Big winners and losers from cold snap

Robert
That is going to be an understatement for all sectors of the economy.

If you are a small business man who has strugled though the last two years and now you have the ecomony standing still for another year - HMRC getting tougher - the larger companies moving the payments to a longer time period - When do you call it a day?
The banks are gearing up for a number of owners to throw in the towel sadly.

This was always going to be a grim year

HMV is plainly facing a structural challenge: competition from the supermarkets, online retailers and digital downloads...

As VAT and tax avoidance is still topical how about mentioning that internet / mail order competition in HMV's market is dominated by tax free imports from the Channel Islands. This must have an influence on their figures.

Robert the answer is very simple. HMV is dead on the back of Amazon. Next is down simply because in an age of austerity people do not need middle range product. A view compounded by its proposed price increase of 8%. Evidence of a tired management if any were needed.

As for the strange growth of John Lewis - no surprise it is business focussed on customer service and value. Unlike Tesco who only claim to know about value John Lewis has strong ethical values that support customers.

The only real surprise is that JohnLewis.com has not expanded across Europe on the back of strong values and excellent products. Given the prevalence of the john Lewis list I would expect Brussels to be the natural European Launch of this excellent retailler.

The John Lewis situation is easy to explain - shoppers are going for quality, rather than cheapness. Buy a better made, reliable product for the long term and keep it. As in Germany, Holland and Scandinavia.

Marks and Sparks is losing its popularity as its appears not to be maintaining it quality, its Christmas advertising is extravagant and I suspect there is a little bit of a political backlash as their CEO came out publicly in support of government cuts, which has affected my attitude to the chain.

Restructuring to exploit the not yet maxed out on-line potential must be surely a priority for a whole range of retailers who can take advantage of virtual size overheads to shift goods that are not needed every day. Maybe some can combine to have internet retail cafes?

Harsh winters could be no big problem if only you had Local Authorities who had the basic skills of anticipation and recognition. We are so lucky to live in Dumbartonshire who keep the roads open and services functioning. Why don't some of the jammed areas pay a visit and see how it's done?

This could be the start of a more profound structural change in retailing.

At some point network retailers and brands (excepting the superstores) will decide that catalysts such as bad weather are the final straw. Over many years there has been an accumulation of cost (rents and HR costs being the main protagonists) which will boil over at some point. Woolworths now HMV - could be the start.

As the online world begins to dominate (approx 40% of retail sales currently) will we be faced with a high street full of coffee shops and little else.

The likely impact on the economy of this potential retail weakness is less clear. The UK consumer is a significant contributor to overall GDP and its weakness could not fail to be significant. To date, retail sales have held up surprisingly well in the economic downturn and the UK government is gambling that the VAT rise will not stop people spending. The early signs are not good, but cannot yet be said to constitute a trend. Investors will have to wait and see.
https://www.mindfulmoney.co.uk/2853/economic-impact/hmv-next-the-importance-of-consumer-confidence.html

It's a retailer and so whilst it provides jobs, the goods it sells will simply be sold by another outlet.

More important to the economy must those businesses that make goods. It seems to me that the transfer of jobs to Poland by Kraft:

https://www.bbc.co.uk/news/uk-england-bristol-12118639

..is a more serious loss.

With 5 or 6 retailers providing all of our food and clothing, and transporting all of these products by road using Diesel fuel, I do hope that the government has considered the effects of panic buying in the event of interuptions to the transport fuel supply.

These interruptions could come from industrial action, external price hikes or shortages from the oil producers, actions by rogue states such as Iran or merely PEAK OIL causing supply shortages volatile supply leading to food shortages to the end users.

I think it is time for the government to instruct local authorities to build a Strategic refned Oil products store at locations all around the country to keep the country going, now that the North Sea supply is in rapid decline. Otherwise with all the supply of food controlled by 5 companies we could all be BIG LOSERS.

Merely having a buffer stock of fuel in place would effect the panic mentality of crowds. - Comments Please?

John Lewis is unbeatable for the whole shopping experience; well planned shop floors with classy merchandise and helpful staff. The Place To Eat is not cheap, but it always provides a decent refuge mid-shop with good quality foodstuffs. The staff never fail to be helpful, cheerful and courteous. Now compare all this with almost any other chainstore. I do often find goods that are too expensive for my wallet in John Lewis, but I never get the feeling that the shop is trying to rip me off. I always buy my major goods such as cookers, TVs and PCs from John Lewis...the extended guarantee is always welcome. I spent a fortune with them this Christmas, but don't begrudge them a penny!

So in summary Robert - businesses that provide the right products at the best price, at times to suit the customer are the big winners. You could be onto something. No wonder government workers howl whenever opening up services to the market are even mentioned.

10. At 17:29pm on 5th Jan 2011, PaulattheRocks wrote:
"Merely having a buffer stock of fuel in place would effect the panic mentality of crowds. - Comments Please?"

The reason that there is always panic whenever a crisis hits is because people fail to plan. They are complacent because everything is laid on for them on demand, however with "just in time" supply chains the shops will be stripped bare in a day in a real crisis.

Instead of asking government to solve all of our issues we should prepare for the worst and have 6 months food and water stored within easy reach as well as a good stock of essentials such as candles, medicines and cooking equipment. A store of fuel locally would not help in such a scenario. We need to think for ourselves and take out our own insurance.

This year will be a bloodbath for retail. There will probably be a number of stories around this issue but I'm not sure that there's a lot to say. It's mostly obvious stuff. Consumers will be squeezed from all directions and they won't have the money to spend. I've no idea what we're going to do with all the empty shops though.

I buy most of my non-food products online. In my experience, service standards are generally very good and prices are usually lower than the high-street. It is also very convenient and I do not have to endure traffic problems, car parking or foot journeys in bad weather.

