Falling Comets

There is Blood on British High streets as the declining consumer retail spend is cannibalised by deep across the board discounting by all the major retailers. Marks and Spencer is cutting prices in its clothing and homeware departments by 20% for one day only on Thursday, its first one-day sale for four years. "The customer is not conditioned to expect M&S to do these things very often," retail analyst Fraser Ramzan, of Nomura, said. Some M&S stores will stay open until midnight for the discount day. BHS reacted to this unprecedented deep discounting by Marks and Sparks by launching a 3 day 30% discount event the very next day and Debenhams launched a 2 day 25% discount event whilst the same day Mark One, the fashion retailer, announced it had appointed administrators, no doubt the latest of many such retail failures.

Yesterday Sainsbury advertised 1 litre of Bailey’s Irish Cream Liqueur at £10, down from £17.99, today Tesco hit back with one litre at £8.00. I don’t like Tesco (http://daithaic.blogspot.com/2007/11/tesco-supermarket-which-arte.html ) but nobody can accuse them of being slow in responding to competition. M & S launched two dine in for £10.00 for a main course, side dish, desert and a bottle of wine for two, Tesco have launched a similar offer for £9.00 with wine and £5.00 without. Meanwhile Tesco have responded to the discounter challenge from Aldi, Lidl and Netto by branding themselves as “Britain’s Biggest Discounter” and launching copy cat ranges. Truly, in 2008 Credit Crunch Land retailing is strictly for the brave!



Debenhams, Marks & Spencer and Sir Philip Green's Arcadia clothes empire have all been slashing prices this week in an attempt to lure shoppers. The John Lewis decline extended the near 10% fall suffered in the previous week. Waitrose, the supermarket owned by John Lewis, joined the gloom. Its weekly sales fell 4.6%, a performance that suggests even large food retailers may have a tough Christmas. Retailers hope recent interest rate cuts will filter through to shoppers in time to rescue Christmas. The Bank of England is expected to cut rates again next month perhaps to 2.5%. Marks & Spencer saw like-for-like sales fall 6.1% in the 13 weeks to 27 September, while Arcadia Group, the owner of such retailers as Topshop, Dorothy Perkins and Burtons, experienced a 2.8% drop from 2007.

Sales on the UK's High Streets fell by a lower-than-expected 0.1% in October, figures from the Office for National Statistics have shown. The decline was much less than the 0.9% drop that analysts had predicted after sales fell by 0.4% in September. Retail sales grew at an annual rate of 1.9% compared with 1.7% in September. Many retailers have opted to hold pre-Christmas sales in a bid to boost spending at what should be their busiest time of year. Food sales rose 1% in October, but non-food sales fell 1.1%. Sales of household goods were down 1.5% and clothing sales fell 3.4%. "The drop in non-food sales clearly suggests that discretionary spending is taking a hit," said Vicky Redwood at Capital Economics.

The retail sector is continuing to suffer at the hands of the housing market slowdown with the Comet electrical goods chain warning yesterday that it is heading for a loss because of disappointing sales of refrigerators and washing machines. The company, part of the pan-European Kesa Electricals giant, believes that people are unable to move home and are not splashing out on new household appliances. Comet is also suffering because more people are shopping online. The scale of the setback during the three months of the year to the end of July surprised analysts. Sales at the chain of 251 stores fell by a thumping 9.9 per cent. This is far worse than the rival electrical chain Currys, which has reported sales 7 per cent lower.



However at the weekend the Celtic Sage at Comet’s out of town store in Aylesbury the Celtic Sage gained an insight into why Comet is such a poor customer proposition. The outlet is fine from the “Big White Shed” school of retailing and as you go in helpful young staff are on hand to assist and guide and the layout is clean and open with an air of activity to draw you in. However all the Sage wanted were 5 hoover bags for his Miele vacuum cleaner. These are £6.99 in John Lewis but here in Comet they were a whopping £11.99, an amazing 72% MORE EXPENSIVE than on the high street. I bought the bags under protest but made a mental note not to darken the door of Comet again for like every customer I know when I have been treated like a fool. So don’t bother to sell me a big ticket item, Barrow boy in Comet’s marketing department you have lost this customer’s loyalty. This is a mistake failing retail propositions make in thinking that customers will be price insensitive on accessories. Jessops the camera shop did the same to me by trying to charge twice what Argos would charge for rechargeable batteries; result I’ll never buy a big ticket item like a camera there.


The luxurious £11.99 vacuum bags from Comet!

Comet tries to defend its position and said it had protected margins by refusing to slash prices to draw buyers into its stores. "One day the cycle will tick up – in the meantime the business is refusing to chase unprofitable revenue," said an adviser in September 2008. Well I’m sure this sounded sensible then and he has left to pursue “new opportunities” elsewhere by now! Sales of laptops and televisions were more resilient, although the company admitted "we now anticipate Comet will make a loss in the first half". Kesa's arguments did not satisfy the stock market, which marked its shares down by nearly 10 per cent. Analysts slashed profit forecasts for the current year. Overall, Kesa, which takes in the French electrical chain Darty and other retail outlets operating throughout Belgium, Holland and Slovakia, reported a 4.7 fall in sales for the opening quarter. Darty fared better than Comet with sales down by 3.2 per cent, but conditions in France remain tough and the scale of the slowdown also caused concern in the market. Unconnected with the Celtic Sage’s rip off vacuum bags the CEO has fallen on his sword (sorry; “decided to retire”) and Jean-Noel Labroue will leave after a handover period to Thierry Falque-Pierrotin who is joining the Group on 5 January 2009 as Chief Executive Officer (CEO). I hope he does well but he will do it without my help, once you lose a customer he stays lost, and that is a home truth the Barrow Boys in marketing don’t understand and there is no point in paying large amounts of money to Finsbury PR whilst squandering customer loyalty!


Oxford Street

Another company which is surprised that shoppers are shunning it is The John Lewis Partnership. Weekly sales at John Lewis's flagship London stores lurched downwards once again as shoppers held off on making purchases in the hope prices will keep falling. The Oxford Street store that usually does well whatever the economic weather saw sales off 12.6%. Other stores in highly affluent areas also struggled. The Peter Jones branch at Sloane Square was down 18.6%. Cambridge down 26.7%, Bluewater off 15.7% and Kingston down 17.9% continued the trend. This was part of a wider slump at John Lewis in the week to 15 November when sales across the country fell 14% on average. This is the worst weekly sales performance in at least a year and suggests that consumers are ignoring the lure of sales in the expectation that stores will be forced to slash prices again before Christmas. Barry Matheson, the retailer's head of selling development, said: "There can be no getting away from it that last week was a disappointment. "We are not immune from the reality of the economic crisis that grasps every headline. “Even John Lewis's internet arm is struggling, with sales down 8.8%.”

