Sainsbury’s, Caution and Quality in Business: A Sure but Steady Passage from Solitary Dairy Grocer’s Shop to a Major Supermarket Chain

Posted on by E Curb Nottus
Commerce & Business, Local history, Retailing history

Next year, Sainsbury’s, which has long maintained a place on the podium of Britain’s leading supermarkets will reach its sesquicentennial milestone – 150 years in the grocery retailing trade. Over the last 20-plus years the company has had to content itself with the runner-up position in the market leadership ladder of supermarket chains, trailing the seemingly ubiquitous and dynamic Tesco which has swept all before it. Nevertheless, Sainsbury’s has carved itself a distinctive and impressive notch among the titans of modern British retailing since it first opened for business in the Victorian era.

Foundation years, butter and establishing the Sainsbury style
In 1869 the newly wed John James Sainsbury, founded Sainsbury’s in partnership with his wife, Mary Ann Sainsbury (née Staples). The two opened their first dairy goods shop at 173 Drury Lane, Holborn (London). Mrs Sainsbury played an active role in the business, in the early years she effectively managed the Drury Lane shop, making it “famous for the quality of its butter”. As Sainsbury’s built its formative business reputation largely on product quality, Mary Ann (the daughter of a dairyman) insisted on fresh milk on the shop’s shelves, as well as, that the Dutch supplier of Sainbury’s butter date-stamp every unit item it supplied [‘The History of Sainsbury’s – Trying Something New for 147 Years’, (Darren Turner, 11 Nov.), www.s4rb.com]. The freshness and purity of Sainsbury’s butter gave it a commercial edge over the competition in an era known for widespread food adulteration (eg, it was a common practice for milk to be watered down) [Judi Bevan, ‘Battle of the Supermarkets’, RSA Journal, Vol. 152, No 5517 (June 2003)].

In the 19th century Sainsbury’s rivals in the grocery game were shops like Lipton’s and Home and Colonial Stores. Early on John J Sainsbury developed a business model which made the shops stand out from the other grocers by doing things differently. Appearance was important to Sainsbury, the shops were clean and hygienic, on offer were “high-quality products and fresh provisions at prices even London’s poor could afford” (an early shop slogan was “Quality perfect, prices lower”).

A gradualist approach to growth
John J Sainsbury, whose motto could well have been “Make haste slowly”✱, was in no hurry to expand the business. From the Drury Lane foundations he gradually added a shop in Kentish Town and then two more in the new railway suburb⊡. It wasn’t until 1882 that Sainbury made his first move outside London, establishing a shop in Croydon, one that specifically sought to cater for a middle-class clientele, selling comestibles which were in the luxury range (foreign cheeses, poultry and game birds, cooked meat delicacies, etc) [‘Sainsbury family’, (Bridget Salmon), Oxford Dictionary of National Biography, (23-IX-2004), www.odnb.com].

Even well into the 20th century century each new Sainsbury’s store was a matter of measured deliberation…the company continued “to place the highest priority on quality, taking the time to weigh each decision, whether it meant researching suppliers for a new product, assessing the reliability of a new supplier, or measuring the business potential of a new site” [‘J Sainsbury plc History’, Funding Universe, www.fundinguniverse.com].

During John J Sainsbury’s tenure in charge, the company established what was to become the Sainsbury’s “house style”, stores which were elaborately decorated in contrast with the other (typically drab) grocers of the day. The key to the company’s success was covering all of the bases…John James would price-match the competition while at the same time offering higher standards of quality, service and hygiene. Moreover, the likes of Home and Colonial and Lipton’s, while having numerically more shops, could not match Sainsbury’s range of products [ibid.].

Sainsbury’s “Own Brands”
Although “own brands” are thought of as a modern phenomena in retail merchandising, Sainsbury’s first introduced the concept as early as 1882! The shop’s first own brand was its staple commodity – butter. Sainsbury’s continued this practice and by the 1950s there was a host of such offerings on the shelves: ‘Sainsbury’s Cornflakes’, ‘Sainsbury’s Snax Biscuits’, ‘Sainsbury’s Cola’, ‘Sainsbury’s Peas and Carrots’, etc, etc. [‘The History of Sainsbury’s’, loc.cit.]. By 1980 half of the products Sainsbury’s sold were under its own label [Bevan, op.cit.].

Modernising Sainsbury’s
In 1950 Sainsbury’s refitted one of its earliest shops, in West Croydon, creating what was Britain’s first supermarket proper, one of the country’s earliest to operate as fully self-service. Some customers were at first put off by the innovation, thinking it impersonal and “anti-social”, however the convenience factor of not having to wait to be served eventually won out…Advertising and Marketing magazine reviewing the new store concluded: “From the point of view of the customer the chief advantages of self-service shopping are the speed with which shopping can be done and the ease with which one is reminded of things needed…these advantages substantially outweigh the disadvantages of not getting the personal attention of the assistant.” [‘Sainsbury ‘s return to site of first self-service supermarket’, (Graham Ruddick), The Telegraph (UK), 30-Aug-2013, www.telegraph.co.uk].

