts are on the investors page of their website there is much to learn.  I think it’s worth a look.

But the big surprise from using one supermarket on a regular basis is how quickly some of the check out staff remember you. One in particular, Angela knew us from using the Post Office that we ran and had read a couple of the articles that the local newspaper had published about us. The first time she served us she said that she was very pleased to see us and as she rang our purchases on the till she kept up the sort of conversation I would expect from an independent local store. This of course was not a one off with this assistant as we have found several other members of the store checkout team in this style of conversation with other customers.

When the multiples can match this level of customer relationship it’s time to ask what independents need to do to keep ahead. My father has been telling me about the village shop where he lives since it changed hands a few years ago and the efforts that the owners are going to to make their business thrive. The latest story has been about choice, he went to the counter with a pack of frozen salmon and was asked if he would prefer fresh salmon on the day. Interesting, my father is delighted by the care that he gets from the store because he knows that the older he gets the more important it is that he has easy access to amenities like a village convenience store.

What are you doing to stay ahead?

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‘Our recent challenge has been to try to deliver our papers at an acceptable time to customers. This has proved to be very difficult as our wholesale deliveries get later and later.’

In the past I had significant difficulties caused by a variety of titles at different times. The Smiths News wholesale house at Crawley had a firm approach to newspaper arrivals after the ‘Cut Off’ time. They undertook delivery of the rest of the titles and reran the errant title(s), they told me that it was the only action that they had available to them.

After years of frustration with late newspaper arrival times we developed a strategy for staying ‘stress free’ HND retailers. It took some time, but here are the 12 rules that we use over the past decade or so:

1. Keep the customers informed of late running issues by getting the newspaper delivery staff to delivery a letter from me telling them why we can’t deliver and to come and collect their paper from our shop. We have a set of stock letters covering all the title ready for any failure.

2. Ask the NFRN about who to talk to at the publishers and wholesaler and their contact detail. Keep the NFRN Help Line informed of every failure.

3. Develop a positive relationship with the supply chain, both wholesaler and publishers.

4. Regularly talk to the important/key personnel at the supplying wholesaler, the House Manager & Night Manager and further up the management tree.

5. Discover from the Newspaper wholesaler when the ‘Cut Off’ time is and how they decide what action to take.

6. Use the National Distribution Monitor website to discover how many other newsagents are being affected by the poor arrival times of newspapers.

7. Continually explain why having all the newspapers by the Required Delivery Time is important and what the benefits are and the consequences of a poor delivery time and reruns are.

8. Ask customers to contact the senior managers/directors of the publishers of their newspaper to explain how the service failure affects them and you.

9. Ask publishers and wholesalers to assist in sales development.

10. Never just rant at the supply chain; they are at the beginning and end of the day important business partners.

11. Find different ways of getting the message out to a wider audience. I used a blog, Village Counter Talk where I regularly published items about how the industry ‘fails’ my customers, but today I would make use of Twitter. #DailyMirror_late_again sounds like a good hash tag to me!

12. Be patient, it takes time.

By implementing these rules we didn’t stop reruns, but we did gain a consistent first delivery time that enabled us to have a many years of stress free service.

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“We are successful when our products are consumed responsibly.”

This has reminded me about how we dealt with customers who were abusing alcohol. Let me be frank when you sell alcohol you are likely to have alcoholics amongst your customers. The first one we came across was a grocery retailer whose family owned 20 or so shops in across the South East up until the 1990′s.

But he had a problem, he was addicted to high strength large and cheap spirits. His wife was so concerned that she asked if we could stop selling alcohol to him. We tried to but he continued to buy some alcohol from us and other stores. His alcoholism eventually killed him and some months later I was given a very graphic account of his final days of his life. Needless to say I felt very uncomfortable that we didn’t find a way of stopping him buying from us.

The next alcoholic customer liked her wine just a little bit to much and was up to three bottles a day when her husband asked us to stop selling it to her. This time I took a much more proactive approach and told her that her husband had asked us to stop selling to her. I can only say that her response was some what less that friendly. I did persevere and explained what had happened to the previous customer. She did hear me out, but went away unconvinced and now buys her alcohol and other shopping elsewhere.

