The Word

THE LATEST ELECTRICAL GOODS INDUSTRY NEWS

DISCOUNTING AND THRIFT ON THE HIGH STREET

UK retail sales saw a marginal rise on a total basis in January, supposedly due to aggressive discounting by retailers during the month. A ccording to the British Retail Consortium and KPMG, total sales increased 0.4% against an increase of 2.2% in January 2019, but like-for-like sales were fl at, following a rise of 1.8% in the preceding year.

Online, sales of non-food items increased by 2.5% against growth of 5.4% in January 2019, although the penetration rate continued to rise, up from 29.5% to 30.6%.

Paul Martin, Partner, UK Head of Retail at KPMG, said: “Consumer confi dence has started to return post-General Election, but we have not experienced any major leaps for the sector yet. “We have to remember this semi-positive performance will also be the result of aggressive discounts and consumers’ preoccupation with bagging a bargain. That’s not always good news when looking at bottom lines.”

Chief Executive of the BRC Helen Dickinson said recent political uncertainty and a decade of austerity appear to have “ingrained a more thrifty approach” among shoppers. “Furthermore, as sustainability continues to rise up the agenda, many customers are switching to more environmentally friendly products or simply choosing to buy less. These e ects are not just limited to the high street as growth in online purchases also slowed.”

KPMG’s Martin added: “January is usually a quieter month for retail, and although static sales might not appear triumphant, at least it is no further deterioration.

NON-FOOD RESPONSIBLE FOR JANUARY SHOP PRICE DECLINE

Pressure on prices in the non-food sector of retail led to overall shop prices falling 0.3% in January compared to a 0.4% decrease in December. The fi gure is below the 12-month average decline of 0.0% and above the 6-month average of 0.5%, according to data from the British Retail Consortium and Nielsen.

While food infl ation accelerated to 1.6% in the fi rst month of the year, non-food prices fell 1.5% – the same rate of decline as in December – prompting the BRC’s Chief Executive Helen Dickinson to assert that “shoppers will cheer”.

The fi gures for non-food represent the continuation of a long-term trend. Mike Watkins, Head of Retailer and Business Insight at Nielsen, put the sector’s plight down to no infl ationary pressure coming from the high street as shoppers remain nervous about spending. “Hence, discounting continues for many non-food retailers,” he added.

Whilst promotions in Supermarkets returned to more normal levels after Christmas, Watkins said the non-food sector remains “embattled” with fi erce price competition which looks set to continue.

RETAIL AGONY: JOB LOSSES MOUNT AS SECTOR STRUGGLES

57,000 retail jobs were lost in the fi nal quarter of 2019 following the worst year on record for retail sales growth.

Figures from the British Retail Consortium show that the three-month period represented the 16th consecutive quarter of year-on-year decline, but the fall of 1.8% was well below the 2.8% recorded in the same period of 2018.

An earlier report from the Centre for Retail Research showed that more than 140,000 jobs were lost in the 12 months of 2019, up from 117,000 in 2018, with 2020 forecast to bring further losses of 171,669 jobs and store closures estimated to reach 17,565.

The CRR said the retail crisis was caused by “high costs, low profi tability, and losing sales to online shopping.”

Commenting on the BRC’s Q4 Retail Employment Monitor, Chief Executive of the organisation Helen Dickinson said there were many challenges for retailers in 2019: “Businesses had to contend with the repeated risk of no-deal Brexit, a general election and the ongoing transformation of the industry, leading to weak consumer demand. As a result, employment has su ered in retail, the UK’s largest private sector employer.”

“WORST YEAR ON RECORD FOR RETAIL,” SAYS BRC

Figures released by the British Retail Consortium show 2019 to have been the worst year on record for retail sales with total sales for the twelve months down by 0.1%, compared with 1.2% growth in 2018. The year was also the fi rst to show a wide-ranging decline in sales – this being refl ected in the CVAs, shop closures and job losses the industry su ered in 2019. Paul Kirkland, Director of Retail & Hospitality at Fujitsu UK, said: “It shouldn’t come as a surprise to retailers that total sales fell in 2019; from declining footfall as online competitors grow their market share, to the continued impact of the UK’s political and economic uncertainty, it was a particularly di cult consumer environment to navigate.”

