The £2.37 shop

Poundworld in the UK has closed down.  The closest equivalent here is Japan Home Centre, which used to be the "10 dollar shop", but quietly dropped that concept (in 2001, apparently).  When Poundworld tried to do something similar in 2016, it didn't go well:

Not so penny-wise: the last days of Poundworld

“Each week we would be rolling out new shelving bays as ‘manager’s specials’, where prices were written by hand, and customers would say: ‘I thought this was supposed to be a pound shop.’”

...and maybe that was the beginning of the end.  Of course, the concept made a lot more sense 20 years ago:

[Chris] Edwards [who launched Poundworld] writes in his book of a trip to China in 1997: “I would see stuff I had bought from wholesalers in Britain for 55p and it would be for sale to us for 25p. It was exciting!”

Two obvious problems here: £1 in 1997 is equivalent to around £1.78 today, and the RMB is 33% higher than it was 21 years ago.  So it should be "the £2.37 shop".  Well, maybe not.

Yes, you can sell smaller packs at the same price (which they did), but that's an expensive change to make (and customers may notice this and complain, whereas small price increases are not so obvious).

To be fair, their similarly named rival is still in business, though they have also faced challenges.

At one point, Poundland almost had to stop stocking reading glasses, one of its biggest sellers. “We had to work very hard with our supplier,” says Nick Agarwal, a consultant at the chain. “They took out metal parts from the spring hinge in the arms and changed production to produce the plastic in each pair in one go.”

In Hong Kong, Living Plaza sell reading glasses (and most of their other products) for HK$12.  Not quite so snappy as 10 or 1, but I suppose it works for them.

Or you can go crazy at the "Ten Dollar Store" and pay HK$89.90 (but, hey, you also get a plastic case).  Oh, and that annoying jingle played in a continuous loop.

And (from that same Guardian article) this is hardly a new idea:

In 1884, a Polish-Jewish migrant called Michael Marks opened Penny Bazaar in Leeds. His slogan was: “Don’t ask the price, it’s a penny”. Marks joined Tom Spencer, a bookkeeper, and, by 1900, Marks & Spencer had 36 Penny Bazaars. Eventually, the pair began moving away from fixed pricing and began trading under their own names.

If you want to know more about the history of M&S, try here.

Odds against

Another excellent “Long Read” from The Guardian, by Tom Lamont - the same writer as the one about pubs that I highlighted last year.

The big gamble: the dangerous world of British betting shops

In total, there are around 9,000 licensed betting shops in the UK, around half of those operated by Ladbrokes and William Hill. The two corporations are great and bitter rivals, tracing a contempt for one another back to the 1930s. Difficult as it is to credit now, both companies once shared a snotty attitude about the idea of bookmakers having shops.

“I don’t think it would be very nice,” said Mr William Hill, founder of William Hill, in 1956, “to see at every street corner a betting shop.” There was never a Mr Ladbrokes; the company was named for a country house where its founders trained horses in the 1880s. Up to the 1960s it reckoned itself too posh for street-level trade.

[…] Once Ladbrokes and William Hill could not ignore the potential profits any longer, they began to open branches, or take over existing ones, and from the mid-1960s on, the two companies’ spread was rapid and aggressive. Between them they absorbed dozens of smaller now-forgotten firms – Solomons & Flanagan, JJ Simonds, Ken Munden, Fred Parkinson.

[…] [Then] around the turn of the millennium, [came] the first modern gambling machines – “fixed-odds betting terminals”, or FOBTs (pronounced fobtees), offering a digitised version of roulette as well as other arcade-style games that could be gambled on.

[…] Many shop workers I spoke to had stories about looking on, impotent, as the machines under their charge were angrily destroyed by the customers who had been playing them. Worse, somehow, was when a machine was calmly destroyed. The deputy manager of a William Hill in Hull said: “You just watch, there’s nothing else to do. It’s normal. It’s normal for people to smash up the shop.” (A representative of William Hill said this was “rare”.) A woman working at an Oxfordshire Ladbrokes told me she had watched all four FOBTs in her shop get wrecked by a man swinging a stool; by the next day’s trade, she said, her ruined machines had all been replaced. According to figures I have seen, the number of incidents of damage to machines in Ladbrokes branches rose steadily between 2010 and 2015.

A senior figure at Ladbrokes during this period became increasingly concerned by the situation at shop-level “getting silly, getting crazy”. They told me it was their belief that with the introduction of the machines, betting shops had more or less become “mini casinos”. And how many casinos, they asked, got by without bouncers to cope with aggrieved gamblers? How many were run by individuals on their own?

As with his story on the pub trade, Tom Lamont highlights the impact on some of the people working in betting shops.  Sadly, this time there’s no happy ending.  Very far from it.

Closing time

A really good article in The Guardian today:

The death and life of the great British pub

The Murphy family, John, Mary and their adult son Dave, were preparing to spend a 33rd Christmas as landlords of the Golden Lion pub in Camden, north London when they heard the rumours. A mysterious figure was said to be looming in their corner of the industry, harrying publicans, striking down premises. There was “a Grim Reaper of pubs”, the Murphys were told, and he was circling their handsome Victorian building on Royal College Street.

