Comment by J.Skidmore: Abandon discounting at your peril

Tuesday, 08 Oct, 2004 0

Desperate times require desperate measures. Lunn Poly chief Derek Jones announced that, for the first time in five years, the multiple was not going to match competitors’ deals.

Desperate? Surely that sounds like a positive move. Everyone in the industry needs to get prices off the floor. It’s not the idea that’s desperate, but the thinking behind it.

Lunn Poly, like many other retailers, is losing clients hand over fist as holidaymakers shop around and book online. Jones said: “Our shop staff are on the back foot. They think the web, not the high street, is the future.”

They’re right. Jones is putting a brave face on it, saying he doesn’t believe that.Meanwhile, his boss Peter Rothwell is planning to shut travel agencies and talking about how booking patterns have changed so much they can no longer be avoided.

If Jones is to breathe new life into his ailing shops, he needs more than a knee jerk refusal to match prices. He needs to give the outlets a new image and a new lease of life.

Multiple retailers are often parodied as order takers simply offering the best deals. Of course, that is patronising nonsense. Some of the best and most customer-focussed agents work at multiples. The problem for them is that the perception is often different to reality.

In many ways, the multiple has only got itself to blame. For years it has positioned itself as offering the best prices (who could forget those ‘get away’ ads?). People go to Lunn Poly for a deal. If you suddenly tell them they can’t have one, they’ll go elsewhere – unless you can convince them that Lunn Poly stands for something else and that will take a long time.

A Porsche is seen as an exciting sports car. You can’t convince people in a weekend that it’s a sober saloon. Jones hopes the new move will give staff back some sparkle and make the high street exciting again.

I suspect it’ll make the high street exciting again for other agents as they abandon Lunn Poly in favour of a better deal. The tactic failed last time and I think it’ll fail again.

Jones is a likeable and intelligent manager and I hope he gloats at me for being wrong when he sees his next set of sales figures. But I suspect it will take something much more substantial than an abandonment of discounting to make customers flock through the door again.

Ginny McGrath

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