Retail Chains Go Belly Up. But The Internet Is Not The Main Reason For It

R.F.Wilson writes from London: Another retail chain goes belly up in Britain that is supposedly going through a sluggish recovery, if you listen to people like George Osborne, a man who moonlights as Chancellor. (You can’t really treat him as a full-time finance minister, can you?)

The latest to fall is Blockbuster Video, a chain of rentals of  DVDs and computer games, which has called in the administrators this week, even though it was pretty clear about a month or two ago that it was going under. Just as it was pretty clear that HMV, the music store chain that called in the administrators the day before Blockbuster did, was not really doing very well. The same was with Jessops, the photo equipment chain, that went down a day before HMV. (With that sort of rate there will be only be Ann Summers, coffee shops, McDonalds and an odd hairdresser left on the high street.)

Retail analysts, an odd breed, are telling anyone who will listen that it has all to do with the Internet pushing out retail outlets. What is the point, they say, of people going out to buy a camera, or rent a film or buy a CD when they can do that online, pay less and wouldn’t even need to go out? And, as this stupid theory goes, more and more retail names will be disappearing from the high street because of Internet shopping.

Well, I beg to differ. I think that the main reason why retail chains are failing is because we have a hidden recession hitting us hard, with people not having enough money to spend and lenders strangling consumer demand by charging customers extortionate rates of interest on their borrowings. That is the main reason why things are not going swimmingly on the high street. The government can produce as many stats as it wants but you don’t need to be an economist to realise that things are not going well and there’s not much money to spend.

And then there’s the quality of the overpriced goods that are on offer, most made in China or in some other exotic location like Vietnam or India, but priced as if they have come from Italy or France or Sweden. Not to mention that there are no decent films and albums coming out that warrant a trip to the shop and parting with a tenner or more. I mean, how long can you expect consumers to bring home DVDs and CDs, only to find that they are a waste of time? At least on the web you buy them cheaper, if you are into s..tty films and music and not make much effort.

And clothing is not really getting more exciting, is it? I have been to several department stores, flagships of retail trade, in London in the past couple of weeks and I was appalled by the low quality of garments and their prices. I noticed that it was mostly foreigners who were still buying. (Funny really to see Chinese tourists buying junk that was made in their communist Motherland and taking it back there.)

The whole point of retail trade is to respond to the changes in demand and act accordingly. Lots of people love to shop at stores, able to touch the fabric and try clothes on to see if they fit. Going out shopping is part of their social life. But if they constantly encounter limited stocks and appalling service, being advised to go to relevant websites, then they lose interest and stop. Not to mention that every week there are fewer of them who have spare money to spend.

So as long as the government pretends that the economy is recovering, allows lenders to strangle consumers, and retail outlets behave as if they don’t give a s..t, expect more retail chains to go down. I know of three that are barely breathing.

–End–

4 Comments

1. 1Sausage says:

   January 18, 2013 at 8:46 am

   HAHA like the point about the Chinese buying the the crap produced in their own country, that’s soo true, have you seen them at retail outlets? They think it’s Christmas, yet if they stayed at home they could buy the ‘copy’ equivalent for a 100th of the price.

   In my opinion the high street isn’t and never will be what it once was. An internet business makes sense, we can now buy something while sitting on the comfort of our own bog! What’s better than that?
2. thaifoonthaiger says:

   January 19, 2013 at 5:59 pm

   I think the shyte service you get on a saturday especially with cheap untrained part time staff puts alot of people off – it does me. I went into HMV like a vulture this morning and found that their CDs on special clearance sale offer were still more expensive than on Amazon. Surely they should welcome shoppers and say “ok so make me an offer.” And I agree that companies are rippin g us off right left and centre by having shit stuff made in India and China and still charging European prices. They are criminals who must share some of the blame for the mess that was heralded as “globalisation.” The krusties were right – but probably for the wrong reasons.
3. Kevin says:

   January 21, 2013 at 11:17 am

   I really miss Jessops a great shop to browse camera’s. You really have to have a camera in your hand before you buy it. They also had a great range of accessories, I imagine there on-line store is doing really well that’s why they closed down high street shop. After all a lot of the customers ask to many questions and do not commit to buy or get the information they need write it down and then have a look on the net. Lets hope something happens that will bring back Jessops and make other shops think before they close their doors early.
4. mahatmacoatmabag says:

   January 21, 2013 at 1:21 pm

   Kevin, sadly the british high st. is becoming more & more like a dinosaur . I miss the days M & S had staff who actualy served customers, I miss Woolworths for its Pick & Mix etc, I miss Virgin Megastores & Tower Records & lots of other high st. stores that have gone out of business. Its sad for the customers & even sadder for the staff who lost their jobs, but quite frankly thats the way of the world, things change & nothing remains the same except for mans inhumanity to his fellow man