Financial Director: Which retailers are keeping the British high street afloat?

Melanie Stern finds three finance directors of businesses who see little but opportunity in Britain’s stricken city centres and high streets

WALKING down your local town centre or high street counting the number of closing down sales or vacant shops makes for a depressing pastime. And not many of us can say our local shopping haunt has not become… well, haunted somewhat.

Mary Portas presenting her review of the high street Photo by bisgovuk @ Flickr

While so many once-mighty retail brands that formed the core of the British shopping experience are falling as fast as Middle Eastern military dictatorships, the perfect storm of bad news – high unemployment, poorer consumers, high inflation, prohibitive business rates and the threat of the euro imploding – makes it a hostile time for new businesses to form and take their place. Those pressures do not look to be ebbing away in 2012.

But is it really so bad? Behind the wailing “retail Darwinism” headlines is a grain not just of truth, but of hope. For every Woolworth’s or Barratt’s taking its final bow there is a lesson about what tomorrow’s consumer wants that those brands failed to offer. There are highly entrepreneurial outfits large and small, trading on our high streets and in our town centres who are flourishing from the fertile compost of yesterday’s retail business model.

Bucking the trend

While the crucial Christmas 2011 trading period proved disastrous for many of the big players, specialist chocolatier Hotel Chocolat, discount store chain 99p Stores and national food-to-funerals giant the Co-operative Society reported strong sales.

In the four weeks to Christmas, 99p Stores had “double digit like-for-like sales – simple things like kitchen foil and bin bags did well,” chief financial officer Saleem Karim tells Financial Director; Peter Harris, Hotel Chocolat’s co-founder who recently moved from the FD role to strategy director, reports that sales “were at the upper end of our expectations – not that it wasn’t tough”. Martyn Wates, who was group CFO at the Co-operative Society until his recent promotion to group deputy chief executive, says that though his business still makes most of its revenues through its shops, it enjoyed a 20% like-for-like rise in its online electricals sales over Christmas. Impressively, in the middle of a punishing economic downturn, the group experienced a surge in Land Rover sales from its three dedicated Co-operative dealerships in Yorkshire.

Though these businesses are completely different, what they have in common is worth noting in 2012. All of them have significantly expanded their estates in 2011 and intend to continue doing so in the next 12 months, taking advantage of a flooded commercial space market, using the footfall they command on shopping streets and their brand strength to negotiate a fair price, and moving quickly. Noted in the recent Portas Review about the predicament of the high street, on behalf of the Department for Business, Innovation & Skills (BIS), the growing number of empty shops is hurting the remaining traders, and renting them to charity shops is not helping the economy. The inflexibility of landlords on rent prices and lease length, set against the forthcoming 5% rise in business rates – already costing as much as 50% of the value of retail rent space – is one of the top challenges retail finance directors see in 2012.

Opportunism

The Lalani family, owners of 99p Stores, became an immediate presence across South London in 2009 when co-founder Hussein bought 15 stores from the administrators of Woolworth’s, and within weeks had many of them open for business. The company aims to open 18 more stores in 2012, mostly in retail parks where CFO Karim thinks many of the commercial space deals are going to open up.

“We don’t have a plan as to where specifically we’ll open up – though we know where the gaps are for us. We’re more opportunistic than that,” Karim tells Financial Director. “It depends on getting offered property that matches our needs more than where it is. When Focus DIY went into administration we were offered its entire property portfolio, but we were then able to pick and choose the bits we wanted, just like with Woolworths. We’re getting offered between 60-80 properties every day.

“In 2012 I think a lot of retail parks will be looking to half their estate size,” he adds. “Now that we’re well known due to our expansion in 2010-11, those landlords see us as their first port of call when those properties come up.”

