Henderson Retail Opens First New Concept Supermarket

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DANSKE BANK: FUNDING THE RECOVERY TO HELP BUSINESSES THRIVE AGAIN

One of the major challenges businesses have had to deal with over the past 18 months is the removal of their ability to plan ahead because of the COVID-19 pandemic.

Many in sectors such as hospitality and retail have been concentrating on survival and desperate to see the end of restrictions. But for a lot of others less acutely affected, the uncertainty over how and when life might return to normal has been enough to hold them back from investing in their businesses.

Thankfully, as we enter the second half of 2021, we are seeing positive signs that investment activity taken off the table during the pandemic is back in play and companies are moving into growth mode – for example, a rise in asset finance applications for new plant and machinery.

As Northern Ireland’s biggest bank, we want to see individuals and businesses in NI thrive and to give business leaders confidence that now is the right time to take steps like this.

In April, Danske Bank reaffirmed its commitment to NI and the local economy by creating a £500m Business Growth fund for medium to large size businesses designed to help them push the button on growth plans. At a time when other lenders are restructuring or increasing the amounts they want companies to self-fund to secure loans - our locally-based business teams are committed to raising funding for customers.

Our £500m fund is open to both existing business customers and businesses who are currently with other banks but are open to moving their banking relationship to Danske Bank. New business customers who borrow from the fund will benefit from removal of the cost of switching through no arrangement, valuation or legal fees, as well as a 75% transactional fee discount for six months.

There is evidence of a rise in demand for lending across many sectors. The engineering and manufacturing sectors are beginning to invest in growth again, with a number of Danske Bank customers making significant investments in robotics to automate processes. This investment hasn’t resulted in job losses – far from it, but rather workers being redeployed to higher level roles within the organisations.

Among the trends I have noticed is significant demand for funding of professional buy-ins and buyouts across a number of sectors, including accountancy, legal, veterinary, dental, opticians and general practitioners - perhaps as a result of founders and partners viewing the end of the pandemic lockdown as the right time to take a step back. Many businesses like these have traded well at the end of the recession and in the early post-Covid phase, so are well positioned to make such a transition now. We expect further M&A activity to accelerate through the rest of this year across various sectors.

Many businesses in the convenience store sector are seeking to invest in expanded premises and product offering as the trend for more shopping locally, continues.

We are also seeing significant liquidity within many businesses who availed of Government backed interventions, including the Coronavirus Business Interruption Loan Scheme and Bounce Bank Loan Scheme. While many companies who took this support for cash flow and to stay afloat are now focused on starting to pay back those debts, many other companies took the loans “just in case” and still have that money stored away for investment. While the debt hangover from CBILs and BBLs may prove challenging for some businesses, those with liquidity are seeking opportunities because they know the economy is expected to grow by around 7% this year and their own businesses should benefit.

We saw agility and innovation from businesses in response to COVID-19, with businesses pivoting into new sectors and for many the new products or services they created have become a core part of their business for the longer term.

Agility and innovation resonate with Danske Bank because we had to use both to operate remotely, deliver new products and still keep our branches open. The innovations that made that possible are now embedded in our own organisation.

As businesses build for a new future, we will make sure the funding is there to enable such innovation to translate into growth and expansion for our customers.

By Aaron Ennis, Head of North Business Centre, Danske Bank

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“Sausages!”

Those of a certain age may think that’s about that famous talking dog on “That’s Life” the famous Esther Rantzen TV show but for those of us dealing with out workings of Brexit it’s pretty much all we’ve heard this past month.

The Co-Chairs of the UK/ EU Joint Committee to manage the Protocol met on the 9th June to discuss the its implementation and the experience of business and households. It was an opportunity for them to collectively agree actions to make it work. Sadly, they failed.

The preamble to the Protocol makes clear its intent. Both the UK and EU agreed that “the application of this Protocol should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland”.

But for many in business that commitment is not their experience as the Brexit friction created by controls in the Irish Sea has meant supply chains have been strained.

Of course, this is the choice which the UK made when it chose one of the hardest versions of Brexit and agreed the first trade deal in history which made business most costly and difficult.

The biggest challenge for Northern Ireland’s manufacturers remains the preparedness and willingness of GB businesses to send components, ingredients and raw materials to our firms. When surveyed, more than half of manufacturers said their GB suppliers remain ill-prepared for sending goods to Northern Ireland but worryingly 1 in 5 report their GB supplier will no longer send stuff here at all.

But equally our manufacturers report that EU customers and suppliers are struggling to differentiate between the UK and NI too. 46% say they have issues with EU suppliers and almost 1 in 3 say EU sales have been impacted. Goods are currently not freely circulating to and from the EU’s market as promised.