Well Barry Matheson, let me help you to understand why sales in Oxford Street and elsewhere are falling. Recently I went into the store to buy a pair of gray casual trousers. In the large Menswear department there was only one type for sale, A German “No Name” Brand I had never heard of but actually manufactured in Bulgaria and a rather frumpy looking wool / polyester mix amazingly priced at £80.00. I left and down the road at M & S they had over 20 different types in stock and I bought a smart looking wool / cashmere mix for £35.00. Similarly I went into Peter Jones in Sloane Square to look for a casual jacket. The cheapest available was a £220 “designer” jacket that looked, well, like nothing. Strangely under their “Never knowingly undersold” policy a stereo would be more expensive in John Lewis’s Milton Keynes store than in Peter Jones, Sloane Square. For the price comparison policy applies to retailers within 3 miles so there are lots of electrical discounters for audio equipment in Chelsea but not in Buckinghamshire! Look for an Irish “Claddagh Ring” or Indian style jewellery in John Lewis you will be disappointed for its buyers’ are firmly stuck in a twin set and pearls Home Counties mindset. And it is owned by its staff which frequently translates into overstaffed shops where customers are ignored whilst staff cluster with each other or, as in Milton Keynes, have to take a ticket and queue to speak to a staff member, a rather quaint approach to people who want to give you money. Or I could mention the ludicrous pricing and slapdash service in the “Place to Eat” which is always chaotic and is by any standards a premium priced self service. No doubt this is lost on Andy Street, the CEO, as he leaves the John Lewis Palace at 171, Victoria Street in his chauffeur driven Jaguar, how retro!




Happy Xmas, John Lewis?

Earlier this month, the Bank of England cut interest rates to 3% from 4.5% in the hope of putting more money in consumers' pockets and encouraging them to spend. However, some analysts say that any positive effect - if it comes at all - will be too late to boost sales in the run-up to Christmas as rising unemployment has also dented consumer confidence. So expect the “Dog eats Dog” atmosphere to continue on the UK High Street. And in this climate consumers will be unforgiving to retailers who underestimate their intelligence. Be they Comet with its rip off “bits and pieces” and bias towards overpriced warranties and John Lewis which consistently gets its price point wrong and is that bit “too popular with itself.”

Falling Comets

There is Blood on British High streets as the declining consumer retail spend is cannibalised by deep across the board discounting by all the major retailers. Marks and Spencer is cutting prices in its clothing and homeware departments by 20% for one day only on Thursday, its first one-day sale for four years. "The customer is not conditioned to expect M&S to do these things very often," retail analyst Fraser Ramzan, of Nomura, said. Some M&S stores will stay open until midnight for the discount day. BHS reacted to this unprecedented deep discounting by Marks and Sparks by launching a 3 day 30% discount event the very next day and Debenhams launched a 2 day 25% discount event whilst the same day Mark One, the fashion retailer, announced it had appointed administrators, no doubt the latest of many such retail failures.

Yesterday Sainsbury advertised 1 litre of Bailey’s Irish Cream Liqueur at £10, down from £17.99, today Tesco hit back with one litre at £8.00. I don’t like Tesco (http://daithaic.blogspot.com/2007/11/tesco-supermarket-which-arte.html ) but nobody can accuse them of being slow in responding to competition. M & S launched two dine in for £10.00 for a main course, side dish, desert and a bottle of wine for two, Tesco have launched a similar offer for £9.00 with wine and £5.00 without. Meanwhile Tesco have responded to the discounter challenge from Aldi, Lidl and Netto by branding themselves as “Britain’s Biggest Discounter” and launching copy cat ranges. Truly, in 2008 Credit Crunch Land retailing is strictly for the brave!



Debenhams, Marks & Spencer and Sir Philip Green's Arcadia clothes empire have all been slashing prices this week in an attempt to lure shoppers. The John Lewis decline extended the near 10% fall suffered in the previous week. Waitrose, the supermarket owned by John Lewis, joined the gloom. Its weekly sales fell 4.6%, a performance that suggests even large food retailers may have a tough Christmas. Retailers hope recent interest rate cuts will filter through to shoppers in time to rescue Christmas. The Bank of England is expected to cut rates again next month perhaps to 2.5%. Marks & Spencer saw like-for-like sales fall 6.1% in the 13 weeks to 27 September, while Arcadia Group, the owner of such retailers as Topshop, Dorothy Perkins and Burtons, experienced a 2.8% drop from 2007.

Sales on the UK's High Streets fell by a lower-than-expected 0.1% in October, figures from the Office for National Statistics have shown. The decline was much less than the 0.9% drop that analysts had predicted after sales fell by 0.4% in September. Retail sales grew at an annual rate of 1.9% compared with 1.7% in September. Many retailers have opted to hold pre-Christmas sales in a bid to boost spending at what should be their busiest time of year. Food sales rose 1% in October, but non-food sales fell 1.1%. Sales of household goods were down 1.5% and clothing sales fell 3.4%. "The drop in non-food sales clearly suggests that discretionary spending is taking a hit," said Vicky Redwood at Capital Economics.

The retail sector is continuing to suffer at the hands of the housing market slowdown with the Comet electrical goods chain warning yesterday that it is heading for a loss because of disappointing sales of refrigerators and washing machines. The company, part of the pan-European Kesa Electricals giant, believes that people are unable to move home and are not splashing out on new household appliances. Comet is also suffering because more people are shopping online. The scale of the setback during the three months of the year to the end of July surprised analysts. Sales at the chain of 251 stores fell by a thumping 9.9 per cent. This is far worse than the rival electrical chain Currys, which has reported sales 7 per cent lower.