At the other end of the retail scale, Hotel Chocolat is looking at opening in cities such as Cardiff and Glasgow, but Harris will not put a figure on the number of stores it will aim for. In 2012 he is looking to leverage the brand to get into places with a healthy mixture of locals, students, office workers and tourists. He agrees that the recommendations in the Portas Review to stop upward-only rent reviews should be a matter of urgency for government.

“It’s now easier to negotiate with landlords for the leases we want; our presence on the high street or in a city centre attracts other retailers,” he says. “The strength of our covenants has become less important. But it hasn’t gone far enough. The way landlords operate on lease length makes it difficult to stimulate retail; they need to be ready to offer affordable rent, not five to 10-year leases and upward-only rent reviews you just can’t get out of when times become tough.”

Bank on the Co-op

The Co-op plans to open 300 more shops and create 7,000 jobs in its supermarket business by 2013, but the biggest prize is the potential to buy up 632 UK retail bank branches from Lloyds as it is forced to sell them to comply with European competition rules. The deal is expected to be set in the first quarter of 2012 and would make the Co-operative Bank the UK’s seventh-largest in its sector. In addition, Wates says the group will exploit the Legal Services Act amendments made last October that allows banks to offer consumer legal advice. A successful trial of its existing consumer legal services business was conducted through its existing banking network in 2011, but the Lloyds deal could see it dominate that field this year and up their presence on high streets and in town centres.

“The Lloyds deal would be transformational to the society at large, not just our banking business, while provision of impartial legal advice to consumers is right at the heart of our ethos of social justice as a business. At the moment, it’s something of a postcode lottery,” Wates tells Financial Director. “We have ambitious plans to grow the legal services business in 2012 and if we can scale it right up, it will make it even cheaper to deliver.”

Deloitte recently put a figure of 11% on the level of retail administrations to be expected in Q1 2012 as VAT payments on Christmas sales come due alongside business rates. If some of those administrations end up becoming pre-pack administration deals – as the recent rescues of high street retailer La Senza and Blacks Leisure did (see page 47) – any stores deemed to be under-performing are likely to be left out of acquisitions, creating yet more empty square footage in our shopping precincts. Smaller retail businesses, with solid financials that can move swiftly, may find that in 2012 those landlords are unusually happy to negotiate to more reasonable rental rates.

Once again, though, Deloitte’s prediction is a boon for an entrepreneurial upstart like 99p Stores.

“It’s another opportunity to move into new areas, because we now have access to property we previously wouldn’t have had. There’s less competition so we can command the sort of arrangements we want,” says Karim. “Shopping centre companies used to turn their noses up at us – and suppliers would tell us to go and talk to their distributors. But in the recession we’ve found we now have mostly middle class customers, and suppliers are happy to deal with us directly.”

Parking woes

One of the biggest challenges in 2012 for retailers is simply consumer confidence, and Harris, Karim and Wates concur that one of the deciding factors in gathering footfall for them will be the cost of customer parking in high streets and town centres. It is often very cheap in out-of-town shopping malls. In her review for BIS, high street troubleshooter Mary Portas says modern shoppers see free parking as a “non-negotiable” and recommends local councils implement free controlled parking dedicated to their town centres.

“In many town centres I have visited for this review, parking has been run-down, in an inconvenient place, and most significantly really expensive,” says Portas. “There are some places that are doing things differently.”

She points to the city of Chester where the local council has laid on free parking after 3pm to stimulate trade.

99p Stores’ Karim finds this issue significantly raises the cost of doing business.

“When we are taking deliveries, we find these militant wardens looking to give us a ticket at any opportunity,” he says. “We can’t do night-time deliveries as that would disturb residents, so in order to get the deliveries unloaded as quickly as possible, we have to pay for extra staff to unload everything before the warden shows up.

“If councils allowed longer parking times, our customers would be less stressed out worrying about getting back to their car before they get a fine, and spend more time shopping. It could mean they put one extra item in their basket.”

