UK re­tail­ers: un­happy new year?

The Week - - City -

“Good­bye Jones Boot­maker, adios 99p Stores, RIP Mul­tiy­ork, Jaeger and Agent Provo­ca­teur.” These were among the ca­su­al­ties that led Deloitte to re­port a 55% jump in the num­ber of high-street re­tail chains (those with more than ten shops) go­ing bust last year, said Patrick Hosk­ing in The Times. It’s no sur­prise that some are go­ing un­der in the face of the on­line chal­lenge (as well as ris­ing rates and wage bills). This week’s profit warn­ing from Mother­care is an­other omi­nous sign. If the Gov­ern­ment is se­ri­ous about slow­ing this “bru­tally Dar­winian” process, it must act ag­gres­sively now to level the play­ing field on tax be­tween bricks-and­mor­tar shops and on­line.

Are Bri­tain’s bricks-and-mor­tar re­tail­ers in “ter­mi­nal de­cline”, asked Matthew Vin­cent in the FT. Yes, to judge by the Christ­mas pe­riod re­sults from Deben­hams: sales fell 1.3% and shares plunged by 11 times that. No, sug­gests cloth­ing-to-home­ware chain Next, where fes­tive sales rose 1.5%, send­ing its shares up 6%. One bright spot ap­pears to be food, said Sarah But­ler in The Guardian. Early data sug­gests spend­ing held up strongly. Mor­risons an­nounced bet­ter-thanex­pected Christ­mas re­sults on Tues­day, with Tesco, Sains­bury’s and M&S due to pub­lish their fig­ures later in the week.

Too many tra­di­tional re­tail­ers moan about their prob­lems while do­ing noth­ing to “rein­vent them­selves”, said Matthew Lynn in The Daily Tele­graph. How about cre­at­ing spa­ces in DIY stores to learn about home im­prove­ments, or of­fer­ing makeover and fit­ness classes in de­part­ment stores? How about di­ver­si­fy­ing into services, such as fix­ing prod­ucts? Or us­ing new tech – such as us­ing vir­tual re­al­ity in clothes shops – to make shop­ping eas­ier? Or of­fer­ing home de­liv­ery to make it more re­lax­ing? “Not ev­ery chain can be saved – but far more could be than looks likely right now.”

High street ca­su­alty

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