Retail Week columns
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Iceland: why I’ve bought the company back
Iceland tycoon Malcolm Walker on why staff and customers keep him going.
March 16, 2012
This time last year I was doing my final training in the Alps before heading for Mount Everest.
In 2012 my colleagues and I have just taken on a £1bn mountain of debt to complete the purchase of Iceland the company from Iceland the country. Like reaching the North Col last May, it has been a long, hard slog but it feels fantastic to have achieved our goal.
Why have I done this at an age when most people are congratulating themselves on paying off their mortgage, and developing a close acquaintance with their carpet slippers? Well, as I have noted before, we are all mad at Iceland. But there are some perfectly sane reasons, too.
First, there are our 23,000 staff, who recently had official confirmation from The Sunday Times Best Companies Awards that they work for simply the best big company in Britain.
Be honest, did you believe that when you read it? Would you even have put Iceland on your shortlist of best retailers, never mind the best company full stop?
But it’s true. Our staff love working for Iceland, because we have put a huge amount of effort into improving their pay and conditions and, just as importantly, ensuring that they can do their jobs with the minimum of stress and the maximum of fun – an ingredient far too often overlooked in management handbooks in my opinion.
One thing is for sure. Allowing Iceland to pass into the hands of private equity players focused on short-term financial performance would have meant that it did not stay the best place to work for very long.
Then there are our customers – 5 million of them a week. Hard though it may be for the Waitrose-shopping, London-based media to believe, they love us too.
They would have missed us if we had succumbed to a break-up bid from one of the big supermarkets, or a venture capitalists’ takeover that would have changed our character. Someone tried to make Iceland into a different sort of business when I was away for a while a few years ago, and the customers quickly voted with their feet.
Last and rightly least, there are personal considerations. I haven’t had a boss since Mr AV Green of Woolworths gave me the sack in 1971. Now doesn’t seem like the time to change the habit of a lifetime and start taking orders from someone else – particularly about a business I think I know quite well by now.
So how will you be able to tell the new Iceland from the old one? Well, it won’t be easy, because we’re not planning to change it. Our breathtakingly boring strategy can be summarised in four words: more of the same.
More innovation in products, more great value, more shops. For the last seven years we have focused on doing the right thing for our staff and our customers, and good financial results have followed as if by magic. As top secret formulas go, it’s one of the simplest and most effective you will ever find. Why not give it a try?
If you reach the top of Everest, the really difficult part begins: getting down without killing yourself. When you reach the top as the Best Company to Work For, there are hundreds desperate to take your place.
I don’t think anyone has ever held the title for more than one year, but we are going to try our hardest to stay on top. Because happy staff make happy customers, who in turn make happy investors. And what could be better than that?
Fiddling while Rome burns
Retailers suffer at the hands of bureaucrats and get nothing in return, says Malcolm Walker.
December 16, 2011.
Last week I received a two-page letter from some MP complaining about the danger of the flame height on disposable lighters that don’t comply with EU regulations.
Personally, if you’re a smoker, I think the flame height of the lighter is the least of your concerns. But it is symptomatic of the widespread belief that almost everything that goes wrong in this country can be put right by heaping yet more regulations on the retail trade.
If a hooligan throws one of my shopping trolleys into a canal, it’s obviously my fault. It is a criminal offence to sell a 17-year-old a knife and fork so if he stabs someone rather than using them to eat his dinner, the retailer must be to blame.
And the drunken yobs roaming our town centres can only be down to the shopkeepers who sell them alcohol, not to any more general failings of education, parenting or society as a whole.
In June 2009 I wrote a column here about the ludicrous code of practice that Jacqui Smith put out for consultation on alcohol retailing. It included requirements for live radio links to the local police, direct lines to taxi operators ‘to get the public home safe’ and a dispersal policy to prevent disorder. Honest: I’m not making this up.
It has not got any better. That d(r)aft legislation was not enacted but new conditions were introduced in February last year and now every one of our stores has to have a DPS (Designated Premises Supervisor) present at all times when alcohol is sold. They have to pass an external exam to qualify. Frankly this seems to be about as much use as a speed awareness course.
The local licensing authority can add all kinds of bizarre conditions to the licence including cameras to monitor the street outside and door supervisors, even though we are a family-friendly food retailer, not a nightclub. The penalties for non-compliance are severe. Till operators can be fined £20,000 and face up to six months in prison.
Even liqueur chocolates fall into the category of restricted products. Test purchases are carried out by local trading standards with all the zeal that you might expect them to bring to bear on attacking drug dealers.
Selling alcohol to a 17-year-old who looks 20 will bring down all the wrath of the law but if that 17-year-old steals the alcohol it’s only a misdemeanour and the police won’t attend.
Just how much use was any of this regulation in stopping this summer’s riots, which trashed several of our stores? An episode in which the police proved no quicker to intervene than they are in the everyday, smaller scale looting that is the bane of every shopkeeper’s life.
When I came back into Iceland in 2005 it was facing bankruptcy. Our plan for rescue wasn’t a complex five-year plan but just three basic principles: focus, simplicity and accept reality. It has served us well and the Government could not do better in this time of crisis than by adopting those same three principles.
Focus on what’s important, cut out stupid bureaucracy and wake up to the reality that Government is far too tolerant of people who steal and scrounge, and takes those of us who pay our taxes and obey the law too much for granted.
At the risk of sounding like Jeremy Clarkson, if I were in power I’d stop worrying about dodgy lighters and start taking some action on those anti-capitalists on benefits camping outside St Paul’s. Something involving water cannon springs to mind.
No news like good news
Doom sells papers, but why is it always at the expense of good news, asks Malcolm Walker
October 28, 2011
Why are we so addicted to bad news rather than good? And why do we give so much more credence to unauthorised leaks than to carefully drafted and vetted press releases?
In some ways I suppose it is lucky that we do have a taste for doom and gloom. Because in the absence of overpopulation, global warming, ironically rising fuel bills, the euro crisis, unemployment, threats of depression, protest movements, wars, terrorism, neglect of the elderly and dodgy ministerial advisers, there might be nothing left to fill the newspapers apart from PR-fuelled grocery price wars.
But it is a bias that can make life a bit frustrating for those of us who are essentially in the good news business. Everyone expresses amazement when I point out that Iceland has increased its profits in 36 out of the 37 years I have been in charge. Yet a company which makes a profit warning will find that it is etched on memories forever, and that it will take years before it again achieves a mention that does not include the adjective “troubled”.