But businesses should be careful of spending 2012 wishing local government would chip into their survival. Local businesses could club together and part-subsidise parking – even an extra hour or two each day – or take on Mary Portas’ recommendation that they work in concert with councils and community representatives to address structural issues.

Hotel Chocolat’s Harris says that wherever his stores rely on paid-for parking business deteriorates markedly, but he does not think such an approach would solve it.

“That’s just not how things work,” he says. “You need to concentrate on your own business. We’re not a business for running things by committee: we’re not really political and we prefer just to get on with it. I don’t think it would be a good use of our time.”

Consumer confidence

No one expects an economic recovery in 2012, but retailers live and die on consumer confidence. While more of our household brands go to the wall every day, confidence among retailers that they will not be among their number is just as important.

The strong performance of 2011 Christmas food sales in higher-end retailers such as Waitrose – compared with the disappointing performance of other types of retailers over the festive period – demonstrates that as shoppers get poorer, they will try harder to find a way to afford the odd treat. And everybody can make use of 99p washing up liquid or binbags. But even for businesses as entrepreneurial as 99p Stores or Hotel Chocolat, if customers cannot easily and cheaply get to their stores, the high street faces a bleak future.

This article was published in Financial Director magazine’s February 2012 issue – if you like it, help me out – click here and tweet it!

Jaguars and paintbrushes: a volunteering weekend in Bolivia’s Chapare

I came across a piece of copy I wrote for the newsletter of Projects Abroad, the volunteering outfit I worked with in 2007, about a weekend job myself and a bunch of other volunteers took up in Bolivia’s Chapare region (best known for being a hotspot for coca growing, and cocaine production – but there’s a lot more to it than that). There really was a jaguar on the loose among the trees, but everyone came away from the project with all their limbs so it never took a hit at us, even though we were sitting ducks. It was great fun to work on clearing and painting a dilapidated abbattoir to be used as a day-care centre, and a good way to get a better understanding of how communities fill in the services blanks their governments fail to provide for. The thing is, it was already in use as a daycare centre…

Paint, sweat and beers: Melanie Stern recalls painting a daycare centre in Puerto Villarroel

Puerto Villarroel, Bolivia

Picture from panoramio.com

In June, a group of Projects Abroad volunteers from different projects in Cochabamba signed up for what they thought was a free holiday in the Amazon jungle outpost of Puerto Villaroel. Looking forward to four days of sunbathing, monkey-spotting and Taquiña imbibing, their hopes of hammock-based relaxation were killed stone dead when, at a meeting to organise the trip before leaving, Projects Abroad Bolivia director Daniela handed out a schedule for 12-hour days and 6.30 am starts: they were there to paint a day care centre. At that point – after Daniela revealed that a Jaguar had been seen prowling the grounds of Los Lagartos, the house volunteers were to stay at – at least three people came down with streaming colds and had to drop out.

Projects Abroad  ́s care placement in Puerto, a remote, languid Chapare township of just 2,000 people on the banks of the River Ichilo is less than a year old, and only recently received its first volunteers – who come to work in the guardería looking after the children with manager Juana – this February. The group of Projects Abroad volunteers visiting from Cochabamba, made up of journalists, medical students and care workers met with the two current volunteers in Puerto, Johnny, an English law graduate managing the guarderia, and Alexis, another Englishman grafting on the farm at Lagartos for three months. Johnny was lumped with managing the group of volunteers painting the day care centre, but took quickly to organising them according to what needed to be done. Which was a lot: on the group’s first tour of the centre, a dilapidated former abattoir with completely bare dirty walls, no running water and rat shit all over the floors and blankets, volunteers were met with two very small children running after each other with two large kitchen knives – knives kept on a low windowsill in the kitchen to prise open the doors, having no working locks. A row of very dirty, sad looking cots with no mattresses were lined up against one wall, which reminded some volunteers of Romanian orphanages they used to see on the news back home. The building is shared with an electricity company, which is ironic, being as there is no electricity in the building itself, and therefore no lights.