There is no doubt that the UK needs to step up but equally the EU needs to get its act together too.

However, despite the challenges, our businesses remain committed to making the Protocol work. They recognise the opportunity which it provides and are appealing to the NI Executive to identify and grasp the opportunity which has been provided to us. Only 18% say they want the Protocol scrapped.

Business is clear, the Protocol is the law but we need help to make it work.

For them there is a need to quickly agree actions to decompress the politics and provide ‘stability’; an appeal for ‘certainty’ by agreeing long term weatherproof solutions; for greater ‘simplicity’ on the administrative requirements to move stuff across the Irish Sea; and, to remove costs or provide compensation to ensure ‘affordability’ for families and traders.

Get that right and the ambitions of the Protocol can be achieved and prosperity can flow.

And already there are signs that this is within our grasp. Our sales of goods to Ireland are up 44% and Invest NI report that they have already had more foreign investment enquiries in the first 3 months of 2021 than any of the last 3 years in full. Ulster Bank’s PMI’s also report a rapid growth in new orders as markets at home and overseas reopen from Covid restrictions.

We can of course substitute the ‘British Banger’ with great produce produced at home but if our manufacturers are to grasp our unique competitive position that’s provided by having access to both the UK and EUs markets then we need the NI Executive to secure opportunities with a compelling and consistent message to markets and for the UK and EU to ensure that our supply chains flow with the freedom both agreed back in October 2019.

Stephen Kelly, CEO Manufacturing NI www.manufacturingni.org @manufacturingni

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Localism on Steroids

By Glyn Roberts, Chief Executive, Retail NI

At long last we can begin to ask ourselves what success looks like for our post pandemic High Streets as we begin the long road of recovery for our retail and hospitality sectors after some of the toughest ever months.

Unlike this time last year when retail reopening began, only to close some months later, the game changer this time is the fantastic progress of the vaccine rollout.

Part of the solution to this challenge lies in fully developing and implementing the concept of ‘localism’ to repurpose our town and city centres as unique hubs at the heart of our community, with as Mary Portas said in her ground-breaking report, to reimage them as ‘destinations for socialising, culture, health, wellbeing, creativity and learning’

Retail NI members have always championed localism, priding themselves in supporting local suppliers, producers and manufacturers. 70 pence in every pound spent with an independent retailer is recycled around this supply chain and other local businesses. This is why we want to see localism ‘on steroids’ along with the reimaging of our high streets as destinations where residents and visitors can dwell as they work, rest and play as the central policy priorities of the Executive’s recovery plan to drive future post-pandemic prosperity.

Localism is not just about supporting independent retailers; it is also about empowering people and communities to reshape and repurpose their local villages, towns and cities and above else reinvigorate the leadership model.

Our eleven local Councils have a key role in the localism agenda and the Executive needs to devolve regeneration and other powers to them so they can play a fuller role in the recovery process.

We also need to focus on a plan to get people safely back to their offices and workplaces at an appropriate time. There is no doubt that homeworking might well continue to be an option for many employers, but many workers want the social interaction that goes with the office and of course they play a huge role in the footfall and spending in in our town and city centres.

The welcome news from Finance Minister, Conor Murphy of plans for a number of civil service hubs,

will be a boost to local towns and promote regional economic balance. It is vitally important that the location of these hubs is done on a strictly town centre first basis for maximum benefit for our retail and hospitality sectors.

The introduction of the High Street Voucher scheme in early Autumn will be a much-needed stimulus measure benefiting our whole economy. We need to be very clear that this voucher needs to be directed toward independent retailers and local hospitality firms and not large multiple supermarkets who have done well during the pandemic.

While the new High Streets Taskforce is rightly focusing on the medium to long-term policy priorities, we need a short-term ‘reopening’ group, comprising Executive, Councils and Business representatives to co-ordinate all of this over the next few months.

While many of our members, have a business rates holiday until April 2022, we have still the huge problem of fixing our antiquated and broken system of business rates to address, not to mention Reval 2023 to get thorough.

Let’s also not forget that the virus is still out there, and we need to ensure we do all of this in safe and timely manner while we complete the vaccination process and begin to chart a post pandemic economic and wellbeing recovery.

“70 pence in every pound spent with an independent retailer is recycled around this supply chain and other local businesses.”

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I Wouldn’t Start From Here

Professor Mark Durkin, Executive Dean, Ulster University Business School

There is no post-pandemic context in my view – we will be living with the out-workings of COVID-19 for the foreseeable future, in much the same way we live with flu.

