Honda’s hammer blow to the heart of UK manufacturing

First British car plant to shut since 2007 sparks fears for industry as Brexit looms

Sylvia Pfeifer in London and Kana Inagaki in Tokyo

© FT montage; Bloomberg

Britain was to be the gateway to Europe. It was the 1980s and prime minister Margaret Thatcher wooed foreign investors with the promise the country would be a springboard to the continent. Japan’s carmakers were enticed and flocked to the UK.

Nissan led the way, its first car rolling off the production line in Sunderland in 1986. Honda arrived in 1985 and started producing in Swindon in 1992. Car production began at Toyota’s plant in Burnaston in Derbyshire in the same year.

Fast forward three decades and the late UK prime minister’s promise hangs in the balance as Britain’s industry faces a cliff-edge, no-deal Brexit that threatens the loss of access to Europe’s markets just at a time when the big manufacturers need to make key decisions to remain competitive.

It is why Honda’s decision to close its factory in Swindon, which produces the Civic, is a hammer blow. Not just for the 3,500 people at the plant and up to 3,500 who could lose their jobs at suppliers to the carmaker, but for a British auto industry that is already stuttering because of a combination of challenges.

These include falling demand for diesel, disruption from trade tariffs, tougher environmental regulations and a seismic shift in the form of electrification.

“This is a body blow to UK manufacturing,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, the industry body. “Swindon is part of the fabric of the UK automotive industry.”

Investment in the sector has stalled. Levels were down by almost 50 per cent last year to £588m, according to the SMMT. At the same time, production has dropped to its lowest level in five years, with 1.52m cars made in UK factories in 2018.

Just two weeks ago Nissan announced it would no longer build its X-Trail sport-utility vehicle at its plant in Sunderland, the biggest motor manufacturing facility in the UK.

Jaguar Land Rover said in January it would cut 4,500 jobs from its workforce, a large majority of which are based in Britain. Ford has also warned it could make more cuts at its two UK plants if Britain crashes out of the EU without a deal.

But Honda’s decision is the biggest blow to the industry yet. It is the first-ever closure of a vehicle factory in the Japanese group’s 71-year history and will also mark the first closure of a car factory in the UK since Peugeot quit its Coventry plant in 2007.

Yet, despite the enormity of the decision, there were still questions around why Honda pulled the plug on Swindon now, with just 40 days to go before Britain leaves the EU with potentially no deal in sight and delays at customs almost a certainty.

For most of its existence, the Swindon plant has generated only marginal profits for Honda and production has dropped from a peak of about 250,000 cars before the financial crisis in 2008 to just 161,000. Yet the Japanese group’s unwavering loyalty to Britain remained even as the country decided not to adopt the euro against its wishes.

Despite an adamant denial from the usually softly-spoken Takahiro Hachigo, Honda’s chief executive, who cited the group’s need to invest in electrification as the main factor, the view among many is that Brexit must have played a role.

That has also created alarm among Japanese business executives, who are typically conservative but may be influenced by Honda’s decision to follow suit and move.

Already Sony plans to re-domicile its European headquarters of its consumer electronics business from the UK to the Netherlands, following a similar move by Panasonic.

“This is the same for any other Japanese company and I’m sure other firms are struggling with similar decisions,” said a senior executive with close knowledge of Honda’s operations. “There is no way a company can formulate its strategy in this environment. It’s pretty hopeless.”

Honda, however, was categoric that Brexit was not a factor.

Ian Howells, senior vice-president for Honda Motor Europe, insisted: “I can say hand on heart Brexit was not part of that decision.”

He added that Honda was due to make a decision on where to build the next Civic model “around this quarter.”

It was one “driven by global factors” and taken for strategic reasons as Honda moves to restructure its operations to adapt to the industry’s seismic shift towards electrification.

The company believes against that background it was best to focus on those markets where it has the highest production volumes, notably Asia-Pacific and North America, with volumes in excess of about 2m in each.

“When I compare those two markets against a market in Europe which is around 150,000 units where would you place your investment on something that is transformational in terms of business? It drives the decision towards where production is the highest, sales opportunity is the highest,” Mr Howells told the Financial Times.

He also played down the recent signing of an agreement between Japan and the EU which holds out the prospect of tariff-free trade from 2027.