BRC’s Helen Dickinson elaborated: “Twice the UK faced the prospect of a no deal Brexit, as well as political instability that concluded in a December General Election, further weakening demand for the festive period.”

“There are many ongoing challenges for retailers: to drive up productivity, continue to raise wages, improve recyclability of products and cut waste. However, this takes resources, so it is essential the new Government makes good on its promise to review and then reform the broken business rates system which sees retail pay 25% of all business rates, while accounting for 5% of the economy.” “It shouldn’t come as a surprise to retailers that total sales fell in 2019”

AO CLOSES LOSS-MAKING NETHERLANDS OPERATION

AO World announced the closure of its lossmaking Netherlands operation as it reported Group operating losses of £10.6m for the six months ended 30 September 2019. John Roberts, AO Founder and Chief Executive O cer, said the move will enable the Group to concentrate on the transformation of its German business.

Total Group revenue for the period increased by 16.3% to £470.1m, up 3.2% on a like-for-like basis excluding revenues from the recently acquired AO Mobile.

Total UK revenue rose 20.3% to £402.7m, up 4.5% on a like-for-like basis excluding Mobile.

Revenue in Europe fell 3.4% to €75.7m as the European operating model was realigned with the company’s UK policy. “These results were achieved during a period of signifi cant change for the business where we were focused on laying the foundation for disciplined, long-term growth,” Roberts commented.

“There are encouraging green shoots of profi table growth across our UK business, including within our core MDA o er and we will continue to invest to drive this further. “Our relentless focus to accelerate profi tability in Europe continues, and as part of this we have today announced the closure of our Netherlands operation. This will enable us to concentrate on the transformation of our German business, where we have increased confi dence in, and visibility of, the three core drivers of the business model that will put us on the path to profi tability.”

CONSUMER CONFIDENCE GETS “MINI BORIS-BOUNCE”

Consumer confi dence gained an encouraging lift in January, marking two consecutive months of improvement.

According to researcher GfK, public sentiment rose two points in the fi rst month of 2020 with improvements in consumer assessments of their personal fi nances and the general UK economy. Although still in negative territory, at -9, GfK said it expects a return to positive headline scores soon. Looking at the 12 months ahead, expectations for personal fi nances increased three points to +6, fi ve points higher than January 2019, while those for the general economic situation increased three points to -24, which is 15 points higher than the same month last year.

Joe Staton, Client Strategy Director at GfK, said: “The fi rst month of 2020 has given us a mini Boris-bounce.” The only downward score was recorded by the Major Purchase Index, which Staton said refl ected January’s “seasonal post-Christmas empty-wallet feeling”, while noting the further impact in the longer-term contraction and sluggishness experienced across the retail sector.

“However,” he said, referring to consumer confi dence on the whole, “if current trends continue we’d expect a return to positive headline scores soon.”

MIND YOUR OWN BUSINESS?

The John Lewis Partnership announced it will cease publication of its weekly sales fi gures and will no longer break down sales and operating profi ts between its two brands, John Lewis and Waitrose, making it di cult for those interested in the performance of the omni-channel department store chain John Lewis to gauge how this side of the business is performing.

The move follows the fi rm’s decision announced in October last year to manage the operation of the two brands as a single business in a plan to break free from the “cycle of declining returns”.

“The Future Partnership strategy,” the label given to the company’s new setup, “means we are now operating as one business and are therefore moving to a new fi nancial reporting structure,” a JLP announcement released at the end of January said. Writing in the Business section of The Daily Telegraph, commentator Ben Marlow was sceptical about the fi nancial reporting change: “Apparently the new structure is the reason, not the fact that performance has been utterly dismal,” he said. “Expect to see fl ying pigs on the shelves in the coming weeks.”

In a trading update for the 7-week Christmas period, released early January, sales at the Partnership fell 1.8% to £2,167m compared to last year – the outcome shedding doubt on whether the fi rm will pay its Partnership Bonus.

Sales at John Lewis fell 2.3% on last year (down 2.0% on a like-forlike basis), with Electricals & Home Technology, down 4.0%, the worst a ected.