However at the weekend the Celtic Sage at Comet’s out of town store in Aylesbury the Celtic Sage gained an insight into why Comet is such a poor customer proposition. The outlet is fine from the “Big White Shed” school of retailing and as you go in helpful young staff are on hand to assist and guide and the layout is clean and open with an air of activity to draw you in. However all the Sage wanted were 5 hoover bags for his Miele vacuum cleaner. These are £6.99 in John Lewis but here in Comet they were a whopping £11.99, an amazing 72% MORE EXPENSIVE than on the high street. I bought the bags under protest but made a mental note not to darken the door of Comet again for like every customer I know when I have been treated like a fool. So don’t bother to sell me a big ticket item, Barrow boy in Comet’s marketing department you have lost this customer’s loyalty. This is a mistake failing retail propositions make in thinking that customers will be price insensitive on accessories. Jessops the camera shop did the same to me by trying to charge twice what Argos would charge for rechargeable batteries; result I’ll never buy a big ticket item like a camera there.


The luxurious £11.99 vacuum bags from Comet!

Comet tries to defend its position and said it had protected margins by refusing to slash prices to draw buyers into its stores. "One day the cycle will tick up – in the meantime the business is refusing to chase unprofitable revenue," said an adviser in September 2008. Well I’m sure this sounded sensible then and he has left to pursue “new opportunities” elsewhere by now! Sales of laptops and televisions were more resilient, although the company admitted "we now anticipate Comet will make a loss in the first half". Kesa's arguments did not satisfy the stock market, which marked its shares down by nearly 10 per cent. Analysts slashed profit forecasts for the current year. Overall, Kesa, which takes in the French electrical chain Darty and other retail outlets operating throughout Belgium, Holland and Slovakia, reported a 4.7 fall in sales for the opening quarter. Darty fared better than Comet with sales down by 3.2 per cent, but conditions in France remain tough and the scale of the slowdown also caused concern in the market. Unconnected with the Celtic Sage’s rip off vacuum bags the CEO has fallen on his sword (sorry; “decided to retire”) and Jean-Noel Labroue will leave after a handover period to Thierry Falque-Pierrotin who is joining the Group on 5 January 2009 as Chief Executive Officer (CEO). I hope he does well but he will do it without my help, once you lose a customer he stays lost, and that is a home truth the Barrow Boys in marketing don’t understand and there is no point in paying large amounts of money to Finsbury PR whilst squandering customer loyalty!


Oxford Street

Another company which is surprised that shoppers are shunning it is The John Lewis Partnership. Weekly sales at John Lewis's flagship London stores lurched downwards once again as shoppers held off on making purchases in the hope prices will keep falling. The Oxford Street store that usually does well whatever the economic weather saw sales off 12.6%. Other stores in highly affluent areas also struggled. The Peter Jones branch at Sloane Square was down 18.6%. Cambridge down 26.7%, Bluewater off 15.7% and Kingston down 17.9% continued the trend. This was part of a wider slump at John Lewis in the week to 15 November when sales across the country fell 14% on average. This is the worst weekly sales performance in at least a year and suggests that consumers are ignoring the lure of sales in the expectation that stores will be forced to slash prices again before Christmas. Barry Matheson, the retailer's head of selling development, said: "There can be no getting away from it that last week was a disappointment. "We are not immune from the reality of the economic crisis that grasps every headline. “Even John Lewis's internet arm is struggling, with sales down 8.8%.”

Well Barry Matheson, let me help you to understand why sales in Oxford Street and elsewhere are falling. Recently I went into the store to buy a pair of gray casual trousers. In the large Menswear department there was only one type for sale, A German “No Name” Brand I had never heard of but actually manufactured in Bulgaria and a rather frumpy looking wool / polyester mix amazingly priced at £80.00. I left and down the road at M & S they had over 20 different types in stock and I bought a smart looking wool / cashmere mix for £35.00. Similarly I went into Peter Jones in Sloane Square to look for a casual jacket. The cheapest available was a £220 “designer” jacket that looked, well, like nothing. Strangely under their “Never knowingly undersold” policy a stereo would be more expensive in John Lewis’s Milton Keynes store than in Peter Jones, Sloane Square. For the price comparison policy applies to retailers within 3 miles so there are lots of electrical discounters for audio equipment in Chelsea but not in Buckinghamshire! Look for an Irish “Claddagh Ring” or Indian style jewellery in John Lewis you will be disappointed for its buyers’ are firmly stuck in a twin set and pearls Home Counties mindset. And it is owned by its staff which frequently translates into overstaffed shops where customers are ignored whilst staff cluster with each other or, as in Milton Keynes, have to take a ticket and queue to speak to a staff member, a rather quaint approach to people who want to give you money. Or I could mention the ludicrous pricing and slapdash service in the “Place to Eat” which is always chaotic and is by any standards a premium priced self service. No doubt this is lost on Andy Street, the CEO, as he leaves the John Lewis Palace at 171, Victoria Street in his chauffeur driven Jaguar, how retro!




Happy Xmas, John Lewis?

Earlier this month, the Bank of England cut interest rates to 3% from 4.5% in the hope of putting more money in consumers' pockets and encouraging them to spend. However, some analysts say that any positive effect - if it comes at all - will be too late to boost sales in the run-up to Christmas as rising unemployment has also dented consumer confidence. So expect the “Dog eats Dog” atmosphere to continue on the UK High Street. And in this climate consumers will be unforgiving to retailers who underestimate their intelligence. Be they Comet with its rip off “bits and pieces” and bias towards overpriced warranties and John Lewis which consistently gets its price point wrong and is that bit “too popular with itself.”

Whistleblowing

It is ten years since Britain passed a law giving protection to whistleblowers... employees who felt something was wrong in their workplace and told the bosses about it. However given the revelations of malpractice which have emerged with the current Banking Crisis the question may reasonably be asked “Where were the whistleblowers?”

The Public Interest Disclosure Act 1998 (PIDA) was brought into effect as part of the recommendations of the Nolan Committee on Standards in Public Life whose report is quoted in the introduction;

"All organisations face the risks of things going wrong or of unknowingly harbouring malpractice. Part of the duty of identifying such a situation and taking remedial action may lie with the regulatory or funding body. But the regulator is usually in the role of detective; determining responsibility after the crime has been discovered. Encouraging a culture of openness within an organisation will help: prevention is better than cure. Yet it is striking that in the few cases where things have gone badly wrong in local public spending bodies, it has frequently been the tip-off to the press or the local Member of Parliament - sometimes anonymous, sometimes not - which has prompted the regulators into action. Placing staff in a position where they feel driven to approach the media to ventilate concerns is unsatisfactory both for the staff member and the organisation."

