Page 124 - DMGT553_RETAIL_STORE_MANAGEMENT

Unit 7: Store Audit

Notes
Franchisees
The Body Shop is a multi-local business, built on franchising. Although the firm owns a
number of shops, 1,300 of the 1,500 outlets are franchised. This has allowed the phenomenal
growth rates of the firm over the last 21 years. Franchisees have the benefit of an easily
recognised, proven product and brand name, guaranteed supplies, training and advice
and the use of the company livery. Franchisees own their businesses and are dependant on
them for income. This will, therefore, affect their objectives.
Customers
In the 52 weeks to 28th February 1997, The Body Shop recorded 87 million customer
transactions. This means that every 0.4 seconds, someone, somewhere buys something
from The Body Shop. Customer care therefore has become a crucial part of the trading
policy. The Body Shop customers demand not only high quality, value for money products,
but also recognise the need for environmental responsibility. The customer needs to be
well-informed in order to make responsible choices.
Suppliers
The Body Shop has hundreds of suppliers, all of whom have their own stakeholders to
satisfy. For smaller suppliers, profits and income may be significant, but also discounts
and payment periods may be important. In 1990, The Body Shop introduced the idea of
product stewardship which attempts to assess the credentials of ingredient suppliers,
giving them a score from 0 to 3 stars based on their commitment to environmental
management and auditing, water management and the ecological impact of the ingredients
and packaging production. In order to assist the suppliers, The Body Shop has begun to
share best practices and benchmarking.
Community Trade suppliers
This is a group of 25 suppliers in 13 countries (as at May 1997), such as Brazil, Ghana and
Bangladesh, specifically chosen because they are struggling economically. The Body Shop
believes that this trade should be more than the simple exchange of goods and currency.
It wants to help create livelihoods and explore trade based approaches to supporting
sustainable development by sourcing ingredients and accessories directly from socially and
economically marginalized producer communities. The emphasis is on long-term trading
relationships, seeking to work with the communities rather than exploit them for a profit.
The Body Shop offers its knowledge, training, creativity and purchasing power in exchange
for materials. These communities clearly have a stake in the future success of the organisation.

Shareholders
The Body Shop is a Public Limited Company and its shareholders are the legal owners.
Individuals and institutions buy shares in order to make a return on their investment.
Although shareholders may recognise the importance of social and environmental issues,
the share price remains important. A falling share price can wipe millions of pounds off
the value of a company. In theory, if the shareholders are dissatisfied with the performance
of the company, they can remove the Board of Directors at the Annual General Meeting.

Although a firm has many objectives, it is part of a local community and therefore, has a
responsibility to the community in which it operates and the local economy. In
Littlehampton, for example, a town with unemployment above the national average, The
Body Shop is the second largest employer. Job creation is therefore very important to the
town. The Body Shop also allows its employees paid time off to do volunteer work in their
local community.
Contd....

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