Although under its founder Sainsbury’s had been reluctant to get too big too quickly, once the company passed to his successor, son John Benjamin Sainsbury✫, the number of stores grew (though still at a trademark cautious pace). Under the strong leadership of a string of postwar CEOs (such as (John) Baron Sainsbury of Preston Candover), this trend was maintained❂.

Although Sainsbury’s followed a typically cautious approach to its business model, the company couldn’t be accused of dragging its feet when it came to embracing new technology. In the early Sixties they were the first retailer in Britain to develop a computerised distribution system and their stores were among the first to turf out electronic cash registers in favour of scanners in the late Eighties [‘J Sainsbury plc’, www.company-histories.com].

In 1973 the company went public under the holding co name J Sainsbury plc after being floated on the stock market. The 1970s witnessed increasing competition from discounters and a squeezing of profit margins, prompting an escalation in diversification…non-food items started to appear on Sainsbury’s shelves. It also innovated with the advent of ‘Savacentre’ hypermarkets and ‘Homebase’ house and garden centres. Overseas expansion was concentrated in the US – Sainsbury’s acquired Shaw’s Supermarkets, Giant Food Inc and Star Markets (its holdings in Shaw’s were unloaded in 2004).

Stumble and renewal
During the Nineties, Sainsbury’s, hitherto accustomed to being the premier supermarket chain, was relegated to second place by Tesco which became supermarket “top dog” in the UK in 1995. A change-up was required at Sainsbury’s and further diversification was sought. In 1997 the company ventured into in-store banking (in partnership with the Bank of Scotland – before going it alone in 2014). During this period the 130-year direct involvement in running the company of the Sainsbury family came to an end with the retirement of David (Lord) Sainsbury. The acquisition of Bells Stores in the early 2000s signalled a move into convenience stores, adding to the variety of its retail outlets.

Sainsbury’s – status quo in 2018 and future fortunes?
In the contemporary British retail landscape, Sainsbury’s, with a healthy slab of the market, is the second largest chain in the country✥ with ≻1415 stores (2017) and ≻186,900 employees (2018). Despite having long conceded first place to Tesco, this state of play is a fluid one…no longer dominated by the Sainsbury family (though it retains 15% of shares in the company), these days the majority shareholder is the Qatar Investment Authority (note comparisons with Harrods). 2018 has seen Sainsbury’s unearth a bold attempt to unseat Tesco’s hegemony through a planned merger with ASDA which would give the merged entity around 30-31% of the UK market – as against about 27.5% for Tesco (Source: Kantar). Approval of the controversial merger is still pending but could depend upon Sainsbury’s and ASDA offloading 463 of their stores to win over the competition ‘watchdog’ (CMA) [‘Walmart’s Asda agrees to UK merger deal with Sainsbury’s’, (Silvia Amaro) 30-Apr-2018, www.cnbc.com; ‘Sainsbury’s and Asda may have to offload 460 stores to seal merger’, (Sarah Butler), The Guardian, 28-Sep-2018, www.theguardian.com].

Footnote: A “leg-up” for UK supermarkets
As the age of postwar austerity and scarcity gave way to an era of abundance and growth in the 1960s, supermarket heavyweights like Sainsbury’s and Tesco led the way. The supermarket chains on their expansionary arcs was facilitated by legislative changes affecting the retail sector. The abolition of resale price maintenance (RPM)✧ by the British Board of Trade in 1964 was a total game-changer! RPM had allowed (especially large) manufacturers to dictate terms to retailers, the law change shifted the balance in favour of Tesco, Sainsbury’s and co, who now could lord it over even the largest of manufacturers like Unilever and Procter & Gamble [James Buchan, Review of Trolley Wars by Judi Bevan, The Guardian, 30-Apr-2005].

PostScript: How Tesco outmanoeuvred and outgunned Sainsbury’s
One of the key moves made by Tesco was to take careful note of what the older retailer was doing right (eg, offering quality in goods and service) and copying it! (in “Tesco-speak” this is called ‘benchmarking’ the opposition) [Bevan, op.cit.]. As Tesco grew incrementally it benefitted from a “virtuous circle” of business⊙. The sheer, monolithic size of Tesco allows it to buy merchandise more cheaply and accordingly sell it more cheaply. Ergo, they turn over more customers and make greater sales, and so the cycle is sustains itself [Buchan loc.cit.]. Tesco has a reputation for following intuitive hunches…being less risk adverse than other major supermarkets like Sainsbury’s it happily ventured into lower class, ‘brownfield’ areas that its competitors wouldn’t touch [Bevan, op.cit.].