This spring I joined the successful Iceland Everest Expedition, to almost universal indifference. The only time we made it to a single front page was when a lorry crash made it look like we might have to call the whole thing off. My lugubrious PR adviser did tell me that he might secure a few more column inches if I got killed in the attempt, but I had to inform him, with regret, that this went far beyond the limits of what I was prepared to do for publicity.
In the last few weeks Iceland has put out two genuinely good news releases. One was on our inflation-busting 6.5% pay award which, to general incredulity, makes Iceland’s retail staff the second best paid on the high street. The other marked our passing of the £1 million mark in fundraising for our charity of the year, Alzheimer's Research UK. Neither was deemed of any real interest outside the always comprehensive pages of Retail Week.
The appetite for leaks, on the other hand, is almost insatiable. Nearly every weekend for what seems like months now thousands of trees have been sacrificed to print updates from nameless sources on the progress of Landsbanki's and Glitnir's planned sale of their Iceland shares. No matter that many of these stories were entirely inaccurate; or that they concerned a private company with just seven shareholders and no debt, which should surely limit our potential interest to outsiders.
Does it matter? Yes, because it unsettles our hard-working staff and loyal customers, most of whom don’t read the City pages but do hear exaggerated third-hand rumours based on their stories.
Despite this, the good news keeps coming, as surveys report that Iceland and the discounters are increasing their market share at the expense of the big four supermarket retailers. Do we get a pat on the back for our brilliant strategic positioning and superb management? No, we are told that we just happen to be in the right place as consumers trade down.
Would we absolved from blame and permitted to point out adverse market conditions if our sales were going the other way? Of course not, it would be management's fault and we would be ridiculed for our pathetic "excuses".
I know life's not meant to be fair, but wouldn’t it be nice, every now and then, to turn the page and read a positive news story that gave a little credit to those who made the good things happen?
It’s time for zero tolerance
The authorities have turned a blind eye to retail crime for too long, says Malcolm Walker
August 25, 2011
As David Cameron and Theresa May found out the hard way, August is never a good time to go on holiday. It’s the month when wars break out. Though even I was surprised to find battle being joined on England’s high streets, with many Iceland stores in the front line.
There is quite simply no excuse for this. We are not living under an oppressive dictatorship, or in unbearable poverty. Living standards in this country have improved out of all recognition since I started Iceland in 1970. The sad fact is that standards of education and behaviour have moved just as sharply in the opposite direction.
Interviews with the louts who trashed our city centres, and with the parents who failed to control them, usually revealed a depressing inability to string a simple sentence together. For them, reading or writing would no doubt represent a challenge of Everest proportions.
This is an all-round failure: by teachers, politicians, the police – and by the rest of us for failing to put our feet down years ago and demand change. I have written before about the utter wrongness of treating shoplifting as a minor, victimless misdemeanour. Our store staff are regularly terrorised by individual shoplifters and gangs, yet find the police almost always “too busy” to turn up to do anything about it.
It’s just a change of scale to have thousands smashing windows, clearing whole stores and then burning them down.
Yet I detect no reluctance to enforce the law on those who are unlikely to fight back. Only last week a local authority found the time and resources to send a 17-year-old stooge into one of our stores to buy alcohol, which will land one of our checkout assistants with a criminal record for mistakenly selling her a bottle of wine.
In North Wales, where we have our head office, the last chief constable was dubbed “the Mad Mullah of the traffic Taliban” for his zero tolerance approach to speeding motorists. Doing 34mph in a 30mph zone still invariably results in prosecution, and I regularly see five patrol cars within a mile monitoring the traffic on my journey home.
Yet where were the police when terrified retail staff were trying to barricade themselves inside their stores as frenzied mobs rampaged in the streets outside? Hanging back because they have had it drummed into them that these days they are a service, not a force?
I know that many people see Iceland as an advertisement for management continuity, and it is certainly true that it wasn’t a conspicuous success when I took a period of enforced leave for the four years before 2005.
But we’re far from a closed organisation and would never have thrived as we have done if we were not receptive to new ideas and new blood from outside.
The police too could do with a firm reminder of just what they are there for, and some fresh thinking on how to achieve results. If that means breaking up their insular closed shop and importing some expertise from the US, it certainly gets my vote.
It’s high time for a zero tolerance approach to theft, criminal damage and abusive behaviour in Britain’s shops. So let us all hope that David Cameron has got the message from the events that dragged him back from Tuscany.
That way we will be able to look back on the riots of August 2011 as having a positive outcome: making politicians and police alike finally twig that crime against retailers really is crime, and that it matters.
Iceland is not for Sale
Vultures are supposedly circling, but Iceland is fighting fit and battle-ready, says Malcolm Walker
June 24, 2011
I used to think that there could be few things worse than lying ill in bed and overhearing plans being made for your own funeral. But that’s easily capped by having the undertakers measure you up when you are fighting fit.
Imagine running a retail business that’s just reported record results, with like-for-like sales up more than 50% over six years, 22,000 contented staff, no debt and cash in the bank. You’re driving strong growth in your core market through some really exciting product innovation, for which you have just won another clutch of awards.
That’s exactly the position of Iceland today – except that our contented employees are becoming increasingly nervous. Because whenever they pick up a newspaper, they read another story that says their company is up for sale and about to be broken up.
Every time it happens, our head office is swamped by a tidal wave of staff seeking reassurance, and customers offering us their support in the battle to “Save Our Iceland”.
And we have to tell them that there is no war. The company is not for sale. Yes, our largest shareholder has said that they intend to market their stake, but so far all they have done is appoint some advisers. All the rest is pure speculation and media froth.
It would not be so bad if the stories were about other retailers hoping to get their hands on an iconic and successful British brand. But they’re not. They’re all about their desperate desire to buy some or all of our 796 sites to fuel the expansion of their convenience store formats.
There are two ironies here. First, surveying the wreckage back in 2005 and unsure whether we could turn the business around, we invited the other food retailers to take a look at our store portfolio. After protracted research, M&S bought 28 of them (some of which they have since handed back) and Sainsbury’s took one – as a gift.
The second irony is, of course, that one of the root causes of the Big Food Group crash was trying to turn Iceland into a convenience store.
I don’t believe for a second that Iceland has had its day, any more than I have. There are two ways to go when you hit 65, as I did earlier this year. Buy a reclining chair, study the Saga holiday brochure, allow hair to sprout from unlikely places and cultivate a paunch; or challenge yourself to keep going by doing stupid things.