Honda is betting the shift to electric vehicles will give the company another chance to revive its fortunes in Europe. That involves shutting down Swindon and exporting hybrids and EVs from Japan and China to Europe.

“We want to strengthen our brand once again in Europe and if we think about optimising global manufacturing, I think [ending production at Swindon] is the best option to take,” Mr Hachigo said.

Honda exports about half its Swindon-made cars to the US and these will instead be built locally following the plant closure. The closure will be in time for the roll-out of its next Civic model in 2021.

For Britain’s car industry, however, which had become a flag bearer for the country’s manufacturing, the future looks uncertain at best. A big decision looms for Toyota, which has pledged to build the next-generation Auris hatchback at its plant in Burnaston.

The company, known as one of the most conservative within Japan’s biggest carmakers, committed to maintaining its production in the UK as recently as two weeks ago. But analysts say Toyota, which declined to comment on Tuesday, has even more options than Honda in Europe since it has plants in France, Turkey and the Czech Republic.

“They have usually been the last to make these kind of decisions but that doesn’t mean they have never done it,” said CLSA analyst Christopher Richter. He pointed to Toyota’s announcement to withdraw from car manufacturing in Australia in 2014 after a similar decision was taken by Ford and General Motors.

And the spectre of Brexit looms large. Greg Clark, the UK business secretary, told MPs in the House of Commons that the one message coming from across the UK-based motor industry was that a Brexit deal should be ratified and “no deal” averted.

“The motor industry, Japanese investors and Honda in particular have been very clear for many months that Brexit is an additional worry at a difficult time,” he said.

Clarity on the terms of Britain’s departure from the EU is paramount, said the SMMT’s Mr Hawes. Its competitiveness is at stake.

“We need to make sure that we give global investors no reason not to invest in the UK,” he said.

“As we speak there are cars on boats from Japan and Korea bound for the UK but I have no idea what tariffs or customs arrangements they will face when they arrive here. It is a huge risk.”

Additional reporting by Robin Harding in Tokyo and James Blitz in London

Islamophobia and the new clash of civilisations

The Muslim and non-Muslim worlds are becoming increasingly intolerant of each other

Gideon Rachman

It is now getting on for 20 years since the attacks on New York and Washington of September 11 2001, and the idea that international politics should be organised around a “war on terror” is no longer fashionable. But suspicion and hatred of the Muslim world, inflamed by 9/11, has not faded with the passage of time. On the contrary, Islamophobia, as it is often called, is now a central part of politics in most of the world’s major power centres — from the US to the EU, China to India.

At the same time, countries that were once seen as strongholds of moderate Islam — in particular Turkey, Indonesia and Pakistan — are witnessing a rise in radical Islamism. The overall picture is that both the Muslim and non-Muslim worlds are becoming increasingly intolerant in their attitudes towards each other, with politicians more and more inclined to pander to fear-driven views of the world.

The most startling recent development has been China’s decision to imprison more than 1m Uighur Muslims in the northwestern province of Xinjiang in mass internment camps, in an effort to “re-educate” them. This policy seems to be a wildly exaggerated response to a relatively minor threat of domestic terrorism, combined with the Communist party’s increasing paranoia about social, political and regional conformity. The internment process has been unfolding since early 2017 and is belatedly attracting international condemnation. A UN human-rights panel has called on China to release illegally detained Uighurs. And, this month, Turkey became the first major Muslim nation officially to condemn Beijing’s policy towards the community.

The outside world’s slowness to respond to China’s actions in Xinjiang stems partly from a reluctance to antagonise the emerging superpower. But it may also reflect an increasingly hostile attitude to Muslim minorities in other parts of the world.

India, Asia’s other emerging superpower, has been governed by the Hindu nationalist Bharatiya Janata party for almost five years. BJP militants make little secret of the fact that they regard Islam as alien to India. About 14 per cent of the Indian population is Muslim, but there was not a single Muslim among the 282 BJP members elected to the national parliament in 2014. The fear of Islamist terrorism in India has surged following a suicide-bombing in Kashmir that killed 44 paramilitary police. With elections looming, an increase in communal tensions seems likely.

Anti-Muslim sentiment has also flared up in Myanmar, where more than 700,000 Rohingya Muslims were forced to flee the country by army offensives, amid reports of rape and murder. Most are now living as refugees in neighbouring Bangladesh.