Chairman Sir Charlie Mayfi eld said: “In John Lewis & Partners we will reverse the losses incurred in the fi rst half of the year, but profi ts will be substantially down on last year. We therefore expect that Partnership profi t before exceptionals will be signifi cantly lower than last year.”

DIXONS CARPHONE CHIEF CONFIDENT ON PROMISE FOR 2020

Group sales at Dixons Carphone fell 2% in the 10 weeks to 4th January, but the company said it is on track to deliver “what we promised for this year” after a good peak in a weak UK market. In its Peak Trading Statement, the business reported a strong performance in sales, market share and customer satisfaction.

UK & Ireland Electricals like-for-like revenue grew 2% due to broad-based growth, with strength in TVs, Gaming, Smart Tech and Small Domestic Appliances, and online growth up 7%. International like-for-like revenue rose 3% with an increase of 3% in the Nordics and 6% in Greece. The region reported good growth in Domestic Appliances and Kitchens and a growing market leading position in the Nordics with Norway and Finland particularly strong.

International online growth was up 5%. UK & Ireland Mobile like-for-like revenue fell 9%, but the company said it was on track to launch a new mobile o er in H1 2020/21.

Group Chief Executive Alex Baldock said: “We’ve had a good Peak in a weak UK market and we’re on track to deliver what we promised for this year and with our longer-term transformation.

“Peak saw us continue to invest in our strategic initiatives with encouraging results. Credit and services adoption rates increased, online sales grew strongly, and our newly remodelled stores performed well. “Coupled with our unambiguous “You won’t get it cheaper. Full stop” price promise, alongside better availability and delivery, this led to big improvements in customer satisfaction and strong market share gains in Electricals.”

The Group will publish its full year results on Thursday 25 June 2020.

Informing producer responsibility – delivering industry leading compliance. Informing producer responsibility – delivering industry leading compliance.

COMEBACK PLANNED FOR TROUBLED GERMAN BRAND LOEWE?

Investment company Skytec, which took over the LOEWE brand in December 2019 following the German manufacturer’s bankruptcy and closure of its Kronach operation in July last year, is to reposition LOEWE as an “international premium brand for sophisticated consumer electronics”, and will present its fi rst products under new management at IFA 2020 in September this year.

In a statement labelled “Skytec sets the course for the future”, the investment fi rm said: “After successful discussions with the city of Kronach, LOEWE now takes over 25,000 square metres at the traditional company headquarters and at the same time hires the fi rst 45 employees to restart.

“With these personnel, the construction of the new company headquarters in Kronach begins and from here the further expansion into international markets will be coordinated. With a view to retail, the new management is working hard to restore the supply chains so that from April 2020 onwards most of LOEWE’s well known LOEWE portfolio can be o ered again, thus ensuring planning security for the partners. A team of initially nine experienced sales employees will start looking after existing and establishing new trading partnerships in February.”

Skytec said it is receiving “extensive support” from suppliers and technology partners such as LG Display and other manufacturers of panels and key components. Support also comes from Chinese company Hisense, which also o ered to take over the long-troubled German business.

“After the takeover of LOEWE, we very quickly sought contact with suppliers and industrial partners and received extremely positive feedback and comprehensive support for our plans,” commented Vladislav Khabliev, CEO of Skytec.

Aslan Khabliev, CEO of the newly founded LOEWE Technology GmbH, said: “We want to get started quickly with the development of new products at the traditional location in Kronach. Until these are ready for the market, we will continue to maintain most of the previously known portfolio in the TV segment and in other areas.

“This means planning security for the trade. But end customers can also continue to rely on the LOEWE brand because the supply of spare parts is guaranteed.

“Our goal is to reposition LOEWE as an international premium brand for sophisticated consumer electronics.”

WHIRLPOOL ADDS MORE MODELS TO WASHING MACHINE RECALL

Whirlpool has recalled a further three washing machine models identifi ed as posing a fi re risk, adding 5,000 more machines to the half-a-million recalled in December 2019.

The new problems came to light following ongoing analysis and investigation by the company’s safety team and, as with the December recall, these machines were manufactured under the Hotpoint and Indesit brands between 2014 and 2018.