Believe me, there are few crazier ideas than climbing to the North Col of Everest in an expedition organised by David Hempleman-Adams. But the good news is that I am not only still alive but fitter than I have ever been. The stone I did not actually need to lose is gradually coming back, in an enjoyable way, and my hunger and passion for the business is greater than ever.
The Duke of Edinburgh kindly served as Patron of the Iceland Everest Expedition, and I am taking him as my role model: I’ll maybe think about slowing down a bit when I turn 90.
We celebrated Iceland’s 40th anniversary last year and I have got one hell of a party planned for our Diamond Jubilee in 2030.
If that means doing battle with giants, whether of retailing or finance, so be it. Bring it on. Once you’ve pranced around dressed up as a Yeti at Everest Advanced Base Camp, everything else in life is a doddle.
Making your own luck
As he climbs up Everest, Malcolm Walker says success is all about determination and luck
April 21, 2011
There can be few less enjoyable experiences in life than seeing your treasured possessions driven over a cliff (unless your mother-in-law is behind the wheel of your new Ferrari at the time).
It’s happened to me twice, now. Most recently when one of the two lorries laden with our Everest kit veered off the road in a thunderstorm and plunged down a ravine, smashing it into the sort of splintered mess you only see in films and think that the special effects people have gone completely over the top.
Luckily the three people in the cab all jumped clear in time.
We’d packed everything into the plastic barrels that will ultimately take our supplies by yak to Advanced Base Camp. These seemed quite resilient. And, of course, there was only a 50% chance that my own stuff would be on the wrecked truck.
But with the sort of good fortune I suppose you should expect if you sit 13 people down at your farewell lunch, one of my personal barrels turned out to be squashed flat under the lorry’s wheels.
The amazing thing, when we finally got it out, is that nothing inside was too badly damaged. I certainly fared better than other blokes who had their stuff drenched in kerosene.
It was one of the nicest surprises I have had since I came back to Iceland in 2005, after the business I founded had also been pretty much driven over a cliff. I gradually realised that it could not only be turned around - which seemed pretty unlikely at the outset - but taken to new heights.
The principles we followed to do that were straightforward: simplification, focus, accepting reality and hopefully having some fun.
I’m trying to approach Everest in the same spirit, though fun has been in short supply since we crossed the oxymoronically named Friendship Bridge from Nepal into Tibet. Here you consider yourself in luck if you don’t have to share your freezing hotel room with a rat, and the pure Himalayan air is rendered so acrid by burning yak dung that facemasks are de rigueur.
As well as continuing our acclimatisation to high altitude, this is helping to toughen up those members of the expedition who have grown used to the finer things in life - me, basically. The experienced climbers in the party seem to get a kick out of roughing it.
But like Tesco, Asda and the rest back home, these super-fit ex-paratrooper types also bring out my competitive side, helping me to achieve the seemingly impossible.
So far my highest summit has been 4,400 metres, which seemed a long way up to me but is still only half the height of Everest.
Iceland keeps climbing up the ‘Best Companies to Work For’ table, reaching
number six this year. None of the big food retailers even features. Whether in business or the Himalayas, we are unashamedly aiming for the top.
I’ve heard rumours that Landsbanki is putting its Iceland shares up for sale while I am away (in the internet cafes of Tibet, they talk of little else). But if Graham Kirkham can close the sale of DFS from the North Pole, being up Everest should present no problem.
I’m just focusing on getting as high as I can and raising that £1m we have pledged for research into early-onset Alzheimer’s disease. It’s a truly great cause and we’re currently just 3% of the way there, so do pay us a visit at www.icelandeverest.org.uk and press the ‘donate’ button.
A different mountain to climb
I’ll climb Everest for charity or die in the attempt, says Iceland chief Malcolm Walker
February 25, 2011
I’m not much of an adventurer, unless you count my adventures in business. I enjoyed Scout camps as a boy but these days I prefer five star accommodation.
OK, I went to the North Pole with Lord Kirkham and that always impresses people until I confess it was in a helicopter - though we did spend a night in a tent on the ice at -30C.
I’ve sailed the Atlantic (twice), both times in November. People imagine that might involve rough seas and howling gales, but the reality was smooth crossings at a warm latitude with crew. I was a tourist really.
But three weeks ago I climbed Kilimanjaro. “A charity walk,” said my brother (from his armchair.) It was physically tough. About 50% of people who try it fail due to altitude sickness. The real problem was the squalor of the campsites along the way.
Our tour leader for the North Pole was David Hempleman-Adams, the explorer. We got talking about his exploits and in particular about when he climbed Everest 20 years ago. It’s probably the toughest challenge on earth. Many people die trying.
I’m writing this on my birthday and am in denial about my age, so I’ve decided to climb Everest myself in order to prove I’m still young. Well, not to the top, exactly. It’s 29,000ft and considering my age and experience, that would be suicidal.
Other will reach the top but I want to get to a point called the North Col at 23,000ft. My son asked to come, which I’m not happy about, considering the risks, but I’ll be glad to have him with me.
I have no doubt this is the biggest challenge of my life. It’s now turned into The Iceland Everest Expedition 2011. We have eight experienced climbers with us, led by Hempleman-Adams, and our intention is to plant an Iceland Foods flag on the summit of Everest.
The reasons for failure of such expeditions are usually bad weather, altitude sickness, or a bad stomach, which can be life threatening at 25,000ft. That’s why we are taking a 60-day supply of hygienically prepared, high calorie Iceland food.
Iceland has a proud record of raising serious money for charity. We prefer to help less fashionable and badly funded charities where we can make a real difference.
Alzheimer’s will soon affect a million people in the UK and almost every family is touched by it. The tragedy is that it’s not just old people who are affected. Early-onset Alzheimer’s ruins the lives of people in their 40s and 50s. There is no cure and little research is carried out into the disease. I want to raise at least £1m - hopefully much more - to sponsor research by internationally renowned neurologist Professor Nick Fox.
Please visit our website, www.icelandeverest.org.uk, to find out more and donate. I leave at the end of March and will be writing a blog. Sir Philip Green blagged £25K out of me at a Retail Trust dinner but he’s already promised to sponsor me. I just hope it’s pro rata to our respective bank accounts.
Come on Tesco, Sainsbury’s, Asda and Morrisons - please help us with a big donation. After all, a quarter of the people over 60 who climb Everest die in the attempt, so there’s a powerful incentive for you to help me on my way.