It was December 2011. In front of the pub’s eyelash-shaped bar, beneath a blackboard that, for as long as anyone could remember, had advertised a heavy discount on tumblers of Irish Mist, the family met with a representative of Admiral Taverns. Admiral was the large pub-owning company – a pubco, as they are known in the trade – that leased the Murphy family their tenancy at the Golden Lion. “The rep told us she had bad news,” said Dave Murphy, a solid, red-cheeked man in his 40s.

It’s a long article, but worth a few minutes of your time.

See also Be careful what you wish for on a similar subject.

1992 and all that

Well, a strong sense of déjà vu for those of us old enough to remember the 1992 General Election.

Then, as now, a significant number of people seem to have told the opinion pollsters that they intended to vote Labour (or Liberal Democrat), only to choose the Conservatives when they went to the Polling Station.

Did they really change their mind at the last moment?  Or did the pollsters just get it wrong?

It’s interesting to consider that David Cameron’s ludicrous gamble on winning a referendum on Scottish independence - without making any concessions - seems to have rebounded in his favour, doing great damage to the Labour Party.  And what would have happened if Ed Miliband had stayed in London and not joined the absurd spectacle of the major party leaders rushing to Scotland – on the basis of an opinion poll that may well have been wrong.

Hovering overhead

Sky News have been making the most of the lengthy post-election negotiations, and they even have (or had) a helicopter flying around London to try to make it all more exciting. On Monday when Gordon Brown was making his first resignation speech of the week you could clearly hear it overhead. It was a curious speech, presented in such a low-key way that you might almost have missed what he was saying. You could imagine the headmaster saying "Speak up, boy, and apologize properly", but Brown couldn't quite bring himself to say that he was resigning.

Predictably, the right-wing newspapers were not happy. They had wanted Brown out, but became even more angry when he confirmed that he would be leaving. Their real fear, of course, was that it increased the chance of a Labour-Liberal Democrat coalition. For a few hours this terrifying prospect did seem to be a real possibility, but thankfully the moment soon passed, and last night Gordon Brown really resigned and David Cameron finally became PM.

The Liberal Democrats seem to have got a lot of what they wanted, including the promise of a referendum on the Alternative Vote system and various concessions on policy, but is this really an election that anyone would want to win?  You might think not, but 13 years out of power for the Conservatives (and considerably longer for the Liberals) obviously bring a different perspective.

The difficulty for Sky News is that a “rolling news” channel wants things to be happening all the time - and in public. And when the most exciting thing the Sky helicopter can find is Sky's own reporters interviewing other journalists outside the Houses of Parliament there’s clearly a bit of a problem - though there has been other excitement on the channel.



The Sun really is a ridiculous newspaper.  Their front page today has this nonsense about a ‘Brown Monday’:

DEFEATED Gordon Brown yesterday sparked fears of a City meltdown after trying to hijack a Tory-Lib Dem deal for a unity government.

His bid to rise from the dead by persuading the Lib Dems to prop him up raised the prospect of a stock market "Brown Monday".

World markets were expected to dump the Pound as the deadlock at Westminster continued to cause widespread political and financial chaos.

A deadline for coming to a coalition deal last night was missed - opening up the prospect of a massive wobble when the markets opened at 7am today.

Mr Brown made a desperate late bid to get the Lib Dems on side.

Despite claiming he was acting in the nation's interests, his meddling was not welcome by City experts as he threatened Nick Clegg's delicate talks with David Cameron.

City experts?  Pah..  So how is the Pound?  Here’s The Guardian

9.49am: Looking at Britain again, and the pound has strengthened against the dollar to a morning high of $1.4984 (from $1.48 last Friday). This has compounded (for now at least) speculation of a 'Brown Monday' on the markets as investors ditched the pound because of fears of a Hung Parliament.

12.04pm: The pound perks up after the Bank of England's decision to leave interest rates on hold. It rose 1.4% against the dollar to hit the day's high at $1.5017, but was little changed against the euro.

Be careful what you wish for

Interesting article in The Independent (When the locals bought their local) about a pub that has been bought by its customers.  

Ten years ago this corner of northern Salford boasted eight pubs within walking distance of the Star. One by one they've closed their doors.

Before Christmas the Star nearly went the same way. Robinsons, the brewery, decided to sell up and gave three weeks' notice of closure. But the Star's locals formed a co-op and bought their drinking hole for £80,000.

This is not an isolated example:

According to the British Beer and Pub Association 39 pubs are closing every week. A new report from Co-Operatives UK estimates that 2,700 pubs will collapse in the next 12 months, compared to 2006 when there were just 316 net closures.

Any landlord can give you a litany of reasons for why the industry is so tough; from spiralling energy costs to tax hikes and the smoking ban. But two things get them most animated: the "beer tie", which forces half of the country's pubs to buy drinks from a particular brewer (often at vastly inflated prices), and the multinational companies known as "Pub Cos". Half of the UK's pubs are owned by Pub Cos, the two biggest owning a quarter.