—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧
✱ Festina lente – the motto of Roman emperors Augustus and Titus, et al
⊡ a calculated, gradual approach to expansion suited John James who had a very hands-on management style, by temperament he was a “micro-manager”, immersing himself in the minutiae of the shops’ everyday transactions
✫ known for his focus on staff welfare and remembered by one of his senior staff as a “benevolent dictator”, [‘Sainsbury family’, loc.cit.]
❂ there have so many Sainsbury family members involved in the company, in British politics, in art patronage and philanthropy, to almost necessitate a scorecard
✥ although it briefly conceded second place to the Walmart owned ASDA in 2003/2004
✧ Resale price maintenance (or retail price maintenance) is a practice where the distributor agrees to sell at a price set by the manufacturer
⊙ a business scenario the Financial Times described as “hard to create, but (also) hard to disrupt”

Marks and Spencer: From a Kirkgate Penny Bazaar to London High Street Heavyweights

Posted on by E Curb Nottus
Commerce & Business, Local history, Retailing history

Before the principals of Marks and Spencer teamed up, the entity was singular, just the one aspiring retailer, Michael Marks, and of material necessity he started very small. A late 19th century immigrant refugee from the Russian Empire’s Byelorussian region, Marks launched his first penny bazaar stall in Central Leeds’ Kirkgate Market with start-up funding amounting to one £5 note – which he had borrowed! Marks met his future partner at this time, Thomas Spencer, and eventually went into business with him after the latter, a Yorkshire cashier, invested £300 for a half-share in what became Marks and Spencer✱.

Early days: Establishing a chain of “penny bazaars”
Michael Marks kicked off with a very basic business model: his initial stall in Leeds was a “one penny stall”, hence the business’ motto, “Don’t ask the price, its a penny”⊡. The early stall commodities focused on household goods, haberdashery, toys and a sheet-music business (note the early spelling of the store name with an errant plural ‘s’ in ‘Spencer’ in the photo at left). Marks (the more dynamic and “hands-on” of the partners) immediately set about expanding the business, first up establishing a shop in Manchester. By 1894 Marks and Spencer had graduated to a permanent stall in Leeds’ covered market (in 1904 they opened their first Leeds shop) and in 1901 concentrated its open market operation in Birkenhead on Merseyside.

Forging a regional retail identity
The two partners initially focussed locally, concentrating on Yorkshire and Lancashire, a new warehouse in Manchester (1897) became the early centre of the M&S business empire which numbered 36 branches by that time…the firm accumulated stalls (later on, shops) in towns and cities across the North of England (Manchester, Liverpool, Hull, Sheffield, Middlesbrough and Sunderland) as well as further south (Birmingham, Bristol, Cardiff, Swansea, etc) [‘The History of Marks and Spencer’, (h2g2, 2008/2012), www.h2g2.com].

Spencer
Marks

By the early 1900s Marks and Spencer was starting to yield a very tidy surplus, becoming a limited company in 1903. At this juncture Thomas Spencer decided to cash in and retire from the partnership with a nice “nest egg” of £15,000 (for his initial outlay of £300) [‘Thomas Spencer (Marks and Spencer)’, Wikipedia, http://en.m.wikipedia.org]. Sadly for both Spencer and Marks, neither got to enjoy their monetary success long – Spencer died in 1905, followed by Marks in 1907. Nonetheless the prestigious company name has long outlived the two founding principals, thriving into the 21st century.

The end of “British-only” and “home-brand only”
In the early 20th century M&S, entering into long-term relationships with British manufacturers, emphasised a policy of selling only British-manufactured goods, clothes and food were sold under the famous “St Michael” brand (named after founder Michael Marks). The fluctuating commercial fortunes of the company in the 1990s led to M&S relenting somewhat on this policy.

Textiles and food
By the Twenties M&S had moved into the sale of textiles in a big way (launching its own laboratories to commercially produce new fabrics for the British market). In 1931 it added food to its portfolio of products…M&S’s own food technology department (from 1948) allowed it to offer chilled poultry to customers, instead of the hitherto frozen or pre-cooked options (courtesy of a new technology it called “cold chain distribution”) [‘What 130 years of M&S history can teach us about innovation”, (Hannah Jenkinson, 2018), www.about.futurelearn.com].

By the 1960s these two commodities, textiles and food, were firmly ensconced as the staples of Marks and Spencer. M&S were forerunners in introducing retail practices that enhanced customer satisfaction, such as the “money-back, no questions asked, no time limit” policy.

Marble Arch – M&S flagship store ⬆

In 1930 Marks and Spencer established itself in the United Kingdom’s financial capital, opening a mega-sized London store at 458 Oxford Street, W1. The Marble Arch store which was to become the company’s flagship store, would go on to compete with those other leading retailers of quality merchandise already with abase in Oxford Street, Selfridge’s and John Lewis’. Marble Arch wasn’t in fact M&S’s first retail outlet in London, that honour went to the one in nearby Edgware Road (which is actually closer to the Marble Arch monument than the Marble Arch M&S!). The Edgware Road store began as a penny bazaar in 1912 with additional floors added in the 1920s. During World War II the building was damaged by German incendiary bombs (as was Marble Arch tube station in an earlier Nazi air raid). In 1959 the original store at Nº228 Edgware Road was closed and replaced by a new, much bigger store at 258-264 Edgware which opened just six days later [‘The History of Marks & Spencer Edgware Road’, (Jan. 2017), www.marble-arch.london].

