4329 days ago
The Christmas trading reports from the retailers do not make for pretty reading. There are some who simply cite consumer confidence (or lack of it) in austerity Britain. But I would suggest that there are far wider structural changes afoot, ones that make me wonder if some companies really have a raison d’etre at all going forward. If it did not exist already would anyone bother to establish Mothercare (MTC)? Somehow I rather doubt it. Certainly when it publishes its Christmas trading statement on Thursday it will be grim.
Of course not all retailers are doing badly. Before turning to Mothercare’s woes it is perhaps worth looking at Tesco (TSCO) in that its relative success is one of the reasons for the failure of others
4329 days ago
It is amazing what cobblers some folk spout. HMV (LSE:HMV) has gone bust. It follows hard on the heels of Jessops which headed to retail heaven earlier this week. Chuka Umunna, Labour’s Shadow Business Secretary, called HMV a “national institution” and described the news as “deeply worrying” Yeah right. What next Chuka? Blame it all on Margaret Thatcher or global warming? HMV is not a national institution it was a commercial enterprise that like British Leyland or coal mines in Yorkshire that had run out of coal was just past its sell by date. In the old days, cretins like Umunna would probably have called for a state subsidy. Now they just blame it on the Tories and wring their hands in a pathetic fashion. The demise of HMV was inevitable, it could not even be saved by soaraway sales of CDs by the UK’s leading chanteuse Ms Cheryl Cole.
4334 days ago
Yesterday Greggs (GRG), the leading bakery retailer in the UK with more than 1,670 retail outlets, released an update on trading for the Christmas and New Year period (5 weeks ended 5th January 2013) and for its 2012 financial year (52 weeks ended 29th December 2012). This included that the company anticipates that it “will report full year results broadly in line with expectations when we make our preliminary announcement on 13 March 2013”. However there were caveats and with concerns about the UK economy and consumer spending – particularly on the high street, the following is my take on the current outlook for this company…
4348 days ago
Insolvency firm Begbies Trainor grabbed the headlines just before Christmas with a claim that 147 retailers across the UK were zombies, the living dead, poised on the brink of insolvency. The headline was scary enough. But the detail was even scarier. I sense that the bloodbath on the high street will reach a rather unpleasant finale during 2013…
We know why high street retailers are in trouble. They face competition from giant online retailers who do not have expensive properties to maintain and enjoy huge economies of scale (i.e. they can screw suppliers). Worse, Tesco (and to a lesser extent the other supermarkets) grab an incremental share of the off-line non food trade each year. And finally, the overborrowed UK consumer (and it seems US consumer) has finally stopped spending. That trend will not change in 2013. In fact none of them will.
