Carlos Criado Perez, chief executive of UK supermarket group Safeway, told an audience of retail experts gathered at yesterday’s annual convention of the Institute of Grocery Distribution that there was no reason the arrival of US giant Wal-Mart should “massacre the UK retail sector,” as customers want more stimulation than the group’s famous “everyday low pricing.” It was an interesting statement from Criado Perez, who served for over a year as chief operating officer for the international division of Wal-Mart before joining Safeway in August 1999.
The Safeway boss firmly denied that Wal-Mart had cornered the market for non-food, which is true, because most of the large multiples have geared up their non-food ranges in the last year or so.
No such thing as an unchallengable status quo
Somewhat controversially, Criado Perez denied that the UK retail market had a dominant player, adding that “while scale played a role, the differences between the four of five big players are not so big that they cannot be overcome. We have all had to reexamine what we do and how we do it – nobody was able to achieve the full benefit of scale economies last year because of the uncertainty of our industry. The race is still on, and each of the big players is a formidable competitor.”
Slammed loyalty cards
Criado Perez, whose professional career spans thirty years in the retail sector in ten different countries, also spoke disparagingly of so-called loyalty cards, saying that their days were numbered – although he conceded that they may well return in a different guise. Safeway ditched its ABC scheme last spring, promising instead to focus on good promotions and low standard prices. He added that loyalty cards are clearly not efficient for promotional purposes, nor to offer a flat discount nor, least of all, to secure loyalty.