The plight of Muslim refugees, however, is not a particularly popular cause in the west. Since 9/11, many more American civilians have fallen victim to school shootings than to Islamist terrorists, but anti-Muslim rhetoric by politicians has become more pronounced. In the immediate aftermath of 9/11, then US president George W Bush visited a mosque and asserted that “Islam is peace”; 15 years later, Donald Trump won the presidency after campaigning to ban all Muslims from entering the US.

In recent years, Islamist terrorism has hit Europe far more frequently than the US, with France suffering particularly badly. The fear of terrorism, combined with the arrival of refugees from the Middle East and north Africa, has produced a surge in support for nationalist and Islamophobic parties. Parties that campaigned against Muslim immigration are now in government in Hungary, Austria, Italy and Poland — and they are powerful opposition forces, shaping the debate, in Germany and France.

The anti-Islam radicalisation outside the Muslim world is coinciding with the rise of intolerant Islamism in some Muslim countries that used to be relatively immune from that ideology.

Recep Tayyip Erdogan, the president of Turkey, once lauded in the west as the model of a modernising democrat, is increasingly despotic and given to bitter conspiracy theories about the west. Turkey’s secularists are on edge, fearing an Erdogan-driven effort to Islamise their country.

The situation has been worsening in Pakistan for decades. Islamists are using blasphemy laws as a weapon to persecute religious minorities and political opponents. Salman Taseer, a former governor of the province of Punjab who spoke out against the blasphemy law, was assassinated in 2011. His murderer has become a hero of the Islamist movement. Imran Khan, the current prime minister, defends the blasphemy law.

Campaigns against blasphemy have also become a political weapon in Indonesia, the world’s most populous majority-Muslim country. Basuki Tjahaja Purnama (known as Ahok), a Christian and former governor of Jakarta, was imprisoned in 2017 after being convicted of blasphemy. Ahok was a protégé of the Indonesian president, Joko Widodo, known as Jokowi. But, running scared of the rising tide of Islamism, Jokowi has selected a conservative Muslim cleric as his running mate in April’s presidential election.

In the immediate aftermath of 9/11, there were endless discussions about a “clash of civilisations” between the Muslim and the non-Muslim worlds. It is no longer quite so fashionable to discuss the concept. But something that looks strikingly like a “clash of civilisations” is emerging nonetheless.

China double downs on gold in shift away from dollar

Aggressive buying by People’s Bank of China will be a support for prices this year

Henry Sanderson

China’s push to boost its gold holdings could see the country challenge Russia as the most aggressive buyer of the precious metal this year.

The country’s central bank, the People’s Bank of China, has bought about 32 tonnes of gold in the past three months. If it keeps purchasing at that rate, China would surpass Russia and Kazakhstan, leading buyers in 2018 which have tapered their acquisitions recently.

China is the world’s biggest gold producer but its gold reserves, at just under $80bn, make up a fraction of its total foreign exchange reserves of more than $3tn, meaning China is underweight the yellow metal, compared with peers. That 3 per cent share, for example, compares to 19 per cent for Russia.

The PBoC said this month that it increased its gold reserves by 10 tonnes in February, following purchases of 11.8 tonnes in January and 9.95 tonnes in December. That takes its total reserves to 1,874 tonnes, or 60.26m ounces.

In contrast, Russian purchases hit their lowest monthly level since December 2006 in January, with 6.2 tonnes of buying, according to Standard Chartered. Kazakhstan’s buying of 2.8 tonnes in January was also below its monthly average of 4 tonnes in 2018, according to the bank.

Central banks as a whole bought 651.5 tonnes of gold last year, the biggest buying spree for almost half a century, led by Russia, Turkey and Kazakhstan. Russia bought 274 tonnes of gold, its largest net purchase on record, according to the World Gold Council.

That, along with sustained demand for gold-backed exchange traded funds, helped gold prices hit their highest level in almost a year in February at $1,246.7 a troy ounce.

Gold has since fallen back to trade at $1,293 an ounce amid stronger equity markets and outflows from exchange traded funds which hold gold.

But continued buying by central banks could offer a “cushion” to the gold price this year, said Suki Cooper, a precious metals analyst at Standard Chartered in New York.

On Huawei, the US and UK Diverge

The West can’t agree on how to handle threats posed by China’s telecommunication giants.

