Category Archives: How not to do retail ….

Mothercare looks to almost halve number of UK stores

Mothercare used to have almost 400 stores, but will now have about 80 to 100. Photograph: Rex
Mothercare is to almost halve the size of its UK chain and stop selling clothes for older children as it tries to carve out a profitable future on the high street.
Mark Newton-Jones, Mothercare chief executive, said it would look to close up to 70 of its 152 UK stores as it adapts to a digital age where 41% of sales are rung up online.
“We are taking a fresh look at our estate and asking how many do we really need?” said Newton-Jones. “We’ve got six stores in Bristol – we don’t need six stores in Bristol. In Sheffield we’ve got five within a 20-minute drive time when we only need one or two. To cover all the major conurbations you only need 80 to 100 stores.”
At the start of this decade Mothercare was a ubiquitous presence on British high streets with closer to 400 stores but successive management teams have whittled away at that figure as the retailer struggled to compete with incursions by the supermarkets and online giant Amazon into what was once a specialist market.
Newton-Jones was hired in 2014 to lead a turnaround of Mothercare, but confidence was knocked by poor trading last summer. Since taking the helm he has closed 100 loss-making UK outlets and modernised 70% of the remaining stores.
Rather than competing in the cutthroat general kidswear market his strategy has focused on the lucrative niche of expectant parents and the paraphernalia required for newborns and toddler. It will now also stop selling clothes or toys for children older than four – previously its ranges ran up to age 10.
Pruning the UK chain, which has racked up losses of close to £100m over the last six years, has put it on the road to recovery with analysts predicting it will move into profit next year.
In recent years Mothercare has been forced to fall back on the success of its large overseas business but that is now facing headwinds of its own as shoppers in the Middle East – its biggest regional market outside the UK – spend less because of the slump in the oil price.
Pre-tax profits at Mothercare were flat at £19.7m on sales of £667.4m in the year to 25 March. Within that UK losses narrowed to £4.4m from £6.4m a year ago while underlying profits at its international business declined 13% to £35.2m. UK like-for-like sales were up 1.1%. The shares closed down more than 3% at 124p.
GlobalData analyst Sofie Willmott described the figures as “lacklustre” with the inclusion of online sales masking some poor store performances in the UK: “Given that Mothercare’s turnaround plan is in part focussed on investment in store refits we expected to be seeing more significant gains in UK store sales by now.”

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Serious Fraud Office steps up BHS investigation

The Serious Fraud Office has stepped up its inquiries into the collapse of BHS and the conduct of the department store chain’s former owner Dominic Chappell.

The Guardian understands that the SFO has contacted individuals involved in running BHS before it fell into administration in April, and the administrators themselves, and asked for a series of documents. The SFO is thought to be particularly interested in the dealings of Chappell and his consortium, Retail Acquisitions, during the 13 months it owned the retailer.
The move raises the possibility of the agency launching a formal investigation into the collapse of BHS and Chappell. The SFO always explores whether there is reasonable grounds to suspect that fraud has taken place before publicly announcing it is launching a full investigation.
The demise of BHS led to 11,000 job losses and left a £571m pension deficit. Its failure is already under investigation by the Insolvency Service and the Pensions Regulator, but the SFO’s interest raises the stake considerably because it has the power to bring criminal charges.
Chappell controversially bought BHS for £1 from Sir Philip Green in March 2013. The company collapsed just 13 months later, but Retail Acquisitions received at least £17m from the retailer.
A parliamentary investigation into events at BHS accused Chappell of having “had his fingers in the till” and helping to oversee the “systematic plunder” of the business. The MPs labelled Chappell and the other directors of Retail Acquisitions as “incompetent and self-serving”.
Chappell owes more than £500,000 to the taxman on the profits he made from owning BHS. Chappell has put the business that owes the tax, Swiss Rock Limited, into liquidation, meaning he could walk away without paying the bill.
Swiss Rock is Chappell’s personal business and was paid at least £1.6m by BHS. It owes £365,000 in VAT and £196,306 in corporation tax, according to documents drawn up by Chappell and David Rubin & Partners, the liquidator.
The SFO confirmed that it was reviewing documents relating to BHS but was yet to open a formal investigation.
A SFO spokesperson said: “The SFO confirms it is reviewing material in its possession. If the director considers there are reasonable grounds to suspect serious or complex fraud which meets his criteria, he will open a criminal investigation.”
Chappell declined to comment. He has previously said he “earned” the money paid out from BHS, that his “conscience is very clear” and his team “did the right thing, right the way through”.
Green remains in talks with the pensions regulator about a deal to bail out the BHS pension scheme. The billionaire tycoon, his family and other BHS investors collected more than £580m from the company during the 15 years he ran it.

Green told MPs in June that he would “sort” the pension deficit. However, he is yet to secure an agreement, despite pressure from MPs such as Frank Field, who has said Green should be stripped of his knighthood if he does not pump money into the pension scheme.
Field chaired the parliamentary investigation into BHS alongside Iain Wright. The report concluded that the collapse of the company represented the “unacceptable face of capitalism”.
The last of BHS’s 164 shops closed in August. However, the Middle Eastern group that bought the BHS brand and international business out of administration will relaunch it on Friday as a website. BHS.com will sell a range of lighting and furniture, with plans to eventually sell kitchen and dining products and clothing.
David Anderson, the managing director of BHS International, said the website would sell about 75% of the most popular online items before the original company fell into administration.
He said: “A huge amount of work has gone into rebuilding and launching BHS back into the UK as an online retailer. With a loyal British customer base of well over one million people and the fact that we have secured contracts with so many leading suppliers who are providing products that were among the most popular with our shoppers, we are in the best possible position for launch.”