Entrepreneurs are not villains
The role of business in generating prosperity still isn’t recognised, says Malcolm Walker
November 12 2010
Next week I’m hosting a bit of party to mark Iceland’s 40th birthday.
On the very day that we opened our first shop in Oswestry in 1970, about 350 people will be celebrating at a charity ball that aims to raise close to £1m for Help for Heroes (H4H), Iceland’s Charity of the Year.
We’ve already held a party in Birmingham for 1,650 of our staff, at which we gave H4H a £774,000 cheque raised during our annual charity week in the stores. The generosity of our employees and customers is astonishing and humbling, particularly in the current economic climate.
No one can dispute that the young people who are going out to Afghanistan and coming back minus limbs are heroes, even if we don’t all agree with the Government’s reasons for sending them in the first place. It was always so. Back in 1970, the army had recently been deployed in Northern Ireland and was soon to suffer its first fatality there.
Some things do change for the better in four decades. It is hard to remember that fridges and freezers were luxuries then, colour TV a rare and expensive novelty, and the internet unheard of.
But other things just seem to repeat themselves, like the threats of union disruption after the ejection of a Labour government (by the Conservatives then, and the coalition now).
It troubles me that one of the main things that does not seem to have changed in all these years is the British attitude to business. Sure, we now have TV programmes like The Apprentice and Dragons’ Den, but in many ways we remain conditioned to look down in a Downton Abbey way on those who are “in trade”.
I left school at 16 and became a retailer; my three children all went to university. And every student I meet these days seems to aspire to be a management consultant, accountant or lawyer - a well-paid, respectable profession. Which, I’ll admit, may well look like the safest way to pay back the ever-increasing debts with which they are being loaded to get a degree.
But there is another way: entrepreneurship. As the public sector prepares to shed half a million jobs, it is entrepreneurs that this country will need to take up the slack.
Since Iceland was founded, I reckon that we have provided jobs for more than a quarter of a million people directly, plus many thousands more at our suppliers.
Totting up our bills for PAYE and corporation tax, we have also handed over
to the Government about £1.75bn in taxes. That’s enough for 30 new schools, seven hospitals or more than half an aircraft carrier.
Back in the 1970s envy and resentment were powerful forces in society. Drive an expensive car and it would not be long before someone ran a key down the side. Ted Heath bemoaned “the unpleasant and unacceptable face of capitalism”. Forty years on, Business Secretary Vince Cable uses his speech to the Liberal Democrat conference to attack capitalism itself.
I worry that we might have learnt nothing during the Iceland’s lifetime. Because one thing is sure: if this country is going to pull itself out of its present economic mess, it needs to recognise that entrepreneurs are heroes, not villains.
We may not be risking our lives on the front line for Queen and country, but without successful wealth creators there will be no armed forces, no infrastructure and ultimately no society worth defending.
The great fresh food myth
Middle class prejudice against frozen food is based on ignorance, argues Malcolm Walker
September 10, 2010
Last time I promised to explain how Iceland leads the way in healthy eating. The answer is really simple: freezing is God’s own way of keeping food fresh.
Freezing is a natural process that doesn’t involve pumping products full of artificial preservatives or flushing their packs with gas. It locks in vitamins and flavours.
If you don’t believe me, tonight make yourself a chicken casserole with the finest fresh ingredients. Then put half of it in the fridge and half in the freezer, and see which of them you would prefer to eat in 10 days’ time.
The crazy thing is the way that the supposedly educated middle classes have allowed themselves to be persuaded that ‘fresh is best’ and are prepared to pay a hefty premium for ‘fresh’ food that has actually been in the supply chain for as long as that casserole. How often do you buy a fresh ready meal, fail to eat it, then bung it in the freezer when it reaches its use by date? We’ve all done it. But what is the psychological block that stops us buying a frozen ready meal in the first place?
Like most ideas, ‘fresh is best’ contains a grain of truth. Nothing tastes better, or is better for you, than the vegetables you pick from your own garden or the fish you catch and cook yourself.
But if those options are not available, why would anyone pay extra for ‘fresh’ fish that could have been hanging around on the trawler, dockside, wholesaler and supermarket counter for a full 12 days? The fish frozen as soon as it comes aboard the good old factory trawler is much fresher in any meaningful sense of the word.
And any exotic fish or other seafood sold to you as ‘fresh’ will almost certainly have been frozen and defrosted before sale. It’s the same with ‘fresh’ turkeys and hot cross buns. Can consumers really believe that they are all killed or baked the day before to meet these massive seasonal peaks in demand? Of course they aren’t.
Your hot cross buns will have been made in January and frozen, your turkey killed in October and put to rot gently in deep chill for three months.
I am incensed by the way the media always pick on the chicken nugget as the supreme example of junk food. At Iceland we are proud of our chicken nuggets, which contain chicken breast, breadcrumbs and, er, that’s it.
Yes, if you shop around I’m sure you can find retailers who sell rubbish, but we took every single artificial colour and flavour out of all our products more than 10 years ago - and every artificial preservative that could go without compromising customer safety.
Supposedly more upmarket retailers preen themselves now on taking out hydrogenated fats from their products: we did it by 2005. We were also in the lead in getting rid of nasties like mechanically recovered meat, just as we were the first national retailer to eliminate all GM ingredients (which the experts all told us could not be done).
I love food - it is one of my passions - and if I’m honest I’m highly unlikely to choose a plate of chicken nuggets for my supper. But if parents want to serve them to their kids, I will do my utmost to ensure that they can choose ones that are wholesome and nutritious as well as great value for money.
And if I can’t shoot, catch or pick the ingredients for my own meals, I’ll choose frozen every time.
The best of both worlds
We could use some of the US’s ambition, but they can keep their food, says Malcolm Walker
July 9, 2010
I am writing this on a plane heading back from the US after visiting a small Midwest town called Rochester.
My trip was for a routine health check and on the recommendation of Graham Kirkham and Tom Farmer I went to the best medical centre in the world - The Mayo Clinic. The experience reinforced all my beliefs and prejudices about the US.
The Mayo Clinic employs 50,000 staff including 3,000 world-class doctors. The buildings, the people, the organisation and the cleanliness are beyond the comprehension of those accustomed to healthcare in the UK.
The grand piano and the opera singer in the atrium are fit for a grand hotel. And everything else about the clinic impresses - from the clean-cut, educated, English-speaking staff to the state-of-the-art equipment, and the efficiency and politeness with which you are processed through. There is no waiting, no appointments for next week or next month - anyone you need to see is called and makes the effort to see you now.