Of the two experiences neither is at all satisfactory, but I am left feeling that I have taken the responsible course in the second case. I definitely feel I should have done more with the first customer.

How do you manage your customers who have a drink problem?

So how are you going to make the most of the opportunities that 2012 will present? Here are some of my thoughts.

• Put together a budget for sales, gross profit and costs.
• Plan to check your actual sales against your budget on a monthly basis.
• Know your best sellers.
• Make sure your merchandising reflects best sellers profit value.
• Deal with your worst preforming products.
• Look at your shop from outside and ask yourself and passers by if it is fit for purpose.
• Review your marketing, is it working? How many new customers did it deliver to you in 2011?
• When did you last invest in your shop, is 2012 the year for a refresh?
• Do a deep clean of your shop.
• Talk to your key supplies about how they will help you succeed in 2012.
• Are you due Business Rate Relief? Check with your local council and if you are, apply for it.
• Look at your place in your community and get involved in their 2012′s celebrations.

In their advice to retailers Warwickshire County Council Trading Standards they say:

‘You must not sell tobacco or cigarette papers to anyone under 18 – ‘tobacco’ is defined widely and, in addition to tobacco for smoking, includes tobacco products for oral or nasal use (e.g. snuff), and smoking mixtures intended as a substitute for tobacco (e.g. herbal cigarettes)’

The Children and Young Persons (Protection from Tobacco) Act 1991 gives retailers one defence, due diligence. Retailers need to have a process that works every time.

If you need advice on this issue you could start by giving your local Trading Standards department a call.

His says “Newspapers would become a legacy part of a company focused on digital distribution – more targeted to older readers and higher-priced. The days of mass distribution are over. There were 50,000 regular tablet users from 300,000 downloads of a Sydney Morning Herald and Age iPad app – users who signed up in the blink of an eye.”

Somewhat explains UK publishers approach to broadsheet pricing this autumn.

VAT registered businesses are always open to receive a visit from one of the HMRC’s compliance officers. During the 22 years we have run our shop we have had 3 inspection visits and the last one was more than 10 years ago. It came as no real surprise that we recently had a phone call from the HMRC asking to arrange an appointment for one of their compliance officer to visit us.

We took the first date given to get the inspection dealt with quickly. The confirmation letter that was emailed to me advised us that we would need to have our business paperwork for the last 4 years available. As we had already delivered most of the 2010/2011 paperwork to our accountant we had to get it back and check that we had all the evidence for the VAT claim and anything else we thought that the officer may want to see. The compliance officer arrived and with his paperwork & notebook out on our kitchen table he started to ask about our business sale and VAT refund claim. He wanted to know who were the directors of our former business and what we were planning to do. He asked who we had sold the business to, their contact details and what the shop’s address is. He also asked us to describe what the business did and how many staff were employed.

All these details noted he wanted to understand why we were claiming a refund of VAT. We have used Total Accounting Service of Bognor Regis to undertake our VAT accounting for 20 years and they provide us with a record booklet every quarter, the officer wanted to see the latest one. After I had explained the records he went through the booklet asking to see the higher value invoices with the larger VAT amounts. Our key supplier that all these invoices were from was Capper & Co, our Spar wholesaler. He also inspected the invoices from our business transfer agent and solicitor for their work that lead to our shop sale.
Having been through all the evidence the compliance officer was satisfied that our claim was legitimate and he passed the refund for payment.

Another job done!

There is something about debit and credit card use that seriously concerns customers though and that is PIN security. Clearly the loss of security of such key information can be expensive and not just in cash. When we had our bank account  fraudulently emptied a few years ago it took hours on the phone to the bank and police to report the crime. We were able to prove that we could not have been over seen in using our PIN’s as we had not used the debit card other than at our own Post Office. Of course it took a while for our bank to put our account right. They charged the retailers who had accepted the fraudulent transactions for the funds.

Over the past few weeks I have been looking at how card users attempt to protect their PIN entries from prying eyes. Its amazing how many different ways there seem to be. From watching what people do I am not sure if there is a fool proof method that does not  totally obscure the users vision. Hum.

