HMV into admin tomorrow. Who next?

[Dave the OAP]

thomas cook gets my vote - who buys holidays in a shop anymore?

dont say that we have just given them 3 grand!!

Actually their on line business is doing extremely well, it is the shops that are not.

 

[KZNSeagull]

It depends on the market to an extent. Supermarkets have been pushing suppliers for a lot longer than Amazon has and yet there's still a decent amount of choice amongst things like food and alcohol (assuming you are willing to pay for niche or premium brands). Amazon's impact on the book market has been the complete opposite of what you outline - they've removed incentives for publishers and made it more straightforward for authors to publish their own books on the Amazon website (as long as you are happy for Amazon to take a significant cut of course!) - and consumers have been left with more choice and some difficulty sorting the wheat from the chaff.

Ok, but also less choice in that they can only buy that author's product from Amazon! They have forced publishers to cut their take from a book dramatically, which has forced the royalties to the authors to be reduced as well, forcing people to self-publish. But to get a physical, self-published book listed on Amazon makes it pretty much unworthwhile for the author to do it. Loads of small publishers have gone out of business and it is usually the smaller publishers that find the gems (Harry Potter being the best example).

But the whole idea of spending vast amounts of our hard-earned money with huge online retailers does not sit easily with me. That money is lost to the high street which is a life blood of the local community. I buy x in the shop next door, he spends y in the shop down the road, who spends z in my shop. We are all happy. I spend x with an online retailer - they don't come and spend that recycled money with me. It has gone. Eventually, we all suffer. That's my take on it anyway.

 

[Nibble]

As much as it's great to have a healthy high st consumers have voted with their wallets, as has always been the case. People shop more online now and as hard as that is at the moment for employment rates etc it's the way things are headed. Adapt or perish.

 

[Guy Fawkes]

I don't see how this would work. Amazon take billions in turnover every year but rarely make a profit. The business model seems to be to sacrifice short term profit for long term market share. But what is the point in market share if you don't make a profit? They seem to be relying on investors sticking with them as eventually they may make a lot of money. When though? I don't get it.

It seems like a similar strategy to Tesco here imo. A rapid expansion with smaller profits from each location due to cheap pricing until the marketplace is saturated, then they can slowly increase their prices and make bigger profits by relying on brand loyalty to keep people coming back rather than going elsewhere which is a little bit cheaper (asda / Aldi, etc..)

When you are starting out and trying to grow a business, you know that there will be little in the way of returns and profit maximization until you are truly established. Investors arn't just investing in the share of the profits now, they are also in for the long term and know that little / no profits now when using this tactic will, more likely than not, lead to market position and larger returns in the future.

 

[Guy Fawkes]

There is nothing controversial in saying that the internet, with it's multitude of cost saving features, is going to be the death of the high street in this country. People in this country are very price sensitive in most areas of shopping. I wonder whether there will come a point when shops are going to start charging for entry? Unlikely of course, so perhaps we'll end up subsidising stores through our council taxes? Most people would object, but do we really want a high street of boarded up premises indispersed with poundlands and a handful of McHighstreet conglomerates? Even the coffee shops will lose their appeal if that happens as there will be no reason for people to go there.

It really is sad to see shops like Woolworths and now HMV disappear off our high streets forever.

They won't charge for entry as that will just stop anyone from going and they need footfall to generate whatever sales they can, be they spontaneous or planned.

 

[Guy Fawkes]

What the hell are they spending money on? The whole point of internet business is they have very low overheads, 74m profit on 3.35bn revenue is awful, and maybe a good example of a company that would go bust when more efficient companies come into the market. All I know is that the futures very bright for consumers, prices are only going to fall for us.

It's not necessarily what they are spending on, rather what they are selling it on at. If the profit margin is so small or sold at break even,

And don't forget they have to pay to then ship it out to the buyer, so the free delivery option still costs, but Amazon end up paying it - You buy something for £3, it cost Amazon £1.25 to post and pack. They have to pay someone to pick the item and to p&p it to you. They have to pay for the site that person is employed at, along with lighting / heating / rates for that site. They have to pay for the product that they brought from their supplier to sell to you for £3 so you can easily see why its possible for there to be virtually nothing left for profit on that sale, especially if, the way they got that sale in the first place was to sell it to you a long way under rrp in order to get you to visit the site (based on cheapness reputation of thousands of other cheap deals before it) rather than go to a shop and look at the item before buying it.

