Tuesday, 11 March 2008

Dixons and BAA - retail hell

It's timely to highlight a recent complaint to BAA, Britain's Spanish owned airport operator. Today BAA announced a 20% hike in landing fees at Heathrow and Gatwick. It's been famously reported that BAA makes more money from car parking and shopping than handling aeroplanes. Its easy to see why - there's more space devoted to retail than there is for security, check-in or baggage collection. BAA isn't interested in what their customers came to the airport for in the first place.

Every one thought 'duty free' would end with the single EU market. It did in law but as 'shopping speak' it lives on. The duty is still paid by someone (the retailer from their margin) but the 17.5% vat is deducted from the 'high street' price'. But what is the real 'high street' price?

Dixons Tax Free, the electrical and technology retailer, has its own definition of 'high street' price. It's the price charged by Curry's Digital - before vat at 17.5% is added. So even though all the price tickets in-store read 'High Street' price, they're only referring to one store on the high Street. Apparently, according to sales staff, this has all been cleared with BAA, so that's OK then.

Of course there are many electrical and technology retailers on the high street besides expensive Curry's Digital. The reason Dixons Tax Free compares only with Curry's is because they are both owned by DSG - who also own PC World. BAA allowed Dixons to carry on with the brand, even though the Dixons name now only retails on the web. Dixons' prices on the web are less than those charged by Curry's Digital on the 'high street'.

Dixons 'Tax Free' price for the Panasonic DMC TZ3 - note high street price comparison £219.89 (small type below main price).

So here's our airport shopper. Lets call him 'The Chief Executive'. He knows the name Dixons - he's seen them on the web with their discounted prices. The Chief Executive wanders into the Dixons' Tax Free store killing time while his plane is delayed. He's surprised because the digital camera he saw on Dixons website last night is £15 more expensive than it was online where the tax was included. 'Ah yes, but we don't compete with the web, just our 'high street' prices' the assistant counters. 'But Dixons doesn't have any high street stores anymore' The Chief Executive 'points out. 'We compare with Curry's Digital which is part of the same group- that's their price, all our prices are checked against theirs daily - BAA has agreed to this'. 'So' says The Chief Executive 'Can you show me the sign in the shop which explains all this to customers?' By this point the assistant offers much less assistance (is this possible in branch of Dixons?) and suggests The Chief Executive refers his complaint to the manager - who isn't here today.

Consumers are offered a great deal of protection under consumer law. Misleading pricing is outlawed. Dixons Tax Free pricing looks misleading. Prices are not directly compared with their own trading name 'Dixons' it is a comparison with only one store - Curry's Digital - this is a pretty heavy qualifier of the generic description 'high street' price.
Complaining to Dixons group is a waste of time (I've done it before) but BAA is responsible for all the claims made by the retailers it licenses. So I email the Managing Director BAA Glasgow about the misleading prices.

The next day, while out and about on the high street I pop into a branch of Curry's Digital.
The same camera is on sale in Curry's Digital for £189.99. Of course Dixons Tax Free checks its prices daily, so I call the airport branch of Dixons. No the Tax Free price is still £187.14. 'But haven't you agreed with BAA to charge Curry's Digital high street price before vat is added?' I ask. 'Yes we have, we'll have to check your claim.' The manager at Dixons Tax Free digital calls me back with an explanation. The Curry's Digital price is a clearance line, whereas we will get more stock, so this is an exemption. 'Where is that exemption condition explained?' asks the incredulous Chief Executive. 'Its been agreed in our terms with BAA'.

'So is Dixons Tax Free price £187.14 and Curry's Digital £189.99?'
'So you'll be quite happy for me to report this to Glasgow Trading Standards?'
'There is another way... I could 'price match' the item and let you have it for £161.69 - the price it would be before vat is added'.

So The Chief Executive has established that its all just made up to confuse not only the airport shopper who might wrongly think they're getting a good 'tax free' deal and hoodwink BAA into allowing Dixons to charge whatever they like. BAA don't care - I'm still waiting for a reply to my email - as long as Dixons keeps paying the sky-high rent.


On yesterday's subject of loyalty - a surprising arrival from Sainsbury's via snail-mail. A happy birthday card - that's why people don't like giving their personal data to retailers - if I pop in to Sainsbury's before the end of the month a free box of Elizabeth Shaw mints await. Obviously they hope I will do my weekly shop too and feel warm about their gift while I trundle my trolley round the aisles. Actually I'm liking Sainsbury's at the moment. A couple of months ago I emailed their Chief Executive Justin King about a fairly major pricing error on a wine promotion - 25% off all wines - but my store's systems only applied a 20% discount ("25% wine swindle" ran the subject field of my email - always get their attention). I wondered if the problem had run nationwide. In a personal, high level response (but not from Justin) Sainsbury's assured me it was a local problem - and they would be writing to all Nectar card holders who had purchased wine at my store during the promotion. I was slightly sceptical - but pleased with the £30 of vouchers they sent me. A month later I received a further standard letter and another £10. It appears Sainsbury's had indeed written to all the Nectar card holders as promised. I don't think they went to the bother of faking a mass-mail out for my sake.

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