Over the next three days, the volunteers really put their back into the project, breaking into teams to sweep out the rat shit, clean the shelving, move the cots outside to clean and varnish them, and sanding or plastering the crumbling walls ready for painting. The budget for the project was miniscule but the team managed to achieve what Johnny wanted to do by improvising – when they couldn’t buy paint trays, they made them with some plastic sheeting lying around fixed with masking tape into some old drawers that had no use, and when they were running out of out paint rations, they added water to make it go further. At the end of the long weekend, having lost two volunteers half way through to illness and sleeping-on-floor fatigue, and a few more to the nearby, much more touristically-developed Villa Tunari, the guardería looked like a totally different place, with colourful, clean walls, clean furniture, and the crowing glory thanks to Johnny, Charlotte, Will and Eleanor, a seascape mural complete with a treasure chest.

What better way to celebrate finishing the project on time, they decided on the last night, than to hit the local karaoke haunt and drink more Taquiña. Except on that night, karaoke had been cancelled to make way for the “Miss Puerto” contest – a bunch of the township’s least attractive menfolk, dressed in woefully unconvincing women’s clothing and parading the length of the bar to the strains of Bolivian reggaeton.

All fifteen sweaty, unwashed, hung-over volunteers went home with visions of very happy children arriving at the centre on the following Monday morning. There was only one regret: no one was attacked by the elusive jaguar, so no one had the pleasure of phoning home to report what could have been the best travelling story of all time.

Learn more about Puerto Villarroel here

Why did McDonald’s fail in Bolivia? Blame the saltena

It’s the entirely unscientific, anecdotal judgement that not very many Europeans or North Americans will have visited Bolivia on which I assess this article by the Andean Information Network, pondering a film that has raised debate about why McDonald’s exited that country.

A snack stand, Ivirgazama, Chapare, Bolivia. 2007.

 

A fair few articles have appeared on this topic in news outlets in both those continents following the release of the documentary Por qué quebró McDonald’s en Bolivia (Why did McDonald’s Bolivia go Bankrupt?), in which Fernando Martinez attempts to explain the reason fast-food Evil Staypuft McDonald’s pulled out of Bolivia after only a few years in operation there. The film hasn’t got a release date in the UK yet so all I’ve been able to access is the trailer on YouTube; the documentary looks really interesting (though neither the Israeli company that produced it nor possible hosts to a UK showing like Canning House reply to my requests for information), but its release has stirred some silliness. As the AIN starts to point out quite rightly in this piece, a flurry of news articles from news outlets saying that McDonald’s closed its last restaurant in Bolivia in December 2011 were not only entirely wrong – Maccy D’s closed all its stores in Bolivia by 2002 – but seemed to spring somehow from the release of the documentary. Someone, somewhere, somehow got the idea that McDonald’s was pulling its final restaurant from Bolivia in December 2011 and put this out as breaking news. And from that tiny seed came a torrent of cut and paste ‘breaking news’ stories from other platforms.

Once they reached my laptop I was mightily confused: when I was in Bolivia in 2007 I was aware that there were no MacDonald’s in Bolivia, but I had walked past the Burger King in Cochabamba to much amusement – it was empty. Obviously, those in Bolivia were more likely to be in possession of the facts, but reporters further afield would have had to make gargantuan efforts – such as Googling for MacDonald’s press office phone number, picking up the phone, ringing them and asking for corroboration of this alleged breaking news – to find out if it was true. Readers in North America and Europe, quite a few of whom probably haven’t even heard of Bolivia, can’t be expected to know. For that reason there haven’t been many reporters writing about why and how so many news outlets followed the original Pied Piper of this fake news story into the stinking river of churnalism.