M&S to be lobbied by MPs and fair pay activists at flagship store

Marks & Spencer is to be lobbied by MPs and fair pay campaigners after a petition against planned pay cuts gathered almost 90,000 signatures.

Siobhain McDonagh MP, who raised the issue in parliament in June, will lead a delegation to present the Change.org petition at the retailer’s Marble Arch store in London on Thursday. Friends and family of M&S employees who are facing pay cuts will be supported by her fellow Labour MPs John Spellar, Carolyn Harris, Karen Buck and Nia Griffith as well as Change.org campaigners and student activists.
Long-serving shop staff say they face pay cuts that could potentially cost thousands of pounds after M&S removed premiums for working Sundays and antisocial hours, trimmed back bank holiday payments and changed pensions payments.
The retailer said it was making the changes to help pay for a 15% increase in basic pay for its 69,000 workers from next April to £8.50 an hour.
McDonagh said: “The company is clearly aware of the reputational damage that it has faced as a result of the changes it plans. Loyal, longstanding staff have lost their morale after their years of loyal service, while M&S customers are seriously disappointed by a company that they had always seen as well-respected bastions of moral values on the high street.”
In parliament McDonagh called on the government to close loopholes which made it possible for companies to make changes to staff benefits in order to offset the impact of the introduction of the legally binding “national living wage” of £7.20 an hour in April.
A number of companies, including B&Q, Tesco and Morrisons have raised basic pay only to cut perks and premium payments for weekend, holiday or late working.
The Labour MP for Mitcham and Morden said some M&S staff would lose up to £2,000 a year as a result of the changes. “This is not just any pay cut. This is a big fat M&S pay cut,” she said.
M&S has said the planned rise in basic pay would give its staff one of the highest hourly rates in UK retail alongside one of the best benefits packages. A one-off compensation payment will be made to staff to ensure they are not financially affected for the first two years of the change.
The retailer has launched a consultation with in-house staff representatives before the changes. But unions have called on the company to open talks as staff have been told new contract terms will be imposed if they do not voluntarily sign up.

Merry Christmas and Happy New Year

Wishing all our readers and followers a Merry Christmas and Happy New Year  

  
 

Vodafone says hackers broke into nearly 2,000 customer accounts this week

LONDON (Reuters) – Vodafone UK said on Saturday hackers had accessed the accounts of 1,827 of its customers this week, the second cyber attack on a British telecoms company this month.
The attackers had potentially gained access to the victims’ bank sort codes and the last four numbers of their bank accounts, along with their names and mobile telephone numbers, a Vodafone spokesman said.
“This incident was driven by criminals using email addresses and passwords acquired from an unknown source external to Vodafone,” he added in a statement.
Only a handful of those affected in the Thursday morning attack had seen any attempts to use their data for fraudulent activity on their Vodafone accounts.
“No credit or debit card numbers or details were obtained. However, this information does leave these 1,827 customers open to fraud and might also leave them open to phishing attempts,” the spokesman said.
The company was contacting all those involved and that other customers need not be concerned, he said.
  

This £70 Aldi supermarket fine is sending us off our trolley

I was furious when separate visits in the same car on the same day to an Aldi store on Nantwich Road near Crewe, in Cheshire, led to a parking charge notice from ParkingEye for £70. The maximum stay there is one-and-a-half hours.
My wife arrived first at 10.39am and left at around 11.30am (after spending £19.14 on groceries). I drove the same vehicle into the car park at around 4pm and left 10 minutes later. No purchase was made at that point, as I only called in to inquire about a fridge. I returned at approximately 4.30pm in a campervan (a more suitable vehicle) and bought the fridge assisted by a member of staff. There is obviously an assumption that the vehicle leaving at 4.10pm had been there since 10.39am.

The charge has cost two hours of my time rummaging through a recycling bin to retrieve the relevant receipts to prove the times of the visits.

Aldi’s car parks throughout the UK are managed by ParkingEye, and although the retailer encourages its shoppers who have been slapped with what they consider to be an unfair charge to complain directly (customer-services@aldi.co.uk), talkboards have been full of complaints about the mailbox being full up.
The time limit for free parking has also gradually been reduced and an hour-and-a-half is not long, particularly for older and infirm shoppers.
In your case, Aldi and ParkingEye have acknowledged that there was clearly a mix-up. An Aldi spokesperson said: “Our car parking system is set up to ensure that we can offer customers maximum car parking space. This includes preventing non-customers from misusing spaces. Aldi does not make any revenue from parking notices.
“We acknowledge that BD was incorrectly charged and ParkingEye has consequently cancelled his charge. We apologise for any inconvenience this may have caused him.”
We welcome letters but cannot answer individually. Email us at consumer.champions@theguardian.com or write to Consumer Champions, Money, The Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number 

 

John Lewis could lay off up to 250 workers as pension costs hit profits

John Lewis says it could lay off up to 250 warehouse workers as part of a lacklustre trading update that saw its half-year profits slump.

The group, which owns the department store chain as well as upmarket grocer Waitrose, also warned that it was likely to miss full-year profit targets due to increased pension costs.
In an unusual step, chairman Sir Charlie Mayfield issued earnings guidance, saying pension charges will be about £60million higher than the comparable figure last year.
Closures: John Lewis said that up to 250 staff could lose their jobs as it shuts down three distribution centres

Closures: John Lewis said that up to 250 staff could lose their jobs as it shuts down three distribution centres
This was due to the economic climate dragging down the value of investments made by the pension fund. ‘In the current market, even a strong trading performance is unlikely to offset this fully,’ he said.
The equivalent of pre-tax profit would be between £270million and £320million, versus £342.7million last year.
The supermarket price war and difficult trading conditions for the department store also had an effect.
Half-year profits fell 26 per cent to £96million while sales grew just 2.1 per cent to £5.1billion.
The firm slipped out news that up to 250 staff could lose their jobs as it closes three distribution centres. It has been forced to put aside £4million to cover redundancies.
Underlying sales at Waitrose fell 1.3 per cent – the first time they have fallen in more than five years.
Mayfield said: ‘This has been a solid first half for the partnership in a difficult market.’ 

