Bernard Ginns: The man who went plural is now electing to go eclectic

Speaking to me at last week’s chamber dinner in York, Allan Leighton revealed that he is going “eclectic”. This summer, the high-flying businessman is coming back from North America, where he has been working with major US and Canadian retailers, to take up “three or four” new roles in the UK.

Intriguing news from the former chief executive of Asda and ex-Royal Mail chaiman. Will they be in retail? “In all sectors,” he replied, adding that he will do “one big job, for want of a better description, and then I will probably do something in private equity and then I’m interested in a couple of businesses which I think have got some real growth potential, seedling businesses”.

Pressed for more information, he said he is in talks with a number of people. “That’s the way I’m really thinking about it,” he added. “I’m thinking about it in an eclectic sense. I’m not going to come back and do one thing. I’m probably going to do a number of different things.”

So, does that amount to the same thing as “going plural”? Probably not, as going plural describes moving from one full-time job to a variety of non-executive directorships. Going from a “plural” state of affairs to another set of engagements, including quite possibly some smaller businesses, warrants an entirely new label, hence the “eclectic” tag, which seems to sum things up reasonably well. We shall see what emerges, or, in Mr Leighton’s words, “starts to percolate out”.

Such colourful language does make a nice change from some of the dreary corporate-speak I encounter. That aside, Allan Leighton has a lot of experience at the sharp end of business, particularly retail.

He is deputy president of George Weston, the Canadian owner of Weston Foods and Loblaw, (he will continue his work with the Weston family after moving back to the UK), chairman of Selfridges and non-executive director of BSkyB, among others.

We discussed the tough time facing UK retailers, which are battling rising inflation, and what they can do to stay on top.

“If you look at clothing prices in the UK, they are up by 11 per cent year on year,” he said. “They have been going down for 20 years so it’s not the fact they are up 11 – which is in itself significant – that is a hell of a change in the trend.”

He added: “The level of inflation that most businesses can work with is two or three per cent because that covers your costs and doesn’t have that much impact on how consumers think.

“When you get north of that, you get into difficult territory and volume starts to fall off and then that becomes a problem. We know consumer confidence is not very good.

“Unfortunately everything you read tends to be bad news and that affects the way people think. If you think about what happened in one week with the tsunami in Japan and the trouble in Libya and the Middle East, that’s a shaker.”

The chief executive of the Co-op, Peter Marks, said last week that there is no growth whatsover in the grocery market. How can the likes of Yorkshire’s Morrisons and Asda cope with that?

“It’s a balancing act. Business today is largely a balancing act because there’s no point chasing volume that isn’t there but you have to keep enough volume in your business to control your cost line and so day by day, week by week, you have to balance the business. That’s why too much inflation is a bad thing because you don’t want the volume going down.

“Most of the businesses are under a bit of pressure, but you have to remember that the four UK retailers – Sainsbury’s, Morrisons, Asda, Tesco – are four of the best in the world.

“I see things from a global perspective and they are well-run businesses and are very good at the things that count in this sort of environment – all the supply chain stuff.

“It will be dog-eat-dog, because it always is. They are four good players and it becomes a bit of a share game and you don’t want to lose any share.

“The market is as the market is, but the game is don’t lose any share. But at the same time, the game is don’t get yourself a lot of share that you pay a lot of money for because that’s folly.

“Sales are for vanity, profit is for vanity. When it’s like this, just bear that in mind.”

Looking on the bright side – like the most successful business leaders, this man seems an optimist – Britain still has a big economy and is populated by consumers who continue to buy things, he said.

If businesses can afford to invest now, they should do because when the economy picks up, their companies will be stronger, he said. A good point – and fundamentally true.