Good on AIN for noting the blooper, but the piece quite mysteriously changes angle half way through to talk about the question the documentary addresses on just why McDonald’s exited Bolivia. Gleaning what little I can from words written by those who appear to have seen it, most theories centre on it simply being unprofitable – well, it’s one of the world’s poorest countries – or the more intriguing idea that Bolivians just don’t like the idea of fast food.

Again AIN does point out that Subway and Burger King continue to serve in Bolivian cities, which somewhat discredits the idea that McD’s found no money to be made there. The second theory is easily dispatched with. First of all though, it must be said that people who’ve got no concept of this place called ‘Bolivia’ except an image of poor, brown-skinned people herding llamas can be forgiven for imagining that Bolivians might well reject the notion of fast food as we Europeans know it. Based on time I have spent in Bolivia, what I can add to the debate is the idea that Bolivians are as ferociously devoted to fast food as the Yanks or the Europeans. The reason they may not have taken to McD’s could well be that they have their own pre-existing types of fast food, and that they are a damn sight tastier, more diverse, cheaper, more readily available, easier to make and better suited to Bolivian life. If someone right this second offered me the choice of a McChicken sandwich or a couple of freshly made morning saltenas with a little spoon of picante and a fistful of serviettes to wipe way the juice, my peripheral vision would close in on the saltena and simply occlude the McChicken sandwich from my view and my desires.

A saltena looks like a palm-sized, American Football-shaped calzone or Cornish pasty – actually, someone should look into why these three snacks from different corners of the Earth are so similar – consisting of a mishmash of boiled egg, perhaps some chicken, chillies, maybe an olive or two, garlic, onion, sugar and spices, and perhaps some parsley baked into a pocket of golden pastry. So perfectly conceived, these little handfuls of heaven are commonly eaten in Bolivia and Argentina (from whence they allegedly originate – specifically Salta, a city in the north; hence the name) and are commonly eaten for breakfast on the run. They’re so ubiquitous, sold in saltenaria, on the streets, in markets and from holes in the wall outlets for a couple of pesos or Bolivianos, so easy to turn out and sell, and so incredibly moreish that I can quite see the challenge posed to the Big Mac – positively flaccid looking in comparison.

When I was working at Los Tiempos newspaper and in the office of a volunteering company in Cochabamba in 2007, once of the most enjoyable parts of generally very enjoyable days was the morning dash past the little bakery on Calle Sucre to grab two or three saltenas; a 1.50 Bolivianos each, I always had enough change on me to indulge (I got into the habit of always having nine Bolivianos in change on me, enough for two saltenas, the bus ride to work, back home for lunch, back to work and back home again). Although they are famed for inconveniencing their purchaser with an uncontrollable ejaculate of orange-hued juice that inevitably bursts from within their just-out-of-the-oven shells as you bite into it – splashing your nice new shirt and running down your chin if you don’t master the skill of wrapping it in a napkin and catching the drips before they embarass you -you only need one hand to eat a saltena, surely a critical design feature of any true fast food.

Compared to anything McDonald’s does, the saltena is genuinely food that is fast; I gobbled mine down single-handedly on the way to work, or at my desk while using my other hand to type or point and laugh at gap-year students. In a land where so many people live on a few Bolivianos a day – some of those in transit on long, uncomfortable bus journeys transporting goods across the country or carting bags of shopping home from market – the saltena is a prime example of design matched perfectly to the needs of its local populace. The Filet O’ Fish, meanwhile, could conceivably have taken many more megawatts to produce and carry a much larger carbon footprint (if only because of the bespoke machines needed to turn out high volumes of highly standardised products and the cost of getting them to Bolivia. I’ll take a punt and say they were not built in Bolivia).

As far as I know (and I have done some research), there is no national or even large regional company turning out saltenas to standardised form or recipe and making overnight deliveries to its own chain of restaurants. There are small businesses who supply local shops with their saltenas locally, as there are variations between cities and provinces in the taste. There is such a thing as a saltena wrapper available for purchase, basically a flap of pastry ready-made to construct saltenas.