So what can retailers do to give comfort to their card using customers?

Looking around the Internet didn’t prove that helpful, most of the websites I found are focused on other types of fraud protection. Part of our recent business sale preparation was to get our Post Office counter safe serviced. This was done by Neil Rollerson of Arxcis and I asked him if he knew a solution as he has worked in the store security industry for many years.

I shouldn’t have been surprised, but he told me about a new product that he is offering called Pin Protect  http://www.pinprotect.co.uk/page3.htm. As you can see the unit encases the card reader/pin pad allowing the customer to enter their code with the knowledge that only they can see which keys are being pressed.

I may have never seen anyone attempting to shoulder surf a customer using their debit card, but that’s not the point. It is clear that a great many people are very concerned about the threat whether it is real or perceived. The question is should retailers take this into account and give their customers the comfort that the transaction security is at the top of your agenda. You never know you may find that more customers use your shop because of it.

We have three of these PIN Protect units to give away, email us your contact details for a chance to win one of these units.

http://db.tt/kqiwJ1NH

A couple of incidents are worth highlighting. With Christmas approaching fast and shoppers starting to buy gifts that will not reach their recipients until 25th December or after many stores are varying their refund/exchange policy. At one check-out this week I observed the truly shocking.

A customer who had selected several items to purchase, queued in line waiting for the next available till had her selection scanned on to the till and then when being told how much to pay asked for a Christmas gift receipt. Unfortunately, the assistant had finished the sale by the time that she appreciated the customers request. From there things just went down hill rapidly.

The assistant asked a more experienced colleague how to produce the requested receipt and was told that the ‘seasonal gift receipt’ had to be requested before the sale was completed. When the customer asked if the sale could be reversed at the till and reentered as a new sale she was told that if she wanted a correct receipt she would have to go to ‘customer service’. This instruction was given in a very brutal manner, shocking.

So what went wrong? What came across to me was that the assistant serving this particular customer was new to the store and she had not had sufficient training to do her job correctly and there was no one supporting her. I think that any independent retailer with an epos system will know they are complex. On this occasion it was the customer who got really poor service as the check-out staff did not have the power to amend the regular receipt with any form of ‘authorised amendment’.

The second store again at the check-out a customer produced a situation that went beyond the ability/knowledge of not just one assistant but two more that also got involved. The first assistant admitted that what the customer was asking was something that happens very in frequently. This meant that the situation was beyond the assistant’s knowledge. Again the staff training was at fault, not the staff member themselves.

So how can independent retailers learn from my observations?

The issue that clearly comes across is that over the next few weeks up to Christmas (and beyond) is to ensure that their staff all understand their role, are fully trained and have the authority to deal with customer facing issues. Not only that, by ensuring that your business doesn’t have rules and policies that cause these sort of issues at your check-out. Focusing on the customer experience in your shop you are going to be on a winner.

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Our first task was to tell our staff that we were selling our business and the their jobs were safe as they were covered by TUPE . As I posted here that we also sent a message to our customers .

To enable the transfer to happen ‘comfortably’ we decided that we would close our shop at 1pm on the 21st. This was to allow for the removal of our rented SparPos epos system and the installation of the buyer’s Nisa tills ready for the next morning. We had prearranged with our stocktaker to undertake the valuation on 21st September and I contacted them to confirm the date. I also contact Post Office Ltd and Camelot to confirm the transfer.

I had been keeping our Spar wholesaler, Capper fully informed throughout our sales process and I spoke to their rep to discuss our final week of being one of their customers. We discussed removal of their equipment including the epos system. We also talked about when our last order would be placed.

Next on the list was a letter to each of our suppliers to tell them that we were selling our business and where needed to pay any outstanding accounts we sent a cheque. We also advised our local council of the impending change as well as the utility companies. And then came the HMRC in all it’s guises.

Throughout our last week we had many conversations with our customers, sharing memories and accepting their thanks for the service that we had provided them and the community. It was an outflow of sadness that we were leaving mixed with warm wishes for a happy retirement. It was delightful to hear from so many customers about how they saw us. We also received dozens of cards and letters.