By Jacob L. Shapiro


The United Kingdom believes it can handle the risks posed by using Huawei equipment in building its 5G networks. That’s according to a Feb. 19 report from the Financial Times, citing sources familiar with the decision made by Britain’s National Cyber Security Center. The report was published just a week after a former director of the Government Communications Headquarters wrote an op-ed arguing that a blanket ban on Huawei equipment was nonsensical. British officials may not yet be willing to publicly declare this the official government position, but that hasn’t stopped the stance from being widely leaked to the press.

That the United Kingdom’s main signals intelligence organizations – of Bletchley Park and Enigma-codebreaking fame – believe the threat posed by China through Huawei can be contained is noteworthy in itself. But the implications of that judgment are far more important. If the FT report is accurate, it means the U.K. is publicly breaking with its closest allies – the United States, Canada, Australia and New Zealand – on what has become a front-line issue between China and the English-speaking world. It would also contradict a study produced just seven months ago by the Huawei Cyber Security Evaluation Center Oversight Board, raising the question of what prompted such a sudden change of heart among British intelligence.

The HCSEC’s fourth annual report to the U.K.’s national security adviser, delivered in July 2018, concluded that due to the “repeated discovery of critical shortfalls,” neither the NCSC nor the HCSEC “can provide long term technical assurance of sufficient scope and quality around Huawei in the U.K.” HCSEC reached this conclusion on the basis of two areas of particular concern. The first relates to the NCSC’s requirement that it possess a reliable copy of the coding behind all computer programs deployed in the creation of the U.K.’s 5G infrastructure. (Comparing the reliable copy to the deployed program is one of the key ways the NCSC could detect the intrusion of potentially malicious code.) Huawei has cooperated thus far, but even if everything goes without a hitch, the NCSC has assessed that it would be mid-2020 before Huawei’s equipment could be brought into compliance with the requirement, to say nothing of the long-term challenges in assuring the accuracy and reliability of the copies.

The second major problem is that Huawei’s technology integrates both commercial and open-source third-party components that HCSEC concludes are not under either Huawei’s or the NCSC’s “sufficient control.” Ironically, one of the problematic components is software sold by a U.S.-based firm that will stop issuing security patches and updates for the software in 2020 – even though the Huawei products themselves would still be in service. That could potentially leave any British network with these Huawei products embedded vulnerable to external attack.


The HCSEC report was released the same month that the spy chiefs of the U.S., U.K., Canada, Australia and New Zealand agreed to cooperate on containing Chinese telecommunication companies, including Huawei and ZTE. Since then, the Australian and New Zealand governments have both acted to prevent telecom firms in their countries from using Huawei’s equipment in 5G networks. In the next few weeks, U.S. President Donald Trump is expected to issue an executive order expanding a ban on domestic use of Huawei technology. In December, Britain’s largest telecom company, BT Group, announced that it was stripping Huawei equipment from existing 3G and 4G networks and would not use Huawei technology for its core network. But after this initial spate of anti-Huawei moves, the campaign seems to have stalled. Just two months ago, the head of MI6 said the U.K. had tough decisions to make on Huawei and Canada arrested a Huawei executive at Washington’s behest – but at present, neither the British nor Canadian government appears convinced that a blanket ban on Huawei is the best course of action.

If the British government has decided against such a ban, it would represent a significant policy divergence between the United States and the United Kingdom, a divergence that may influence other members of the original five-country anti-Huawei coalition. Speaking to reporters on Feb. 18, New Zealand Prime Minister Jacinda Ardern said her government would conduct an independent assessment of the risks posed by Huawei. Canada, which has been dragging its feet on deciding whether to ban Huawei technology from its 5G network, can now point to the United Kingdom as an alternative model to the United States’ more heavy-handed attempt to contain Huawei. (Canada may even see this alternative as a way out of the U.S.-China crossfire in which it has been caught since December.) A shift in the British position would also vindicate other European countries like Germany and France, which have been skeptical of U.S. requests to ban Huawei. The German government, which as recently as last month was considering such a ban, issued a statement this week saying that it had already decided not to pursue one.