 

Shareholder group issues ‘red alert’ warning on Sports Direct bonuses

Store managers and employees are in line for bonuses
One of the City’s most influential shareholder groups has issued a warning about planned changes to a multimillion-pound bonus scheme at Sports Direct, the retail chain run by Mike Ashley, the owner of Newcastle United football club. 
The Investment Management Association (IMA) issued its “red top” alert – its most serious warning signal about corporate governance breaches – ahead of the retailer’s annual shareholder meeting next week because of concerns over pay.
It is understood to be among a number of shareholder groups to have expressed concern that investors are being asked to approve lowering profit targets for the long-term share bonus scheme.
The four-year bonus scheme was approved by shareholders last year but Sports Direct wants to lower the profit performance target for the current year to £420m from £480m. It says this change is necessary because planned acquisitions did not materialise and profit targets for the following three years of the scheme remain in place. But some shareholder groups, including the IMA and advisory body the Pensions & Investment Research Consultants, have expressed concerns about the lower targets.
Under the scheme, Dave Forsey, the Sports Direct chief executive, is in line to to be awarded up to 1m shares – worth £8m at today’s share price – while the finance director, Matt Pearson, is in line for up to 30,000 shares worth £241,000.
Hundreds of store managers and employees at the company’s head office also qualify for awards. But thousands more staff on zero-hours contracts are not included in the scheme, an issue which is the subject of legal action.
Sports Direct is also facing controversy over the re-election of its chairman, Keith Hellawell, at its annual meeting on 9 September. New rules giving increased rights to minority shareholders mean that Ashley, who owns a 55% stake in Sports Direct, can be challenged for the first time on the election of non-executive directors. 

 

WHSmith accused of hiking prices at hospitals
Shop forcing people to pay almost double for some items in hospital stores

A4 notepad was £12.99 in hospital outlet compared to £8.99 on High Street

MP Paula Sherriff called the practice ‘exploitative’ and ‘completely unfair’

Comes after company demanded boarding cards at airports without passing on VAT savings 

By Steph Cockroft for MailOnline
Published: 07:40, 25 August 2015 | Updated: 09:24, 25 August 2015
WHSmith has been accused of exploiting patients by charging up to 45 per cent more in hospital stores than on the High Street.
The retailer is making NHS staff, patients and visitors pay nearly double for items such as water and notepads than they would in its traditional stores.
It comes just weeks after the company came under fire for demanding boarding cards at airports without passing on VAT savings to passengers.
WHSmith has been accused of exploiting patients by charging up to 45 per cent more in hospital stores than on the High Street

WHSmith has been accused of exploiting patients by charging up to 45 per cent more in hospital stores than on the High Street
The Independent found that a 750ml bottle of Evian water was £1.39 at its store in Hammersmith, west London, while the same item was sold for £1.69 at St Thomas’ Hospital, Westminster. 
Meanwhile, an A4 notepad which sold for £8.99 on the High Street was sold for £12.99 in the hospital store – an increase of 44 per cent. 
The company has defended its practice, insisting prices are higher because hospitals demand a percentage of sales, rather than ground rent.
But Labour MP Paula Sherriff, who sits on the health select committee and used to work for the NHS, has written to the company demanding an explanation.
She said: ‘It’s exploitative and completely unfair. People are at their lowest ebb in hospital and it is simply taking advantage.’ 
According to the BBC, WHSmith was charging £1.89 for a 750ml bottle of water at Pinderfields Hospital, Wakefield, while it was selling for £1 in one of the company’s city centre shop.
Prices of some products were significantly higher at St Thomas’ Hospital, Westminster (pictured) than on the High Street 

Prices of some products were significantly higher at St Thomas’ Hospital, Westminster (pictured) than on the High Street 
In South Wales, customers were charged £2.99 for a pack of Minstrels at Morriston Hospital in Swansea, while the same item was being sold for around £2 in other branches.
The chain was also charging 99p for a can of coke, compared to its 65p price on the high street. 
A 750ml bottle of Evian water was £1.39 at the WHSmith store in Hammersmith while the same item was sold for £1.69 at St Thomas’ Hospital

A 750ml bottle of Evian water was £1.39 at the WHSmith store in Hammersmith while the same item was sold for £1.69 at St Thomas’ Hospital

Katherine Murphy, chief executive of the Patients Association, said the prices were ‘morally wrong’. 
‘I am shocked because they are targetting the wrong people: poorly paid staff and patients,’ she said. 
A WHSmith spokesman said the higher ‘occupation costs’ and longer opening hours led to the increased rates.

  
They also said that fixed prices on magazines and newspapers meant prices had to be raised elsewhere. 
They said: ‘Occupation costs in our hospital locations can be up to 40 per cent of sales, materially higher than the fixed margins we make on newspaper and magazines. 
‘In Pontefract Hospital, our occupancy costs are almost 60 per cent of sales resulting in a material loss in that store.
‘Despite this, we are committed to continuing to serve our customers in locations such as this.’ 

Retail outlets have become increasingly common in many hospitals in recent years. 
Some NHS trusts receive a flat fee for leasing out space within their buildings, while others get a percentage of the shop’s revenue. 
WHSmith has spent the past decade focusing on these stores as high street shops fall into decline.
Last year, it raked in £72m from its travel operations which are now bigger than its high street business. 