To illustrate HMV's problem, I bought a CD from amazon two days ago at a lower price with free delivery. Given the overhead structure of online retailers, I cannot see how traditional retailing can survive in it's current form. Reduced disposable income can only exacerbate the problem.

I'm not sure that I would call this progress - shopping seems to have changed from an enjoyable shared experience to one focussed upon satisfying needs.

It is not what I wanted - town planners decided that is what I should have.

'Losers'?

Anyone still daft enough to proclaim, "the end is nigh" due to Global Warming!

Winners?

Anyone who replied to the above with a shrug of the shoulders or suitable expletive!

I found Howard Davidowitz's recent interview on Bloomberg (https://www.bloomberg.com/video/65589812/%29 most interesting in this respect. I'm not sure how much we can compare the US to Europe in terms of shopping experience - In Europe, we have pleasant downtown areas. But the fact that brick-and-mortar will suffer and, as a matter of consequence people that finance the brick-and-mortar.

What the retailers never tell us but should is how much of the stuff they sell is imported and where it comes from.

TonyH "I buy most of my non-food products online."

Indeed. Although , your comment about overheads is perhaps a little disingenuous. If our government wants more VAT, perhaps it should consider lowering the LCVR rate for the Channel Islands in line with the rest of Europe , which would make retailing in this country on many service products much more competitive.

"With the rise in VAT dampening consumer spending, and households' fear of interest rate rises a potential second dampener, 2011 is likely to be one of those Darwinian years, which sees the extinction of retailers genetically incapable of surviving a long economic winter."
==============

And ....

1 million people stopping spending as they are deliberately put out of work by the cuts
and
Several million more stopping spending out of fear they will be next
and
Petrol/prices through the roof, worsened by Osborne's taxes
and
Rapidly growing inflation

All we need now is a raise in interest rates.

I think Robert is right that the prospects are not good.

As the rest of the world recovers from the global recession the tories ideology is heading us into more grief.

But don't worry, the billionaire businessmen/spivs funding the tories are apparently doing well.

Don't forget to add in the impacts of changing marketing of Chinese wholesale companies who this year will be gearing up for direct marketing to consumers into the west.

As factory price inflation and wage inflation increases in China they will no longer be happy just marketing to ebay drop shippers, amazon stores or small retailers. They will be needing to increase their margins.

I can not remember the last time I bought electronics from a western based company - I buy direct from Hong Kong and save a lot of money. This winter I even bought my gore-tex jacket from Hong Kong and saved about 60% on the cost of buying from the High Street. While I'm supposed to pay import VAT on items over £18.00 I've never yet been charged this by the courier despite the package showing the actual value of the goods (I don't take the option of asking the retailer to mark the package at below £18.00 - I leave tax avoidance to the super rich)

The one thing that has stopped a lot of UK consumer going down that track is uncertainty of buying direct but this year this will change. Two things will happen to change this; the first is the squeeze on income for most people and they will start looking for cheaper goods and the second is based on your previous blog of high Street companies restricting the availability of cheaper stock items to force people to up-grade their purchases.

I'm changing 50% of my affiliate marketing websites away from affiliate schemes of more well known and household name companies to Hong Kong based wholesalers who market direct to the public and I'm expecting to change most of the others to Hong Kong based retailing by the end of the year.

The tight squeeze on personal budgets will cause a shift in the way people buy items - when an economy goes through tough times it always comes out the other end looking completely different than before.

18. At 19:22pm on 5th Jan 2011, badvocthebad wrote:

Indeed. Although , your comment about overheads is perhaps a little disingenuous. If our government wants more VAT, perhaps it should consider lowering the LCVR rate for the Channel Islands in line with the rest of Europe , which would make retailing in this country on many service products much more competitive.

===================================================

'Disingenuous'? - Not really. I just deal with the taxation system government imposes.

Your proposal, whilst morally correct, would just add to my costs and transfer spending. I'd be worse off to the benefit of the exchequer.

They get more than enough from me already.

John Lewis works for a number of very simple reasons, which many retailers should try and emulate. 1. Their toilets are clean and people do not feel awkward going there. 2. They are very baby/child/pushchair friendly meaning that people who have kids can still get out of the house and do stuff. 3. The store is clean and tidy and does not have music blaring at 37,000 decibels. 4. Most importantly, the staff have a completely different work ethic to nearly everyone else. The staff work hard and work for there customers, not shareholders/investors/locusts who want to bleed a company dry before moving on. The company cares for its staff because it is the staff that will make a difference.

Unfortunately, as someone mentioned before, we will always needs food and will therefore always shop at supermarkets. There buying power is ferocious, a true product of the uselessness of the monopolies commission. So until companies wake up and follow JL's lead, change UK retail staff culture or start selling food, in 25 years the UK will be renamed Tesco, Sainsbury's, Morrison's or Asda(America).

PS. Believe it or not, I am a young guy who cannot stop eating.

"Your proposal, whilst morally correct, would just add to my costs and transfer spending. I'd be worse off to the benefit of the exchequer."

Which is exactly what should be happening now. You'll be worse off anyway , as we all will be. And it's not a question of morals. If the opportunity is there , I say take it, as the online retailers have and the government has so far avoided. However , I do believe that if any one area of retail , be it online , high street or shopping mall is given a chance like this to dominate , then your choice and customer service will inevitably deteriorate.

2. kitgreen

"As VAT and tax avoidance is still topical how about mentioning that internet / mail order competition in HMV's market is dominated by tax free imports from the Channel Islands. This must have an influence on their figures."

So why aren't HMV doing the same? Its a characteristic of the older "record companies" that they have continually failed or been very slow to adopt to the new technologies (e.g. downloads) and changes in busines model (e.g. grey imports, VAT free channels)

Despite all the young, dynamic talent they are supposed to have they are actually utterly useless in business and will fall by the wayside in due course.