Committee on Standards in Public Life
Second Report, Cm 3270 -1 (May 1996) p. 21

To achieve such a balance which allowed for organisational openness, the Act sets out a framework for public interest Whistleblowing, which protects workers from reprisal because they have raised a concern about malpractice. Though the Act is part of employment legislation, its scope is wide and no qualifying periods or age limits restrict the application of its protection (s.7).

Only a disclosure that relates to one of the broad categories of malpractice can qualify for protection under the Act. These include (s.1, s.43B) concerns about actual or apprehended breaches of civil, criminal, regulatory or administrative law; miscarriages of justice; dangers to health, safety and the environment; and the cover-up of any such malpractice. Cast so widely, and with its emphasis on the prevention of the malpractice, and with the guarantee of full compensation, the Act requires the attention of every employer in the UK.



The new law shielded employees from victimisation, and it followed several highly publicised cases where fear apparently blocked the revelation of eventually fatal shortcomings in public or private organisations.

The background to the Act lies in the analysis by Public Concern at Work of a spate of scandals and disasters in the 1980s and early 1990s. Almost every public inquiry found that workers had been aware of the danger but had either been too scared to sound the alarm or had raised the matter in the wrong way or with the wrong person.

Examples of the former included:

• the Clapham Rail crash (where the Hidden Inquiry heard that an inspector had seen the loose wiring but had said nothing because he did not want ‘to rock the boat’),
• the Piper Alpha disaster (where the Cullen Inquiry concluded that “workers did not want to put their continued employment in jeopardy through raising a safety issue which might embarrass management”), and
• The collapse of BCCI (where the Bingham Inquiry found an autocratic environment where nobody dared to speak up).

Examples of where the concern was raised but not heeded included:

• the Zeebrugge Ferry tragedy (where the Sheen Inquiry found that staff had on five occasions raised concerns that ferries were sailing with their bow doors open),
• the collapse of Barings Bank (where the regulator found that a senior manager had failed to blow the whistle loudly or clearly), and
• the Arms to Iraq Inquiry (where the Scott Report found that an employee had written to the Foreign Secretary to tell him that munitions equipment was being unlawfully produced for Iraq).
• Similar messages have come out of the inquiries into the abuse of children in care (over 30 reports of concern were ignored about the serial sex abuser Frank Beck) and investigations into malpractice in the health service. Two recent examples from the NHS are the Kennedy Inquiry into the high mortality rate amongst babies undergoing heart surgery at the Bristol Royal Infirmary and Dame Janet Smith’s Inquiry into the serial killer Dr Harold Shipman.



Most organisations make curious assumptions about the shared goals of their workforce. The new faces at the top are far away, the corporate change of strategy is a lurching change of direction, messages about new priorities are “cascaded” through the email system so that eventually they percolate through to the people at the bottom ...otherwise known as the people who spend their daily life in contact with the customers, where things really matter.

Whistleblowing is one of the checks and balances organisations put in place to try to keep themselves honest. Whistleblowing hotlines are mandatory under the Sarbanes-Oxley accounting rules rushed in by the US authorities after the corporate scandals (such as Enron) at the beginning for the 2000s.



Whistleblowing can of course be effective; publicising a hotline is a constant reminder of the decency at the heart of a company which can be appealed to when things go wrong. But the need for a hotline sheds some light on the nature of organisations ...the way that being “organised” detaches ordinary people from the normal responsibilities and decencies and turns them into corporate persons with loyalties mainly to their immediate superiors...the straight line relationships on the organisation chart. Organisations replace human good behaviour with corporate good behaviour, and it is not quite the same thing.

How can the world’s main banks have got engaged in such an orgy of destruction as we have seen in the past few years?

It must have been more than just stupidity.

The trend in organisations is to chip up the tasks into bits that prevent sensible questions being asked about their purpose: the banks and building societies used to find the money, arrange the mortgage and live with the loan until it was repaid, with oversight of the whole process. Then they thought they could streamline the process into component (and outsourced) parts: retailing loans, parcelling them up, selling them to investors, buying them in bulk. In this way they held the real world at bay, created a machine, and chopped up loan arranging into such tiny pieces that overall oversight was removed from the process, along with any grounding in the real world.

Banks created a machine that disabled the oversight and the responsibility mechanism that used to be at the heart of what they did.

And nobody blew the whistle on it.

Whistleblowing is a necessary part of running a modern organisation. But organisations have to be built so that when someone blows the whistle, they know how to respond.

Some Whistleblowing dos and don’ts

Do

• Keep calm
• Think about the risks and outcomes before you act
• Remember you are a witness, not a complainant
• Look for advice

Don’t

• Forget there may be an innocent or good explanation
• Become a private detective
• Use a Whistleblowing procedure to pursue a personal grievance
• Expect thanks

Whistleblowing

It is ten years since Britain passed a law giving protection to whistleblowers... employees who felt something was wrong in their workplace and told the bosses about it. However given the revelations of malpractice which have emerged with the current Banking Crisis the question may reasonably be asked “Where were the whistleblowers?”

The Public Interest Disclosure Act 1998 (PIDA) was brought into effect as part of the recommendations of the Nolan Committee on Standards in Public Life whose report is quoted in the introduction;

"All organisations face the risks of things going wrong or of unknowingly harbouring malpractice. Part of the duty of identifying such a situation and taking remedial action may lie with the regulatory or funding body. But the regulator is usually in the role of detective; determining responsibility after the crime has been discovered. Encouraging a culture of openness within an organisation will help: prevention is better than cure. Yet it is striking that in the few cases where things have gone badly wrong in local public spending bodies, it has frequently been the tip-off to the press or the local Member of Parliament - sometimes anonymous, sometimes not - which has prompted the regulators into action. Placing staff in a position where they feel driven to approach the media to ventilate concerns is unsatisfactory both for the staff member and the organisation."

Committee on Standards in Public Life
Second Report, Cm 3270 -1 (May 1996) p. 21

To achieve such a balance which allowed for organisational openness, the Act sets out a framework for public interest Whistleblowing, which protects workers from reprisal because they have raised a concern about malpractice. Though the Act is part of employment legislation, its scope is wide and no qualifying periods or age limits restrict the application of its protection (s.7).