The dominance of the Pub Cos can be traced to 1989 when the Thatcher government tried to inject competition into the pub industry. Breweries with more than 2,000 pubs were ordered to sell off their excess, and offer a "guest beer". The cleverer breweries worked out that there was nothing to stop any number being owned by a company that didn't make beer. So they set up property companies to own vast numbers of pubs and force licensees to buy off a brewer.

I know hindsight is a wonderful thing, but I remember wondering at the time whether one or more of the large brewers might decide that there was more money to be made in running pubs, and sell off their brewery business.   As they did.  The Guardian had a good article about this some time ago (Calling time) describing the way these huge “pub companies”operate:

'We buy beer cheap'" - from the big four breweries, Scottish and Newcastle (now owned by Heineken); Coors; Carlsberg; and Inbev (better known as Stella Artois) - "'and sell it dear, and that's our profit.'" There isn't much space, in this model, for a publican to make money. 

The Supply of Beer (Tied Estate) Order 1989 and The Supply of Beer (Loan Ties, Licensed Premises and Wholesale Prices) Order 1989 were intended to increase competition in brewing, wholesaling and retailing, by ensuring that no brewer could own more than 2,000 pubs. However, the consequence of this legislation was the creation of stand-alone pub companies, the pubcos, to whom brewers sold their pubs. The pubcos were exempt from the beer order legislation, because they did not brew the beer themselves.

So the government legislation totally failed to achieve what was originally intended.  In fact it has made things worse by moving control from the big brewers to the shadowy pub companies that are only interested in profits.  Smaller breweries find it just as difficult to sell their products into local pubs, and many landlords struggle to make a living.  It’s somewhat ironic that a Conservative government should have tried to interfere in the market in this way, but hardly surprising that it had such unfortunate consequences.   

Brown nosing

Watching Cable TV news tonight is franky a bizarre experience.  Gordon Brown seems to be the hero of the day, and thus we get to see the highlights of his political life, including the time his best mate Tony Blair bought him an ice cream (I guess you had to be there...).

Just a few weeks ago the very same Gordon Brown was the most unpopular prime minister in the history of prime ministers (well, at least since Tony Blair, or maybe John Major), so this is rather an unexpected development.  I'm sure he can find plenty of ways to make himself unpopular again before the next election, so I hope he enjoys it whilst it lasts.

The British plan will result in the government owning about 60% of RBS and 40% of the merged Lloyds TSB and HBOS:

BBC business editor Robert Peston said the announcement would "count as perhaps the most extraordinary day in British banking history" and was "an absolute humiliation" for the banks.

Management shake-up

As part of the banks' announcements:

  • Lloyds and HBOS said they had renegotiated their merger, reducing the number of Lloyds TSB shares that HBOS shareholders will receive.
  • RBS said chief executive Fred Goodwin was quitting with immediate effect - without a severance pay-off. He will be replaced by British Land boss Stephen Hester. RBS chairman Tom McKillop is to retire.
  • HBOS chief executive Andy Hornby and chairman Lord Dennis Stevenson said they would stand down from their posts.
  • RBS and Lloyds TSB/HBOS will return mortgage and small-business lending to 2007 levels, which is much more than they are currently lending.

Ho hum.  The curse of ABN Amro strikes again - Fortis had to be rescued last week, and now it's RBS.  How sad it is to see bankers humiliated...

Room with a view

Back in 2004, the boss of Ultimo (a lingerie company in the UK), claimed that conditions in the dormitories at factories in Guangdong producing her company's products were similar to that of a 'Travel Inn'.

Well, maybe not.  Or at least not the dormitories for the workers.    

Now comes a story (I read it in The Sun, but it's everywhere), one elderly couple in the UK have been living in the same room in another budget hotel chain for 10 years - and before that they lived in another branch of the same chain for 12 years:

A COUPLE who stayed in a Travelodge in 1985 loved it so much they moved in - and have LIVED in them ever since.

David Davidson, 79, and wife Jean, 70, have spent around £100,000 over 22 years, averaging out at around £90 a week.

But they reckon its worth it for the trouble-free time being cared for by staff — and their view of the car park.

Retired banker David said: “This is our home. We have everything we need here and the staff are like family now.”

The couple even stay in Travelodges when they go on holiday.

They first sampled the budget hotel chain when they booked into a newly-opened branch in Barton-under-Needwood, Staffs, while visiting an elderly aunt.

They tried another on the A1 at Newark, Notts. Although they had bought a small flat in Sheffield for £20,000 in 1980, they were so impressed with the hotel location for trips to Derby and Lincoln that they gradually found themselves moving in.

David said: “We were there for 12 years. Then in late 1996 we heard about a new hotel opening later that year in Grantham and we decided to permanently base ourselves there, having watched it being built.”

In July 1997 the couple moved into Room 1 of the hotel on the day it opened at the Gonerby Moor service area on the A1 — and remain there to this day.

They never have to cook, clean, wash up, do the laundry or make a bed. Nor do they pay the usual household bills.

Well, if they are really only paying around £90 a week, then it's quite good value for money.

But I have to say that looking at the photos of the couple in The Sun, they don't look very happy to be living in an anonymous hotel room right next to a busy trunk road...