The MRI scanner at the Chester Bupa hospital is a mobile unit on a lorry and is only there on Tuesdays. The Mayo has banks of them.
It costs money but the only complaint we heard from our taxi driver was about the Obama medical bill being forced through. He doesn’t want the government “screwing up health - leave it to private enterprise”.
Yet for a city built round a hospital with the most advanced healthcare in the world, a remarkably high percentage of the local residents are fat. Not just fat, but grossly obese to the point where they can’t even walk properly.
The restaurants in town had the most amazing staff in the world but the food they served was dire. It is not possible to eat healthily. Most of the protein comes in bread buns and if it doesn’t you have five choices of sauces. The portions are enormous and even upscale restaurants offer a take-out box for any leftovers. Why?
Bizarre contradictions abound. Eating a breakfast in the Mayo hotel should guarantee the clinic a customer for life: even the French toast is deep-fried. The Mayo has the most accurate and sophisticated brain scanners but the hotel internet wouldn’t work.
The US is the economic powerhouse of the world, a nation of entrepreneurs whose self-reliance and confidence leaves us for dead. The saying went that in the US a man sees someone drive past in a Rolls-Royce and thinks “one day I’ll have one of those” whereas in Britain he thinks “bastard”.
And it certainly used to be true. When I acquired my first Porsche in the early 1980s I parked it away from the office as I was embarrassed if the staff saw it. That didn’t stop it being scratched on a weekly basis by the local residents.
People also say: America today, Britain tomorrow. I just hope we can import some of their drive, ambition and can-do attitude and leave behind the food and the resulting obesity.
Having said that, it’s here already and I blame not the US but whoever abolished domestic science at school. That is actually the root cause of many of our health and social problems.
And that comes from me - the ultimate purveyor of chicken nuggets. But in my next article I’ll explain why Iceland leads the way in healthy eating.
After all, my aim is to live to be 120 in perfect health - and The Mayo Clinic confirms that, so far, I am exactly on plan.
The retail Arctic Explorers’ Club
A little volcanic ash couldn’t dampen a birthday trip to the North Pole, says Malcolm Walker
April 30, 2010
Retail entrepreneurs can be a surprisingly generous lot. Sir Philip Green famously flew all his mates to a lavish birthday party in the Maldives.
I thought Lord Kirkham showed even more imagination when he called me some weeks ago to tell me he’d organised a birthday treat for me. “I’m taking you to the North Pole.”
I’ve known Graham for 30 years and he’s always had the capacity for the unexpected but this did seem a bit extreme even for him. I suppose he thought it might be an appropriate destination for me.
“Yeah right,” I said, but then realised he wasn’t joking when he explained we were going with the famous Arctic explorer David Hempleman-Adams. He’d also invited his pal Sir Tom Farmer, the Kwik Fit founder.
Any more information was in short supply until the kit list finally arrived. Scott of the Antarctic managed with leather boots and Harris Tweed but clothing technology has moved on.
Four hours in four different specialist shops saw me with base layers, mid-layers and outer shells made from fibres I never knew existed. I always get cold feet - literally - when it gets below freezing but inner socks, vapour barriers and outer socks would do the trick. It’s not often the advice and guidance from a young sales assistant could be a matter of life and death.
The trip was to take five days and I envisaged pulling sledges across frozen wasteland and possibly losing a few fingers to frostbite. More people have climbed Mount Everest than have ever been to the North Pole and this wasn’t something to be undertaken lightly.
Only two days before departure the itinerary finally arrived. It didn’t exactly make it look cushy but I was rather reluctant to dilute the admiration of my friends and family by showing it. The trip involved a four-and-a-half-hour flight by private jet to Spitzbergen, just on the Arctic Circle, followed by a two-and-a-half hour flight in a Russian jet to within 30 miles of the pole, and finally a half hour flight by Russian helicopter to land at the pole itself.
Spitzbergen is the size of Switzerland, with a population of 2,000 humans and 5,000 polar bears. It’s -25°c and the cold was a shock as we got off the plane.
We overnighted at the polar hotel and were warned not to leave the hotel without a guide with a rifle - polar bears are everywhere.
The Arctic ice cap is only a few inches thick but the Russians clear a runway for just four weeks every year and manage to land an Antonov S.T.O.L. transport plane to service their scientific research station. We spent the night at “base camp” in an unheated tent we erected ourselves. The temperature was -35°c. Surprisingly, no one was ever cold; the specialist gear did the trick.
The old Russian helicopter probably presented more of a risk than actually walking to the pole but we finally made it to the top of the world. We had a couple of hours taking photos and drinking hot punch before we finally retreated in the face of near frostbite and back to base camp.
Our journey back via Spitzbergen involved a stay several days longer than intended due to certain volcanic activity but we filled the time with long journeys into the wilderness each day either by snow mobile or driving dog sleds. Now, as fully paid up members of the Arctic Explorers’ Club, we are debating what to do next year.
It’s Kirkham’s birthday in December. I think I’ll just send him a card.
Sexy products are more interesting...
Entrepreneurs thrive on selling products that they find sexy, says Malcolm Walker
March 12, 2010
I always think that as entrepreneurs we fall into our respective companies pretty much by accident.
For most of us business is business and not often a hobby as well although of course in time, if we are to succeed at all, we become absorbed and even excited by our products.
That wasn’t the case with my first job as a trainee with Woolies. I hated it and wasn’t even much good at it, but I stuck at it for seven years.
I always had a few things going on the side and from my school days I used to book a church hall, hire a pop group and sell tickets for dances. I suppose I could have called myself an impresario. After finding a hall with a large capacity available on Saturday nights, I had a call from some guy called Peter Stringfellow who wanted to come in with me. How different life could have been.
Another venture with a Woolworths colleague found us trying to sell strawberries from a roadside stall one Sunday. He had his girlfriend and I had my wife with me. Not one single car stopped.
Peter and I hid behind a wall and left the girls to it. Within minutes cars were pulling in and we’d sold out within an hour. There’s a lesson there somewhere.
We spent the money in the pub that lunchtime and conversation got around to what to do next, which is how we came to open Iceland and how Woolies came to fire us a few weeks later. Now 40 years on I’m still running Iceland and enjoying it enormously.
I’ve been a member of my business club for years and it’s interesting watching the other members and the satisfaction they get from their businesses.