Nº228 Edgware (Source: M&S Co Archive) ⬇

M&S shift of strategy in an increasingly volatile retail market
At the turn of the 21st century Marks and Spencer’s prospects appeared fairly sanguine…in 1998 it became the first British retailer to achieve a pre-tax profit of over £1B.

But in the first decade of this century, M&S, sensing the need to compete for more of the market, made some seismic changes. The standard–bearer St Michael’s brand was dropped, other longtime lines were rebranded. The company moved away from its emphasis on “British quality goods”, starting to sell big-name grocery lines like Marmite, Kellogg’s Corn Flakes and KitKats in its stores [‘Marks and Spencer to start selling top brands’, (G Hiscott), The Mirror (UK), 04-Nov-2009, www.mirror.co.uk] (previously it had concentrated on ‘luxury’ food products exclusively). This marks the recognition by Marks and Spencer that the falling trend of clothing sales needed to be heavily supplemented by popular food items.

Marks and Spencer (colloquially and affectionately known on the street as “Marks and Sparks”) as at April 2017 could list a total of 959 operating stores across the UK✣, 615 of which traded in food only (the “Simply Food” label), evidence of how food products had come to prop up the other traditional areas of the business. Future prospects for the major British retailer remain somewhat nebulous after the company signalled in 2018 its intent to close around 100 M&S stores in the country by 2022. Retail finance watchers have also questioned, with such a reliance on food items, whether M&S can ultimately match it with the UK’s food and groceries powerhouse Tesco [‘M&S online food delivery service will be no piece of cake’, Robert Plummer, BBC News, 28-Apr-2017, www.bbc.com]. Still, Marks and Spencer remains in majority British hands (unlike its rival heavyweights Harrods and Selfridges).


⬆ Commemorative M&S clock in Leeds market

━━━──━━━━──━━━━──━━━━──━━━━──━━━━──━━━
✱ the foundation date for the company is traditionally given as 1884, however the exact date the partnership began between Marks and Spencer seems conjectural – other candidates are from 1894 (the Leeds permanent stall) or from 1901 (the Birkenhead market)
⊡ product inexpensiveness was not to stay the M&S catch cry – by the late 1920s Simon Marks (the founder’s son who had assumed the reins) placed a 5/- limit on items. Long before this M&S had made the store focus one of quality over cheapness
✣ plus over 200 overseas stores in at least 40 countries

John Lewis, Senior and Junior: A Contrast in Pathways Up the Retailing Ladder

Posted on by E Curb Nottus
Biographical, Commerce & Business, Local history, Retailing history

The path taken by John Lewis in scaling the heights of retail commerce was typical of many embryonic and aspiring owner-drapers in mid-Victorian Britain. Somerset born and raised, Lewis started his first modest shop in Nº132 (later re-numbered) Oxford Street, London, in 1864 (taking the sum of 16s & 4d on opening day). His first twenty years in business for himself were far from glamorous, a period dominated by hard and dreary ‘yakka’ and slow piecemeal accumulation and consolidation.

The tortoise approach – slow and steady
Lewis took a conservative, uncomplicated (“keep it simple”) approach to retailing and only slowly moved his lines from silks, woollens and cotton fabrics to dress fabrics and clothing and later to furnishing fabrics and household supplies like China and ironmongery (but never food!). His philosophy was sell cheap and no ads (for nearly a century the John Lewis company continued a practice of minimal advertising!)✱. Unsurprisingly for a man described as “a Victorian curmudgeon” [‘John Lewis (1836-1928)’, Geoffrey Tweedale, Oxford Dictionary of National Biography, 06-Jan-2011, www.oxfordnb.com], his management style was rigidly autocratic, he often had abysmally poor relations with his staff and was prone to effecting arbitrary and sometimes wholesale dismissals. In 1920 Lewis’ “pig-headedness” and anti-union stance triggered deleterious industrial conflict…in 1920 the unaddressed grievances of Lewis’ shop-girls led to a strike by 400 staff. Lewis simply sacked the strikers and replaced them, but his arbitrary action brought him discredit and caused commercial ruptures adversely affected the company’s competitiveness vis-à-vis its retailing rivals in the long-term. ‘How John Lewis was the original store wars: As the retail empire celebrates 150 years, we tell its fascinating story’, (Brian Viner), The Daily Mail (UK),, 04-Jul-2014, www.dailymail.co.uk]

ef=”http://www.7dayadventurer.com/wp-content/uploads/2018/11/image-1.jpg”> Flagship store 1939 (Source: John Lewis Memory)[/cap
Lewis adopted an habitually “penny-pinching” stance when it came to running the store’s finances. In this he was the diametrically opposite of his Selfridges contemporary, the ostentatious, big spending, big advertising Harry Gordon Selfridge. In the eyes of Lewis, Selfridge must have seemed absolutely criminally profligate! Nonetheless Lewis did earn “brownie points” with London consumers for his straight dealing and commitment to the purveyance of quality goods, and profits grew accordingly. Sales for the ‘John Lewis’ stores rose from an underwhelming £25,000 in 1870 to a commendable £921,000 in 1921.

http://www.7dayadventurer.com/wp-content/uploads/2018/11/image-2.jpg”> Peter Jones[/caption
Another instance of Lewis’s circumspect approach was his reluctance to expand the business. It was not until 1906 that he made a move in this direction, purchasing the ailing Peter Jones store in Chelsea after the death of the store’s original Welsh owner✧. During his long lifetime John Lewis made no further expansionary attempts. The company during this period was clearly hamstrung by a lack of dynamic vision under its founder – losing vital retail ground to the likes of Whiteleys and Owen Owen [Tweedale, loc.cit.].

