Just Eaten?

When Dav and I were first married we’d often watch a video on a Saturday night. “Why don’t we stay in and watch a film tonight?” my lovely wife would say.

What she meant was, ‘Why don’t you drag yourself away from the fire, put your coat on, drive down to Blockbuster, rent a video – and a tub of ice-cream – and bring it home? And then tomorrow you can do exactly the same and take it back.’

…And as the rain lashed down I’d think, ‘There has to be a better way.’ And now there is. Amazon, Netflix, on demand… The idea of going out into the dark and the cold to rent a film is simply ludicrous. Dan and Rory fall about laughing.

Blockbuster? At its peak in 2004 it employed 84,000 people worldwide in more than 9,000 stores. It filed for bankruptcy in 2010 and its last stores were sold the following year.

Until recently, I felt much the same about takeaways. “Oh, I can’t be bothered to cook. Why don’t we have a Chinese or an Indian?” But it wasn’t a takeaway: it was a go-and-collect.

Just Eat

Then the takeaway shops started to deliver – and technology and big business eventually came together in a plethora of Just Eat signs. The company started in Denmark in 2000, is now headquartered in London and operates in 13 countries around the world. It’s just posted a 44% increase in revenue for the third quarter and is the most visible face of our love affair with takeaway food. There are now more than 56,000 takeaways in England, up by 4,000 over the last three years.

So let me pose a question: could Just Eat eat the restaurant industry?

Ever since this blog started in 2010 ‘nothing is impossible’ has been a constant theme running through it. ‘Don’t think it can’t happen because, today, it can.’

So could the restaurant industry – that basic staple of birthdays, anniversaries and targets achieved – be under threat? According to accountants Moore Stephens the answer is yes. They cite the rising cost of imported food because of Brexit and problems with increasing business rates – due to rise by 42% in some parts of London this year – and suggest that 20% of the UK’s restaurants could go out of business.

Factor in the rise and rise of the takeaway and the number could be even higher. ‘Go and collect it’ has become ‘tap the app and have it delivered.’ Eating out means getting changed, booking a table, going into town, one of you can’t drink because you have to drive… “Let’s just stay in, order a takeaway and watch a film” is quick, easy and convenient – and a lot less expensive.

But business rates and Brexit are one thing: a fundamental shift in consumer behaviour is quite another.

And right now the words ‘fundamental shift’ apply everywhere: ‘don’t think it can’t happen because it can’ probably ought to give way to ‘don’t think it can’t happen because it already has.’

Five years from now chatbots will be interacting with your customers, autonomous vehicles will be reducing the need to own a car and machines will be learning. As a recent article in Forbes put it, ‘Algorithms will be doing the heavy lifting.’

…And that’s before we consider voice control. With Alexa – or her second cousin – sitting in every home and on every desk, controlling everything in your home and office with voice commands will be second nature.

It’s easy to see the future glass as half-full. Amazon drones flying overhead delivering everything we need and Just Eat and Deliveroo drivers knocking on the door with all our meals. Throw in the ability to work from home and we may never need to leave the house again.

But you won’t be surprised to know that I see the glass as very much half-full. Yes, change is coming and it will impact areas of our lives and businesses we thought were set in stone. But change always brings opportunity – and who better to capitalise on it than the members of TAB UK?

 

Xi Jinping is on the March. Should we be Worried?

One of my more serious posts this, and it doesn’t come much more serious than the 19thCongress of the Chinese Communist Party held last week in Beijing.

The Chinese capital is a fair old distance from the UK – 4,978 miles from TAB HQ in Harrogate if Google is to be believed – so should we really worry about what’s happening there? Wouldn’t we be better off just concentrating on our businesses?

Maybe not…

Napoleon famously said, “Let China sleep. When she wakes, the world will tremble.” Well, China most certainly is awake now, and last week President Xi Jinping was confirmed in power for another five years. While Europe was struggling to agree on when talks about talks about Brexit might begin, Xi was calmly laying out plans for China to dominate the world economy. No surprise that Forbes is now suggesting China will overtake America to become the biggest economy in the world as early as next year

But let’s step back a moment. Who is Xi Jinping? He may not have a perma-tan or a tower named after him, but it is arguable that China’s Xi Jinping is the real holder of the ‘most powerful man in the world’ title.

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Five years into a theoretical ten year term Xi is the General Secretary of the Chinese Communist Party. Born on June 15th 1953 he is married to Peng Liyuan and has one daughter, who was educated at Harvard. His wife was formerly a very popular singer on Chinese TV and among her hits are those classic rock anthems, People from our Village, My Motherland and In the Field of Hope.

Xi’s father, Xi Zhongxun, was a hero of the Communist revolution and, as such, Xi enjoyed a privileged upbringing as a ‘red princeling.’ All that changed with Chairman Mao’s Cultural Revolution: his father was imprisoned, the family humiliated and one of his sisters committed suicide. At the age of 15 Xi was sent to the countryside to be re-educated. The story is that Xi lived in a cave in the mountains – but he survived and at the age of 22 he returned from the countryside, “full of confidence and with my life goals firm.”

With his father released from prison and rehabilitated, Xi joined the Communist Party and began a steady, if unspectacular, rise through the ranks. By his 50s he was a senior party leader, but someone still with a reputation for dull competency. When he became Communist party leader in 2012 he was very much a compromise choice – but since then he has ruthlessly consolidated his power. He is now unquestionably China’s strongest leader since Chairman Mao.

So while Theresa May was begging for help (according to Jean-Claude Juncker) and Jean-Claude Juncker was heading for the bar (according to David Davis) Xi Jinping – untroubled by petty irritations like democracy – was telling the delegates what was going to happen and sending them back to work. Specifically, he was telling them about ‘One Belt, One Road.’

China has a domestic population approaching 1.4bn – nearly one-fifth of the world population of 7.5bn (do not click the link: it is terrifying). But ‘One Belt, One Road’ – a huge infrastructure project – is intended to massively extend its economic reach, market and influence.

First mooted by Xi Jinping around 2013, the initiative will see China’s push into global economic affairs extending through a land based Silk Road Economic Belt and the Maritime Silk Road, with the focus being on infrastructure investment, construction, railways and highways, automobiles, power and iron and steel.

The land based Belt runs across Asia and through Europe. The Maritime Road (yes, you would have thought that the ‘road’ would be on land…) reaches South East Asia, Oceania and North Africa. More than 65 countries, 4.4bn people (63% of the world’s population) and 29% of the world’s current GDP are in its path.

Sitting here in the West it is easy to see the Belt and Road initiative as simply a naked power grab. I think I’ll keep the blog out of geo-politics, but what’s undeniable is that it will give China access to vast natural resources and a huge pool of labour. And whatever you think about the rights and wrongs of the situation, that is not a labour market wrapped in red tape about a national living wage or health and safety.

In the medium to long term that has to impact on manufacturing industry in the West – and as advances continue to be made in robotics and AI, it may end up impacting a lot more than manufacturing. China is awake, she is flexing her muscles and we may all have cause to tremble in the future.

Meanwhile let us finish with a word of sympathy for the delegates back at the Congress Hall – who may well have been glad to escape at the end. Xi Jinping spoke for 3 hours and 23 minutes to an audience that was by no means in the first flush of youth. What’s the Chinese for ‘comfort break?’ A four-hour TAB meeting needs at least one interval. But given that popping out in the leader’s speech was almost certainly a treasonable offence, you have to wonder how they coped…