Only a disclosure that relates to one of the broad categories of malpractice can qualify for protection under the Act. These include (s.1, s.43B) concerns about actual or apprehended breaches of civil, criminal, regulatory or administrative law; miscarriages of justice; dangers to health, safety and the environment; and the cover-up of any such malpractice. Cast so widely, and with its emphasis on the prevention of the malpractice, and with the guarantee of full compensation, the Act requires the attention of every employer in the UK.



The new law shielded employees from victimisation, and it followed several highly publicised cases where fear apparently blocked the revelation of eventually fatal shortcomings in public or private organisations.

The background to the Act lies in the analysis by Public Concern at Work of a spate of scandals and disasters in the 1980s and early 1990s. Almost every public inquiry found that workers had been aware of the danger but had either been too scared to sound the alarm or had raised the matter in the wrong way or with the wrong person.

Examples of the former included:

• the Clapham Rail crash (where the Hidden Inquiry heard that an inspector had seen the loose wiring but had said nothing because he did not want ‘to rock the boat’),
• the Piper Alpha disaster (where the Cullen Inquiry concluded that “workers did not want to put their continued employment in jeopardy through raising a safety issue which might embarrass management”), and
• The collapse of BCCI (where the Bingham Inquiry found an autocratic environment where nobody dared to speak up).

Examples of where the concern was raised but not heeded included:

• the Zeebrugge Ferry tragedy (where the Sheen Inquiry found that staff had on five occasions raised concerns that ferries were sailing with their bow doors open),
• the collapse of Barings Bank (where the regulator found that a senior manager had failed to blow the whistle loudly or clearly), and
• the Arms to Iraq Inquiry (where the Scott Report found that an employee had written to the Foreign Secretary to tell him that munitions equipment was being unlawfully produced for Iraq).
• Similar messages have come out of the inquiries into the abuse of children in care (over 30 reports of concern were ignored about the serial sex abuser Frank Beck) and investigations into malpractice in the health service. Two recent examples from the NHS are the Kennedy Inquiry into the high mortality rate amongst babies undergoing heart surgery at the Bristol Royal Infirmary and Dame Janet Smith’s Inquiry into the serial killer Dr Harold Shipman.



Most organisations make curious assumptions about the shared goals of their workforce. The new faces at the top are far away, the corporate change of strategy is a lurching change of direction, messages about new priorities are “cascaded” through the email system so that eventually they percolate through to the people at the bottom ...otherwise known as the people who spend their daily life in contact with the customers, where things really matter.

Whistleblowing is one of the checks and balances organisations put in place to try to keep themselves honest. Whistleblowing hotlines are mandatory under the Sarbanes-Oxley accounting rules rushed in by the US authorities after the corporate scandals (such as Enron) at the beginning for the 2000s.



Whistleblowing can of course be effective; publicising a hotline is a constant reminder of the decency at the heart of a company which can be appealed to when things go wrong. But the need for a hotline sheds some light on the nature of organisations ...the way that being “organised” detaches ordinary people from the normal responsibilities and decencies and turns them into corporate persons with loyalties mainly to their immediate superiors...the straight line relationships on the organisation chart. Organisations replace human good behaviour with corporate good behaviour, and it is not quite the same thing.

How can the world’s main banks have got engaged in such an orgy of destruction as we have seen in the past few years?

It must have been more than just stupidity.

The trend in organisations is to chip up the tasks into bits that prevent sensible questions being asked about their purpose: the banks and building societies used to find the money, arrange the mortgage and live with the loan until it was repaid, with oversight of the whole process. Then they thought they could streamline the process into component (and outsourced) parts: retailing loans, parcelling them up, selling them to investors, buying them in bulk. In this way they held the real world at bay, created a machine, and chopped up loan arranging into such tiny pieces that overall oversight was removed from the process, along with any grounding in the real world.

Banks created a machine that disabled the oversight and the responsibility mechanism that used to be at the heart of what they did.

And nobody blew the whistle on it.

Whistleblowing is a necessary part of running a modern organisation. But organisations have to be built so that when someone blows the whistle, they know how to respond.

Some Whistleblowing dos and don’ts

Do

• Keep calm
• Think about the risks and outcomes before you act
• Remember you are a witness, not a complainant
• Look for advice

Don’t

• Forget there may be an innocent or good explanation
• Become a private detective
• Use a Whistleblowing procedure to pursue a personal grievance
• Expect thanks

Ikea Tripping

IKEA MK - The Eco store where Customer Service is a priority?

The August monsoons had hit Buckinghamshire (Hey, It’s summer in England, did you expect sun?) and so in a moment of weakness I uttered the immortal words “let’s go to IKEA” as the West Wing required some new furnishings. Our nearest Ikea is Milton Keynes which is their 14th UK Store and with the new Linsdale bypass now open it is a quick trip from Castle Caldwell. Went to have a look at their MK store before and whilst slightly manic not long after its opening we came away with a favourable impression, it is certainly better designed than the older stores such as the dump near Brent Cross. It started to build in May 2005 opening just after Christmas the same year, in 31 weeks it was Ikea’s fastest build ever. It was predicted to get 50,000 customers per week - approximately 2 million a year, cost £88M to build and requires 150 trucks to fill the store and has created 400 jobs. The store is actually in Denbigh near Bletchley and you follow the signs off the A5 for Milton Keynes East. This is another advantage as with the bypass the store is actually 2 miles shy of MK Central and easier to access from our direction.

Milton Keynes is also Ikea UK’s flagship eco-store, a large bio mass unit helps the company reduce its carbon footprint and a waste-to-energy unit burns damaged wooden products and pallets. And, rainwater harvesting will soon be built into all new stores. It was also the store where Ikea promised to lay to rest the ghost of the major reason people avoid Ikea – its notoriously cruddy Customer service or “Customer Abuse” as many commentators have called it.

We were not alone in going to Ikea - Forty-five million customers will enter a British Ikea this year, close on a million a week, more than go to church, more than go to football. One-size-fits-all is the essence of the Ikea business model. To benefit from economies of scale, you can’t be tweaking products to suit local tastes. Many bemoan this homogeneity: “Products should have national characteristics, that’s what people love.” But is it? Peter Högsted, Ikea UK’s 39 year old Danish MD from his functional HQ in Wembley, thinks not. “There is this thesis that we are all so different,” he says, “but we are not.” And so the whole world has learnt to love Billy and many other Ikea products with even stranger names.


