Tesco cuts back it's 24 hour operation - what can retailers of all shapes and sizes learn from this?

A story caught my eye in the news this morning. It is regarding the fact that Tesco is paring back it's 24 hour operation in a large chunk of their stores. The reason quoted in the article is the fact that online shopping is eroding their in-store customer base.

I can see that an upturn in online shopping (with a similar downturn in customers physically visiting their stores) can have an effect on how long you need to keep the doors open. I know that big retailers have been backwards and forwards will having their stores replenished overnight or not. But this is more like a complete change in strategy for Tesco rather than a tweaking of a few opening hours.

The 1990's through to the last couple of years have been all about expansion got the big retailers, particularly the supermarkets. They bought up land, drove into new markets and employed more and more (often part-time) staff. The recent scandals and the competition from the discounters has put Tesco on the back foot. It has also given them an opportunity to assess where they are and where they want to be. 

Expansion for the sake of it means nothing.

If it's not an area that makes money then why bother with it?

And that brings me to your business. I'll ask the exact same question-

If it's not an area that makes money then why bother with it?

It's time to assess all aspects of the retail business that you work in and decide whether they are all pulling their weight. Your business needs to be as efficient as it can be. Unless an area generates footfall that you need. The National Lottery is an example of this. The income it generates is poor but it drives people through the door that may buy other things.

The best way to do this is to break down your business into different areas and attribute costs to each of these areas. This can be staffing costs, materials, energy use or whatever resources this part of the business consumes. Then measure this against the income it brings in. You will soon generate a list of the performance of every aspect of your business. From there you can see the top performers and those that aren't quite doing so well. Assess the likely impact of removing some parts of your business and moving the resources into others.

• Does this work?
• Will it being more income?
• More profit?

It is by analysing everything that you do that can make the difference between profit and loss. Don't wait for a major event to hit you like Tesco. Act now.

Do organisations have an obligation to people other than their shareholders?

I ask this question because, as I grow older, read more about the world and experience life with more and more organisations I see things that perhaps I hadn't seen before.

I've recently read the autobiography of Mahatma Gandhi and one of the  overwhelming themes was living on what you need to get by.

I would put it to you that many, many multinational organisations gather in vastly more resources than they need and yet their staff at the bottom level struggle to exist on the minimum wage. The question emerges - do the leaders of the organisation at the top have more of an obligation to look after their employees (higher wages, more annual leave and better benefits) than their obligation to their shareholders (lower costs, greater profit and better dividends)?

And it's not just with wages that I feel organisations need to look at their obligations. I read this article yesterday with some interest-

http://www.independent.co.uk/news/business/news/boots-to-cut-700-office-jobs-in-the-uk-10305508.html?origin=internalSearch

A genuine "restructure" where a company redeploys it's resources into different parts of the business for commercial reasons makes sense. Adapting the online offering, moving people from traditional marketing to the social media team or moving people from one store to another to react to customer demand all make sense.

The euphemistic restructuring that companies use as a buzzword now means job cuts and a drive to reduce the overheads a business faces - at the detriment of the workers who lose jobs, have hours cut, have to relocate, are under-employed or don't deal with the change very well, sometimes because they aren't supported through this change by the organisation that brought it about.

Again, it begs the question of where the company's priority obligation lies.

I've often thought that there are enough people in the UK that believe in equality and fairness and they could be mobilised to buy shares in a company and apply pressure on the policies that the company has, in terms of salaries, environmtal considerations and ethical business practices.

Make decisions based on long-term trends rather than one-off incidents

I've been working with a few retailers recently and we've been looking at the long-term trends in their business. This is getting a fix on what us happening on an average day or event rather than looking at one instance and making a knee-jerk decision.

For example, one retailer has a fortnightly run when they change their promotions over. It keeps their offering looking fresh and keeps customer interest levels high. On the first such changeover of the new year, there were a few changes to how things are done and this meant that the team delivering this were completed early. The retailer wanted to immediately cut the hours allocated to this task and make a cost saving. However, my instinct was to wait and assess how this change went over proceeding weeks, to ensure that the time saving was ongoing, rather than just a one-off event. As it happened, there was a cost saving, but only at about half the level that was expected after the first incidence.

My point is, that by making a decision after the first event, you aren't getting the full picture and may have to make the decision more than once.

Every change to your business will necessitate at the very least, a thought process that looks at whether this changes affects other parts of the business. A new product may need staff training, a change in opening hours will need staff consultations for a change in their hours. And so on.

The next step is how to evaluate the change and how you will make changes, and this is mainly done with evidence. See how the new product is projected to increase sales and how much extra/different knowledge each team member needs to be able to sell it. From there, you have a training budget and can measure this against expected sales. Ensure that it is cost-effective.

As in the example I cited above, an analysis if the changes over several weeks and plotting the amount of time saves on each changeover will give you an average number of hours saved per fortnight and then either a reallocation of hours elsewhere in the business, or a staff consultation to see where hours can be saved. In our case, there was a vacancy that came up somewhere else in the store and someone volunteered to change roles and more over there.

Communication is the key, and being able to discuss these matters openly and honestly with your team will ensure a smooth transition in the event of any change.

How to sell your home: What estate agents don't tell you by Steven Thompson http://www.amazon.co.uk/dp/B00I5HOJAM/ref=cm_sw_r_udp_awd_awF5ub0SFJ9E4

http://www.amazon.co.uk/dp/B00I5HOJAM/ref=cm_sw_r_udp_awd_awF5ub0SFJ9E4