#22

I've never frequented a John Lewis store and I have doubts over the significance of the first 3 reason you give for their success, however I have heard of the unique staff culture that exists in JL and how this translates into genuinely good customer service.

But your prophecy is extreme.

IMO the old theory of supply and demand and brand perception are two factors that will make or break a business. Obviously with HMV the demand simply isn't there. And with Next, I think that their marketing strategy simply hasn't worked and as a consumer, I have to say I don't know what they stand for. M&S evidences the importance of branding - its clothing department is struggling because it cannot shrug of its 'oldies' image but it's food business holds up reasonably well because its renowned for its quality.

The supermarkets will never be enough just on their own but they cater for those who are more concerned with price and convenience. But there's plenty left to fight over and it's up to budding management teams to find their market segment!

Erm.. NonLondonView..

HMV are doing the same , they're just utterly hopeless in mainland Britain , that's all...

Supermarket chains ... monopolies, oligopolies... on 'essentials'.

Without a credit boom ... real net disposable incomes for most are under strain for 75% -80-% of the UK population.

Rents/operating expenses for most retailers are too high from credit boom inflated commercial real estate rents and yields. A friend of mine tried to open a shop recently in a secondary highstreet pitch ... the likely cost of the venture

half a million quid ... rent, fitting out, stock, dilapidations account, business rates etc ... horrendous

All that many small retailers want is ordinary basic market stall facilities and a load of local authority bureacracy and medieaval marketing restrictions to go with it ... ask your local council about this ... and you're lucky if you even get a laugh out of them.

UK Import spivs not finding its easy either ... the UK costs are too high all around ... even for import spivs ... as Brits are being a bit more cautious with credit card debt as the vultures and baliffs are circling and getting ready for a big feed.

And what do we get - a VAT rise for good measure!

To awyc24

Being honest, I do agree with you that view is a tad extreme. I do agree that customers are more price and convenience focused. Which is a shame really, because buying vegatables, meat and fish at the local shops is a little more expensive, but quite fun and the quality is noticeable.

My main gripe is the sheer size of the supermarkets and the fact that they have an almost captive market. You cannot drive a mile in any direction without seeing one of their signs or advertisements. Without labouring an overstated point, big supermarkets have harmed local businesses in many smaller areas and have erased local/select knowledge in the name of providing jobs (wiping out local jobs to create new jobs - never got that one). I have no beef with Tesco's butchers but they do not know their onions.

As for HMV and Next, they are effete companies who profited in the now and did not plan ahead. The same could be said for many companies, it is just that these two were caught out this time around. It should be wake up call to others.

All the Supermarkets need now is an Investment Banker licence so that they can trade in derivatives, borrow short term to lend long term and spread bet on the Russian stock market

give everybody 1 orange.

The phrase 'Location, location, location' comes to mind, Robert, in answer to your puzzling over John Lewis and M&S. Both chains go for prime locations and bad weather provision may well have been a factor in their choice of location. M&S were doing bumper food trade the last few times I was there.

HMV were always going to be struggling in the 21stC, paying rents for near prime locations but selling a product that not only takes up little floor-space in a supermarket but also slips through letterboxes easily. {Kinda disproves what some politicians were saying about Royal Mail in the last two years!}

I don't know whether HMV also have to pay prime salaries but it's a chain where, in my experience, you can give a scrap of remembered song line to a staff member - words or badly hummed tune - and have a fighting chance of the sales assistant recognising it and finding the appropriate CD for you. That may cost them in staffing with little pay back in sales.

Happy New Year, Robert and posters all!

I totally agree about the John Lewis effect,where else do you get fantastic service plus free waranties and free delivery.Not that expensive either recently brought a Babyliss hair trimmer £34-99 same thing £44-95 at Boots and £39-95 at argos.As for the comments on supermarkets lets not forget Waitrose is part of John Lewis

HMV are suffering from the very British syndrome - failure to adapt. They can't compete on price with downloads and they can't compete on stock-size with Amazon. So what to do?
How about making the experience of shopping in HMV a more enjoyable experience? Perhaps they could provide people with facilities to sit and listen to music - not for the few seconds that iTunes allows, but as much as they like. Perhaps they could employ people who are genuinely interested in music of all genres - maybe even (whisper it!) train them so that people coming in and asking "I'm interested hearing some more (say) Scottish folk music, can you recommend something" would get an informed response. Maybe even arrange live music performances by local talent in their stores.

On the other hand they could continue whinging about downloads (legal or otherwise) while the folk who regard the company as a cash cow are checking out other herds.

Of course, the John Lewis Partnership is owned by a trust on behalf of the employees, who receive a significant proportion of the partnership's profits in the form of an annual bonus. No shareholders or private owners - no wonder the employees work hard to deliver value for money and cutomer service.

As a previous post said: not just value, but values.

#22

One reason could be because John Lewis is a partnership and all staff are partners who get a share of profits - or bonus - at year end :)

and #33 has said that already....... darned moderation!!! :-)

My wife used to be a partner with John Lewis (I nearly wrote "worked for" - a phrase for which she would have chastised me) and regarded it as a great place to work. My sister works at a company with a similar "co-operative" structure. She works harder than she ever has done before but has never been happier in her working life.

How can this not spill over into a good shopping experience for customers or clients?

Robert, sometime when you are not too busy, could you analyse the affect to the economy if all the tax 'avoiders' and off-shore tax-free bank accounts were to be required to pay their taxes and would this have negated the necessity to raise VAT?

#29. ronnieboy1 wrote:

"give everybody 1 orange."

So you are going to pay for them, are you? (Oranges are food and as such zero rated for VAT.) They have dropped in price since Christmas as one might have predicted - just like the stock market will do and for much the same reason!