Lord Kirkham was a member for years and I’ve never seen anybody so excited by sofas. Well, maybe it’s not actually sofas but the business itself. James Timpson repairs shoes and cuts keys and is passionate about his company.
We have members who provide scaffolding, run landfill sites, build houses, make paint and dozens of other products that seem sexy to them but would be boring to others.
We meet with our wives and invite speakers to join us for dinner. Needless to say, whoever invited the chief executive of Manchester City Council couldn’t really have expected the same turnout as when Sir Stuart Rose came. He was funny and charming and scored a very high rating talking about his life and business.
On Tuesday night my fellow columnist Jacqui Gold agreed to speak. We meet in Manchester and don’t pay a fee so it’s remarkable to me how fellow entrepreneurs so generously give of their time to join with like-minded people and share their experiences.
Would anybody be surprised that Tuesday night was the highest turnout for ages? Maybe it was something to do with the champagne reception we held in the Ann Summers store near the hotel. Or the lingerie models passing round the canapés.
Jacqueline is a remarkable woman who gave a brilliant talk on her life and business. She runs a serious company and clearly enjoys what she does.
I guess that many of my business colleagues, much as they enjoy their business, would rather be involved with something else; manufacturing ski gear, selling boats or expensive cars.
But given the choice most of us might like the chance of running Agent Provocateur, or a 50:50 joint venture with Peter Stringfellow.
There but for the grace of God…
How a soldier turned vicar helped change Malcolm Walker’s mind on assisting ex-offenders
January 8, 2010
There we were, on safari in Botswana hundreds of miles from anywhere, when a new group walked into camp.
They looked odd. Everyone else we met on the tour appeared to have spent a fortune on the right gear but this lot weren’t dressed right.
One guy wore a black Armani suit and trendy shades; others wore the wrong sort of casual clothes. It turned out they were Christian millionaires from a church in Knightsbridge - they’d been giving away money in Rwanda and decided on a few days safari.
One guy looked different. Tough, with a lived-in face. It turned out he was their tour leader and an ex-soldier, ex-prisoner, ex-bad boy who found God and become a vicar.
I liked him and his life story was enthralling. His focus now is helping prisoners create a new life after release. I’m a lock them up and throw away the key sort of person - particularly with shoplifters - but I was amazed at what he told me.
A prisoner on release might have served five or 10 years. It’s difficult to readjust anyway but, chances are, when he walks out of the gate he has nowhere to live, no family and no job. He’s clutching all his possessions in a clear prison-issue bin bag.
Help is at hand though: he gets £45 and a rail warrant to where he was arrested. Not to where he actually wants to go, just to where he was arrested. If he applies for benefits they take six weeks to come through. So who’s surprised that the reoffender rate is 78%?
My new friend Paul the vicar has created a volunteer network who work in prisons and help those who want to lead a better life. They are met at the gate on release and fall into a support network that helps them find somewhere to live and keep on the straight and narrow.
It works. Their reoffending rate is 20%. The problem is these people can’t get a job and the self-respect that brings. If they could, it would help drive their reoffending rate even lower.
Instead, they can look forward to a life on benefits. We don’t employ anyone with a criminal record and I guess most other companies don’t either. “I can give them a job,” I heard myself saying.
Ironically, a couple of weeks after I got home the News of The World discovered that one of our contractors uses an open prison as a base to transfer boxes between vehicles. Instead of praising us for providing work for prisoners they decided some of them were probably drug users, so the angle was to “expose” us for hypocrisy after our little fall-out with Kerry Katona.
Well, at the risk of more bad press, Iceland is setting up a scheme with my vicar friend to offer ex-offenders placements.
During the past two years Iceland has raised more than £2m for charity - mainly Alder Hey Children’s Hospital. In a way, that’s an easy thing to do - conventional, respectable and laudable. Offering jobs to ex-offenders is more challenging and open to setbacks.
I actually feel quite good about this. Maybe we can help to change some people’s lives. Everyone deserves a second chance and I’m looking forward to the challenge that brings. Any of you want to join in?
Armbands on the Titanic
Appointing a grocery ombudsman will achieve nothing but cost increases
October 30,2009
It’s a funny word, Ombudsman. Apparently it’s Old Swedish in origin, and Sweden established a Parliamentary Ombudsman as long ago as 1809. Ours did not arrive until 1967, but we have taken to this Nordic import as keenly as we did to Abba, and now have nine different UK Government-appointed Ombudsmen covering everything from housing to legal services, pensions to telecoms.
Please don’t let us take it into double figures by inflicting one on the grocery industry. Because the English word that springs most readily to mind in conjunction with that Swedish one is “useless”. You can’t raise an issue with the original Parliamentary Ombudsman unless you do it through an MP, and even then nearly half the complaints are rejected without investigation. Those that do make it through the obstacle course typically take 40 weeks to resolve.
The internet is riddled with criticism of the English Local Government Ombudsmen, mainly because all three of them are former council chief executives, suspected of sympathising with their former colleagues. My brother’s pension fund was shrunk dramatically by awful financial advice and mismanagement, but he could only obtain redress in court; the Pensions Ombudsman was not empowered to resolve his complaint, and could award only derisory compensation anyway.
What on earth does the Competition Commission hope to accomplish by asking the Government to impose an Ombudsman on the grocery industry? The only certain outcome will be more bureaucracy, frustration and cost.
The Government is always inclined to legislate for PR purposes in a way that puts a sticking plaster over perceived public concerns, but does not fix the underlying problem. Take, for example, knife crime. What do they hope to achieve by making it a criminal offence to sell a knife or even a razor blade to someone under 18? Any child can get a knife from anywhere – the kitchen drawer being the obvious place to start. And God help them if they need to start shaving.
When I was young penknives, a piece of string and a sixpence were standard issue for boys; I wonder how many Parliamentary hours would be devoted now to clamping down on my catapult.
The same tendency to knee-jerk legislative overkill is evident in the draconian crackdown on alcohol sales that I have already written about, and the infamous Dangerous Dogs Act.
Businessmen have to prioritise, but legislators seemingly don’t know the meaning of the word. Spending money on useless Ombudsmen and quangos apparently ticks all their boxes, while they happily skimp on such luxuries as helicopters and body armour for Afghanistan.
If a grocery Ombudsman is created, he or she will be there to fix a problem that does not exist; and, if it did exist, an Ombudsman would not fix it. All it will do is increase costs and therefore ultimately put up prices to the consumer.
