Smoke and Mirrors…it’s the Friday Blog!

Published on: 2nd November 2018

Less than cheery news continues to flow from the retail channel: this week it was the turn of Mothercare, which has announced that it will be shedding 150 jobs at its head office in Watford. In fact, 200 roles are disappearing as part of a restructure, but 50 new roles are being created, allowing some of the affected members of staff to stay within the business. Obviously it is always sad news when people lose their jobs, but I do sometimes find myself surprised by the sheer number of head office personnel that certain retailers employ. Is that just me, or do other people feel the same way? Just curious…

Meanwhile, the BBC has reported that as many as 200 shopping centres could be in danger of falling into administration, unless their owners – many of which are US private equity companies – are able to secure fresh funding. The FT has also reported that about £2.5bn worth of shopping centres and retail parks are currently up for sale, many ‘unofficially’. One analyst put forward the theory that there are too many shopping centres with the same stores and products, which on one level is hard to disagree with; however, the damage which a spate of closures would inflict on small towns in particular would be potentially devastating.

Of course, there is a prevailing belief that an increasing volume of retail business will continue to migrate online, but when I read reports that grocers – for example – would need to charge £15 for a delivery to break even (and they are currently nowhere near that figure), I do wonder whether this trend can continue unabated. As delivery costs will only be exacerbated if demand continues to grow, surely retailers will reach a point where they have to take some tough decisions on their online strategy, as Tesco did with its Direct operation earlier this year?

Speaking of retailers, the BTHA has announced that the application process for the Retailer of the Year Awards is now open. Self-nominations are encouraged, and you can find out all about the process and categories in our story here. As a member of the judging panel, it is always a lively debate as to who the winners will be, but as Camelot would say, “You’ve got to be in it to win it.” So, feel free to make our choice even harder by throwing your hat into the ring.

I wonder if any of the online ‘tech giants’ will be entering the Awards this year (one of my own personal favourite categories, as I am sure you can imagine)? The chancellor offered brief hope this week that the government recognises the inherent unfairness of the current tax system as it applies to retailers, with the news that he is proposing a digital tax. However, let’s not get carried away just yet; even a cursory look into the proposal reveals there is a massive element of ‘smoke and mirrors’ about the announcement. First, it is a measure that ‘could’ be introduced, not ‘will definitely’ be introduced. And the earliest it would take effect would be April 2020 – a lot more damage can be inflicted on bricks and mortar retailers in the next 16 months. Most importantly, the OBR (Office of Budget Responsibilities) has estimated that, based on the details revealed so far, the move would cost the tech giants around £30m each – a figure that will be dwarfed by the huge saving they will each make from the 2% reduction in corporation tax which is due to take effect by then. So, while it might sound like Spreadsheet Phil is getting to grips with the current inequality, the reality is rather different…

I’d like to congratulate Ravensburger’s Benn Bramwell on his promotion to senior international product manager for children’s games. A great new role for Benn, and as Ravensburger is currently recruiting for his successor, it will be a great opportunity for them too. Details of the role and how to apply can be found in our recruitment section here.
I’d also like to wish Ronnie Berg all the best for his retirement, as he stepped down from his current role at Mookie Toys this week, after an incredible 54 years in the toy trade. He has definitely earned a rest!

The November issue of Toy World landed on desks at the start of the week – you can catch up with the digital version of the issue here. Unlike some magazines, we have always been scrupulous about not putting the digital issue online until after the print issue has arrived. While I appreciate that some people may query this strategy, we are convinced that it’s the right approach for both readers and advertisers. If you put the issue online 10 days before your issue lands, many people will have read the most interesting articles already, and may not bother to open the print issue when they get it. And it is in the print issue where the ads are infinitely more effective and impactful (especially in the larger, luxury format of Toy World – I appreciate this doesn’t apply as much to smaller format, ‘honey I shrunk the magazine’ titles). Of course, I’m not a total luddite: the digital issue is a hugely valuable resource, allowing content to be shared around the globe quickly and easily. However, the magazine is conceived first and foremost to be consumed in print, so that is always the way we want people to experience it first. So, no ‘cheating’ for us – not that we need to pretend that our issue is out when it has only just been sent to the printer anyway. That’s the kind of smoke and mirrors that Spreadsheet Phil would be proud of…