(The end of year stock market generally benefits from the inflow of money into pension funds at the end of the year that has to be quickly invested by the pension fund managers. So prices go up to enable the brokers to extract as much money from your pension contributions as they can, prior to letting the market fall to a more usual level. - a bit like oranges - everyone wants satsumas / clementines / mandarins for Christmas - so the retailers pile them high and keep prices up prior to Christmas and have to off load the unsold ones soon after!)

Oh great! Hallelujah for the supreme all conquering supermarkets!
Thanks to UK Corporatocracy PLC I may very well soon get to make a full circle in my career! As a 17 year old I started off as a supermarket shelf stacker doing Saturday/ Holiday work to earn some extra money...
Now aged mid-thirties I'll soon be given the ideal opportunity to reacquaint myself with Supermarket work as I expect the spending cuts will very soon cost me my job.
This is all despite my efforts to 'play the game' - getting well educated, going to College, going to University, getting a Degree and even a Postgraduate level qualification (I've got tuition fees up to my eyeballs! Yipee!) and I even got into the habit of getting a haircut and having a shave too...
Now my prospects are about to be smashed to smithereens in the middle of this never ending financial catastrophe/ 'economic winter'. Fancy me thinking I could get a job with less than national average salary in the despised 'public sector' and thinking I could have any kind of steady and lengthy career in this day and age?
If only I'd been wiser and pursued the pathway towards being a market speculating spiv in the glorious 'City'. I could've been quids in eh? I could've been bailed out, instead of cut back, too!

So gawd bless the glorious supermarkets for allowing me and so many others to harbour some hope for further employment in future and to do something 'productive' and mundane on a whopping minimum wage.

PS - Any idea how the fast food multinationals are getting on Robert? Maybe I could get a second job flipping burgers eh? That's the spirit we all need to show in this all new super-dooper low wage economy isn't it? I'll probably need a third job too but I guess approaching HMV with my CV will now be out of the question eh?!

I would add that HMV does on line business and downloading. They have in general been cheaper than Amazon because they have always offered free delivery. It is probably some of the stores that are having the problems, but hopefully the flagship stores in Oxford Street will thrive.

I would also add that HMV staff in the main stores have great musical knowledge and have pinpointed obscure music for me in all genres, but especially in classical music

It is very easy to understand why John Lewis and their supermarket chain waitrose always succeeds where other larger brands fail. They focus on customer eperience and service something the other stores can spell but haven't the maangement skills to understand. The other outstanding difference between the large chains and John Lewis is that John Lewis is a "partnership" and all staff sorry partners share in the profits. (Not like BHS were the profits seem to disappear to that nice expensive part of Europe thus avoiding a large slice of tax on earnings generated in the UK)
However I digress, John Lewis has another major difference they do not pay just above the minimum wage they pay a decent wage and have a decent wage structure. Shock horror! all those industrialist (not many of them left) and retailers who bleated about the introduction of the minimum wage now have no excuse for paying the minimum wage or just above it because the shining example of the John Lewis Partnership has just proved how short cited these managers of retailers have been. Its enough to make their CEO's and chairmen (who incidentally earn far in excess of John Lewis CEO) choke overr their balance sheets.
Their is lesson for the government too in this assuming that one of them understands a balance sheet(other than a banking one) and that they collectively
understand or are forced to understand some very basic facts regarding business.
1. Give your customer base real valued service.
2. Offer them excellent quality products.
3. Treat them with respect by having polite, helpful, well trained professional staff paid a fair wage.
4. Stop trying to help those in the higher echelons of industry who earn in some cases obscene amounts of money, they should be told very bluntly that the days of screwing the workforce are over, and that is the message that they should be passed on as bluntly to the institutional investors and the greedy bankers.
If the government takes all this on board it will be a miracle, if they continue with driving the population of this country into becoming a low wage, low qualified, no hope economy, then I doubt they will still be in office inside 12 months.

We didn't set foot in any of these shops this Christmas.

Food came from the local shops and Co-Op.
Pressies came from a small music/DVD chain and independent book retailers (Gandhi DVD was the perfect gift, so full of protests!).

Two reasons. First, we don't tend to waste too much at Christmas on junk and secondly, we made very political decisions.

I will not spend money with massive corporations who don't pay tax properly, who whine on about the need to make profits while there are people in this country who are unemployed, living on disgraceful poverty wages and can't as much hope to have a warm home let alone a comfortable life.

When they behave themselves and serve us, rather than subverting our democracy, I'll think again. Now, note, I said think, not shop in their stores.

11. At 17:47pm on 5th Jan 2011, Dinersore wrote:
John Lewis is unbeatable for the whole shopping experience; well planned shop floors with classy merchandise and helpful staff. The Place To Eat is not cheap, but it always provides a decent refuge mid-shop with good quality foodstuffs. The staff never fail to be helpful, cheerful and courteous. Now compare all this with almost any other chainstore. I do often find goods that are too expensive for my wallet in John Lewis, but I never get the feeling that the shop is trying to rip me off. I always buy my major goods such as cookers, TVs and PCs from John Lewis...the extended guarantee is always welcome. I spent a fortune with them this Christmas, but don't begrudge them a penny!

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This would be because their staff own the place as it is an employee owned business which is why it is a model to follow. There are no fat cats sitting at the top creaming off the bulk of the profits generated by the work of those in the rest of the company. This is very much the model which the current government hopes can be emulated in the public sectors with staff who give two figs for their customers because they own the business and it is in their interests to make it succeed.

The failing retailers are those who have poor managements who don't understand either their customers or their businesses other than as abstract slides on a presentation or from a balance sheet.

It is true that John Lewis is not the cheapest place to buy goods, but they do sell quality goods at the lowest price. The question is does this represent value for money/ The price of lots of goods is high for one of two reasons. Firstly, sheer quality. Secondly a whole range of 'special features' which sound good but you don't really need.

