KBzine: the original kitchen and bathroom industry e-news - since 2002
18th January 2019
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We have mail: Stephen Munton of the Domestic Cleaning Alliance UK Trade Association writes in response to last week's leader...
Jan - brilliant article as always. Between March 1997 and February 2002 I was working in a Co-Op electrical showroom and up until that point manufacturers of white goods had always set the lowest possible retail prices - God help any retailer who went below it! In the Autumn of 1998 the government of the time made this practice of "price fixing" (as they called it) unlawful as they felt it went against the basic principles of competition - which of course it did. But what it also did was make sure there was at least some profit in an industry sector where very little profit was being made.
As well as this, we had the Internet and online shopping coming in the other direction. Our prediction as a store was that shops would close and the quality of the goods would plummet as fast as the prices were falling. And we weren't wrong.
What we saw happen almost overnight was frightening - prices in other stores began to drop and with it so did the quality of the appliances we were selling. Efficiency of appliances was the name of the game - essentially a good thing of course - but appliances were also stripped of their build quality and gradually customers began to expect a much more simplified but better performing appliance. Gone were the days were those customers who backed Britain insisted only on a Hotpoint, and those who got excited by the reputation for German engineering went for a Bosch or AEG, because in what seemed like no time at all the production of white goods was rapidly moving to Turkey and the Far East - presumably to be able to meet the price-point which consumers were rapidly coming to expect.
As well as the pressure all this put on independent retailers, a lesser-known chain called Tempo soon went into administration, followed soon by the gradual closure of all the Powerhouse (formerly electricity board showrooms) stores. In 2009 Apollo 2000 went the same way, albeit with an eventual buy-out of some stores by the Hughes chain. In 2012 Comet succumbed to the pressure. And of course, the store I worked in has long since closed down and been bulldozed to make way for redevelopment.
29th September 2017