The saltena is just one example of the rich fast food offerings Bolivians enjoy on a daily basis, and have done since long before McDonald’s turned up. Contrary to the European or North American idea of Bolivia as a country of semi-starving people – not to understate the poverty that many live in there – it’s my experience that Bolivians are passionate foodies who have fashioned a range of fresh, but fast snackfoods to be eaten on the go, and for pennies. Having not industrialised them, and with regional variations, they remain diverse and tasty enough to put any foreign comers at risk of not competing.

There is the empanada, a larger, greasier version of the saltena mostly comprising cheese and served hot to eat on the go at bus stops, on the way to work and so on; but even foods that need you to sit still at a counter to eat is conceived around getting in and getting out. Before catching a bus out of the town, I dined at a food market in Potosi among hordes of time-pressured stallholders wolfing down a steaming bowl of stew. I don’t know precisely what was in it, but it definitely contained heaps of soft pasta cuffs and quinoa, some veggies and meat that fell apart with the spicy juice it was cooked in. I was done in ten minutes and on my way to the station a few Bolivianos later, ready for my 7 hour bus ride.

If I had wanted something greasy, Bolivians have long had the art of the filthy burger down pat – no pun intended. Most bus or train stations, markets and street stalls offer the good old burger in a bun shat on by an billowing turd of mayonnaise and ketchup, and they sometimes forego the separate fries to jemmy a handful of salty mini-fries, with fried onions, in-between burger and bun. Aside from price and convenience, their burger has one other critical advantage over the McDonald’s or Burger King’s equivalent – at your request, a fried egg rammed in for good measure. 

Why did McDonald’s leave Bolivia? My guess is that it just couldn’t compete with the true fast food that already dominates Bolivian life. Hopefully this documentary will be brought to the UK and I can hear the arguments for myself.

Financial Director magazine: Employment reform

My latest article for Financial Director magazine, in its January 2012 issue. If you like it, please click on the hyperlink underneath where it says “you’re fired” which will take you to where the article is hosted, and tweet or add to linked for me!

You’re fired: Employment reform plans aim to reduce tribunals to a trickle and save businesses £40m in the process. Melanie Stern assesses the government’s key proposals

It was cheerily pitched as “getting the state out of the way” – Vince Cable’s announcement of radical reforms to employment law he claims will save business £40m by making it quicker and cheaper, especially for SMEs, to fire underperformers or make redundancies.

Principal among the proposals are four ideas: making employees pay to pursue claims against their employer; forcing them to take potential claims through the Advisory, Conciliation and Arbitration Service (Acas); the introduction of protected conversations; and reducing the statutory consultation period on collective redundancies by as much as two-thirds.

Slotted into Cable’s November speech at EEF, the European manufacturers’ association, was a plea that no one should see the changes as a threat to workers’ rights. He is merely “improving the process for when staff have to be let go”. Trade unions predictably have said they don’t believe the changes will create or save jobs.

But Cable himself doesn’t seem sure. He points to the OECD view that the UK labour market is among the most lightly regulated of developed economies, while his own Department for Business, Innovation & Skills (BIS) recently found that just 6% of SMEs regard employment regulation as their main obstacle to business.

And finance heads with whom Financial Director spoke have mixed feelings about the impact they can have on SMEs.

Transferring the cost of tribunals from employers to claimants, all employees with a claim will now be obliged to enter into pre-conciliation talks through Acas in the first instance. If that fails, Acas can refer it to tribunal, with employees obliged to pay both to lodge a claim and to pursue it from their own pocket.

The Ministry of Justice is seeking views on two possible fee systems – payment of a fee to lodge a claim and a second to take it to hearing, or a £30,000 threshold so those seeking an award higher than that will pay more to bring a claim.