Returning to the issue of quality, which is why I buy things from JL. Paying twice as much for something that lasts three times longer puts the issue of cost in a different perspective. Not everyone can afford to shell out larger sums of money, but there are enough on average incomes recognise that 'you get what you pay for' to keep JL very busy.

The danger is the adulation that JL sometimes gets. By choosing the products it sells it is aiming at a market of its own choosing. Many public and private companies and organisations do not have such a luxury. The JL model may not be so successful in other areas. The standards it sets however should be seen as universal targets.

Interesting. I heard that some Banks (Lloyds Group?) are sending their top managers and directors behind the counters in their branches. Managers meeting customers! Whatever next?

I suppose they will label anyone who complains, as an ungrateful bigot.

Re No. 32 by PoliticalGoose2; yea I know how you feel, and I am nearly mid-40s with wife and kids. Even though I would be able to get a job by "getting on my bike" but in Asia if you dont work for a MNC / brandname forget it! They are obsessed and the world needs either a "size" tax on Number of Offices (for MNCs with hundreds all over the place), or a sliding scale Corp Tax Rate so they pay more. No future for the world without entrepreneurs (one of the 4 factors of production : Land Labout Capital and Entrepreneurship), and barriers to entry now too difficult. It is a (global) problem and getting bigger fast.

In my opinion, there are a number of retailers are following the same fate. Basically the technology has been moving so fast, the old thinking BoDs fail to anticipate swiftly. The only way for them to survive is to diversify in a very fast pace. Once you are behind, the consumers will brand you as dead breed.

HMV, Jessop, Alworths - I don't expect to see them in the next few years.

I guess Kodak will shrink further and further to a much smaller niche company but will still exist.

Yahoo lacks of identity and direction trailing behind Google and Facebook, will be approached by another company with cheap price.

Sony's Playstation Portable and Nintendo DS are losing steam quickly to iPhone and they are reckoning the trend, so as the mini handheld camera market.

#46
The managers at HSBC have also been doing this lately. It seems the banks might have been "sold" a brand new marketing initiative by some bright advertising executive- I wonder where he dreamt that one up????

On the John Lewis comments- I work for a Credit Union, a not for profit financial organisation, although we are not allowed to directly share in the profits, those of us who are also members of the Credit Union do get great returns on our savings. It's also a great place to work. The ethos of a "not for profit", member service organisation is far better than that of the main high street providers I have worked for in the past, most of them badly managed and poorly supervised.

I know nothing...I'm only the consumer who stands and queues over Christmas whilst husband waits in warm car and does Sudoku. However, John Lewis has a trick: it sells beads, bins and beans all under one roof. So I don't need to go to three other stores; it's all under one umbrella. And there were too many queues in all the shops this Xmas; hire the unemployed to address the balance.

#20 Aberguy

So essentially what you're telling us is that you don't mind supporting a communist one party state to save a few quid, not pay UK tax and keep unemployment here higher than it should be.

You're just the sort of person we really need.

the rise in popularity of 'buy on line' I think can be in part attributed to the cost and inconvenience of parking to visit some of the names mentioned. I'd have liked to go to HMV on Lincoln High St. many times but no way am bother for those reasons. You'd have to drag me to a there, what a miserable experience it is.

GC

#52 makes a valid point

Councils have hiked parking charges to the extent that it is just too expensive to go to the High Street at times. Perhaps if this was addressed, there would be less bad news for some.

As for HMV, I find their stores to cramped and blaring loud music, so I avoid them generally

Rubbish - these retailers peddle as much rubbish from their mouths as they peddle in their stores!

Next and HMV suffer because of the weather but John Lewis has no problem - funny isn't it?

What the results show is actually where the pain of the 'deficit reduction' is being felt. The mass market ordinary folk stores are being hammered - but the hoy poloy still shop as if there is no recession (I mean after all - asset based 'riche' are seeing their incomes rise in value - it's the wage earners who are seeing their purchasing power fall)

.....or is it all just 'selective weather' - some people will really believe anything won't they?
I mean does anyone remember the 'great retail collapse' of 1984 due to the weather - when we had another exceptionally cold winter?

"One question, for when the dust has settled (and the snow has stopped settling), is which retailers are experiencing serious difficulties unrelated to poor weather."

One answer - ALL OF THEM.

What are the establishment going to blame next? - the star signs, the wrath of the gods, the solar eclipse?

I knew the HMV figures were going to be bad - I'm no soothsayer or 'respected business hack' - simply from going in the Oxford street store on December 24th and not having to queue to buy something.

Anyone who has used HMV around christmas will know exactly what I mean - in fact I am surprised they are only 14% down and not 40% down.

Now where is that recovery in the private sector which will absorb the imminent destruction of the public sector by the bullying bullingdon boys? - it seems to me the coalition has pinned all our future on it coming up black - and the ball is currently bouncing into the red...

Ah well - you'll all get to vote again soon - I wonder who you will choose this time after seeing all your previous 3 choices fail dismally in 'controlling the Economy'.

Maybe all voters should wake up to the fact that the fraudsters of Government don't actually influence the Economy in any controlled way - you see despite the continual claims of recovery - job losses and falling sales hardly provide a ringing endorsement of growth do they?

#51

- So essentially what you're telling us is that you don't mind supporting a communist one party state to save a few quid, not pay UK tax and keep unemployment here higher than it should be. -

so where do you think 80% of the consumer goods come from? All I'm doing is missing out the middlemen and buying direct with the subsequent savings.

do i worry about supporting a one party state? not when they look after their citizens more than our government does here. I'm in the process of emigrating, it's one of the benefits of having an internet based business - you can take it anywhere. While it's not China I'm going to I am going to one of the major eastern economies because in the UK £60k will buy you a derelict garage while £60K where I'm going will buy you a 4 bed detached house in a gate community next to a national park. Who wants to work hard in the UK to live a life of poverty?