Earlier this week, analysis claimed that the company pockets up to £10million a year by failing to pass VAT discounts from airport shops to consumers in its airport stores. 
Details of the alleged windfall come amid a passenger revolt against stores using boarding passes to claim 20 per cent VAT exemptions from those flying from the UK to outside the EU. 

Airport VAT row: customers threaten not to show boarding passes

Shops at airports are facing a consumer revolt over claims that retailers are asking customers to show boarding cards to avoid paying VAT without passing discounts on to customers.

Customers of prominent stores including WH Smith, Boots and Dixons have pledged on social media not to show their boarding passes at airports and urged their followers to do the same.
They have also been demanding answers from the stores about whether they are passing on to customers the VAT savings they make at airports.

  
There is growing concern that information on boarding cards is being used to claim VAT relief on sales to travellers leaving the EU.
Retailers do not have to pay 20% VAT on goods sold to customers travelling outside the EU.
The revolt comes after Treasury minister David Gauke said some retailers were not passing on savings to customers. Speaking to the Independent, he said: “The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops.
“While many retailers do pass this saving on to customers, it is disappointing that some are choosing not to. We urge all airside retailers to use this relief for the benefit of their customers.”
The shadow culture secretary, Chris Bryant, was among those on Twitter saying he would refuse to show his boarding pass at airport stores.
— Chris Bryant MP (@RhonddaBryant) August 12, 2015

I’m certainly not showing my boarding pass to airport retailers. What message must this send to tourists? Rip-off Britain?
At Heathrow on Wednesday, passenger Owen Evans, 32, blamed the government for not preventing retailers from taking advantage of the loophole.
“It should be made illegal,” he said. “If the shops are playing the system, it’s the government’s fault for allowing them to do that. Anyone would do that if it’s legal. Obviously you want to do the best for your business. But obviously it’s not providing the best service for your customers.”
Jonathan Stanton, head of digital retail at Nintendo and a regular traveller, said he wanted the VAT he had paid in duty-free shops to be refunded. He said he felt cheated. “It’s unfair if they pocket the money,” he said. “It’s basically the VAT that we pay and they are pocketing it.

“It doesn’t make any difference to me today, but I have just come back from LA and I’m going to New York in a few weeks. I would probably like them to give me the VAT back at the point of purchase.”

Of the boarding card checks, he added: “I thought it was just a security requirement. It was never explained to me at the time.”
A spokeswoman for Boots said customers were asked to show boarding cards at airports. She said: “It is not compulsory to ask for [boarding cards] so if someone doesn’t want to show it we won’t force it.”
In a statement the company said information on boarding passes was used to ensure accurate accounting. It said: “Our airport store teams are asked to request and scan boarding cards to ensure the accuracy of our accounting records, which includes the accurate reporting of VAT. We request our customers’ boarding cards so that our VAT accounting is in line with the HMRC’s requirements.
It added: “The HMRC and airports accept that this is general practice for all retailers located within airport terminals. Our pricing in airport stores is consistent with our London prices and VAT is not taken into account when setting prices of products. Showing a boarding card is not a compulsory requirement and any of our customers that do not wish to share this information can shop with us without the boarding card being scanned.”
A former WH Smith employee at Manchester airport, who did not wish to be named, told the Guardian that store staff were told to check boarding passes as part of an unexplained “survey”.
She explained: “When processing a purchase airside, a window on the till pops up that had two options: EU or non-EU. There’s no apparent way to bypass this screen and you couldn’t proceed to payment without pressing an option, which means we were always pressed to ask for the boarding card. I was told that if customer didn’t have their boarding pass on them or refused to show it, to select the non-EU option as a default. It was never explained to me what the actual reason behind this procedure was, just that it was some sort of survey.”
The shopworkers’ union Usdaw urged customers at airport shops not to take out their frustration on store staff.
A spokesman said: “Checkout operators are only asking for boarding passes because they are required to by their employer. So whilst customers may choose to not comply with this request as a protest, I hope they will do so politely and in a way that respects shopworkers. Over two-thirds of retail staff are verbally abused by customers and we wouldn’t want this issue to contribute further to that worrying statistic.”
WH Smith confirmed that staff in its airport stores requested customers to show boarding passes, but conceded: “There is no obligation on the part of the customer” to do so.
It said dual pricing would be impossible to implement, even though many duty-free shops already display two prices – one for those flying within the EU and a lower price for those flying outside the EU.
WH Smith said: “Whilst much of what we sell, eg newspapers, magazines and books, is fixed price and does not attract VAT, any VAT relief associated with the identification of customers travelling outside of the EU is reported in accordance with UK legislation, and any relief obtained is reflected in our single price and extensive promotional offers provided to all of our customers. Operational and financial system constraints make any form of ‘dual pricing’ for our extensive product file a practical impossibility.
“The destination data, regardless of whether it is to the UK, EU or beyond, allows WH Smith to analyse the purchasing trends by time of day and by product category for customers travelling to different locations, and assists us in product ranging and placement decisions at our airport stores. This information is limited to the IATA three-digit destination airport codes, which form the basis of IATA’s worldwide airport database and does not give access to any personal data of WH Smith customers.”
Customers have expressed frustration at WH Smith’s refusal to offer dual prices.
— Stuart Menges (@bluestulondon) August 12, 2015

@WHSmith so it’s impossible to charge two different prices at an airport? With an electronic till? I’d suggest trying slightly harder
— Dan Beasley (@danbeasley1) August 12, 2015