Employment lawyer Ronnie Fox thinks this will make life easier for SMEs. He believes it is “too easy, cheap and low-risk for a savvy, disgruntled employee to run up costs quickly”. While FDs think it will stem the flow of claims – 218,000 in the past year, with businesses spending some £4,000 defending each claim, and UK taxpayers paying an average £1,900 per claim, says BIS – they foresee complications.

“It will almost certainly stop claims, but that isn’t necessarily good,” says Matthew Howes, a principal with SME interim finance director provider The FD Centre. “The ability to take action will be determined by the depth of employees’ pockets rather than the strength of their case. For SMEs, that could lead to an increase in ‘no win, no fee’ cases from lawyers, which would increase our costs.”

Ian Sharpe, FD at Renewable Technical Services, says: “Fees are probably necessary to reduce vexatious claims, but this change could lead to hardship.”

Duncan Tatton-Brown, CFO at privately owned gym chain Fitness First, thinks it “should help reduce unwarranted claims and speed up resolution at a lower cost”.

But Fox is not convinced. “Acas involvement is already possible, but has rarely proved useful in practice. It’s unlikely to make much difference,” he says.

Fox goes further on proposals to reduce the consultation period for collective redundancies from 90 days to 60, 45 or even 30 days, for which BIS is currently gathering evidence. “The fact is consultation is almost always a complete sham, with a pre-determined outcome. The shorter the period, the better,” he says. “It would be best if the need for such ‘consultation’ could be abolished completely.”

Howes is similarly worried that too short a period could lead to too many or the wrong people being lost to the business, though Sharpe welcomes a reduced period.

One proposal drawing mostly favourable reaction from FDs is “protected conversation’’. Beefing up the current provision for “without prejudice” discussion, employees and employers can raise sensitive issues, including performance or retirement, without bringing a formal dispute. Whereas current provision permits discussion as evidence in a constructive dismissal case if it began before dismissal, protected conversations are inadmissible in a subsequent dispute or tribunal. The government will publish a consultation in early 2012 on this idea.

Sharpe and Howes think it is a good idea to allow discussions to start early, while Fox says it could address problems with existing law relating to without prejudice discussions. “If the new law is expressed in terms easy for the layman to understand, covering discrimination and unfair dismissal, there are real advantages for businesses,” he says.

But do FDs think these measures will help growth and encourage SMEs to take on more staff while the status quo disintegrates before their eyes? Not likely.

“My experience is that businesses do or don’t take people on for sound business reasons,” says Howes. “If either party is thinking about the employment law ramifications, they are either the wrong person, there isn’t a proper business case for the hire, or it’s the wrong business.”

Two new learnings about Christmas and NYE in other countries

This was a fun Christmas and I’ve come away from it with two new factoids about the festive season and how it is celebrated in other countries.I’ve come by these new cultural learnings from some Spanish friends, with whom I spent New Years Eve getting drunk, and from  Skype call with my boyfriends’ sister-in-law who is German.

Ronaldo enjoying some NYE grapes. Pic totally stolen from the Daily Mail via Google Images. Copyright rests with Splash News.

Factoid 1 – Germans mark the dawn of a new year by watching a rubbish 18-minute, English-language, black and white comedy sketch from 1963

I was having a Skype video conference on New Year’s Day with my boyfriend, his sister-in-law Miriam, brother and two young nieces who live near Hamburg. Miriam mentioned something about Dinner For One, but amid the slow connection and the niecelets jumping about in the background (combined with my hangover) meant I missed what she was saying but didn’t give too much more thought to it. Shortly last my boyfriend’s dad mentioned it again – saying that the elder niece, 5, had seen a man tripping over a lion head in this Dinner For One and after it was repeated a few times asked her dad, ‘is that supposed to be funny?’ – well, whatever she was on about, this was one smart pre-schooler and I had to know what she was on about. Said father of boyfriend directed me to his computer to YouTube this “Dinner For One” thing. Turns out it’s an 18-minute comedy sketch, filmed in black and white – in 1963 – in English, which is virtually unknown in the UK but enjoys cult status in Germany where it is a hard-wired staple of New Year’s Eve TV schedules. According to Wikipedia, the same goes for the Danish, Swedish, Norwegian, Finnish, Estonian, Austrian and Faroe Island NYE telly schedules. Wikipedia also notes that the sketch appeared as the world’s most frequently repeated TV programme ever in the Guinness Book of World Records in every edition between 1988 and 1995. Apparently the Ozzies have now added it to their NYE schedules.

