Monday 19 December 2011

The internet claims another victim on the UK high street

OK, HMV has only issued an annual loss rather than going into administration, but it is only a timing thing. the chances of HMV being around this time 2012 are somewhat remote.

Yet, still there are plenty of listed businesses that fund managers and investors are prepared to back, whilst their business models are ruined. This is unforgivable.

Yell is another good example of this as well. Yes it can move online, but that is not the same scale of business that it currently keeps trying to keep going offline.

Lots of things people in the UK buy they are happy not to see anymore. We are the most advanced Country in the world for this so our high streets are going to change the most first.

Having said this, I think this is a hugely positive thing, as there will be businesses that grow in the UK and are then able to dominate in other countries where adoption rates are less - for example Playtech (although this is a pure VAT avoidance ruse) ASOS (a super online clothes retailer). Of course, the exception to prove the rule is Ocado - a stockmarket dog mainly due to the huge over-hype given to its listing.

Long-term, I ask what is next - one is estate agents and another is car dealers - any other ideas?


SumoKing said...

I am minded to think that the only thing saving a lot of high street retailers from internet-mageddon is that internet retaillers fall down on delivery.

Particularly if you live in some new city centre block of flats, and you don't want to traipse out to the central post depot, you cannot get things delivered. The aupermarkets manage to deliver out of hours (people even pay a charge for it!) but virtually nobody else does.

The minute DHL or UPS or UK mail realise they could get away with charging an extra few quid for a 6pm-8pm delivery slot its game over.

I do have another rant about people who don't understand markets (see the awful 'google' review and the silicon roundabout bollocks) wittering about the internet but I'll keep that for another day.

ChrisM said...

Surely porn magazines can't survive for much longer.

Anonymous said...

WH Smith is a crap retailer that hasn't crashed yet? I might short it to balance my long book a bit.

There, I did it, hope they have a really bad Xmas. Humbug!

Nick Drew said...

also revealed that British consumers pay less for their communications than many other people across the world

that's a key issue

it'll be interesting to get mr Q's views: but my instinct is always to see advantages like that exploited for what they are worth: the rest is dirigisme & Luddism

someone else will do it if you don't

are there any travel agents left ?

Botogol said...

@sumoking - the challenge on delivery is how to remove the seller from the conversation: so that the the deliverer and the recipient can engage directly to find the time-slot / price / logistics that suit them. I think it's a technical challenge, and might end up looking somethnig like the 'secured by visa' dialogue that we are used to (where again the seller steps out of the conversation just for a moment to let the credit-card company and the buyer talk directly to eachother).

Mark Wadsworth said...

The whole debate about 'the high street' is a bit strange. If you got to a decent shopping mall (i.e. the Olympics one) it is absolutely packed with people, they ARE the high street, it's just that they're not on the high street any more, they are wherever somebody can bag dozens (hundreds?) of acres of land for the shopping mall and the car park.

It strikes me that a sensible town planner who cared about keeping business in town should have done is basically tear down half the town centre and have a shopping mall built, with three or four levels, with loads of free parking, pref. close to the bus station or train station, motorway junction* etc.

* It can take ten minutes to get from the M25 to Lakeside, even though they are only a few hundred yards apart because it is solid shopping traffic, so the fact it is out of town doesn't completely solve the access problem.

dearieme said...

I don't like buying clothes or shoes without trying them on. It's very different from having Tesco deliver tinzabeans or bottles of fizzy water.

andrew said...

The key point of many of these things is the delivery

It would be nice if they could deliver to the office address.

There will always be a tension between online and physical retail - but the laws of finance say that above a certain price point

cost of delivery from warehouse to individual < cost of delivery from warehouse to shop + cost of shop.

However, along with the decline of the high st will be the rise of the shopping as experience / destination in it's own right.

This is a return to the past in some ways - before industrialisation, there was not much in the way of shops as we know them (never mind a high st) in much of england outside the larger towns. There were fairs and markets.

Timbo614 said...

As many of you may know I am a small shop owner. I've just bought out an on-line business in a similar field (computing repair) and 2012 is going to be our change over year - we will still have someone manning the shop but it will be more "repair reception", despatch and customer service than a display area for parts & bits and bobs even though some of them are very profitable.

So we are going on-line. I'm pretty sure I have identified a niche market which has little on-line competition :)

When on-line is built-up and functioning we will abandon our high street address and move to anywhere where customers (& us) are not persecuted by parking wardens, where employees & customers can park for free and have reasonably easy access which is essential to our customers if they are dropping off or collection a PC.

The time has come to give up with the war on cars & parking by our council. So, Let it be.

BlackRaven said...

whsmith high street stores are dying, but their railway and airport shops make more than enough to keep the chain running.

hmv did have a great asset in waterstones, there is still room for good retailers.

estate agents are still going to be around; you need to physically view the place. some twit in an ill fitting suit that still lives with his mum is going to have to drive around in a garishly painted mini sneering at you while calls a small closet a spacious spare room.

what is more interesting is that a place like boots doesn't face internet competition, its the one retail sector where there is almost nothing online.

Anonymous said...

mark -"It strikes me that a sensible town planner who cared about keeping business in town should have done is basically tear down half the town centre "

Absolutely - the regeneration of Bristol city center shops is a cracking example of "doing it right". It still has some way to go IMO but its certainly a step in the right direction.

On the other hand, town planners are hamstrung but idiot councils and their anti-business rates. Personally, I would like to see all anomolies like discounts for charity shops removed in small market town/suburban high streets.

Weekend Yachtsman said...

"It would be nice if they could deliver to the office address."


They do. I get most of my Amazon orders sent to the office, due to the "nobody at home" issue, and also anything (such as the wife's Xmas presents) that I don't want visible at home until the day - or at all ;-) Some employers may not like it, but mine is enlightened enough.

The phone companies have cracked the delivery thing - chap turns up in (what appears to be) an ordinary private car, usually early evening, he has a boot-full of mobiles, here's yours sir, sign here, thanks and goodbye. Only a matter of time before "Big Courier" catch on that they're missing a trick here.

Estate agents, yes, they're finished.

Car dealers, not so sure: you may find a car on the internet, but you'll want to go and look at it, plus all the other ones that will be there on the same site. I think they'll do fine.