@WHSmith Impossible for you to have dual pricing in airports? You do already if you pay VAT on EU flights & not elsewhere. One giant scam.
Others were annoyed at being directed to WH Smith’s self-service checkouts where it is impossible to buy items, including newspapers which are VAT-free, without scanning a boarding pass.
— Rich (@claireandrich) August 12, 2015

@skynews whsmith self service require a boarding pass to scan-otherwise you can’t buy it-more expensively than the high Street.
A statement from Dixons Travel confirmed that its customers were also asked to show boarding passes, but added that “this is only on request and has not caused any reported issues”.
It said its airport stores followed standard practice by offering a single price for products for passengers to both UK and EU destinations.
Many Twitter users have vowed to refuse to show boarding passes at airport stores. They included the classical music broadcaster Petroc Trelawny.
— Petroc Trelawny (@PetrocTrelawny) August 12, 2015

oh to fly somewhere again so I can enjoy the small pleasure of refusing to show my boarding pass when I buy essentials at Boots and Smiths
Here’s a sample of others:
— Kevin Moore (@unfkblvbl) August 12, 2015

@whsmith @boots Last time I ever show you my boarding pass you slimebags. Unbelievable!!! http://t.co/EjKDgP2aRq
— Joe McCabe (@josephmccabe) August 12, 2015

Quite looking forward to refusing to show my boarding pass at WH Smiths or boots when I go to the airport next week
— George Preston (@YourLocalGP) August 12, 2015

@WHSmith going through Heathrow this morning. Following VAT revelations in news this morning,in your stores do I HAVE to give boarding pass?
— david oliver (@mancunianmedic) August 9, 2015

@Laconic_doc next time they ask in Heathrow WH Smith or Boots I will refuse and tell them they have no legal right to ask for boarding pass
It is not a legal requirement for passengers to show their boarding cards when buying supposedly duty-free goods. But customers reported problems when they refused to show their boarding passes.
— Saul Fowler (@LewesianDragon) August 12, 2015

@BBCBreakfast I declined to show boarding pass at Dixons, LGW last month. Was told ‘it is the law’ – would not process sale without it.
In a email to the Guardian, Fowler added: “I flew out of Gatwick last month and needed a pair of headphones. When asked by Dixons staff for my BP I said I would rather not show it, which I think flummoxed them. I was told that they couldn’t process the transaction without it. I said that I wasn’t required to show my boarding pass and that’s when I was told ‘it’s the law’.
“After an ‘it’s not’, ‘it is’ exchange, I left the headphones on the desk and walked away wondering whether the staff actually believed that it was the law or whether that was the line they were asked to tow [sic] by management.”

— Dr Aisha K Gill (@DrAishaKGill) August 11, 2015

@Peston I bought a bottle of water at Gatwick airport and questioned why I had to show my boarding pass in Boots. They were not impressed.

Wishing all our readers a blessed Ramadan Kareem

  

Sky customer sends company bill for all time spent trying to cancel his contract – and receives £1,500 payout

Sky customer sends company bill for all time spent trying to cancel his contract – and receives £1,500 payout
SWNS Pete Swift 

 Tables turned: Pete Swift, with the correspondence he received

A Sky customer has landed a £1,500 pay-out after sending them a bill for the time he spent trying to close his account.
Pete Swift, 30, faced several frustrated months with debt collectors after the company failed to cancel his TV and broadband when he moved house.
After nearly 18 months of being threatened, Pete decided to take legal action, first contacting the Citizens Advice Bureau and then the Ombudsman.
Once Sky finally admitted their failings, he counted up the hours he had spent speaking to those involved via phone and email, as well as meetings with lawyers.
Producing an itemised list of his hours at a rate of £25 per hour, Pete billed Sky for £1,395, plus court costs of around £72.
The company eventually offered Pete payment of £1,500 — two years and a half after the dispute began.
Pete, who works as a research consultant, said: “It was exceptionally frustrating being contacted again and again by debt collectors.
“I grew increasingly infuriated with Sky’s inability to correct their error or act upon the information I’d provided.
“The customer service I experienced was abysmal, there was just a complete disregard for the situation they had put me in and a continued failure to take ownership and fix the problem.”
Pete moved house to Leith, Edinburgh in October 2012 and as a result tried to cancel his broadband and TV package with Sky.
But a few months later he was contacted by a debt collection service.
SWNS Pete Swift

In control: Pete Swift turned the tables on Sky

He showed them proof he had paid his final bill to Sky and told them to pass the information over.
Two months later, Pete was contacted by another debt collector and he went through the same process again.
He also made a complaint to Sky.
But in April 2014 he was contacted by a third debt collection agency who told him he had outstanding debts with Sky.
Since the saga began, Pete had been failing credit checks and he was worried his credit had been damaged.
For two months he was passed from one person to another at Sky customer services with no solution in sight, until he decided to contact the Ombudsman.
Pete said: “I had started failing credit checks, despite previously having a good credit history and started stressing out about my ability to obtain credit.
“I felt very powerless as a consumer to fix the situation – and I couldn’t even ascertain what damage had been done to my credit file.”
After mediation through the Ombudsman, Pete rejected the offer given to him by Sky.
He said: “The main reason was that I was concerned about damage to my credit file.
“They said they would ask Sky to correct any negative impact they had made.
“But when I asked about rectifying any damage caused by the third party debt collectors Sky had employed, they said they could not enforce corrections from them as they were not under their jurisdiction.
“The money was also an issue though, they would only request for Sky to pay me £60 as a gesture of goodwill.
“I told them that this sum was not proportionate to the hassle and frustrations I had experienced as a result of their error and was therefore not appropriate compensation.”
SWNS Pete Swift

