Fresh from a refreshing holiday in the sun in St. Barts to celebrate his 62nd birthday, with daughter Chloe and super model Kate Moss on hand to join in the fun, Sir Philip Green is reportedly now becoming a green grocer – getting ready to sell radishes for a penny more than he pays for them. This is a business where you only succeed by rapidly turning over large volumes at low margins.
His British Home Stores (BHS) department store chain is to start selling food, and the nation’s supermarkets on head-on it seems, on the nation’s High Streets.
A billionaire, Sir Philip, who owns a bunch of high street chains including BHS and Topshop, has told a British Sunday newspaper that he aims to sell branded food products at 10% less than the competition in up to 150 stores .
This could hardly come at a worse time for the top grocery supermarket chains – Asda, Morrisons, Sainsbury’s and Tesco who are already being attacked by major discounters Aldi and Lidl on their home turf.
Morrisons, which has shown trading losses recently, is already promising to dedicate about US$1.6 billion (£1 billion) to cutting prices in the coming three years. Its competitor Asda has also begun to slash its prices too.
Initially the first two of Sir Philip’s BHS stores will now offer food as soon as later this month – with plans for about 140 more later in the year.
Sir Philip commented on his new plan, saying: “There’s no point in opening up and getting torn apart because we haven’t got competitive prices, ” adding…
“We know what we’re going into – the most competitive food landscape for some time.”
“On the basis that everyone is going into the high street and convenience, maybe it’s an opportunity. If you don’t buy a ticket, you can’t win the lottery.”
The new in-store food openings will reportedly see sections of stores set aside for branded products such as bread and cakes, frozen foods and carbonated and other beverages.
The idea that Sir Philip was considering launching food stores within BHS again was first floated as a trial balloon last year. Now it seems he is going ahead.
BHS stores used to sell food before he bought it in 2000, so this new step is a sign of the increasing general intensity of the merchandising wars on the British High Street.
And, of course one should not forget the elephant in the room when it comes to selling food in department stores on British High Streets. BHS’s rival Marks and Spencer sold US$8 billion (£4.9 billion) of upscale quality foods in 2013, and it has begun to carry regular branded foodstuffs as well.
Even though they have had a few problems of their own in recent years, one might think M&S are unlikely to just sit back and watch as BHS tries to get back in the game they were pushed out of after 2000, when Sir Philip gave up on food to begin with.