Amanda Aldridge on retail: Britain loves foreign retailers - except grocers

Much is made in Britain of our island mentality and our supposed resistance to all things foreign. But does this spill over into our attitudes toward high-street shops?

It is entirely possible that many consumers do not appreciate the magnitude of foreign influence on UK retail. Irrespective of what they choose to see, however, that influence is undeniable.

Some time ago I wrote in this column about the issues that face retailers establishing operations overseas. The implied focus was British companies looking abroad, but what about foreign retailers looking to Britain? Why do they choose to make forays into this island market?

Ours is obviously one of the biggest markets in Europe, one where history has shown that premium prices can be charged in certain sectors. For US retailers, the UK can prove a useful stepping stone into Europe.

Above all, as a body of consumers, we do not seem to treat foreign retailers with a sense of distrust. If the product offering is right and the price seems fair, we'll buy into the brand. As I have already hinted, although many shoppers will know that major names such as Gap or Benetton are foreign companies, do they realise that Zara and Mango, for example, are Spanish operations, or that Borders and Toys 'R' Us are US-owned? More importantly, do they care?

Our high streets are no easy hit for any old foreign retailer, however.

Even the mighty Carrefour, from France, decided on an about-turn after its initial attempt to break into the UK. That was 25 years ago, admittedly, and it did leave the legacy of the grocery hypermarket format, which has gone on to define our retail landscape. But even one of Europe's biggest retailers could not make it work.

One sector in which it is difficult to please UK consumers is food retailing.

Firms such as Aldi and Netto, which are trying to revolutionise the sector and take us down the discount supermarket route, can testify to this.

All have been here for more than 10 years but are still fighting a tide of snobbishness, something apparently inherent to UK grocery shopping.

Aldi and Netto have 400 stores between them in this country, but their long-term plans would give them a combined total of 4000 or more. Progress has been steady, but how they must pine for the fervour that greets discount retailers in almost any other sub-sector.

Some foreign retailers just can't get enough of the UK. Take Zara. It is already well-established here and plans to open seven more stores this year, with 15 more in 2005. Sister brand Massimo Dutti is beginning to gain a foothold, and parent company Inditex has announced the launch of another brand, Bershka, into the UK teen fashion market.

H&M plans to have 91 UK stores by the end of the year. The Subway sandwich chain will have 2000 franchised outlets in the UK and Ireland by 2010.

Krispy Kreme aims to have 23 of its American doughnut shops up and running in the UK in the coming years. And Borders has a dozen new superstores in development.

Foreign retailers have brought an awful lot to the UK in terms of innovation and product choice. I for one am quite happy that the UK consumer is indifferent to where they come from, because they add variety and interest to what is already a vibrant UK retailing scene. Long may it continue.

- Amanda Aldridge is head of retail at KPMG

30 SECONDS ON ... ZARA

- Spanish clothing store Zara's appeal is built on its quick turnaround of new designs. Whereas most of the fashion industry takes nine months to get items from planning to shelves, Zara has cut the process to three weeks. The 600 worldwide stores receive deliveries twice a week, always including new lines.

- Its reputation for up-to-the-minute fashion helped Zara's sales rise by 70% last year, according to Verdict Research, despite bad publicity over a rabbit fur cardigan that went on sale last autumn. It has now stopped using real fur.

- Interiors brand Zara Home was launched in August last year, with concessions in Zara's stores. There are now 30 outlets in four countries.

- Zara began with one store in northern Spain in 1975. The brand is now at the centre of a company earning £300m profit.

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