Battle: Sky have apologised to Pete Swift and given him the goodwill payment

Pete then took Sky to court and last month they finally came to an agreement, two days before his court date.
He said: “I did send the full itemised bill with timings to Sky along with a formal invoice – charged at £25 per hour.
“When Sky finally agreed to cover the full settlement I had mixed emotions.
“On one hand I was really pleased to have the £1,500 and some form of resolution, but I was still very resentful of the lengths I’d had to go to and the way Sky had dealt with the situation.
“Sky had contacted me the week before to try and talk me down to a lower sum of £500.
“The whole time I was dealing with them it just felt like I was being fobbed off with the bare minimum they could get away with.
“There was never really an acknowledgement that something was wrong procedurally that needed to be addressed, it just felt like a case of lets pay off the complaining customer so he shuts up.
“As a single customer you often feel like there’s nothing you can do, especially when you are engaged in a dispute with a large transnational company.
“That’s why I would encourage people that had suffered a similar problem to follow it through until they receive a proportionate resolution.
“Everyone I have spoken with was really supportive and seemed delighted with the outcome, I guess a lot of people have been subject to really poor service at some point or other.
“So I was glad I pursued the matter.”
Pete’s bill included 31 hours and 25 minutes speaking to Sky either on phone or by email, with a further six hours dealing with Mackenzie Hall debt collectors.
Sky said the issue was due to a technical fault with their systems, meaning his cancellation was not recorded on his file.
A spokeswoman said: “Our staff work hard to deliver great service. However, in Mr Swift’s case we got it wrong, and didn’t resolve things quickly enough.
“We are really sorry and have apologised, offering a gesture of goodwill in recognition of the frustration he has experienced.”
Pete’s bill and the time he spent dealing with it:
Wescot (debt collection agency) — 3 hours
Mackenzie Hall (debt collection agency) — 6 hours
Sky – 31 hours 25 mins
Equifax (credit reporting agency) — 5 hours 20 mins
Experian (credit reporting agency) — 1 hour 30 mins
Noddle (credit reporting agency) — 30 mins
Citizens Advice Bureau — 4 hours 50 mins
Ombudsman Services — 3 hours 15 mins
Total time spent — 55 hours 50 mins
Consultancy services priced at £25 p/h
Total £1,395.83

Next accused of telling staff to give up Sunday bonus or lose jobs

Next shop in Manchester

Next has been accused of bullying workers into giving up overtime pay for working on a Sunday.

The fashion and homewares retailer, which employs more than 52,000 people, wants about 800 shop workers to give up the premium they are currently entitled to, worth up to £20 a week or £1,000 a year.

The workers all joined the company before 2008, when Next stopped offering a Sunday premium to new staff. In March, they were involved in a consultation on changes to their contracts. The GMB union said the staff rejected these, but Next said 99% of them accepted. 

The company said that as a result, all employees are now being moved on to contracts under which they do not receive extra pay for Sundays. Staff members that do not accept are to be made redundant. 

Next said it had offered compensation equal to one-third of the Sunday premium that staff earned over the past year to those who make the change.

A spokesman for Next said: “Working on a Sunday, since it was introduced back in the 90s, has become a new normal – so Next feels it is no longer justifiable to pay some of its staff up to 50% more than colleagues doing the same work on the same day.”

Mick Rix, the national officer for retail workers at the GMB union, said: “Next claims that it considers Sunday to be a normal working day and uses this opinion to justify cutting pay on Sunday. There can hardly be a better example of a company that has a total disregard for family life.”

Next’s chief executive, Lord Wolfson, last month pledged to raise shopfloor wages by at least 5%. After months of pressure from workers’ rights groups over pay in its stores, Wolfson offered to share his bonus among staff if there was a shortfall in funding.

The Tory peer, who was paid £4.66m in cash and shares last year, including a £1.1m bonus, said the wage rate would rise from £6.70 an hour to £7.04 in October, or £7.58 including bonuses.

Wolfson recently provoked anger when he declared the living wage campaign irrelevant. He wrote to staff to say that he was mortified by the way in which some of his comments were misinterpreted. He said: “I certainly did not intend to belittle the difficulties some people have in making ends meet.”

He said a combination of increased wage rates and longer contracts meant that the average staff member earned 33% more than two years ago.

Sacked Morrisons boss receives £1.1m on top of £2.1m pay

Dalton Philips left Morrisons in January.

Former Morrisons chief executive Dalton Philips doubled his pay last year to £2.1m and will receive a further £1.1m payoff despite being sacked after a slump in sales and profits at the supermarket chain.

Philips, who left in January, was awarded a £1m annual bonus in cash on top of his £850,000 salary, £213,000 in pension payments and £28,000 in benefits including a car allowance and private health insurance, according to Morrisons’ annual report published on Monday. Normally, the company defers half of directors’ annual bonuses in shares for three years but the board decided that strategy was not necessary as they were not trying to retain Philips’s services, which is cited as the main purpose of a deferral.

In addition, the Irishman will collect a £1.1m payoff in 12 monthly instalments. This includes salary, benefits and pension payments for up to 12 months after his exit. On top of his salary package and payoff, earlier this year Phillips collected shares worth about £475,000 relating to his 2011 annual bonus and could be in line for shares worth more than £500,000 in 2017 if performance targets are met. 

Philips’s replacement, David Potts, could earn up to £5.1m if he meets performance targets. Like his predecessor, he will receive a basic salary of £850,000 and could earn up to double that in an annual bonus if he meets certain objectives. But Potts could also earn a further £2.55m in long-term incentive shares, or three times his salary, compared to a potential 240% possible for his predecessor.

