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MAIL ORDER CATALOGUERS “LIKE RABBITS IN HEADLIGHTS”, ACCUSES REPORT

News, 05 September 2000


Britain's mail order catalogue industry, currently embroiled in a drastic slump, is acting "like rabbits in the headlights", according to a report just published by retail analyst Verdict Research.

In the dock are the UK’s ‘Big Five’ catalogue retailers – Empire Stores (now rebranded Redcats), Freemans, Grattan, Great Universal Stores and Littlewoods – all of which have shared a £243m decline in sales during the past year.

This is due to Britain's changing social structure, diagnoses Verdict, blaming the industry’s dogged adherence to outmoded selling methods - women agents selling merchandise on extended credit from catalogues to a circle of family, friends and acquaintances. But this traditional structure has collapsed and most agents now restrict purchases to their immediate home and family. Strong price competition from high street retailers is another factor in the decline.

Mopping up the lost business is a relatively new breed of catalogue operator – direct order retailers such as Next and Tesco, online merchants and TV shopping channels. In 1999, consumers spent £800m online, nearly double the previous year; together with TV shopping channels, e-tailers have snatched an 8% market share. The biggest loser, says Verdict, is Great Universal Stores. Although still industry leader with 20% of the market, only a year or two back this stood at 25%.

Although trying to re-invent themselves, GUS and other members of the Big Five are moving too slowly to implement change. Their main hope for survival, Verdict suggests, lies in greater flexibility and a marked improvement in one-to-one marketing.

News source: BBC Online Business News (UK)