Our retail legacy is hard-wired into anyone over 20. Boots and Marks & Spencer, Sainsbury's and WH Smith: the essence of a nation of shopkeepers, as much a part of the unifying British experience as the BBC.
The high street retailers were middle class in a way that included the Pooter classes and the respectable working class. They were ubiquitous and socially responsible before anyone had invented the phrase "corporate social responsibility." They were family firms founded mainly in the Victorian era—in the mind's eye, the staff can be seen paraded in front of the branch fascias like a line-up of Mr and Miss Polly in, say, 1895. John Boot, father of Jesse, opened his British and American Botanic Establishment in Nottingham in 1849. Michael Marks's first stall opened in Leeds in 1884, Sainsbury's was a dairy in Drury Lane in 1869, Smith's started earlier—1792—and had its first big growth spurt with the 1840s railway boom.
All four had become familiar national institutions before the first world war and grew massively after it, and then again in the 1950s and 1960s consumer boom. The City editors and brokers' analysts now call them the "legacy" retailers. But in City-speak "legacy" means baggage—and baggage is bad. Baggage is inherited costs, baggage is inflexible ways, baggage means disappointing the shareholders. Over the last ten years, the four establishment retailers—the former widows-and-orphans stocks that belonged by right in every fund—have fallen off their perches. They have faced takeover bids—in the case of M&S and WH Smith—or the constant rumour of them. They have changed their top management teams on a two or three-year churn rate—again unthinkable in companies which until the 1980s employed "lifers" throughout the business and family members at the top.
As the chains grew ubiquitous, confident, paternalistic—with their lending libraries and pioneering employee benefits—those fascinating founding families became assimilated into the upper classes. Smith's, the earliest and grandest, had a viscountcy by 1891. The rest gathered a clutch of baronies in the 20th century. (Anthony Blond's wonderful autobiography Jew Made in England (2004) describes the social life of the Marks and the Sieffs.) But 21st-century retailing is a different story. The centre doesn't seem to be holding in the same way. Retail analysts are forever talking about polarisation, the increasing tendency for the consensus markets in practically everything to be torn apart between "luxury" added-value brands—Prada, Gucci and their peers—very focused specialists and lowest-cost operators. The universal middle ground that the legacy retailers occupied has become the commercial killing fields. It is analogous with the fragmenting television market, where ITV, the universal provider, is disappearing in a multi-channel world.
The one universal retailer to have succeeded in recent years is Tesco. Once a below-stairs brand, Tesco now serves sink-estate mums with its value brands and Marylebone High Street yuppies with its "affluent" ranges. Tesco overtook Sainsbury's as Britain's biggest food retailer in 1995 and has never looked back, driving profitably across eastern Europe and into every smart high street in London. Tesco's non-foods, sharply designed, sharply priced clothes, in-store pharmacies and news shops—have hit the other three traders as well. They outsell Boots in many familiar chemists' lines and cut into WH Smith's markets in news, magazines, top ten books, CDs and DVDs. And Tesco Finest hits the M&S "treat" food proposition.
But there is worse. The assumption always used to be that retailing did not travel—that culture, site monopolies and transport costs created a barrier to overseas retail entrants. Tell that to Gap (US), to Zara (Spain), to H&M (Sweden). Those three clothiers alone, with their sharply priced, highly segmented offers, have made M&S look slow. It was also assumed that online retailing would stay at the margins, serving just some of the people some of the time. But look at the impact it has had on books, CDs and even the middle-class weekly food shop. The legacy retailers don't have leading positions online like Tesco, Ocado (part of John Lewis) and Amazon.
Look at the commercial histories and you will see that the problems started in the 1980s, when City analysts were still suggesting their clients pile into the big four's shares. They all seemed to lose that boundless confidence in their original propositions and went on the acquisition trail. M&S bought Brooks Brothers in America and never made a penny out of it. Smith's bought a clutch of specialist businesses; Boots and Sainsbury's started to look dowdy. They all did things outside the core offer, most of which they have now sold off under City pressure.
Like a mass of other British institutions, they have emerged punch-drunk and uncertain. We still feel warm and wet about them. We want them to survive and succeed, but we are creeping off to Prada and Primark, Hermes and Hennes. Like Guy Ritchie, the baronet's stepson who learned to talk common while living ultra-posh, we hardly know where we are now.
