Tuesday, 15 June 2010

Times Online closes; M&S stocks Coke; Majestic lets you buy 6


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So – Times Online closes today, making way for its paid-subscriber-only replacements.

Marks & Spencer is stocking Walkers Crisps and Coke after god-knows-how-many-years of selling only own-brand products. (Witness embarrassingly poor iPhone snap above.)

And (as @FieldVole informs me) Majestic Wine's profits are up 26% after reducing their totemic minimum purchase from 12 bottles to 6.

The corporate world is changing. That's the aftermath of the credit crunch for you.

But which of the above is the odd one out? Well. Both the M&S and Majestic are shifting their luxury/high-spend (and, crucially, high-margin) market focus a little. They're reasoning – I suppose – that these are straitened times, and they need to follow their somewhat-more-impecunious customers down the luxury scale. Offer them some lower-spend options.

Glad to see it's working for Majestic. Well, actually, I'm not really monstrously glad. Because those bastards once rejected my graduate job application. On the (clearly trumped up) charge that I — I! — am 'not a natural salesman'. Pah!

But, yeah, it's working for them: profits are up. And I guess M&S too may see a rise in sales.

But is it all about rises in sales?

The biggest risk is for M&S. Once you've introduced foreign brands, it's going to be a massive deal to get rid of them again. And by offering your customers a lower price-point, aren't you making it pretty hard to get them to shift back up again when the rosy economic sunrise occurs (sometime in 2020 or so)?

Not such a big thing for Majestic, perhaps. But they're inching that bit closer to a war against supermarkets. And something tells me that Mr Tesco ain't quaking in his boots at that prospect.

My point, I guess, is that having a high-margin, perceived-as-luxury brand image is a massively valuable thing (ask Apple, a company that has done pretty damn well by dominating the high-margin segment of the consumer electronics market, yet never achieving huge overall market share). Selling huge volume at low margins is a very, very scrappy, dirty and vicious business. If you're not part of that scrapping, you probably want to keep out.

So – over to the Times, then. Murdoch and his henchmen have decided that they're fed up with internet freeloaders. Having been engaged in the scrappiest and lowest-margin market I can think of (free, theoretically ad-supported online news), they are trying to haul themselves into the premium bracket.

Will it work? Broadly speaking, I don't know. Personally? I'm sticking with the Guardian.

In any case, I wonder what Murdoch would make of these recent M&S and Majestic strategic shifts …



Okay. So. My last three blog posts: politics, bottom-fondling and capitalism.

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