'Brits love a bargain', says Gerald Ratner, as he weighs up the challenges facing UK high streets
PUBLISHED: 16:38 02 October 2018 | UPDATED: 16:38 02 October 2018
Gerald Ratner has a better perspective than most about what it takes to achieve business success on the high street and in the online world. He once ran the successful jewellery chain The Ratner Group, and now operates the online jewellery business Gerald Online.
Somewhat ironically, it was a joke comparing a set of his company’s earrings to an M&S sandwich that “probably wouldn’t last as long” that cost him his job as head of the Ratner Group, and now, it is Marks & Spencer he criticises when it comes to the current crisis gripping the high street.
“The Marks & Spencer of this world have lost the plot, they no longer know what they’re doing,” he said at the MENTA Business Show in Bury Saint Edmunds today, where he was appearing as a speaker. “They spend a huge amount on advertising, but there’s no point spending all that money advertising a product that nobody wants.
“When people are not doing well, they blame the weather, rents and business rates. But if you’ve got a restaurant or shop that people like to go to, you can deal with all that other stuff and still make a profit.”
Mr Ratner points to Primark, Sports Direct and Uniqlo as examples of brands that are managing to beat off online competition and thrive on the high street.
He claims that although many retailers are complaining about having to stump up business rates, “actually, that isn’t the problem.”
“The problem is that internet companies are taking business away because they are offering a better product than the high street in terms of price and service.
“You can send back anything you want from Amazon, as people do, it arrives very quickly, and in a lot of cases, it’s much cheaper.”
Mr Ratner claims that the cost of selling products on the internet is actually much higher than people think, and much more than it used to be, because of “the competition for words, for pay per click.” “I found that when I started in 2003, my marketing costs were about 5%. They’re now 25%, so its no longer cheaper (to run an online store), unless you’re Amazon and you don’t need to spend all that money on marketing.”
Mr Ratner was one of the first British businessmen to conquer the US market, and by the time he stepped down from the Ratner Group, he had more than 1,000 stores Stateside.
He claims that the US market is very different to the UK - because we Brits love a bargain. “Its very price driven in the UK.
“A lot of so-called commentators and experts live in the West End of London, which is a totally different market, but in less affluent areas, British people always want a bargain.
“To combat the internet in the UK you’ve got to have best service and products, but most importantly, you’ve got to have price. You cannot ignore that.”
Mr Ratner also claims that while in America there are “loads of parking lots,” in the UK, councils make it “as difficult as possible” - “so you have to drive around in circles in the pouring rain. They don’t make the shopping experience very pleasant.”
Mr Ratner also slams attempts by retailers to draw in trade with gimmicks such as free Proseccos or yoga classes. “That’s a load of rubbish.
“Its not going to stop you from buying a book that’s half the price on Amazon.”
Read about Mr Ratner’s comeback from his historic gaffe here.