What’s so amazing about this sketch that entire nations down their champagne flutes and stollen to watch it every single year? I watched it but am none the wiser. Filmed in a single take, it is a simple enough tale of an elderly woman who sits down to a meal with three friends, served by an equally aged butler. Except the three friends have long since died, so as the meal wears on and a fresh alcoholic drink is served with each course, the old lady expects the butler to pretend that he is each guest, and to drink their share of the booze, whereupon he becomes progressively more drunk. With each course served the old butler trips up on the head of a tiger rug – and the audience is more entertained with incredulity each time he returns to do this – and the crux of the comedy element rests on him wearily enquiring to his employer with each course: “The same procedure as last year, Miss Sophie?” to which Miss Sophie replies: “the same procedure as every year, James!” – followed by the butler making ever more sozzled emulations of the absent friends as he staggers round the table serving the booze, then skolling it, then tripping up on the lion head. I really cannot understand what is so funny, though the director helpfully recorded live audience laughter with it, which does get progressively more ridiculous so you know where the funny bits are meant to be.

I definitely understand why my boyfriend’s niece asked her daddy if the tripping up was meant to be funny. Have a look for yourself here – then surprise and delight your German or Nordic friends by crow-barring the phrase “same procedure as every year!” into your conversation.

Baffling.

Factoid 2 – The Spanish eat 12 grapes, one each second for the final 12 seconds of the outgoing year, and have done for over 100 years

In a not dissimilar way to the Coca-Cola Corporation’s ingenious hijacking of the legend of Saint Nicolas to create the portly, ruddy, Coke-bringing Santa we know from their adverts who helps sell gazillions of litres of the stuff each Christmas, Spaniards across their fine country switch on their TVs armed with a fistful of grapes as the last 12 seconds of a year approach. A live, televised event, Las doce uvas de la suerte, “The twelve grapes of luck” is a cult phenomenon whereby Spaniards pop one grape for every second until the New Year strikes, gathering in Madrid’s Puerta Del Sol by the thousands to join in.

The tradition comes from some clever clog vine growers in the Alicante region who, around 1895, had had a bumper crop and needed to come up with a way to get shot of their surplus for a tasty profit. They devised the grape-eating ritual, adding on a made-up legend that to successfully much 12 grapes in 12 seconds as the New Year comes in would bring a year of prosperity to said muchee, and somehow parlayed it into Spanish dogma.

Allegedly the first time the ritual was performed was at the Puerta Del Sol tower clock, which is why it become a broadcastable event from that same site. As it goes, I learned of this on NYE when I was at a party thrown by a close Spanish friend. One of her other Spanish mates arrived with three packets of Tesco grapes, which I noticed – as you might when you’re hoping someone will supply Ben and Jerry’s ice cream for dessert, not grapes – but didn’t think much of it until she and our other two Spanish guests started washing and decanting them into glasses to be passed to every guest. After the tradition was explained to me there was much faffing as they tried to tune into the Spanish channel broadcasting from Madrid, but as the broadband failed we resorted to Skyping a relative in Spain who counted us down as she watched it live. I was deeply sceptical that anyone could successfully chew and swallow 12 grapes in 12 seconds, but I managed it, so I expect a prosperous 2012. Another plus was seeing in the New Year twice in as many hours, being as Spain is one hour ahead.

Watch some Spaniards doing the munch of the grapes here – though this looks a bit more like a wake than a celebration.