Father v son
Lewis’s innate caution also showed itself in his hesitancy in passing even a portion of control of the firm over to his sons, especially his eldest son John Spedan Lewis. When Lewis’s sons came of age, he gave them a limited role only…Spedan (as he was universally called) was put in charge of the newly acquired Peter Jones store (presumably to keep him from interfering with the central operation of the business). Spedan increasingly clashed with Lewis Senior over their fundamentally different approaches to business, with Spedan in charge of Peter Jones and JL Senior holding sway in Oxford Street HQs, relations between father and son deteriorated alarmingly (characterised in some quarters as equating to intra-family “store wars”) [Viner, loc.cit].

After the founder’s death in 1928 Spedan was free to fully implement his more progressive management ideas – in the area of staff relations these were often light years away from his father’s outmoded views and intransigent bellicosity…once at the helm Lewis Junior started by cutting working hours and introduced tea-breaks for the staff…Spedan envisaged further, more radical, plans for modernising ‘John Lewis’ and propelling it forward in the Thirties.

Under Spedan’s watch – JLP up and away!
Spedan wasted no time in taking ‘John Lewis’ in a very different direction to his late father’s ultra-cautious, steady-as-it-goes approach. In 1929 he reformed the enterprise into a public limited company, John Lewis Partners (JLP). Staff were rebranded ‘partners’ and made shareholders in the firm. Spedan diversified and pursued an expansionary route that Lewis Senior had so long doggedly eschewed. Smaller, less profitable chains were acquired – from 1933 on Spedan widened the John Lewis Partnership dramatically, adding purchased stores for the first time outside of London – Nottingham, Weston Super-Mare, Portsmouth and Tyrrel, Southampton, etc. [‘The 1930’s; a period of growth’, (Johnathan Blanchford), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk]. One of JL Junior’s ideas was to create a chain of John Lewis hotels, and to supply these hotels he bought a chain of grocery shops, known as Waitrose, in the Thirties. Waitrose proved a spectacularly profitable acquisition for John Lewis’⊛. As of 2016 there were some 353 Waitrose supermarkets across the UK, collectively worth more than £1B (one of only five such successful food and drink brands in Britain) [‘Waitrose’, Wikipedia]http://en.m.wikipedia.org.

In the Forties John S Lewis bought up some of the failing Selfridge business concerns after the former high-flying company plummeted and Harry Selfridge was forced out to pasture and into retirement. Other (overseas) business moves into South African draperies however turned out to be unsuccessful ventures [‘John Lewis’, Wikipedia, http://en.m.wikipedia.org].

▼ Spedan Lewis

Although Spedan was less autocratic, and certainly less confrontational✣, than his father, he was no democrat when it came to running the John Lewis business empire. Some observers (including insiders), recognising an inherited family trait, saw Lewis Junior as a “my way or the highway” type of business leader. Recollections of some ex-staff and associates point at a Spedan inclination to public losses of temper and the arbitrary and unfair treatment of staff on occasions, with a suggestion of a peculiar bias against staff (including managers) with ginger hair [‘Memories of Spedan – not all sweetness and light’, (Margaret Cole), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk].

Today JLP remains an employee-owned British company (consistent with the “worker-cooperative” entity (the ‘Partnership’) as initiated by Spedan Lewis in 1929). According to the Sunday Times it is the third largest private UK company by sales – £3.78B revenue in 2017 [“The Sunday Times HSBC Top Track 100 league” (2016)]. As a retail operator JLP maintain its traditional market position as a chain of high-end✫ department stores⊡, competing with its historic, equally upscale rivals in the merchandising field, Harrods and Selfridges.

FN: the corporate colours of retailing
John Lewis’s store colours have traditionally been green and white – supposedly because Spedan Lewis wrote his memos exclusively in green ink (the auditor’s colour!) on white paper [Tweedale, loc.cit.]. Interestingly, green seems to be the preferred colour of successful London-based retailers…Selfridges’ salient business colour is also green, and both Harrod’s and Marks and Spencer’s traditional hues are green and gold.