Both recalls are due to safety concerns about the appliance door lock system. Whirlpool said the heating element when activated can in very rare cases cause a component in the door lock system to overheat which, depending on product features, can pose a risk of fi re.

The safety issue concerning the 500,000-plus washing machines puts more pressure on Whirlpool, as it follows a recall of thousands of tumble dryers in July this year after Government demands made a month earlier relating to machines that had not been modifi ed under a long-running safety campaign involving Hotpoint, Indesit, Creda, Swan and Proline models identifi ed as a fi re risk some four years ago and still in the public domain. Martyn Allen, Technical Director at Electrical Safety First, said: “Issuing a recall as Whirlpool has now done is the correct course of action when a potentially dangerous fault such as this is discovered.”

But Sue Davies, Which? Strategic Policy Adviser, suggested the washing machine problem will leave the company’s reputation “in tatters” and accused the business of having “a track record for appearing to put corporate reputation ahead of public safety in its disgraceful handling of the unsafe tumble dryer crisis”. In response to the recall, Whirlpool said it is doubling its call centre team to 800 customer service agents; sharply increasing production at its fi ve washing machine factories in the region to prioritise the manufacture of like-for-like replacement models; increasing its engineer workforce to 1,100 and providing specialist training on the in-home modifi cation; engaging third-party logistics support to undertake collection of a ected washing machines from people’s homes and delivery and installation of replacement appliances.

ESF CREATES “RECALL-READY” ALEXA APP

Consumer protection charity Electrical Safety First has launched a “recall-ready” Alexa app to help reduce the number of electrical fi res in UK homes. The move means consumers (using the requisite device) can now e ortlessly discover if they have a recalled electrical item, simply by telling Alexa the item’s brand name. Emma Drackford, Director of Communications at ESF, said: “We hope that by launching the Alexa app people will use it to make ad-hoc checks while doing chores around the house, without having to open a website. It’s all about removing barriers and giving our audience the tools they need to use their electrical products more safely.”

Product recalls currently achieve a success rate of just 10-20%, leaving a large number of potentially unsafe electrical items still in use and

presenting a signifi cant risk of fi re.

Research by ESF indicates almost 270 million unregistered

electrical products are still in UK homes.

Drackford said: “In 2017 almost 5,000 fi res were caused by faulty electrical appliances and leads, including recalled items – the equivalent of 13 fi res per day across the UK.”

“We are committed to using every advantage provided by new technology to reduce this risk.” “Research by ESF indicates almost 270 million unregistered electrical products are still in UK homes.”

FULL-YEAR OPERATING PROFIT DOWN 10% AT LG

LG Electronics announced preliminary earnings results for the fourth quarter and full-year of 2019, anticipating consolidated revenues of KRW 16.1 trillion in the quarter with an operating profi t of KRW 98.6 billion.

Total annual sales reached almost KRW 62.3 trillion, the highest annual sales in LG history, surpassing KRW 60 trillion for the third year in a row, with operating profi t of KRW 2.4 trillion expected to be 10% lower than the previous year.

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LEEDS LEEDS UNITED STADIUM - 15 OCTOBER 2020

REGISTRATION IS FREE. THE OPPORTUNITIES ARE PRICELESS.

Charmaine Warner, former Refrigeration Trade Marketing Manager for Hotpoint, Indesit and Whirlpool brands, has been appointed to the role of Brand Manager for Whirlpool.

The John Lewis Partnership has appointed Nina Bhatia as Executive Director, Strategy & Commercial Development. She will report to newly installed Chairman Sharon White as a member of the new Executive Team. Charmaine Warner

Nina Bhatia

Owen Watters

Accessories distributor Hama UK has appointed former Roberts Radio CEO Owen Watters to the role of Managing Director following the retirement of UK Country Manager Paul Irish.

Appliance specialist Caple has appointed Adrian Pashley as business development manager (BDM) for the East Midlands region, including Norfolk, Hertfordshire and Bedfordshire.

Adrian Pashley

Gloucestershire headquartered distributor D.A.D has appointed a National Contracts Manager in what is seen as a progressive move for the business. Stuart Garmston, who has over 30 years’ experience in the industry, takes on the role to sustain and grow the distributor’s contracts sector.

