Future of Retail — The CFO Issue

issue 04

“It’s absolutely critical companies are at their core purpose-driven businesses with values.”

try and take a long term view. We’re not involved in the obsession with like-for-like sales, which is such a crude measure. As a family-owned business we remain very much in control. This would be different if we had to deliver on quarterly numbers,” he explains. One area that fits in the long term camp is the

‘purpose-driven’ strategy that Steele is pursuing at Cook whereby it operates to certain values such as treating employees well, being environmentally aware, and treating all people fairly. This is in contrast to operating the business to just maximise short term financial gains. “It’s absolutely critical companies are at their core

purpose-driven businesses with values. The challenge for me is to articulate the message to all stakeholders including investors, suppliers, employees, and the community that there is value in this stance. It would not traditionally have been seen as having value and in the short term it does not show as such but by doing it you are giving long term value to the business,” explains Steele. From an old school perspective he says it could easily

be seen as simply denting profits but the offset of this is that it undoubtedly generates trust and loyalty: “From a FD’s point of view I’m trying to get a balance in the value being created within the business.” Another big balancing act involves handling the

company’s purse strings whereby investment is made in legal and safety aspects alongside some more exciting elements. “We’ve an ever more demanding shopping list of things to invest in that gives the best returns to shareholder but we also have to do some things for legal and safety reasons. The top one for us is not hurting customers and number two is the health and safety of our employees. It’s hard to get a focus on these things in an entrepreneurial business because people want to focus on things like the newest shop-fits. The challenge of the FD is to ensure there remains a focus on the less

interesting things,” explains Steele. There are certainly myriad things to invest in because

Cook is particularly complex being a vertically integrated business comprising manufacturing, distributing, and multichannel retailing with stores and an online operation. With Cook’s online business showing annual growth of 30-40% Steele says there are decisions to be made about supporting this growth through IT investment. “People’s expectations are high. They expect to

be able to place an order as they move between their devices and for it to be delivered not in four days but in a couple of hours. This requires investment,” he says. One added element of complexity that digital brings

FDs is the data that it inevitably creates: “When you have online and delivery then you’ll have big data issues. There is a lot of online growth and it’s driven by getting people’s details and emails. The General Data Protection Regulation – the update to the Data Protection Act - comes into play in May 2018 and because it’s legal compliance it comes into my remit.” On top of managing all this Steele says there is one

other area that is focusing his mind and this involves the uncertainty around Brexit and the implications of Donald Trump being in power in the US. Brexit has already resulted in a 10% devaluation in

Sterling that he says has pushed up the cost of Cook’s packaging, which is all sourced from within the EU. On top of this there is the general uncertainty in the economy post the Brexit vote that has dented consumer confidence and has the potential to impact sales. It is also causing some concern with the company’s labour supply as it includes a high percentage of non-British people – many from around Europe. “I’m not sure if there will be any restrictions on them.

I assume not but all the people that are employed by us are asking us about it,” says Steele.

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