Morrisons said it was giving Potts the opportunity to earn a higher than normal share bonus over the next three years as “an immediate performance driver and alignment with shareholders”. The former Tesco executive, who did not have a full-time role when he was hired to join Morrisons, will have to meet free cash flow, underlying earnings and total sales targets in order to collect the full award.

Potts’s potential earnings outstrip those of finance director Trevor Strain despite the executive’s 7% pay rise this year. Strain earned £1.2m last year, including a £490,000 basic salary and a £602,000 bonus. His basic salary will now be £525,000.

Tesco set to announce record £5bn losses 

The supermarket group’s boss, Dave Lewis – who replaces axed chief Philip Clarke last year – has vowed to turn the company’s fortunes around

Tesco

Troubled retail giant Tesco is set to announce record losses of up to £5billion this week – the worst performance in its 97-year history.

Clive Black of stockbrokers Shore Capital said Wednesday’s announcement will be a “horror show” for the retailer, still reeling from a Serious Fraud Office probe after it admitted exaggerating half-year profits by £264million last autumn.

Mr Black said: “Within a generation Tesco went from a reasonably robust British grocer to the world’s third largest supermarket group.

“Now it must reorder its rebalance sheet and focus on reducing its costs. Tesco still has a 29% share of the UK grocery market.”

Boss Dave Lewis – who replaced axed chief Philip Clarke last year – has vowed to take the firm, which has 320,000 UK staff, back to what made it a global success.

Apple’s retail chief admits that the Apple Watch launch didn’t go as planned

 Angela AhrendtsGetty Images Entertainment
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Apple retail chief Angela Ahrendts on Thursday sent a memo to Apple employees that explained the shipping delays for the Apple Watch, and she hinted that the company would return to iPhone-style launches with lines outside its stores.

The French Apple news site iGen.fr obtained the memo, which goes into detail on the status of Apple Watch orders. In the email, she says “customers who preordered will start receiving deliveries next Friday as planned.”

Ahrendts also says people will still not be able to walk into an Apple Store and buy an Apple Watch — and that’s going to continue in May. A previous memo explained that initial orders for the Apple Watch would take place only online, stopping people queueing up outside stores from buying them.

But Ahrendts hints that Apple will return to its old way of launching products: “Are we going to launch every product this way from now on? No. We all love those blockbuster Apple product launch days — and there will be many more to come. They’re the moments where you, our teams, shine. And our customers love them as well!”

One way to think about the launch of the Apple Watch is that the launch was if anything too successful and that Apple underestimated the number of people who wanted the device.

But another way of thinking about the Apple Watch launch is that it didn’t go anywhere near as smoothly as Apple planned. Ordering online and trying on the watch in stores was meant to be a smooth, easy ordering process. Instead, the shipping date for many models of Apple Watch has been delayed until June. Apple even removed the April 24 availability date from the Apple Watch page on its website, signalling that there are major delays with shipping the device.

Here’s the memo in full:

Team,

On behalf of Tim and the rest of the executive team, I want to thank you very much for making last Friday’s debut of Apple Watch unforgettable. The Previews going on in our stores and support from our Contact Centers are unlike anything we have done before.

The feedback from customers is overwhelmingly positive. They are excited about Apple Watch, and your teams are creating fantastic experiences for them. Customers who pre-ordered will start receiving deliveries next Friday as planned, and I know you will do a great job helping them get set up.

Many of you have been getting questions asking if we will have the watch available in stores on April 24 for walk-in purchases. As we announced last week, due to high global interest combined with our initial supply, we are only taking orders online right now. I’ll have more updates as we get closer to in-store availability, but we expect this to continue through the month of May. It has not been an easy decision, and I want to share with you the thinking behind it.

It’s important to remember that Apple Watch is not just a new product but an entirely new category for us. There’s never been anything quite like it. To deliver the kind of service our customers have come to expect—and that we expect from ourselves—we designed a completely new approach. That’s why, for the first time, we are previewing a new product in our stores before it has started shipping.

Apple Watch is also our most personal product yet, with multiple case and band options because it’s an object of self-expression. Given the high interest and initial supply at launch, we will be able to get customers the model they want earlier and faster by taking orders online.

I know this is a different experience for our customers, and a change for you as well. Are we going to launch every product this way from now on? No. We all love those blockbuster Apple product launch days—and there will be many more to come. They’re the moments where you, our teams, shine. And our customers love them as well!

Apple Watch is an exciting new product and we are at the start of a very exciting time at Apple. You’re the best team on earth and you are doing an amazing job.

For customers who want to buy a watch, please continue to help them place their order online. Also make sure they know that, wherever they buy, Apple will provide them with a great Personal Setup experience — either online or in our stores. This includes syncing their Apple Watch with their iPhone and teaching them about all the incredible features of their new Apple Watch.

Thank you very much again, and I look forward to seeing you soon.

Morrisons to cut 700 head office jobs

Morrisons chief David Potts said of the restructure: ‘We believe our customers and our staff will appreciate the improvements.’

Morrisons is to cut more than 700 head office jobs in a sweeping clearout by its new boss that will reduce staff at the grocer’s Bradford site by nearly a third.

David Potts, a month into his role as chief executive, has already axed half of his top management team and is now turning his attention to the wider head office as he attempts to revitalise the loss-making business.

Potts said it was a “tough but necessary” decision to cut 720 out of the 2,300 head office staff at the UK’s fourth biggest supermarket chain.

At the same time, 5,000 extra staff are being hired for the 500 stores, to cut queueing times at checkouts and boost service.

“We are focusing on the things that matter to our customers. That means having more of our staff in stores, improving product availability and helping customers at our checkouts. We believe our customers and our staff will appreciate the improvements,” said Potts.