BSH Hausgeräte GmbH has announced that Dr. Carla Kriwet will take over as CEO of the company, succeeding Uwe Raschke who, alongside his duties on the Robert Bosch Board of Management, has led BSH since July 2019.

Gunjan Srivastava

Gunjan Srivastava has been appointed CEO of BSH UK & Ireland, succeeding Andreas Meier, who in November last year announced he will be taking on the role of Executive Vice President, Head of Consumer Product Division, within the BSH Group.

Electrolux has promoted Luke Harding to the role of General Manager UK and Ireland, succeeding Peter Spencer who has been promoted to Vice President Services within the European business.

Exertis has appointed Liz Greenwood as UK IT director, reporting to Richard Hinds, chief operating o cer Exertis UK&I. Michelle Roberts has been appointed UK head of Health & Safety (H&S) and facilities management at the Basingstoke-based business.

Michelle Roberts Luke Harding

Liz Greenwood

Acoustic Energy has appointed Adrian Dykes to the role of UK Sales Manager for independent specialist retailers.

Adrian Dykes

The Kitchen Bathroom Buying Group (KBBG) has appointed Neil WhitakerJohnson as Regional Sales Manager for the Midlands.

Neil Whitaker-Johnson

The Professional division of German brand Miele has appointed Simon Venni as head of professional sales UK.

Matthew Bartlett

John Franks

Chord Electronics has restructured its senior executive team, promoting Manufacturing Director Matthew Bartlett to the position of Managing Director. Founder, owner and Chief Designer John Franks becomes Chairman of the business.

techUK’s Paul Hide has taken on the role of Chief Executive of the Association of Manufacturers of Domestic Appliances (AMDEA).

Paul Hide

Valpak has made two major additions to its executive team: Ben Richardson, Head of Procurement, joins the business from sister company Helistrat, and James Skidmore returns to the company after seven years, focusing on making Valpak’s data expertise and packaging knowledge more accessible to producers such as retailers and manufacturers. James SkidmoreBen Richardson

Connected Distribution Ltd has appointed Mark Che ns to the position of regional sales manager to head up business development across the southern region of the UK.

Mark Che ns

Invision has appointed Robbie Russell as technical sales support specialist.

Robbie Russell Sarah Milton, former Head of Product at Channel 4, has joined Digital UK in the newly created role of Chief Operating O cer. Steve Gettings, former Director at Ofcom, joins the company in midMarch as Head of Strategy and Policy.

SHORTCUTS

Consumer market research company Euromonitor International has named Haier the number one brand globally in major appliances in 2019. It is the 11th consecutive time the Qingdao headquartered Chinese fi rm has achieved the top spot, having held the position since 2009.

Rangemaster has launched a consumer cash-back promotion o ering up to £250 on a selection of range cookers and hoods, providing retailers with the opportunity to drive sales in the fi rst quarter of 2020.

KBB PR agency jmm PR has won the Best PR Campaign Award in the EK&BBusiness Awards for its National Quiet Day campaign on behalf of Whirlpool.

Buying Group CIH has, under the Euronics brand, become the Lead Partner for the Saracens Mavericks 2020 Vitality Netball Superleague season. The brand will feature on the front and back of match dresses and training kit, and will become a regular courtside branding fi xture at home games and in matchday programmes.

Swedish brand Blueair is claiming the title of “fi rst ever” air purifi cation brand to be accredited with the Good Housekeeping Institute stamp of approval for its Classic and Blue Pure ranges of appliances.

iFi Audio has appointed Armour Home as its o cial distribution partner for consumer retail in the UK.

Online electricals retailer AO.com has announced the achievement of obtaining over 150,000 reviews on Trustpilot – one of only eight companies in the UK and the only electrical retailer to have done so.

Hoover has gained Quiet Mark accreditation for its Telios Extra vacuum cleaner.

GOVERNMENT TO STRENGTHEN SECURITY OF INTERNETCONNECTED PRODUCTS

New legislation to improve security standards of internet-connected household devices to protect tens of millions of product users has been announced by Digital Minister Matt Warman.