None of this is to say that the United Kingdom has broken with the U.S. and its other closest allies on the broader issue of the potential long-term threats posed by China. (After all, it was just last week that the U.K.’s defense secretary announced that the United Kingdom’s sole aircraft carrier, the HMS Queen Elizabeth, would be dispatched to the Pacific for a freedom of navigation operation designed to display Britain’s hard power and its will to use it.) It does, however, reflect the extent to which China has already won the race for 5G technological superiority. If there were other sources for the 5G equipment in question, a country like the U.K. would ditch Huawei without a second thought. But most British telecom companies think that blocking Huawei and other Chinese companies like it might lead to delays of at least a year for rolling out 5G – and those estimates may be overly conservative. Implicit in a decision not to ban Huawei is the calculation that the cost of pursuing a ban would outweigh the risk posed by Huawei’s equipment in the first place.

On the surface, this might seem like a reasonable calculation. After all, there’s been little direct evidence to suggest that China is already slipping malware into the systems its companies have exported, or that it has any intention of doing so. But that is precisely where the logic of this position begins to waver. In this case, past behavior does not shed sufficient light on future intent. For the U.S., the threat has never been about Huawei. It is about China. The U.S. is blocking Huawei not because it thinks the company has nefarious intent, but rather because it thinks the Chinese government would not hesitate to seize control of Huawei, or the information it possesses, and use its technology against the U.S. and its allies during a conflict. Considering the scope of Chinese President Xi Jinping’s current drive to consolidate the Communist Party’s power at home and to secure Chinese power and influence abroad, it is a worst-case scenario worth preparing for.

But there is a deeper, quintessentially human fallacy at work here, one that is neither Western nor Eastern, liberal nor communist – namely, the idea that something as complex as Britain’s 5G network can be so expertly controlled by anyone, whether British or Chinese. As the HCSEC report showed, even assuming the best of China’s and Huawei’s intentions, there are other serious vulnerabilities that come with using Huawei’s technology – and, indeed, in using or becoming too dependent on any single technology – that can be manipulated by external actors looking for weaknesses to exploit. In that sense, the potential threat posed by Huawei is as much – if not more – about the complexity of 5G itself as about the Chinese government’s willingness to use Huawei’s 5G technology as a cyber-Trojan horse. The notion that British intelligence can mitigate the risk posed by using Huawei equipment in 5G networks sounds more than a little bit like hubris, but then, the notion that China can use Huawei to conquer the Western world has always sounded more than a little bit like paranoia.

Far more consequential here is the public airing of a difference of opinion, however slight, between the United States and the United Kingdom over how to deal with China. In the grand scheme of things, it is a relatively minor disagreement concerning the implementation of an overall strategy rather than a disagreement about strategy itself. But using technological advantage to drive a wedge between coalitions of countries aligned against it is far more in keeping with Chinese strategic thinking – and in the long term far more threatening – than China using a secret Huawei switch to vanquish its rivals.

Retail’s Big Mistake: Slashing Payroll Cuts into Profits

When sales are down and the quarterly report is due, a common strategy for retailers to boost profits is to cut labor. Payroll is the second-largest expense for most stores, so reducing associates’ hours is a fast, easy way to make the numbers work. But this quick fix is “business school thinking gone wrong,” according to Wharton professors of operations, information and decisions Marshall Fisher, Serguei Netessine and Santiago Gallino. It is imperative for retail companies to recognize that employees are the most valuable asset on any sales floor, especially now. Increased competition from online shopping threatens the very existence of many physical stores, so top-shelf service can make the difference between a customer making a purchase or walking out in frustration.

In their latest research, the professors make the case for having an adequate, well-trained staff as the long-term solution to stable profit margins. They also unveil a mathematical approach they have devised to help companies determine how much staffing is needed at which locations. The research is captured in a paper titled, “Setting Retail Staffing Levels: A Methodology Validated with Implementation.”

“Understaffing stores and undertraining workers was never a good idea, but it’s especially bad now, because it takes away the biggest advantage traditional stores have over e-tailers: a live person a customer can talk with face-to-face,” the professors wrote in an article for Harvard Business Review. They joined the Knowledge@Wharton radio show on Sirius XM (listen to the podcast above) to talk about their work and share the embedded lesson for retailers who don’t want to become the next statistic. Nearly 8,000 stores closed in 2017, according to investment banking firm UBS.
To be fair, the professors said, retail is a tough business with extremely high turnover. For many managers, underinvesting in training for employees who could be gone in six months anyway seems like a sound decision.