2013: John Lewis presence in Westfield’s Shepherds Bush mall ∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸
✱ the John Lewis motto (dating from 1925) characteristically is “never knowingly undersold”
✧ the sale was the stuff of legend in London retailing – Lewis reportedly walked the distance from Oxford Street to the Sloane Square, Chelsea, Jones premises, with bank notes in his pocket to the value of £20,000 to complete the purchase in person. Today, Peter Jones is the ‘posher’ sibling of the John Lewis store
⊛ Waitrose is an upmarket grocer in line with the general emphasis of John Lewis merchandising
✣ JL Senior’s quarrelsome, confrontational nature was often fraught with consequences – a protracted turn-of-the-century legal dispute with Lord Howard, Baron de Walden, saw Lewis being sentenced to three weeks in gaol in 1903 for contempt of court [‘How John Lewis ended up in prison. A new century same old Mr Lewis’, (J Blanchford), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk]
✫ a monumental departure from the early days of JL Senior’s “sell cheap” strategy
⊡ currently around 30 JL stores in England, Scotland and Wales and concessions in the Republic of Ireland and Australia

The Selfridges Story: The Making and Unmaking of Harry (or Several Lessons in Cultivating Customer Satisfaction)

Posted on by E Curb Nottus
Biographical, Built Environment, Commerce & Business, Local history, Retailing history, Travel

“People will sit up and take notice of you if you will sit up and take notice of what makes them sit up and take notice.”
~ HG Selfridge

⊹⊹⊹ ⊹⊹⊹ ⊹⊹⊹

Before I ever visited the UK I wasn’t at all familiar with Selfridges. I knew about Knightsbridge and Harrods and its preciously preserved pedigree all right…we’ve done that! My first time in London I was on a bus travelling (make that crawling) down Oxford Street heading towards the West End when I was enlightened as to the existence of the second-best known upmarket London department store. As the bus idled stationary I spotted a sign in front of a building that said ‘Selfridges’, my first thought, I remember, was “strange name!”…but when I think about it now I vaguely recall that I had previously heard the name Selfridges, but without inquiring further at the time I sort of formed the literal impression that it was a store as the name sounded that “sold fridges”, ie, a purveyor of domestic white goods! So when I did eventually get my beak inside the store’s doors at 400 Oxford Street I was surprised to see lines and lines of (pricey) fashion wear, shoes, accessories, skin care products, bags and more – but not one refrigerator in sight! (in its time it has apparently sold most everything!)

Even without visiting Selfridges’ flagship Oxford Street store, you may well be aware of it or of its US-born founder Harry Gordon Selfridge thanks to the recent ITV television series Mr Selfridge (first aired in 2013). The series was a period drama about the flamboyant, visionary retailer and the interactions that take place around him in his eponymous London department store✱.

A Marshall Field blueprint for London
Wisconsin-born Harry Gordon Selfridge initially earned his business ‘spurs’ working for Chicago department store Marshall Field & Company (right), this segued into him purchasing his own department store in Chicago. In hardly any time at all the mercurial Selfridge abruptly re-sold the business, making a quick profit and retired to play golf. In 1906 while holidaying in London, Selfridge sensed a new retail opening for his entrepreneurial talents in the British capital. For £400,000 he purchased land and surrounds for a novel custom-built, mega-department store in the then unfashionable, western end of Oxford Street [‘Harry Gordon Selfridge’, Wikipedia, http://en.m.wikipedia.org].

“The American Invasion of London”
The London press was not initially warm to the notion of the American’s incursion into the world of London commerce. The City’s daily and drapery trade press described it as an “American Invasion of London” [Lawrence]. Selfridge’s loud in tone and bombastic approach to selling the project didn’t help in endearing him to the newspapers (described in some publications as being “aggressively big in scale”). Selfridge’s efforts to make the store a reality were driven by an unwavering vision: creating a “monumental retail emporium” was in his eyes the key to elevating “the business of a merchant to the Dignity of Science” (as he grandiosely put it). Selfridge believed to achieve that, he had to construct a gigantic “technologically advanced department store”, hence the massive amount of money, time and effort he put into the project [LAWRENCE, J. (1990). ‘Steel Frame Architecture versus the London Building Regulations: Selfridges, the Ritz, and American Technology’. Construction History, 6, 23-46. Retrieved from http://www.jstor.org/stable/41613676].

A ground-breaking, landmark modern steel-framed building
Construction of the Selfridge store was something of an architectural coup in itself. It won praise in its day from British building journals for its innovative construction methods…built with steel frames and reinforced concrete allowing for much narrower than usual walls, the frames permitted a far greater window area, so very large plate-glass windows could be installed (12 of which were the largest sheets of plate-glass then in the world!) – making for much more interior natural light and brightness (designed by famed US architect Daniel Burnham and associates). Originally comprising a 250′ x 175′ site, Selfridge’s had nine Otis passenger and two service lifts and six staircases. 100 separate departments were spread out over eight floors. While the physical construction of the Oxford Street store took only 12 months, Selfridge had first to overcome London City Council’s raft of objections (unprecedented size of the commercial structure, fire danger, etc). Selfridge and his engineers’ lobbying of the LCC Committee eventually resulted in the passing of two local building acts – LCC (General Powers) Acts of 1908 and 1909 – necessary for the Oxford Street project to be completed [Lawrence, ibid.]☯.