To enable our buyer to get his EPOS system up and running by 22nd September we allowed him to have his back office computer installed on the previous Friday. As the Spar and NISA EPOS systems are very similar we were able to arrange for our stock file to be made available which saved a great deal of effort. His team did check that all our stock lines were on their system and then needed to add newspapers and magazines.

As the buyer and his store management team were in the shop for some of the days in the run up to completion we were able to introduce them to our staff and to start to introduce them to our customers. On hearing that one of our staff was concerned about his future with the business I arranged for him to have a interview with future owner. This dealt with the worry that all the staff were going to have to reapply for their jobs, this concern apparently came about due to a misunderstanding about the need for the new owner to provide a replacement contract of employment.

When our last day arrived it was business as usual, well nearly, all the deliveries arrived including a dry goods only one from Capper. This stock was set aside and its value was taken off the delivery note. Of course more customers wished to bid their own farewells to us, quite emotional really, but there was much to do.

At 1 pm we closed our shop for the very last time, I have to say it was quite a relief. The tasks for the afternoon and evening still had to be achieved. There was the stock valuation, removal of the SparPos system and Post Office balance that I needed to complete. Two stocktakers had already arrived and we set them to work. The Spar till engineer arrived and removed the tills, but before we allowed him to close down the back office computer we backed up and printed out data that we thought that we may need in the future such as the ‘electronic till rolls’.

We also needed to have our newspaper delivery customer debt figure to ‘sell’ to our buyer. As we had been computerise throughout our ownership that was just a matter of running a report. We had brought the value down significantly during the previous few days by sending out statements at the start of the week. A remarkable coincidence was the figure was with a few £1s of our 1989 transfer amount.

The buyer’s challenge was to get his scanning system installed and operational. This was followed by his team undertaking a full stocktaking using several hand held terminals and up loading the captured data on to the system. No small task.

During the afternoon our solicitor visited us so that he could be present at our last board meeting where we signed a series of documents that included us resigning as directors of our company. We also handed over to him the company record books for him to send on to the buyer’s solicitor. He told us that the purchase money for the business and stock had already been forwarded to him so completion would go head as arranged.

With the Post Office fully counted and the shop stocked on their system there was just the question of was everything in place for the following morning? As it was past midnight by this time I offered to provide floats for their tills and we locked up and looked forward to another busy day to come.

The new owner and his team were back by 5.30am and they checked the news delivery in and put the rounds together. At 7am I showed them how the automatic front door operated and they were off and trading. The Post Office trainer arrived before 8.30am and by 9am The new sub Postmaster, the trainer and myself had locked ourselves in the PO strongroom and the transfer stock count had begun. It was midday by the time everything had been checked and the paperwork completed. I was no longer a Sub Postmaster.

As we lived over the shop the 22nd of September was also our moving day, but that’s another story. Needless to say it was all a bit manic, but we had achieved our goal and after 22 year 6 months and 9 days of ownership of the newsagents on Haglands Lane in West Chiltington we had past the baton to a new owner.

I will look at the period from transferring the business to the new owner up to agreeing our completion accounts in a few months time.

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This approach clearly has been working well for WHS as their net profit has more than doubled between 2004 and 2010. Over the same period sales have declined by 8%. Clearly the alchemy of pulling increased net profit from declining top line sales won’t go on forever. The part of their business that is performing best is the travel division that has shown an increase in net of 150% since 2004.

Why look at what this multiple is doing? Simple, they are in our channel selling a huge volume of magazines and they are suffering the same issues of being high street retailers as many independents. Therefore watching what they are doing to grow bottom line is valuable.

2003/2004 was a year of significant change when they closed down their two international divisions so it is interesting to see that they started to build a presence overseas again in 2009. Last year they re-entered the Australian market place with a travel stores at Melbourne and Sydney airports. This month there has been a report in the Sydney Morning Herald saying that WHS will have three outlets at the redeveloped Melbourne Southern Cross railway station. This has got Australian newsagents asking will WHS start to appear in shopping malls.

I think that it’s reasonable to say that WH Smith’s having looked into the face of failure over the past decade or two now know what their real strengths are and are building a sustainable business around them.

The question for you is do you recognise your strengths and are you using them as a basis for success?

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