Regardless of the size and profile of a business, taking care when reporting on finances and investments is paramount.
Supermarket giant Tesco made a big mistake last week – and is still being berated for it – when it overstated its half-year profits by £250m.
Industry commentators have blamed the error on a misjudgement of the revenue that it receives from multinational suppliers, the promotional activity it takes part in and assumptions about rebates.
But the bottom line is profits were counted before there was any ringing of tills.
The mistake follows news of flat sales and a decline in profits for the firm. Its share price has also fallen more than 40 per cent in the last 12 months.
People are astounded that a mistake like that could be made by one of Britain’s biggest and most respected businesses.
And some have even said it’s the kind of mistake that’s likely to made by a small business, which I believe is very unfair. Smaller businesses may not have as much capital behind them and will have less staff but that doesn’t mean that they are any less organised and able to report accurately on their finances. Efficiency and care are the most important factors here.
What it does go to show is that no matter how big a business is, in terms of stores and visibility, mistakes can be made.
Errors can be unavoidable in business – but glaringly obvious ones like this can make consumers lose confidence.
Maybe the big boys are becoming too complacent. Being too confident can stop a business moving forward. Relying on a loyal customer base is all well and good, but you need fresh ideas and innovation to keep existing shoppers interested as well as bringing new ones in.
Tesco’s financial faux pas has only added fuel to the fire for the Big Four – Tesco, Asda, Morrisons and Sainsbury’s – in terms of the question of their shift in status in the hearts and minds of UK shoppers.
A decade ago supermarkets were leading the way, but the rise in popularity of discounters like Lidl and Aldi shows consumer attitudes are changing. Value for money and saving money are two very important themes for shoppers. Supermarkets do run promotions and deals but some shoppers are looking to save across the board. They’re not so brand sensitive anymore and they don’t mind going for an alternative, much less expensive version of the same product if it’s going to save them some money.
How you shop and where you shop is dependent upon so many different factors, but even if you are a millionaire, the chances are you still want to know you’re getting value for money.
Convenience stores are also on the up. For the shoppers not looking for a big weekly shop, these stores are ideal for a top up shop day-to-day. Scotmid is said by some to bridge the gap between convenience and supermarket – and this is clearly proving a hit with shoppers, with Scottish Midland Co-operative Society reporting operating profits of £2.1m to July this year.
Symbol stores – ones that are part of a particular fascia group, like United Wholesale (Scotland)’s Day-Today estate, run by brothers Athif and Asim Sarwar – are helping to dispel the myths around convenience stores being more expensive.
They’re a big part of the local communities they serve and retailers are often very pro-active in the area’s activities and fundraising.
Tesco’s mistake will no doubt give shoppers food for thought and may allow convenience stores to take an even bigger bite out of the market.
Whatever the case, taking care when reporting your finances, no matter what size your business is, is always going to be the way forward.
Graduate Job Market Shows Signs of Life
University is hard work. Yes students have a reputation for partying every night of the week and sleeping late – but the reality is you need to put in the effort in order to get your degree. It’s not just going to fall into your lap.
But once students are finished – what then? Then it’s time to go out into the big bad world and find a job. However the reality is the market hasn’t favoured graduates of late which is why I was encouraged to read figures that suggest there graduate employment is on the increase.
The Higher Education Career Service Unit (Hescsu) looked at where graduates ended up six months after finishing their degree and it found that in January this year 7.3 per cent of people were unemployed, compared to 8.5 per cent in 2013.
Areas that were hit particularly hard by the recession, like sciences and technology, have experienced pick up, although many graduates in this field are finding themselves in other jobs not related to their degree.
Nevertheless these are really positive figures which will hopefully be the start of a new trend. The competition for graduate jobs is crazy and students really need to stand out from the crowd in order to secure employment.
The advice from Hescu to students, which I agree with, is to seek career advice early and take on work placements as this will allow them to experience their chosen path and prepare for employment.
It Made Me Laugh: Branson’s Holiday Free-for-All
Fellow entrepreneur, Richard Branson, has an incredible mind and some of his ideas have transformed the many industries in which he operates.
However last week I had to laugh at his latest brainwave, which I’m not sure is at all practical.
With immediate effect he will allow his staff, who manage his personal fortune, to take as many holidays they like – no questions asked.
Not only is he sure this is going to work but is encouraging other companies to follow suit, as he claims it will increase productivity.
I’m not an old-fashioned boss, I understand the need for staff to take time off and have a break from work. However this sounds like an HR disaster – surely there will be people that take it too far? And unfortunately it will be the rest of the team that suffers as a result.
It Made Me Weep: Violence in Glasgow’s Jewellery Quarter
I find myself despairing at the world sometimes. I count myself lucky that we live in such a thriving, forward-thinking country and I am constantly proud of the achievements we make almost on a daily basis.
But then when incidents happen, like the one in Glasgow’s Argyll Arcade last Wednesday, I find it difficult to comprehend such a violent act right on our doorstep.
A group of masked robbers descended on the famous jewellery quarter, which houses more than a dozen retailers, wielding sledge hammers, smashing windows and trying to grab as much product as they could.
Stunned shoppers and staff could only dive for cover as the robbers ran riot. Luckily no-one was seriously hurt but it could have been so much worse, which doesn’t bear thinking about.