David Potts is one of three former Tesco executives at Morrisons.
David Potts is one of three former Tesco executives at Morrisons. Photograph: Morrisons/PA

“To support this we need a simpler, faster and cost-conscious head office and that requires some tough but necessary decisions,” said Potts, who replaced Dalton Philips after he was forced out in January.

Staff have been put on a 45-day consultation and some will be offered a role in the stores and redeployment in other areas. The reductions in head office follow a 50% increase in the number of staff in seven years as the business attempts to expand into online shopping and convenience stores.

Potts – one of three former Tesco executives at the top of the business – is due to face City analysts for the first time next month when Morrisons is scheduled to present its first-quarter trading update. The business made £800m of losses last year and suffered a 6% fall in sales.

Morrisons’ new chairman Andy Higginson and the finance director Trevor Strain also used to work at Tesco. Potts left in 2011 – before the current accounting scandal at Tesco – after a 38-year career beginning as a shelf-stacker.

Potts spent Easter visiting a number of Morrisons stores and is requiring the top management team to be located in Yorkshire. Earlier this week Casper Meijer, the group trading director, left after refusing to move full time to the UK from his native Netherlands. His departure was the latest change to the senior line-up – within a week of joining, Potts had sacked almost half the group’s top team.

As is the case with the major supermarkets, Morrisons is looking for ways to compete with the discounters, such as Aldi and Lidl, and deal with the rise in online shopping and the use of convenience stores.

When he joined Morrisons in mid-March, Potts had recorded a video in which he promised to listen to staff and customers. He spent Easter visiting a number of stores.

The job cull at Morrisons coincided with shopfloor roles being lost at Mothercare, where 620 middle managers have been put at risk of redundancy, with 120-140 jobs expected to go.

Mothercare plans to axe up to 140 shop managers

Mothercare.

Mothercare plans to cut up to 140 shopfloor managers as part of an overhaul of the loss-making UK chain

The company said 620 middle managers had been put at risk of redundancy, with 120-140 jobs expected to go as new roles are created. Mothercare employs about 5,000 people in its UK shops.

The move would save £1.3m and help reduce Mothercare’s payroll costs to 12% of sales, which compares with other chains who aim to operate below 10%, the baby goods retailer said.

The company said: “Mothercare is proposing the creation of new roles and a new structure for its management in stores … This step will lead to an adjustment in working practices for a number of our UK store management colleagues and we are consulting with those affected.”

The changes are being overseen by the new chief executive, Mark Newton-Jones. Since taking the reins at Mothercare a year ago, Newton-Jones fought off a £266m takeover bid from US rival Destination Maternity and has embarked on a mission to modernise the high street chain, which he described as old-fashioned and in need of a complete overhaul.

A trading update on Thursday showed UK like-for-like sales climbed 5.1% in the fourth quarter – the fourth consecutive quarter of like-for-like sales growth – after Newton-Jones decided to run fewer promotions and discounts. International sales were even stronger, rising 11.4% in constant currencies. However, currency movements reduced the actual growth figure to 5.5%.

Newton-Jones said it is “still early days in our turnaround” but hailed the progress made so far. 

“The final quarter is in line with our plan. In the UK, our strategy of reducing promotional and discount activity and returning to being a full price retailer has continued to stabilise margin. By restricting discount periods we produced a stronger end-of-season sale with improved sell through rates as a result. Like-for-like and online sales have also benefited from this approach, along with the initiatives to improve product and service put in place during the year.”

His turnaround plan also involves moves to improve customer service, introducing more upmarket product ranges and thrashing out better deals with suppliers.

Sainsbury’s halves Nectar card points payout

Sainsbury's sign

Anyone with a Nectar card shopping at Sainsbury’s this weekend is going to be disappointed. On Saturday the retail giant halved the number of Nectar points its customers will earn from now on in-store.

As of Saturday, instead of getting two points for every £1 you spend at Sainsbury’s you will now only get one. And shoppers are no longer encouraged to use their own bags as the Nectar point you got for doing so has also been dropped.

So is it time to change where you shop? Evidence emerged last week that some shoppers were already thinking of doing so, with others already having made the move since Sainsbury’s announced the changes to Nectar last October.

“Rather than exchanging for offers that Sainsbury promote we decided, and have for a number of years, to save the points we accrued during each year and use them each Christmas,” says Leeds-based John Salt.

“Sadly, in future this yearly event may not be as much fun as it used to be given the reduced allocation from our weekly trip.”

He adds: “Where we live there is currently an Aldi under construction. We may be quite tempted to forfeit our Nectar points and join the refugees from the higher end stores who are trying the Aldi or Lidl experience.”

The discounted stores such as Aldi and Lidl have made shoppers more focused on the price of goods – but for those who continue to value loyalty points both Tesco and Morrisons have schemes that reward.

Tesco’s Clubcard scheme effectively offers a 1% discount on shopping at the supermarket if not swapped for special rewards.

You earn one point for every £1 spent on shopping in-store or online, or £2 spent with partners Esso and Eon. Each point amounts to 1p, so spending £250 in Tesco will give you a £2.50 voucher.

By exchanging points for partner offers, such as meals out and day trips, you may double or even quadruple their value.

Every £2.50 voucher can be swapped for £10 vouchers for restaurants, travel and days out. You can also make points go further by cashing in on “Clubcard Boost” offers. These enable you to double the value of points when shopping at particular times of the year, typically over the Christmas period.

The Morrisons scheme, introduced six months ago, compares like-for-like products at Tesco, Sainsbury’s, Asda, Aldi and Lidl.

If they are found to be cheaper anywhere else, Morrisons will put the difference in points on your card. For every 1p difference, you’ll get 10 Match & More points.

This may sound a lot, but each point is worth 0.1p.