As I said in my op I am happy to pay the import tax but if customs and excise don't think it's financially viable to chase up import tax on goods worth £100 or so then that's their decision not mine. The goods value are declared and I'm happy to pay if asked.

I tried to do my sale shopping in Top shop - but I couldn't get in! - Some protest about not paying tax by the owner....or something - from a revolution which isn't happening, despite the fact it's going on all around us.

...then I tried to get a new phone at Vodafone - and I had the same problem! Clearly 'tax evasion' is not as morally acceptable as first thought - I presume it's to do with the fact that "we're all in this together" - tax efficient or not.

Maybe the time to admit the truth is upon us - the weather may be poor - but did it also cause 2 million people to pay their mortgage with a credit card last year?

https://www.telegraph.co.uk/finance/personalfinance/8241367/Two-million-use-credit-card-to-pay-mortgage-or-rent.html

Clearly the CML disagree - but then they have a vested interest in keeping 'confidence up'.

HMV is nearly dead as are a number of outmoded chains. It simply does not reflect how most of us want to purchase music, film and books anymore.

Amazon is not just about the price, which is undeniably one of its fundamental advantages. The truth is that a visit to an HMV shop is a grotty experience where one finds themselves looking at a very limited range. The top 50 mass consumed items in a particular chart are stuck up on a wall and then there are old fashioned displays containing at best several thousand overpriced items. In the case of books a 3 for 2 offer at Waterstone is the best deal you will get. A deal consisting of untidy piles of books stacked on a table near the door that the seller is trying to hype. Hardly inspiring. These are often a second or even 3rd 'autobiography' of someone who is of limited interest to those us oblivious to reality tv its mass produced celebrities or the lives of football players or politicians.

At amazon there are fantastic product and book reviews from millions of ordinary people everywhere. This is the internet truely democratising the shopping experience. Therefore the whole arena is one of touch and see, discuss and think and true browsing. Each person has a profile which means that suggestions of purchases of interest are flagged up. The list of titles and products runs to many millions. There is no need to find parking and endure the wasted time and the sense of oppression that most of us feel when somebody invades our personal space while we read the cover of a book. Simply brilliant.

HMV RIP

It has nothing to do with the weather whatsoever. I saw thousands of people out over christmas walking in Richmond park rather than going shopping.

cool-brush-work #15 spot on.

There is no global warming. We have just had the coldest year in 30 years following 3 years where each was colder than the last. The melted ice has reformed in the arctic which is what always happens: big melts are followed by big freezes as soon as a cold winter occurs. Polar bears are in rude health and in stable numbers (head of WWF is the highly paid politician who used to run the dodgy climate change organisation who tried to hide the records. Now he produces those dodgy adverts showing an apparantly desperate polar bear plus her cub stuck on a tiny piece of ice.

Visit https://www.metoffice.gov.uk/climatechange/science/monitoring/hadcet.html

What is becoming clear is that the whole theory is based on 6 unusually hot years in close proximity. Think about it here we are on a planet 4.6billion years old with records running for a couple of hundred years at the end of an ice age. We know nothing not even what caused the extinction of the dinasours. Its a con. As was Y2K as was bird flu.

Finally - to see through this muddy water of statistical fraud, most reporters seem to have missed (or just mis-reported) that the John Lewis rise in sales is compared to this period last year.

...Christmas 2009 - not a great year for retailers, surely the only way is up - and yet for some they continued the downward trend....

https://www.talkingretail.com/news/industry-news/christmas-foods-fail-to-cheer-worst-ever-sales-figures

https://www.guardian.co.uk/business/2009/dec/17/high-street-sales-christmas-shopping

Note the 'surprise' fall making a re-appearance...how many more surprises will it take before the people recognise incompetence and downright falsehood?

So 2008 sales falls were due to the recession
2009 were due to us all eating 'traditional christmas meals'
2010 was due to the weather
....what does Christmas 2011 hold for us? - maybe it will be Godzilla that causes a fall in sales again next year by going on a rampage through the city??

The pattern is lie, lie and then if that doesn't work - hire an 'expert body' to lie for you.

Suddenly the 6% increase by JL Y-o-Y doesn't look so good does it? - and what does it do to the perception of the HMV figures?

Why has the BBC missed this trend? - I mean it's not hard to find, even for poor investigative journalists - do we have to wait for Wikileaks for everything truthful?

Don't forget these are just SALES numbers - not profits, as most stores have been having sales right through Christmas - I wouldn't expect the profit margin to be too comforting. Prepare yourself for some more 'surprises' when the profit warnings arrive.

What a shame you cannot lie your way out of recession - no matter how many 'experts' you employ..

57. At 11:01am on 6th Jan 2011, johnboy911 wrote:

"There is no global warming. We have just had the coldest year in 30 years following 3 years where each was colder than the last. "

Classic "Daily express" interpretation - global warming doesn't mean it's going to get warmer for everybody - it means we will see more EXTREMES IN WEATHER PATTERNS as the climate becomes unbalanced and less predictable.

....or did you think the consequence would merely be we all need to buy more sun tan lotion and we'll save a fortune on holidays?

To be so badly informed about a subject you feel so strongly about is never a good thing.
....just like the Capitalists...

59. At 11:15am on 6th Jan 2011, writingsonthewall wrote:

"or did you think the consequence would merely be we all need to buy more sun tan lotion and we'll save a fortune on holidays?"

Funnily enough, one of the reasons for our poor handling of the recent cold spells over the past couple of years is because local councils believed the hype about "snow will become a thing of the past" and so did not order enough salt, did not renew investment in snow ploughs and removed local grit bins

Looks like they believed everything they were told without researching properly....