 

[Questions]

What's going to happen to Nipper the Jack Russell with HMV gone ?

Sod the redundancies......... That poor dog.

 

[Guy Fawkes]

What probably needs to happen is for business rates to be cut, tax breaks, rents to be cut and other taxes too to make the remaining high street stores more profitable and better able to survive long term. The trouble with doing this is that councils, etc, then lose out and will have less money to spend on the services that the public living in the area want, but is a rate cut better than no income from empty shops?

What may happen is shops move to larger out of town sites rather than be in every high street, (like Lakeside or Bluewater) that way there is a good variety of stores and costs will be cheaper due to location but some chains may just be too big to adapt, scale back and move and will go out of business (like HMV) they have some profitable stores, but it will be virtually impossible for the unprofitable stores to be got rid off without putting too much of a debt onto the profitable ones (redundancies, possible loss of bulk buying supply chain, etc)

However small independent type store that specialise in area (say music for example - not just chart music) may be able to find a way of trading there if they can provide something that isn't already there taking their niche.

 

[Guy Fawkes]

What's going to happen to Nipper the Jack Russell with HMV gone ?

Sod the redundancies......... That poor dog.

Sadly already answered in post #122

 

[Wozza]

HMV had a shit business model for the 21st century - shit for customers, and shit for shareholders, obviously!

In recent years, the model seems to have been: charge as much as we can get away with in stores, targeting old grannies (literally a dying market) and the desperate/impulsive punter (who prefers to save money most of the time, thanks).

Reckon I went in HMV once in last five years. Good riddance.

 

[Questions]

Sadly already answered in post #122

Bit late for a minutes silence on Saturday then.

 

[Guy Fawkes]

Bit late for a minutes silence on Saturday then.

or a minutes a-'paws'

 

[clapham_gull]

Interesting Newsnight tonight. Pretty much concluded that consumer habits are changing, but the High Street doesn't need to die as long as it keeps up.

It just needs to offer things that can't be done online. No surprise that Tesco have been investing in "independent" coffee shops if you've following the news.

The property owners also need a reality check regarding the rents. There are thousands of feasible non online businesses that could survive (e.g. markets) in that case.

Near where I work, there is a Thai restuarant that is doing fantastic business selling hot meals in the road from a bag. However, a certain supermarket got a bit sniffy and made them move away from the premises.

They are still selling but obviously slightly restricted by being forced to somewhat hide themselves away.

My point being (where I agree with the bloke on Newsnight) is that we need to deregulate the high street and go back to original spirit of a free market.

 

[Wozza]

Who's next? Blockbuster.

 

[seagullsovergrimsby]

Who's next? Blockbuster.

Latest breaking news from Sky , Blockbuster heading for adminstration. You preempted their demise by 5 minutes.

 

[Guy Fawkes]

Who's next? Blockbuster.

Could well be, they were reported as being in difficulty about a year or so ago and their market must be shrinking with the rise of internet streaming sites so i don't think it will be too long before they go

 

[Berty23]

Didn't someone day blockbuster previously in te thread? Sorry for being lazy. They will appear I am sure.

 

[beorhthelm]

Could well be, they were reported as being in difficulty about a year or so ago ...

Blockbuster were reported in difficulty 10 years ago, i'm surprised they've limped on so long.

 

[surrey jim]

thomas cook gets my vote - who buys holidays in a shop anymore?

closely followed by argos - cheap chav shop bound to fold

Already suggested this!

My two pence worth for store closures: 1- Halfords. Have been on thin ice before.
2 - travel agents (retail arms) how many people in this day and age go into a travel agent to book all their travel? Most of the time I go its just to pick up a brochure then book online.

Not sure about travel agents. I did some analysis for one of the largest long haul ones and their high street shops were a growth area. In fact areas where they opened a new one saw a rise in sales on all channels (eg people from the area buying online and on the phone).
Plus some of the companies use their high street stores to take phone bookings as well.

If they go under it'll be because they're so badly managed.

 

[Nibble]

I was surprised to see a Blockbuster the other day in Raynes Park I thought they had gone under years by. I miss going to video shop,spending ages choosing and then getting snacks.