“It’s easy to criticize when you’re not in their shoes, and it’s totally understandable,” Fisher said. “At the end of the day, you’ve got an earnings report if you’re publicly traded, and you’ve got to think about that.”
But temporary reductions in personnel or hours often become permanent or cyclical, and stores get caught in what the professors describe as a downward spiral until there is little or nothing left. “Cutting cost is OK if you’re cutting fat, but if you’re cutting muscle, that does more harm than good. And we see this in the data that we analyze,” Fisher said.

Using statistical software tools, the professors created the following three-step methodology for retailers to set staffing levels at each store location:

1. Use historical data on revenue and planned and actual staffing levels by store to estimate how revenue varies with the staffing level at each store. Use employee absenteeism to help you: If an employee does not show up for work at the last minute, check sales impact.

2. Using historical analysis as a guide, validate the results by changing the staffing levels in a few test stores.

3. Implement the results chain-wide and measure the impact.

The professors employed this method with several retailers, including a large specialty retailer, with significant results. For one retailer, right-sizing the staff in 168 stores over a six-month period produced a 4.5% revenue increase and a nearly $7.4 million annual profit increase, after accounting for the cost of the additional labor.

“I hope that our methodology can help retailers start thinking about sales impact of labor,” Netessine said. “All retailers think about, for example, sales impact of marketing activities. Should we put more marketing into Facebook or newspapers or TV? But very, very few retailers systematically think about what is the value-added of an extra dollar of labor in a particular store. In some stores, it’s negative. And in some stores, it’s a huge positive effect. Our experience in working with probably dozens of retailers at this point is that, over the years, they’ve been cutting, cutting, cutting, so there is usually a big impact of adding labor to the store.

Teach Them Well

The key to retail success isn’t just setting the right staffing numbers. The professors advocate for employees to be trained properly in both the products and the processes of the store.

“One surprising thing we found is that when you train store employees on a particular product, it’s not that they increase sales of only that product. What we found is they actually increase sales across a product category,” Netessine said. “We surveyed tens of thousands of employees, trying to understand what it is exactly that they learned. And what we found is that the training gives them overall confidence about the entire line of products.”
Fisher shared a personal story to illustrate how a well-educated salesperson is an asset on the floor: He enjoys backpacking with his son, so he went to a local store in suburban Philadelphia called Out There Outfitters to buy a rain jacket. The store uses a service called ExpertVoice (formerly Experticity) to train associates on the various products, so the salesperson easily explained the features and materials of each rain jacket in stock.

“I walked out having made a purchase,” he said. “That’s the value of training. You have a broad assortment. You explain it to the customer, and they know they don’t have to go somewhere else because they’ve picked the best choice for them.”

Some retailers are reluctant to spend what they may consider lost time on training when they could have an employee on the floor. But that’s a mistake, the professors say. Their research found that for every hour a month an employee spent on simple online training, the revenue from that employee went up about 6% that month. This training doesn’t have to be a formal, disruptive affair. ExpertVoice offers online modules that employees can complete on their smartphones during downtime, for example.

“I would like to think that our research can help emphasize the fact that employees are a huge asset for the retailer, that the way to think about them is as partners in the success that the company can have going forward,” Gallino said. “Being able to train them, retain them, assign them to the right times of the day or the right store throughout the chain is key to the success of the company and also for the employees to have a rewarding job.”

Digital exerts even greater pressure on brick-and-mortar locations to offer shoppers a reason to put down their devices, get off the couch and drive to the store. That’s where great sales associates can help, Gallino noted.
“What I’ve been hearing from retailers is that they see that their physical presence needs to become more experiential,” he said. “If you want to give customers a good experience when they go to the store, then this goes beyond knowledge about facts of the product. It’s being engaged, greeting the customer, learning how to interact with him or her.”

Added Netessine: “We looked at what people care about once they come to a physical store, and inevitably how knowledgeable employees are comes out as No. 1.”

The bottom line is that employees are an essential part of any retail operation’s top line, the professors said. It’s time for CEOs to manage beyond the numbers and see employees as something more than an expense.

“Retailers are struggling to maintain the top line, and we’re talking about things that can add 5% in the staffing, 6% for an hour of training,” Fisher said. “So, I think the key points are this is a gold mine opportunity for retailers.”