This comment was removed because the moderators found it broke the house rules. Explain.

Having ventured inot my local HMV on many occasions over the pre-Christmas period, I have another possible reason for their lack of sales over the Christmas period.

On each occasion, the store was full of competitively priced goods and a large number of customers. The main problem seemed to be the lack of staff actually manning the tills. In a store with 10 tills, only 4 were manned and there were over 60 people in the queue waiting to purchase items.

Now I understand that the Christmas period is a buying frenzy, but anyone with any sense would realise this and staff accordinglyto cater for the customers expected.

If their managment can't cope with this simple concept, then they as a company don't deserve to exist.

59. At 11:15am on 6th Jan 2011, writingsonthewall wrote:

"Classic "Daily express" interpretation - global warming doesn't mean it's going to get warmer for everybody - it means we will see more EXTREMES IN WEATHER PATTERNS as the climate becomes unbalanced and less predictable."

Ah, so we have now classic "Daily Express" interpretation and that on top "Daily Mail" interpretations, then "Daily Telegraph" and whatever other paper does not hold WOTW views on given subjects. Clearly, only "Guardian" and "Morning Star" are the only tabloids worth reading these days....Right.

Funny, how selective you are when it suits you, WOTW yet accuse everybody else of the same sin when it goes against you. Taking the definition of global warming from your favourite and often quoted source, Wikipedia, it actually says:

"Global warming is the increase in the average temperature of Earth's near-surface air and oceans since the mid-20th century and its projected continuation. According to the 2007 Fourth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), global surface temperature increased 0.74 ± 0.18 °C (1.33 ± 0.32 °F) during the 20th century....Other likely effects include changes in the frequency and intensity of extreme weather events"

as in:
https://en.wikipedia.org/wiki/Global_warming

Or have you just decided the inconvenient (but main) bits of the definition are just not right?

Alas, it means mainly temperature increases (the giveaway word here is: "warming"...) so Johboy911 is right. I don't recall having extremely warm summer last year (as in extreme weather event - you would expect weather going to extremes on both sides of the spectrum, wouldn't you?)....

A bit like your loose definition of revolution - so now a demonstration outside the Top Shop qualifies too? Well, if that is all what your famed revolution is all about then we, "capitalists" can sleep peacefully for many years to come. After all, we had plenty of those "revolutions" over the last 50 years....

63. At 13:24pm on 6th Jan 2011, Ian wrote:
59. At 11:15am on 6th Jan 2011, writingsonthewall wrote:

"Classic "Daily express" interpretation
===============
Surely a Daily Express interpretation would have to include 'Princess' Diana?

The HMV model follows the highly leveraged theory of increase sales and margins and sell on at a capital profit.

Unfortunately this short term view ignores the fact that growth is finite, margins are finite. Also now finance is more finite.

Once you have made the easy cuts and easy profits you need to try harder to find more. HMV seem to have followed the rest of the high street in that they have lost their key market and identity and instead have tried to please all of the people all of the time (a la WHSmith, Woolworths etc). The shopping experience in my local HMV is sometimes not pleasant, the aisles are too narrow as they are trying to sell too much stuff. The pricing is confused, are they a pile em high and sell em cheap or a brand who are confident in their values? But I still buy from there at times as you can't beat a browse among the shelves (from a regular Amazon user). But on the whole if I buy music I buy from Amazon, and video games from Amazon or Game.


The other profit warning, Mothercare confuses me as a brand, their prices are certainly not cheap but their stores seem a little shabby and the staff are just faces sitting around at cash registers. Why pay a premium price for little service?

Shops need to realise that the people with the money are more canny now, if shopping is not pleasurable or fulfilling in some way, why shop? after all I can sit at home and shop online easily, find what I want (and more) and generally cheaper.

If the online companies and mail companies could find a way of avoiding the need at times to visit the delivery office for failed deliveries (ie evening / early morning deliveries) then the situation for High streets could be worse still.

When mentioning the weather, also bear in mind that the online companies may lose out because of the problems with delivery due to snow etc, in fact the relative position for the High street could have been worse.

(All this IMO...)

Question:

How many of the companies which have done badly over Christmas have chairmen who agreed with the government's views on public cuts before Christmas, and added their names to the letter agreeing with these cuts?

As I said at the time, the public (who are their customers) would quite rightly show their disapproval by shopping elsewhere.

You reap what you sow!

Here's a thought.

With high street retail moving steadily online, it's surely not going to be long before large swathes of commercial (retail) property get converted into residential property, easing the supply issues of an already suffocating housing ladder.

Watch the slide, especially if they start to inch up rates.

So HMV is going to hell in a handcart, not very surprising since this is the group which also owns Waterstones, the purveyors of 'celebrity' tat.
Regards, etc.

"The apparent anomaly is John Lewis, whose remarkable sales growth seems impervious to any kind of climate."

Or though we should rember that everything that go's up must come down and after odering a coat on line on the 7 December and not receiving it until today 6 January (a month later) one wonders if this type of poor service will effect next years Christmas sales!

This comment was removed because the moderators found it broke the house rules. Explain.

IN the 80's & 90's I worked at both HMV and Virgin Megastores. HMV was THE place to buy your records back then even if it was more expensive than WH Smith or Our Price people just liked the bag believe it or not. HMV did have far more experienced staff too, before the computer age we stocked the shop using a huge Music Master catalogue and phoning orders through to the record companies.

The staff were allowed to borrow the stock to listen to, which is where they built their knowledge as each store had to buy all their own stock. Also before barcodes became the norm the reps would hand out a barcode sticker for a single or album that you were meant to swipe through the seperate 'Gallop' machine with each matching sale. Not being linked to the till meant this was open to abuse and depending on which freebies the reps were handing out, white lables, concert tickets, backstage passes, leather jackets etc would determine the number of extra swipes. I laugh when I think just how rigged the charts were back in the 80's.