The sale of connected devices is rising fast, with research suggesting there will be 75 billion internet connected devices such as televisions, cameras, home assistants and their associated services in homes around the world by the end of 2025.

Now, plans drawn up by the Department for Digital, Culture, Media and Sport (DCMS) will make sure all consumer smart devices sold in the UK adhere to the three security requirements for the Internet of Things:

1. All consumer internet-connected device passwords must be unique and not resettable to any universal factory setting 2. Manufacturers of consumer IoT devices must provide a public point of contact so anyone can report a vulnerability and it will be acted on in a timely manner 3. Manufacturers of consumer IoT devices must explicitly state the

minimum length of time for which the device will receive security updates at the point of sale, either in-store or online

Mr Warman said the Government wants to make the UK the safest place to be online with pro-innovation regulation that breeds confi dence in modern technology.

“Our new law will hold fi rms manufacturing and selling internetconnected devices to account and stop hackers threatening people’s privacy and safety.

“It will mean robust security standards are built in from the design stage and not bolted on as an afterthought.”

The measures were developed in conjunction with the business industry and the National Cyber Security Centre and set a new standard for best practice requirements for companies that manufacture and sell consumer smart devices or products.

The Government said it aims to deliver this legislation “as soon as possible”.

D.A.D OFFERS SOCIAL MEDIA TRAINING TO INDEPENDENTS

Distributor D.A.D is o ering a free social media training day to support independent retail customers in growing their businesses online.

The course will be run by a local Social Media expert Kat Shayler of SharpFox Social (pictured) and tailored to requests from attendees.

Customers will receive training on

promoting and maximising their presence on platforms including Facebook, Instagram, Twitter, Linked In and

Pinterest. Product training and the opportunity to network will also be available during the day. The course will take place on Tuesday 3rd March at the distributor’s head o ces in Tewkesbury, Gloucestershire.

FOREIGN O ce Minister and Pendle MP Andrew Stephenson visits ESSE Engineering Limited’s factory in Barnoldswick to see how the company is gearing up to meet new emissions requirements for wood burning stoves .

MIDWICH ENTERS US MARKET WITH STARIN ACQUISITION

AV distributor Midwich has announced the acquisition of US-based Starin Marketing Inc. for £35.7 million. The move represents a signifi cant strategic investment by the Diss-based distributor to enter North America, the world’s largest AV market, and will also provide extended geographical support for Midwich’s global customers. The acquisition also provides a foundation for the Group’s plans for US expansion with the benefi t of a well-established market position, experienced management team and large customer base.

For the year ended 31 December 2019, Starin delivered unaudited revenue of $222.7m, gross profi t of $29.6m and EBITDA of $6.1m.

CIH LAUNCHES SMARTCARE WARRANTY SCHEME

Buying group CIH has introduced an extended warranty scheme created in partnership with RetraCare to o er better value and a range of “unique” benefi ts to its members.

Smartcare, as the scheme is known, brings a package that will enable CIH members to o er warranties on the vast majority of products they sell, with the option of either a Silver or Gold Protection Plan.

Steve Scogings, CIH Chairman, said: “Smartcare o ers great advantages to CIH members that sets them apart from other retailers and it will be a big benefi t in delivering more margin back to the shop fl oor.”

CENTENARY CELEBRATIONS FOR GDHA BRAND STOVES

Cooking appliance brand Stoves, which was founded on Valentine’s Day, February 14th 1920, is marking its 100th anniversary this year with a programme of activity, the business has announced.

Retailers will be supported with the launch of new products, a number of national promotions and with the brand’s biggest-ever media investment. The Stoves on Tour events will continue, with the hosting of celebrity chefs at dozens of food and drink events across the UK.

The brand will also undertake a number of regional and employee events, commencing with a visit to its Prescot site by local dignitaries including the Mayor of Knowsley, Councillor Jackie Harris, and a two-week period will be assigned to special lunch events for sta , each of which will be themed by decade.

Stoves began life in Warrington as a manufacturer of gas heaters, before moving into the production of gas cookers. It relocated to the current manufacturing facility in Rainhill, Prescot in 1925.

Commenting on its 100 years of manufacturing expertise and ability to adapt to changing demand, the business said: “Stoves has secured its place in British cooking and engineering history.”