The billionaire founder of Ikea has admitted the Swedish furniture chain needs to increase prices and invest in more staff to improve its appalling image among consumers. Sir Terence Conran, who sold his Habitat chain to Ikea in 1992, revealed in an interview with The Daily Telegraph that Ingvar Kamprad, who founded Ikea 60 years ago, made the admission in correspondence between the two. Sir Terence said Ikea had an image problem because some people suffered "horrible experiences" when they shopped there. An Ikea spokesperson said; "We know there is much room for improvement when it comes to the shopping experience at Ikea. Here in the UK customer service remains one of our biggest priorities and we will continue to invest in this area, significantly moving forward."

However the opposite view is that Ikea’s poor customer service is deliberate and actually designed into the way they manage. One of the reasons products are so cheap is that they don't have that many staff on the shop floor. It is about the customers doing all the work, schlepping around the store and hauling a sofa on to the car roof.

Ikea Floor Plan
With thanks to Adam Roe

So what was our experience last Saturday on our quick trip to buy a coffee table, rug and a window blind? Firstly access and parking to MK Ikea is good. It is situated next to the MK Dons Football Stadium and a giant ASDA store but there were no undue delays in and out and both the Ikea indoor and outdoor car park were coping well. I was glad to see there were plenty of disabled spaces and unlike the increasingly arrogant Tesco, Ikea (and ASDA next door) actively police disabled spaces to ensure they are not being abused. The entrance is roomy even if it is clustered with people illegally smoking in the covered area in front (What is the law? £80 fine for them and £1,000 fine for Ikea) and there are travelators, escalators and lifts to take you to the top where your Ikea journey begins. As it was lunch hour we decided to use the “450 seater family restaurant” and I went up and organised the lunch, the Swedish Meatballs (Kottbuller) and the pasta dish. The pasta came with a choice of 4 sauces, pomodora, Bolognese, ratatouille and tuna. The problem was they were all tomato based and all looked the same, they were unlabeled and it was self service. I eventually attracted the attention of a “chef” and asked which was the Bolognese and he showed me. As I poured it onto the pasta I thought it was bit thin and sure enough it was the pomodora when it was tasted by the victim.

I then went up to the till to pay on my Ikea Homecard on which I constantly receive special offers for the restaurant only to be told “we don’t accept them anymore!” They don’t accept their own card, not a notice in sight and certainly no notice to me as a Card Holder and customer. Considering Ikea claim to have 450,000 Ikea Card holders this seems to be a sure far way of destroying customer loyalty. If you pay with any other credit card they charge you a 70p transaction fee so no doubt some Ikea Barrow Boy in their HQ Portacabin in Wembley thinks, for reasons which escape me, that alienating 450,000 of their best customers is a clever wheeze and you only find out when you get to the check out just to maximise the wind up. No notice in sight and Polish person on till can only tell you they stopped taking it a month ago, can’t give you any reason and can’t tell you if they still take the IKEA CARD in the Swedish shop at IKEA (They don’t). I wish I could tell you why there is this unannounced change of policy but during my transit through the Ikea factory I asked 3 other, what I hesitate to describe as, managerial types why this change and they couldn’t tell me. In fairness one of them told me he had only been there two days and knew nothing but he did look smart in his Ikea uniform, radio mike and headphones and has his name on the “Checkout Supervisor” badge!

Ikea Tottenham - traditional opening riots

So off we went on the Ikea chicane through the store (Top floor), took a shortcut through the self serve area (second floor) and ended up in the Self Serve warehouse (Ground Floor). I wish I could tell you more but almost every inquiry point was unstaffed and there were very few of the helpful leaflets on the ranges. We did want to enquire about Sofas but that area was unattended and the next point we came to on our solitary progress through Ikea had one Ikea person but a queue of 12 people in front of them. The person at the top of the queue was obviously highly delusional as he was under the impression that as he was spending £1,400 he was entitled to some customer service. I would like to tell you how he got on but after 10 minutes queuing I had lost interest in life and left. In an insight into Ikea’s efficiency most of my fellow victims in the queue also walked, that’s the clever way Ikea ensures its staff only deal with serious hardcore enquiries. But this is the rub, throughout you felt you were meat in the Ikea sausage machine and their attitude to you, their customer, was fundamentally disrespectful – In Ikea not only can money not buy you love, it can’t even buy you attention!

Finally we arrive at the self service warehouse where we have to pick up the coffee table who we must now refer to as “Benno.” IKEA Milton Keynes makes great play of being the first purpose built 'back-fill' racking store which it claims offers considerable practical benefits for both its staff (who are called co-workers because they are soooo empowered!) and customers. It says “The back fill system requires less warehouse storage space therefore offering more display area in store. The system also allows the replenishment of stock without ever using equipment such as fork-lift trucks on the store floor without disrupting the customer experience and making it a safer shopping environment. This means there is no need for staff to work unsocial night shift hours, leaving more time to improve work life balance.”

All very stirring and exciting I’m sure. The practice was this. Our new friend Benno was not to be found where the label in the showroom said. There are “Find It” touchscreens which should guide you but of the four that should have been there two were dead, one was missing and the strangely luminous one had (you’ve guessed!) a long queue. Indeed (with some difficulty) we found that as Benno came in four different finishes he lived in four different places in the Warehouse! Am I missing something here? Eventually we lurched to the checkout (where, amazingly, IKEA still accept the IKEA card) the checkout we were queuing at closed and we were directed to another one which was opening by one of a dynamic duo of checkout supervisors. He looked like he was working here as he had failed the audition for “The Hairy Bikers” and she was selected as she was tall and had a face permanently like thunder.

We survived the checkout and then emotion took over from experience and even though they don’t take the IKEA card (why would they in IKEA?) I decided to get some stuff in the Swedish Shop as they had a good offer on Kopparberg Pear Cider. By the time I got to check out there was a queue of 15 people, one harassed operator and not much movement. After 5 minutes I gave up, dumped my purchases and walked out. I told the tall checkout supervisor with the practiced thunder face that there was a long queue and only one operator but she was not interested, hey ho, if she was interested we probably wouldn’t be having this unrequited one way conversation. Should I take a ticket and queue to tell “Customer Services and Returns” amongst a crowd of disgruntled customers who looked like they were auditioning for the “Land of the Living Dead”? No life is too short, for the immortal words of Jim Royle came to mind!

