Our shops just can’t compete against the catalogue giants

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I’m surprised that local retailers haven’t been up in arms before, considering that the initial announcement came from Jersey Post’s public relations advisers several months ago. But I guess the sound of Argos catalogues plopping on our doormats has brought it sharply into focus.

On the face of it, the initiative seems a great way of providing us with a wider range of shopping possibilities, as well as helping Jersey Post to survive in an age when e-mail has undoubtedly taken over from letter mail.

The problem is that although Jersey Post is no longer a States trading company – having been incorporated for several years as a proper private company, with a chairman and board of

directors and all – it is still 100 per cent owned by the States of Jersey.

This is a problem the company has struggled with before – just look at what happened to

its fulfillment operation, Offshore Solutions, which used to employ around 70 staff servicing not only Jersey firms but also UK companies which were, it was claimed, using Jersey just to avoid

paying VAT on goods valued at under £18.

Then the UK government, backed by UK retailers, ordered a clampdown and the then Economic Development Minister took away licences from all those who did

not have a presence in the Island.

Now the current Economic Development Minister, Alan Maclean, is having to struggle to explain why our government has spent considerable effort – and cash – to promote its Think Twice, Buy Local campaign on the one hand, and at the same time is encouraging us to buy goods out of the Island through Jersey Post.

It’s all very well telling Jersey retailers that they have to compete on price, but realistically, how can Senator Maclean expect any Jersey shop to compete with the buying power of Argos? There is no comparison between the economies of scale enjoyed by a multinational catalogue company and the discounts applied by the normal wholesale market.

And we are told that there will be more big players to follow.

On the other hand, it has to be said that many of us have been buying goods over the internet in any case. I regularly order books from a UK company which also sends orders from a warehouse in Jersey. I could hunt down the books in the one or two local retail outlets (including garden centres), but it is easier, quicker and probably cheaper to buy them online.

The powers that be at Jersey Post are well aware of our buying habits because they have been watching the demand for their parcel post services increase dramatically in the past year or so. We can hardly blame them for wanting to make the most of the increased business.

It should also be borne in mind that there is now new management at the Jersey Post steering wheel. Long-serving chief executive John Pinel has stepped down this year and the business has been split, with entrepreneur Gary Whipp heading business development and Ship2me in particular.

Mr Whipp, who moved to Jersey several years ago after selling his previous company to Carphone Warehouse, is also chief executive of the Channel Island telecoms firm Newtel. Undoubtedly he knows how to market effectively.

Ultimately, the new venture will stand or fail on consumer demand. If it supplies the needs that we currently have, and makes a profit at the same time, Jersey retailers will have no choice but to find other means of competing effectively.

It will not be easy for them, for sure. In fact, right now, I am quite glad I am not standing in their shoes.

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