Rigid building regulations weren’t Selfridge’s only impediment to making his dream store a reality. Half-way through the project funding became a pressing issue when his partner and main backer Sam Waring, frustrated by Harry’s “grandiose and reckless approach” to the venture (Selfridge had grievously underestimated the complications of the project), withdrew his financial backing. The economic downturn in London (and in the US) at the time made alternative sources of funding a very grim prospect, and disaster was only narrowly avoided when a new backer, millionaire tea tycoon John Musker stepped in to rescue Selfridge [Gayle Soucek, Mr Selfridge in Chicago: Marshall Field’s, the Windy City and the Making of a Merchant Prince, (2015)]. After the big opening Selfridge remembered to make sure the store’s product lines included everything to do with tea-making (teapots, cups and saucers, sugar bowls, etc) [‘Selfridges: 7 things you (probably) didn’t know about the department store’, (History Extra), www.historyextra.com].

Selfridge, customer-centred strategies ahead of the curve
Harry’s approach to retailing was characteristically innovative on many fronts. Selfridge placed tremendous faith in advertising, the 1909 campaign leading up to the store’s opening cost a reported $500,000 in 1909 money [‘Selfridge Dies: Ripon Lad Who Jolted Empire’, The Milwaukee Sentinel, 9-May-1947 (online fiche)] (Britain’s biggest ever ad bill to that point) and he used it imaginatively together with ingenious publicity campaigns. Selfridge was the first retailer to make popular the idea of “shopping for pleasure”, rather than it being solely a functional task undertaken for necessity (as people conceived of it prior to Harry’s advent). In-store activities and arrangements often were original and novel (eg, displaying the monoplane used by aviator Louis Blériot in the first cross-English Channel flight at Selfridge’s (1909)✜). Another interest-generating feature in the store was Logie Baird’s television prototype shown on display in 1925.

Those specially designed wide windows were put to optimal use, Selfridge was the first to utilise window dressing where he could show off the latest fashions and utensils in open display [‘Selfridges 7 things’, loc.cit.]. The staff at Selfridge’s Oxford Street store (initially comprising 1,400 employees) were instructed to assist customers in their purchases, not to pester or use any “hard-sell” tactics on them⊟. Harry’s philosophy was “first get them in, then to keep them there. Thereafter they would buy” (Woodhead). One of Selfridge’s more forward-thinking moves was to locate the goods where they were visible and accessible to customers all around the store’s interior (a practice he devised while at Marshall Field’s in Chicago), rather than hiding them away from sight under counters (as had been the practice in most retail stores hitherto). He also introduced the concept of the “bargain basement” to retailing, a section where shoppers could find regularly discounted commodities [‘Innovation Lessons From The World’s First Customer Experience Pioneer — Infograph’, (Blake Morgan), Forbes Magazine, 26-Jun-2017, www.forbes.com ; Lindy Woodhead, Shopping, Seduction & Mr Selfridge, (2012)].

A visceral, holistic experience
Selfridge’s vision was to make the department store more than just a shop where you went to buy goods, he continued to introduce new features to Selfridges…elegant (moderately priced) restaurants, a library, reading and writing rooms and special reception rooms for French, American and ‘Colonial’ clientele. There were cookery demonstrations in the kitchenware section. All this marked a radical departure from the practices of other department stores which employed floorwalkers to ‘shoo’ people out of the store who were just hanging around and not actively engaged in buying an item! Even the store’s roof was put to productive if curious usage (a shooting range for an all-girl gun club as well as an ice rink✧) [Lawrence, loc.cit.].

The female shopper as an identified demographic
Selfridge saw the role of the department store in macrocosmic terms – “the store should be a social centre, not merely a place for shopping”. Unlike the conservative establishment of the day and much of the mainstream, Selfridge endorsed the Suffragette Movement…the new store was (in part) “dedicated to woman’s service”. In a 1913 advertisement Selfridge described the store thus: Selfridge and Co: The Modern Woman’s Club-Store” [‘Suffrage Stories/Campaigning for the Vote: Selfridge’s and Suffragettes’, Woman and her Sphere, (Elizabeth Crawford), 16-May-2013, www.womanandhersphere.com; ‘Selfridge Lovers: The Secret behind our house’, www.selfridge.com]. Astute businessman that he was, Harry popularised shopping as a leisure activity specifically for women…to make it a more welcoming and conducive place for them to spend time (and money!), he displayed freshly scented floral arrangements and had open vistas in the store, he employed musicians to perform and added beauty and hair salons (Paris-inspired) and art galleries. And he introduced public restrooms for women to the store (the first time ever done!)❅
[Forbes, loc.cit.].

The H.G.S. leadership style
As retail magnate go, Selfridge went against the grain for his day by not being an authoritarian business leader. He was temperamentally inclined towards fairness with regard to remuneration, increasing the wages of his staff, elevating them above “wage slavery”, treating them as employees as opposed to ‘servants’ (cf. Harrods) [ibid.]…not to overstate it, Selfridges shop floor staff were still exposed to long, long hours of drudgery but they were paid a livable wage for their arduous labours. A sample of the quotes attributed to Selfridge reflect his anti-dictatorship approach to business and interpersonal relations: “The boss drives his men, the leader coaches them” ; “The boss depends on authority, the leader on good will” ; “The boss says ‘I’, the leader says ‘We'” ; “The boss inspires fear, the leader inspires enthusiasm” ; “The boss fixes the blame for the breakdown, the leader fixes the breakdown” ; etc.✥ [‘Harry Gordon Selfridge’, Wikipedia, op.cit.]