Would you lose your self respect for Benno?

So homeward bound then but not before going next door to the giant ASDA Superstore which looks like it is on steroids. Now ASDA is also part of an evil empire being owned by Wal-Mart and like Ikea also trades on value. But there is a difference to how they make the customer feel, indeed there is no suggestion, as there was next door, that the customer must accept ritual humiliation to receive good value. As we went into this huge store we were greeted by an Asda person who volunteered information about the store. When I enquired in store about an item which wasn’t available the staff member engaged with me, apologised and explained why they had a stock out. The check out operator greeted us and smiled, was helpful and thanked us for our custom. And as we left the clean, bright and well laid out store we could appreciate that they lived up to their customer service proposition emblazoned on the entrance “Always happy to help” and indeed their policy and store ambience is not an accident for it is detailed on their website “ASDA’s reputation for friendliness is as much a part of the ASDA brand as our famously low prices.”

Contrast this with the sterile anatomic misery of the atmosphere from beginning to end in Ikea Milton Keynes, the Eco-friendly store, where Ikea were going to show us “UK customer service remains one of our biggest priorities and we will continue to invest in this area, significantly moving forward." It is a factory which dehumanises those who shop there and the sad and demotivated “co-workers” who endure its sterility. Will I return for a Sofa? No! Will I return full stop? No! Will I pay off my increasingly useless and devalued Ikea Card and cut it up when I get the statement for Benno and friends? Yes! Is Benno worth losing your self-respect for? No! Will I write and tell them? No, not on your Nelly, why should I care about a company which doesn’t respect its customers?

Ikea Milton Keynes Store Manager Mats Kotka and Ikea UK Managing Director Peter Högsted you should be both deeply ashamed of the appalling customer service proposition at this “flagship” store. And as for the Barrow Boy who thought that not taking the IKEA CARD in IKEA was a good idea sack him now. A person with such a lack of appreciation of your customers and such arrogance can only go on to do greater damage. Indeed it may be too late, he may already be Ikea UK’s new Boy Wonder Managing Director!

Ikea Tripping

IKEA MK - The Eco store where Customer Service is a priority?

The August monsoons had hit Buckinghamshire (Hey, It’s summer in England, did you expect sun?) and so in a moment of weakness I uttered the immortal words “let’s go to IKEA” as the West Wing required some new furnishings. Our nearest Ikea is Milton Keynes which is their 14th UK Store and with the new Linsdale bypass now open it is a quick trip from Castle Caldwell. Went to have a look at their MK store before and whilst slightly manic not long after its opening we came away with a favourable impression, it is certainly better designed than the older stores such as the dump near Brent Cross. It started to build in May 2005 opening just after Christmas the same year, in 31 weeks it was Ikea’s fastest build ever. It was predicted to get 50,000 customers per week - approximately 2 million a year, cost £88M to build and requires 150 trucks to fill the store and has created 400 jobs. The store is actually in Denbigh near Bletchley and you follow the signs off the A5 for Milton Keynes East. This is another advantage as with the bypass the store is actually 2 miles shy of MK Central and easier to access from our direction.

Milton Keynes is also Ikea UK’s flagship eco-store, a large bio mass unit helps the company reduce its carbon footprint and a waste-to-energy unit burns damaged wooden products and pallets. And, rainwater harvesting will soon be built into all new stores. It was also the store where Ikea promised to lay to rest the ghost of the major reason people avoid Ikea – its notoriously cruddy Customer service or “Customer Abuse” as many commentators have called it.

We were not alone in going to Ikea - Forty-five million customers will enter a British Ikea this year, close on a million a week, more than go to church, more than go to football. One-size-fits-all is the essence of the Ikea business model. To benefit from economies of scale, you can’t be tweaking products to suit local tastes. Many bemoan this homogeneity: “Products should have national characteristics, that’s what people love.” But is it? Peter Högsted, Ikea UK’s 39 year old Danish MD from his functional HQ in Wembley, thinks not. “There is this thesis that we are all so different,” he says, “but we are not.” And so the whole world has learnt to love Billy and many other Ikea products with even stranger names.


The billionaire founder of Ikea has admitted the Swedish furniture chain needs to increase prices and invest in more staff to improve its appalling image among consumers. Sir Terence Conran, who sold his Habitat chain to Ikea in 1992, revealed in an interview with The Daily Telegraph that Ingvar Kamprad, who founded Ikea 60 years ago, made the admission in correspondence between the two. Sir Terence said Ikea had an image problem because some people suffered "horrible experiences" when they shopped there. An Ikea spokesperson said; "We know there is much room for improvement when it comes to the shopping experience at Ikea. Here in the UK customer service remains one of our biggest priorities and we will continue to invest in this area, significantly moving forward."

However the opposite view is that Ikea’s poor customer service is deliberate and actually designed into the way they manage. One of the reasons products are so cheap is that they don't have that many staff on the shop floor. It is about the customers doing all the work, schlepping around the store and hauling a sofa on to the car roof.

Ikea Floor Plan
With thanks to Adam Roe

So what was our experience last Saturday on our quick trip to buy a coffee table, rug and a window blind? Firstly access and parking to MK Ikea is good. It is situated next to the MK Dons Football Stadium and a giant ASDA store but there were no undue delays in and out and both the Ikea indoor and outdoor car park were coping well. I was glad to see there were plenty of disabled spaces and unlike the increasingly arrogant Tesco, Ikea (and ASDA next door) actively police disabled spaces to ensure they are not being abused. The entrance is roomy even if it is clustered with people illegally smoking in the covered area in front (What is the law? £80 fine for them and £1,000 fine for Ikea) and there are travelators, escalators and lifts to take you to the top where your Ikea journey begins. As it was lunch hour we decided to use the “450 seater family restaurant” and I went up and organised the lunch, the Swedish Meatballs (Kottbuller) and the pasta dish. The pasta came with a choice of 4 sauces, pomodora, Bolognese, ratatouille and tuna. The problem was they were all tomato based and all looked the same, they were unlabeled and it was self service. I eventually attracted the attention of a “chef” and asked which was the Bolognese and he showed me. As I poured it onto the pasta I thought it was bit thin and sure enough it was the pomodora when it was tasted by the victim.