There have been many enquiries by the Competition Commission in recent years into supermarket power, the alleged abuse of suppliers, and retail competitiveness in general. It has cost us all millions as both retailers and taxpayers, but never found evidence of a problem. Yet the notion persists that the Government needs to curry favour with the public by putting in “safeguards” that will prove as effective as a pair of inflatable armbands on the Titanic.
The plain truth is that all big companies (not just retailers) will often bully small suppliers. Big suppliers are equally likely to bully small traders. It is in the nature of negotiation, whatever industry you are in and indeed in most human relationships. In short, we are dealing with a simple fact of life that nothing is likely to change, and certainly not the appointment of an Ombudsman. The public interest will always be protected by this simple fact: retailers would kill each other for market share, and can only gain it by serving the public well and giving them what they want.
A victimless crime?
The police must recognise that store theft and assault seriously affect staff
August 21, 2009
Two guys are waiting in the car park behind the store. It’s dark and the manager comes out after setting the alarm and locking up.
The blokes come up behind him with a gun, force him back into the store and make him unlock the safe.
A variation could be the timing - maybe it’s early morning, or maybe it’s a knife instead of a gun. Sometimes the store is trading and in front of everyone a gun is pulled on the checkout assistant and the attacker runs off with a fistful of banknotes before anyone realises what’s happened.
It has been known for someone late at night to simply drive a stolen car right through the front window to gain access, but that’s not happened since we stopped selling cigarettes.
It’s a dangerous armed robbery but at least everyone knows where they stand. Head office is alerted, HR swings into action to comfort and counsel the staff, security at the store is reviewed and it’s sometimes reported in the local paper. The manager is in shock but always shrugs it off and gets on with the job - these guys are heroes.
Oh, and the police turn up. They never catch anyone but at least they turn up.
And here’s the amazing thing… it happens almost every week.
But can you believe, a bigger problem for us is the little old lady who steals a packet of cheese or the kids who nick a few sweets? That’s because petty shoplifting has been decriminalised - it’s not really a crime at all, is it? No one suffers, the shop can afford it. It’s victimless. The police aren’t interested and usually don’t turn up.
It’s a bigger problem for us than the armed robbery, because the “little old lady” probably has £60 worth of goods in her bag. She comes in every day and has already been banned from the store but we have no deterrent.
The “kids” are maybe 18 and stealing for drug money or already high on drugs. They come in gangs and the store manager is terrified of them. Maybe they’ll eat a bar of chocolate off the shelf in front of the manager and dare him to do something about it.
If he does he maybe gets attacked or spat at or threatened with a syringe.
Sometimes the manager “arrests” a shoplifter and insists the police turn up. Two hours later they still haven’t arrived and the manager is holding an increasingly agitated shoplifter in his office.
Our staff have to deal with this day after day - in some stores many times every day. More than once a fight has broken out and the police have arrested the store manager on the accusation of the “victim” - the shoplifter. At least armed robberies may happen only once or twice in a manager’s career, but this is every single day.
It costs us millions of pounds in stolen goods. We spend millions on security guards (whose primary job is to protect our staff). Thank God we’ve never had anyone physically injured in an armed robbery, but several of our managers have accumulated an impressive list of injuries over the years from kids and old ladies. We spend millions on cameras but I don’t know why we bother - the tapes have never been used in evidence.
We have a tidal wave of petty shoplifting, hundreds of incidents every day that end in verbal abuse and often violence - but it’s OK because it’s not really a crime is it?
It sounds absurd, but the weekly armed robbery is much less of a problem for us - I think our managers would agree that one armed robbery (soon over with) is better than the daily grind of constant aggravation, taking all the fun out of the job. Somebody please tell the police it’s a crime.
Red tape has gone too far
Heavy-handed legislation on selling alcohol asks retailers to police drinking
June 5, 2009
Every Monday morning our board meets for coffee and we go round the table to give an update of what’s happened the previous week. It’s always a light-hearted affair liberally spiced with jokes and banter.
Sales, store openings, highlights from store visits, the rolling profit forecast, gross margin, logistics, marketing, the latest revelations about Kerry Katona – it all gets covered. Some things are more interesting than others and people usually start texting or fetch more coffee when our IT director gives his report.
The same could sometimes be said about our company secretary. Insurance claims and legal issues can be very boring, but health and safety legislation and stores that fall for local authority entrapment on serving alcohol usually provoke a bit of mild outrage round the table. He’s got a very dry sense of humour and is good at telling jokes. Last week he told a great story…
Have you heard the one about the draft legislation for serving alcohol in stores? The Home Office has put forward a mandatory code for retailers:
- The minimum age for buying alcohol is 18 but we have to challenge anyone who looks under 21
- A senior member of staff has to maintain a live text or radio link with the local police to facilitate rapid response in case of disorder
- We must have a direct line to a taxi operator to get people home safely
- We must install CCTV to monitor and prevent alcohol disorder
- We must have a “dispersal policy” in conjunction with the local police to prevent disorder
- We must keep an incident record to keep police informed
- We must carry out a risk review of our shop and put in place a plan, which should be agreed with the licensing authority, to prevent crime and keep the public safe
- We can’t offer discounts after 5pm or at weekends
The trouble is he wasn’t joking. If we don’t comply our checkout staff could get six months in jail or a £20,000 fine – or both. No, come on, that must only apply to a nightclub in the rough end of town. Surely we don’t have to do all that in our little shops selling Rioja on 2 metres of shelf space… ? Yes, we do.
Am I missing something? Has there been rioting in the wine department at Tesco? Has Sainsbury’s had public disorder in its drinks aisle? Maybe Iceland does need a “dispersal policy” to “keep the public safe”.
Our politicians have gone mad. What planet are they on? In most European countries booze is as freely available as a can of Coke – it’s no big deal, but then European kids don’t binge drink like we apparently do. In the UK the answer seems to be draconian legislation, which increases the burden of red tape.
MPs seem to think it’s OK to rip off taxpayers with their expenses but threaten with jail anyone guessing someone is 21 when they are only 20.
Imagine a phone conversation with the local police: “I’ve caught a shoplifter with £80 worth of our goods. Can you come immediately?”
“Madam,” said the policeman (this is a true story), “wouldn’t our time be better spent catching terrorists?”
Then imagine on the other line: “Police, this is Iceland, I have a 17-year-old who tried to buy a bottle of cider.”
“Don’t panic madam, I’ll send a squad car round immediately.”
Thank God that when I was 17 and used to sneak into my local pub for a half of bitter the local bobby was more understanding. He’d either ignore it or if we were too blatant he’d threaten a clip round the ear.
