UK retailers: unhappy new year?
“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