Tower folly
Selfridge’s thrived, prospered and grew after the Great War (the store size doubled). Things didn’t always go the Wisconsin-born retail magnate’s way however…a couple of commercial reversals suffered by Harry during the decade concerned his plans for erecting a massive tower from the building which was rejected by the LCC Committee because of excessive height, and possibly also because it would have vied with the iconic St Paul’s Cathedral for attention (a fortunate outcome perhaps as the model drawings for the tower suggest the result would have been an incongruous coupling of architectural forms and a hideous eyesore!) [Lawrence, op.cit.]. The other setback was Selfridge’s proposal for a tunnel between the store and the nearest tube station, Bond Street, the plan ultimately got kiboshed!

Harry on the downslide
By the late Twenties Selfridge & Co was at the top of its game, the name was synonym with quality merchandise and Selfridge took its place as a stellar institution on the London commercial scene. Some time after the onset of the Great Depression things started to turn badly pear-shaped for Selfridge, as for businessmen as a whole. Harry Selfridge contributed to his own decline however by persisting in his flamboyantly extravagant spending. He squandered money on his womanising ways for which he earned a certain notoriety, for instance, $4M was wasted on his dalliances and affairs such as with the Dolly Sisters (Hungarian jazz dancers) – a part of his story that the TV series was quick to focus on) [Forbes, loc.cit.. By 1940 the company owed £250,000 in taxes and Selfridge was deep in debt to the bank, forcing him to sell out and retire from the business (retaining a modest annual consultancy stipend) [‘Harry Gordon Selfridge’, Wikipedia, op.cit.; Milwaukee Sentinel, op.cit]

Selfridges’ Birmingham Bullring store ▼Selfridges post H.G.S.
Selfridge & Co’s reversal of fortunes signalled a move from its circling competitors…rival department chain John Lewis & Partners acquired some of Selfridges’ provincial stores in the Forties, which was a preliminary move to John Lewis’ eventual takeover of the flagship Oxford Street store (1951). In turn John Lewis was itself acquired by the Sears Group in 1965. Its current owners, the Anglo-Canadian Galen Weston company bought Selfridges in 2003 for a reported £598M. Today the store name ‘Selfridges’ survives on the Oxford Street building, and in the three other regional branches in the counties (Trafford Centre and Exchange Square, both in Manchester, and the Bullring in Birmingham).

FN: Harry Selfridge from when he first arrived was perceived widely as a Trans-Atlantic “blow-in”, splashing his (and his wife’s) money around, vociferously determined to show the established home-grown retailers what a ‘superior’ type of modern department store looked like. Selfridge displayed a talent for polarising opinion…to his dazzled admirers he was “the Earl of Oxford Street”, the flashy Midwest American merchant was “as much a part of the sights as Big Ben” (as one columnist waxed lyrically), but to his detractors (including many of his competitors and much of the London press) he was merely a “vulgar American tradesman” or worse [Milwaukee Sentinel, loc.cit ; Woodhead, op.cit.].

PostScript: ‘Selfridges gets Sixties hip
In 1966, Selfridges, by now under Sears Holdings boss Charles Clore, recognised the youth market with a separate outlet for young women, Miss Selfridge (forming a link back to Harry Selfridge’s traditional focus on female customers). The new store in Duke Street signalled Selfridges’ wholesale embrace of the Sixties’ fashion revolution. Miss Selfridge used mannequins based on the straight line form of 1960s iconic model Twiggy and sold the latest in Mary Quant and Pierre Cardin fashions. In the early 2000s Miss Selfridge was acquired by the Arcadia Group [‘Selfridges 7 things’, op.cit.].

“The Queen of Time” AKA Ship of Commerce Statue ▼
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✱ described as “Downton Abbey with tills” [” ‘Mr Selfridge’: It’s ‘Downton Abbey’ with tills…”, The Telegraph, (Daphne Lockyer), 15-Dec-2012, www.telegraph.co.uk]
☯ the impressive Selfridge facade, personifying power and permanence, was later complimented by the addition of a decorative Art-Deco motif – the ‘Queen of Time riding her Ship of Commerce’ (clock-statue by Gilbert Bayes)
✜ around 12,000 visited the store to view the displayed history making French monoplane…no doubt plenty of these visitors also made spontaneous purchases while they were in Selfridge’s premises [Forbes, op.cit.]
⊟ Selfridge possibly was quite consciously also trying to make his front-line staff as unlike Harrods’ staff – who had a reputation for ‘snootiness’ and stiff formality – as he could! [Milwaukee Sentinel, loc.cit]
✧ recently the roof was again used in idiosyncratic fashion, by being turned into a “boat lake” and a “putt-putt” mini-golf course for customers
❅ in return, when protesting suffragettes smashed shops windows in Oxford Street, Selfridge’s was one of the few left unscathed
✥ other (very famous) attributed ‘Selfridgeisms’ are “the customer is always right” and “only xx shopping days till Christmas”