Accepting that reality requires a comfort with uncertainty and ambiguity and this is a necessary entrepreneurial quality for business leaders to have as we start our recovery journey. As companies start to consider what the future may look like it is important not to be defined by what has gone before, or indeed what has emerged over the last year. Of course, there is every opportunity to re-envisage how the value proposition in a company can now be offered differently. Will the creation and delivery of that value now involve more online collaboration, hybrid platforms or possibly a return to largely face to face servicing by office based teams? Naturally, in thinking about such things, there is a temptation to look at other companies, competitors and sectors to see ‘what others are doing’ but it must be remembered the way in which any business can best configure its offer is highly contextual and customer-defined. That the pandemic has shown that a company can deliver services online because it had to, is not the same thing as this being the optimal way to deliver value longer-term. Because employees have perhaps been working at home for 18 months does not mean this is the optimal model for the effectiveness and efficiency of a business in terms of employee satisfaction or productivity.

In June 2021, The Guardian reported on research regarding ‘the empty office’. More than half of employees surveyed said they considered online meetings less productive than in-person and only 7% preferred meeting online. They stated that they missed the ‘peripheral vision’ and incidental information exchange that happened in the office with in-person meetings. It wasn’t just about the meeting of course – it was about what happened on the way to the meeting and over an M&S sandwich talking about the meeting - as well as talking about Mare of Easttown and how Kate Winslet doesn’t look as happy now as she did in Titanic. Whether employees come back to work remotely, on a hybrid basis or in the office full-time there will be some cognitive reframing required as business reopens and recovers. Techniques to shift employees’ mindsets so they are better able to look at a situation, person, or relationship from a different perspective are important given that realities for everyone have now changed and change is uncomfortable. What has gone before is gone – what lies ahead is not a return to the old normal. Easier to say than to truly accept however.

Many commentators blithely talk about the opportunity that exists around reinventing the office. We hear about the opportunity to create new flexible ways of working – all as if this has been some kind of panacea to a pre-covid malaise and that the pandemic has brought us a new opportunity to release the latent, bubbling potential of our people – potential that would already have emerged were it not for the fact that employees were just a bit tired from their daily commute all this time. Now that we are more enlightened such staff will suddenly convert that potential into exciting new endeavour for the good of the business, while working autonomously from home. This is naïve in the extreme. Leadership styles, according to McGregor, grow out of the allegiance of managers to Theory X or Theory Y beliefs. Theory Y managers rely on participative techniques and value the opinions of their employees; proponents of Theory X believe workers need to be controlled closely and told exactly what to do. Equally, some employees within those managers’ teams will be disposed to being located in the more social office environment where they can enjoy the incidental information exchange that happens there. Others will be more disposed to remote /home working but what issues may emerge for managers and supervisors around cultural alignment, team building and productivity in the remote model? In the cases of both managers and employees, the X/Y and office/home extremes cited above are just that – extremes - and underscore that this is really a continuum of preferences where managers and employees may seek to be located at various points between those extremes and this positioning may change over time. Think too about the customer and their preferred mode of being engaged with as part of the value proposition. In short, finding an optimal and reconciled balance around a harmonious and effective working model will not be simple.

Research indicates that well over 30% of new jobs which will emerge through the 4th Industrial revolution will require a formal university education and doubtless we need to consider carefully how we configure our human resources to best effect and make sure staff are developed to help future proof the business. The higher education sector is critical in underpinning business recovery and future-proofing our companies and the economy – the sector has a critical role to play in the acquisition of knowledge and skills and converting these to effect positive economic impact. With respect to the higher education delivery model, while many UK universities are retaining much of the remote online delivery activity they were compelled to engage in through the lockdowns, this may not be a sustainable or optimal approach. Learning, especially the deep learning fostered at university, is at its best when delivered as a highly social engagement. University campuses catalyse and stimulate opportunities for interaction, peer learning, group discussion, active learning through live case studies and solving complex problems in an environment fuelled by a collective sense of curiosity and critique. The service interface between university teams and students is a high involvement one. Ulster University’s new Belfast campus, as well as recent multi-million pound investments at the Coleraine and L/Derry campuses reflect an organisational commitment to place and to the role of the University in providing social learning spaces - as well as acting as agents of change within the regional economies where those campuses are located. Moving educational provision purely online can erode the differential value offered by place and consequently can reduce the opportunity for value co-creation between student and the university ecosystem. Such a shift could move education towards potential commoditisation in much the same way the closure of bank branches has led to the commoditisation of banking services. Once place and people are removed from the value proposition surrogate ques emerge through a renewed client focus on cost and price – always a difficult place to be unless your business has significant scale and cost efficiencies.

In short, we need to tread carefully as we reopen, reinvigorate and renew – this is a process that needs to be carefully considered so we don’t lose the opportunity to create the economy we would all wish to see.