Know your customer
Kerry Katona may have had her problems, but she was still right for Iceland
May 22, 2009
“Do you still use Kerry Katona?” If I had a pound for every time I’ve been asked I could retire.
It’s always asked by a certain type – typically middle class and probably a Waitrose shopper. It’s not really a question. It’s more a statement of incredulity meaning: “Why use someone like her in ads? Why not a posh bird like Mylene Klass?”
Everyone thinks they are a marketing expert but I’ve wasted enough millions on TV ads that don’t work to finally speak with some authority.
The worst offenders are ad agents themselves. They say 50 per cent of advertising doesn’t work – but no one knows which 50 per cent. Looking at some, it shouldn’t be hard to guess.
When I returned to Iceland I wanted to change the agency. Since sales had been negative, whatever they were doing clearly wasn’t working. They once tried to attract more upmarket shoppers by confronting their prejudices and put forward a proposal with the headline “Shop at Iceland? – I think my cleaner does”. Jesus.
I knew who to use – Tom Reddy from Manchester. He invented “Mum’s gone to Iceland.” It ran for years, then I sacked him and brought in a big London agency. It was really expensive and produced some of our worst ads.
I had to ask Tom to work for us again. He produced “Driving home for Christmas”. We had our best Christmas ever. Soon afterwards our then marketing director sacked him again.
Now here I was inviting Tom back for a third time. But not wanting to upset too many people in my first week I conceded we should let two other agencies pitch.
Both teams consisted of three young men, two dressed like Mormons and one in a denim jacket who was of course the creative director. There was also the obligatory beautiful young woman in a suit.
30 minutes were spent on a slick presentation showing us slides of our shops (to prove they had been), then a raft of demographic data. Then came proposed ads. They made you wonder what the previous 30 minutes were about. We had singing freezers and the usual polar bears and penguins.
Then in shuffled Tom. He’s err… of mature years and overweight. Calling him scruffy would be a compliment. It was hilarious seeing the reaction of people who hadn’t met him.
Tom explained we needed a powerful relaunch. He would never normally recommend a celebrity as they, rather than the product, could become the star. Who knows, no sooner have you signed them than they get caught taking drugs or something. But he said take a risk and showed us pictures of Kerry Katona. “Who’s she?” I asked.
Former pop star, Mother of the Year twice, on the front of every popular magazine almost weekly, she has “edge”. Perfect for you, Tom said.
It’s four years since I went back and Iceland has been transformed. Sales and profits are through the roof and there is no sign of slowing. One of the reasons why is Kerry Katona. She’s professional and has a great sense of humour. She’s had her problems, but haven’t we all?
One famous financial journalist doesn’t like Iceland and when we were a public company I had to suck up to the likes of her. She speaks with authority and people listen. Once she wrote Iceland had had its day – our customers were buying their ciabatta and sun-dried tomatoes elsewhere.
She’s a snob, but she could have been an ad executive with that level of market knowledge.
In defence of the landlord
Speaking up for public enemy number one
March 20, 2009
I always like to be controversial, so in my first column I thought I would speak up for retailers’ public enemy number one – the landlord. Landlords are probably viewed with the same disdain as the newly disgraced bankers.
Almost 40 years ago I opened my first shop. I had to find a solicitor and he duly presented a complicated 50-page document – the lease. It frightened me but I read every word before I signed it.
As I opened more shops, reading leases almost became a full-time job. They always seemed to be drafted in landlords’ favour and contained bizarre clauses. I couldn’t cover more than 10 per cent of the windows with posters. I couldn’t use the premises for immoral purposes. I had to decorate the interior every three years with good quality lead paint. If the landlord was teetotal, perhaps there was a ban on selling alcohol.
After a while I realised I could negotiate on lease terms and we’d spend hours debating trivia such as whether I could cover 25 per cent of the window with posters instead of only 10 per cent.
The point is, I was signing a binding agreement – usually for 25 years. Nobody forced me to do it. I knew what I was getting into. In return for agreeing to their terms and conditions the landlord would grant me “quiet enjoyment” of the property.
After my first 50 shops I gave up reading leases and let my lawyer get on with it. I realised that provided I paid the rent on time the landlord wasn’t really bothered about the lease’s daft details. That was just fees for the lawyers.
Sometimes I bought a freehold. I preferred to spend my cash on fitting out shops, but if buying a freehold was the only way to get a property then sometimes I would buy it.
Having bought a property I had a policy of never selling it. Over 30 years, almost by accident, I built up a portfolio of properties worth hundreds of millions of pounds and never sold a single trading freehold.
Many times I resisted advice from City whizz-kids and professionals to sell (and leaseback) freeholds in order to release cash to “invest” in the business so I could grow faster.
It seemed to me like the family silver, and when I looked around me the strongest retailers always seemed to own the most freeholds. We’ve seen it so many times. When freeholds are stripped out of companies for short-term gain it leaves them vulnerable and the cash “invested” is usually wasted. It’s never the founding chief executive who does this, but always some short-term manager who finds himself the new boss and wants to prove how shrewd he is.
I’ve seen one new boss sell swathes of freeholds and agree penal leaseback terms with the new landlord in order to maximise value, then a few years later become a spokesman for the anti-landlord brigade complaining the terms are unfair. If I agree a deal, I like to stick to it.
I now realise that a landlord isn’t really interested in bricks and mortar. They are making a financial investment. They buy a property and usually borrow money to do it. They then rent it out to give a percentage yield on their investment. If the tenant doesn’t pay the rent they’re in trouble.
The retailer might suffer in an economic downturn, but so does the landlord. Retailers going bust and empty units with no income to pay the bank loan can put a landlord out of business. Council rates on empty properties make it worse and retailers wanting to renege on their agreements and pay rent monthly can devastate a landlord’s cash flow.
The landlord is running a business like everyone else, and it’s not always an easy business. How many owners of Woolies freeholds are small-time landlords who will be wiped out now they have no income?
The problem is, many retail analysts and City commentators know as much about property as they do about forecasting share prices. I once had a long conversation with a well-known financial journalist who was asking my views on a certain retailer that had just sold a batch of freeholds at 9.5 per cent.
I said it was total incompetence and gross mismanagement as they could easily have achieved 7.5 per cent. She couldn’t understand what I was saying and was totally convinced that a higher yield had to be good news.
And it was – but for the landlord not for the retailer, which had just received perhaps £50m less than the freeholds were actually worth at the going market rate.
