A new age of customer revolt
By Wayde Bull, Planning Director at Principals.
In the pre-dawn hours of Friday last week, 300 citizens pitched battle with 160 police in a street riot that raged for seven hours. The unrest, fought over burning barricades, was sparked by heavy-handed police efforts to arrest local residents believed to possess petrol bombs.
Another Twitter-fuelled uprising from the streets of Libya, Syria or Bahrain? No, it’s the unlikely story of a fierce community protest in the English city of Bristol against the powerful supermarket group Tesco.
The aggressively ambitious retailer, which operates more than 2500 stores in the United Kingdom, is facing growing resentment from local communities who feel overwhelmed by the chain’s relentless push to open more stores, large and small.
According to The Sunday Times, the new outlet in Bristol at the epicentre of last week’s riot was the city’s 18th Tesco store. Protestors argue that the character of local communities is being lost to the homogeneous national chains, which have the power and resources to squeeze out local retailers by railroading local planning laws. And there’s no end in sight; the BBC reports that the big four supermarkets chains are securing planning permission to open a new store a day across the UK.
It is the disproportionate power of big businesses like Tesco – and the largely ineffectual efforts of government of all kinds to rein them in – that is fuelling these angry new forms of community protest, with echoes of the Arabic uprisings. And in the UK at least, the Bristol riot is not an isolated case.
The board of BP faced down angry oil spill protesters at the company’s annual general meeting in London earlier this month. Protesters bought shares to gain access to the meeting and aided other angry shareholders by voting out the head of the safety committee and censuring the chairman with a small yet embarrassing vote against his re-election.
A far broader array of big UK companies are caught in a growing storm of protest around tax avoidance.
A new and social media-savvy protest group called UK Uncut was born out of anger at the austerity budget announced by the new Cameron government in October last year. The group believes deep cuts in public services would be unnecessary if big business was held to account for systematic tax avoidance.
The week after the deep public service cuts were announced, a group of 70 protestors entered Vodafone’s flagship store on London’s Oxford Street, sat down and brought the shop to a standstill.
Similar sit-ins spread to many other Vodafone outlets within hours, fuelled by tweeting protestors. The group accuse Vodafone of avoiding tax payments of about £6 billion a year, a claim that Vodafone ardently denies.
The grassroots group, which came into being through a simple #uncut Twitter hash tag, has gained a powerful voice in the social and mainstream media in just six months. The organisers of UK Uncut wryly observe that Vodafone’s slogan is “Power to You” and implore Britons to “do more than just join a Facebook group – to stand up and defend what they believe in”.
UK Uncut has dramatically broadened its protest effort beyond Vodafone, to now include other alleged tax dodgers such as Boots, Cadbury, Walkers Crisps, Diageo, Fortnum & Mason, TopShop, Barclays and, yes, Tesco. All are venerable British brands with large consumer franchises to protect. It will be fascinating to watch how these businesses answer UK Uncut’s accusations and whether their responses have a bearing on their market share performance.
It’s a striking demonstration of an adage ironically coined by former Vodafone chief executive Arun Sarin that “a brand is what a brand does”. Consumers today, networked together in communities of shared interest, have uncommon access to information, positive and negative, about the conduct of businesses. Reputation management is now vitally linked to brand management, in real time.
All of these fiery examples of protest against big brands are occurring half a world away, in a very anaemic UK economy.
How likely are such uprisings in Australia? Not very likely at all, judging by the comments of Bill Shorten, the Federal Minister for Financial Services & Superannuation, who has been battling with the powerful insurance lobby of late. He wrote in a recent opinion piece for The Daily Telegraph: “I do wonder sometimes whether we flex our muscles enough in Australia. In a modern competitive economy we should never let our relaxed and friendly attitude inhibit our powers of patronage. Companies need to be treated like politicians. If they’re not good enough, then don’t back them.”
While politicians regularly urge Australians to punish big businesses that act against the public interest, it is the threat of legislation that often provides the tipping point incentive to embrace change.
National Australia Bank chief executive Cameron Clyne stands out as a local big business executive who is embracing customer-focused reform, in preference to government-mandated change. In explaining his motives for NAB’s highly publicised “break up” with the other big banks, he said: “If you want to see industry profitability destroyed, get a government involved.” As NAB’s recent advances in market share and customer satisfaction attest, caring about customers is simply an act of enlightened self-interest.
First published on AFR (www.afr.com) - 28th April 2011