I then went up to the till to pay on my Ikea Homecard on which I constantly receive special offers for the restaurant only to be told “we don’t accept them anymore!” They don’t accept their own card, not a notice in sight and certainly no notice to me as a Card Holder and customer. Considering Ikea claim to have 450,000 Ikea Card holders this seems to be a sure far way of destroying customer loyalty. If you pay with any other credit card they charge you a 70p transaction fee so no doubt some Ikea Barrow Boy in their HQ Portacabin in Wembley thinks, for reasons which escape me, that alienating 450,000 of their best customers is a clever wheeze and you only find out when you get to the check out just to maximise the wind up. No notice in sight and Polish person on till can only tell you they stopped taking it a month ago, can’t give you any reason and can’t tell you if they still take the IKEA CARD in the Swedish shop at IKEA (They don’t). I wish I could tell you why there is this unannounced change of policy but during my transit through the Ikea factory I asked 3 other, what I hesitate to describe as, managerial types why this change and they couldn’t tell me. In fairness one of them told me he had only been there two days and knew nothing but he did look smart in his Ikea uniform, radio mike and headphones and has his name on the “Checkout Supervisor” badge!

Ikea Tottenham - traditional opening riots

So off we went on the Ikea chicane through the store (Top floor), took a shortcut through the self serve area (second floor) and ended up in the Self Serve warehouse (Ground Floor). I wish I could tell you more but almost every inquiry point was unstaffed and there were very few of the helpful leaflets on the ranges. We did want to enquire about Sofas but that area was unattended and the next point we came to on our solitary progress through Ikea had one Ikea person but a queue of 12 people in front of them. The person at the top of the queue was obviously highly delusional as he was under the impression that as he was spending £1,400 he was entitled to some customer service. I would like to tell you how he got on but after 10 minutes queuing I had lost interest in life and left. In an insight into Ikea’s efficiency most of my fellow victims in the queue also walked, that’s the clever way Ikea ensures its staff only deal with serious hardcore enquiries. But this is the rub, throughout you felt you were meat in the Ikea sausage machine and their attitude to you, their customer, was fundamentally disrespectful – In Ikea not only can money not buy you love, it can’t even buy you attention!

Finally we arrive at the self service warehouse where we have to pick up the coffee table who we must now refer to as “Benno.” IKEA Milton Keynes makes great play of being the first purpose built 'back-fill' racking store which it claims offers considerable practical benefits for both its staff (who are called co-workers because they are soooo empowered!) and customers. It says “The back fill system requires less warehouse storage space therefore offering more display area in store. The system also allows the replenishment of stock without ever using equipment such as fork-lift trucks on the store floor without disrupting the customer experience and making it a safer shopping environment. This means there is no need for staff to work unsocial night shift hours, leaving more time to improve work life balance.”

All very stirring and exciting I’m sure. The practice was this. Our new friend Benno was not to be found where the label in the showroom said. There are “Find It” touchscreens which should guide you but of the four that should have been there two were dead, one was missing and the strangely luminous one had (you’ve guessed!) a long queue. Indeed (with some difficulty) we found that as Benno came in four different finishes he lived in four different places in the Warehouse! Am I missing something here? Eventually we lurched to the checkout (where, amazingly, IKEA still accept the IKEA card) the checkout we were queuing at closed and we were directed to another one which was opening by one of a dynamic duo of checkout supervisors. He looked like he was working here as he had failed the audition for “The Hairy Bikers” and she was selected as she was tall and had a face permanently like thunder.

We survived the checkout and then emotion took over from experience and even though they don’t take the IKEA card (why would they in IKEA?) I decided to get some stuff in the Swedish Shop as they had a good offer on Kopparberg Pear Cider. By the time I got to check out there was a queue of 15 people, one harassed operator and not much movement. After 5 minutes I gave up, dumped my purchases and walked out. I told the tall checkout supervisor with the practiced thunder face that there was a long queue and only one operator but she was not interested, hey ho, if she was interested we probably wouldn’t be having this unrequited one way conversation. Should I take a ticket and queue to tell “Customer Services and Returns” amongst a crowd of disgruntled customers who looked like they were auditioning for the “Land of the Living Dead”? No life is too short, for the immortal words of Jim Royle came to mind!

Would you lose your self respect for Benno?

So homeward bound then but not before going next door to the giant ASDA Superstore which looks like it is on steroids. Now ASDA is also part of an evil empire being owned by Wal-Mart and like Ikea also trades on value. But there is a difference to how they make the customer feel, indeed there is no suggestion, as there was next door, that the customer must accept ritual humiliation to receive good value. As we went into this huge store we were greeted by an Asda person who volunteered information about the store. When I enquired in store about an item which wasn’t available the staff member engaged with me, apologised and explained why they had a stock out. The check out operator greeted us and smiled, was helpful and thanked us for our custom. And as we left the clean, bright and well laid out store we could appreciate that they lived up to their customer service proposition emblazoned on the entrance “Always happy to help” and indeed their policy and store ambience is not an accident for it is detailed on their website “ASDA’s reputation for friendliness is as much a part of the ASDA brand as our famously low prices.”

Contrast this with the sterile anatomic misery of the atmosphere from beginning to end in Ikea Milton Keynes, the Eco-friendly store, where Ikea were going to show us “UK customer service remains one of our biggest priorities and we will continue to invest in this area, significantly moving forward." It is a factory which dehumanises those who shop there and the sad and demotivated “co-workers” who endure its sterility. Will I return for a Sofa? No! Will I return full stop? No! Will I pay off my increasingly useless and devalued Ikea Card and cut it up when I get the statement for Benno and friends? Yes! Is Benno worth losing your self-respect for? No! Will I write and tell them? No, not on your Nelly, why should I care about a company which doesn’t respect its customers?

Ikea Milton Keynes Store Manager Mats Kotka and Ikea UK Managing Director Peter Högsted you should be both deeply ashamed of the appalling customer service proposition at this “flagship” store. And as for the Barrow Boy who thought that not taking the IKEA CARD in IKEA was a good idea sack him now. A person with such a lack of appreciation of your customers and such arrogance can only go on to do greater damage. Indeed it may be too late, he may already be Ikea UK’s new Boy Wonder Managing Director!