Then things changed once barcodes appeared on everything and EPOS tills were able to track the stock so they centralised the buying to head office to get discounts on bulk orders. The dealer price on full price CD's before VAT back in the 90's was £7.29, £7.59, £7.91, £8.12 for CD's selling at £9.99-£12.99 in the new release/charts and £12.99 to £14.99 back catalogue...the margins are not that big yet the supermarkets were selling CD's at £7.99 or £8.99 using the grey parallel import strategy, it was the beginning of the end for the specialists.

I left HMV for Virgin but watched the decline in sales as the internet took off. It got to the point where they would sell shelf space to the record companies so that prominent in your face shelving as you first walk in to the store went to the highest bidder, regardless of how many CD's they expected to sell. Thats why Virgin had shelves full of blank CD cases padding out shelves to make them look full. I left in 2001 as I knew back then they would not survive. I have been proved right with Virgin and it looks like HMV is going to go the same way.

I hope it is me being a jinx cos I now work in financial services and if anyone deserves to go bust it's the industry I work in.

I tried to use HMV at Truro in the past - it'll be a shame if it goes. Didn't use Amazon this year as foresaw delivery difficulties, but the march of the supermarkets is daunting. We also try to use farmers' markets and small local stores, but they are disappearing or subject to local authority parking hikes.
For this household in 2011, there will be a moratorium on white goods and electronic items. (long may my antique laptop hold out!) Partly due to finances, partly a protest on VAT. We don't have to lumber ourselves with all this junk. Come the power outages, it'll be gathering dust anyway! It is do-able - we don't have a TV, freezer, tumble-dryer, iron or vacuum cleaner. It's very liberating! My emergency food stores (tinned) are still in place from the credit crunch weekend, so will keep 'em stocked for the weather events/fuel shortages yet to come. Dickensian? Yes, it's going that way, but basic neccessities soak up almost all the disposable income.
And there's interest rate rises yet to come...
So, sorry retailers, but Lidl and Oxfam second hand books are my current emporia.

101 WOTW
I am not normally one to criticise another poster to this blog but you mention the worst crisis in 70 years - isn't this the Kondratieff cycle, although I make it approximately 80 years trough to trough. I am teasing but effectively agreeing with your loony lefty presumptions, however my beef is that the Kondratieff cycle that should have ended with the dot.com bust was pushed into orbit by western governments with the instigation of the "Greenspan put" ie socialise the losses! As such, the losses to society are so much greater ie the effects of a bubble on a bubble are that the losses are multiplied (not added).

I come at this from a totally different perspective from WOTW in that I absolutely believe in free markets but with social responsibility and hence social regulation. The real problems we face stem from the previous lack of regulation. I disagree with WOTW as this would not have happened under Maggie, who understood markets - hence the 30% reduction in house prices in the early 90's as signalled by Chancellor Lawson in 1989. John from Hendon has it right that the overleveraged house prices, based upon unrealistic expectations has limited the economy because of the build up of debt.

Where has all this debt gone you may well ask, but if you consider that China now has the largest foreign reserves, then you may well concede that they are likely to hold the majority of the debt.

In my humble view, until the Remimbi is revalued upwards we have no hope of competing economically. Every day you see examples of China buying up the world, be it Rover or now ever more importantly BP assets and more recently Spain's petroleum interests. This to me is extremely worrying and should be for the BP bashers in US, as China now has even more natural resources under its control and you cannot say that it operates as a free market, as when it suits they will limit supply as with earth metals.

I have already said to several US friends that I will not support them in a war with China because they have not helped either us or themselves. However, as you have probably seen, China are now developing a carrier fleet and already have stealth enabled planes, originally not for service until 2020 but now officially expected 2015 - I would expect 2013 given their rate of movement up the value chain!

The real problem we all face with rising prices and effectively reducing wages is supply constraints on essential energy and materials. Why is this, obviously demand from BRIC countries outstrips our ability to reduce demand. Where will this end? I suspect it will end in fuel and food poverty for the less well prepared nations. As such, I propose (and have for three years) that we need to increase the Common Agricultural Policy to promote more farming, however the politicians are only now jumping on the 1990's policy of reducing the CAP - surely a recipe for EU famine to appear!

If this awakens you to the real facts then:-

Happy New Year

re #63
One of the best 'twisting of knife' that I have seen on the Beeb Blogs! A plaudit, Sir!

As a small specialist retailer, if I was weak of mind I would have thrown myself off of the local bridge in a fit of despair after reading the majority of comments on this subject. We seem as a nation to adore 'gloom' and revel in it, walk down any street(if you can tear yourselves away from your internet shopping and I daresay the daily 2 hours onFacebook and Twitter) and you will see little huddles of people discussing the imminent end of civilisation as we know it.

I prefer to avoid the constant stream of negative media and individuals out there as there are still people who prefer to socially interact on a face to face basis. I see plenty of people who want to actually see what they are getting before they buy and have the meaningful back up that quality local traders bring. Price is not just about the price tag, it is the overall value you get from a transaction, and the back up if things go wrong. I for sure would like to see what happens when that 'cheap' sofa gives you a problem and you try to sort it with the supplier 18 months later (I am fully aware of obligations under the sale of goods act before we go off on yet another tangent).

63. At 13:24pm on 6th Jan 2011, Ian wrote:

"Ah, so we have now classic "Daily Express" interpretation and that on top "Daily Mail" interpretations, then "Daily Telegraph" and whatever other paper does not hold WOTW views on given subjects. Clearly, only "Guardian" and "Morning Star" are the only tabloids worth reading these days....Right.

Funny, how selective you are when it suits you, WOTW yet accuse everybody else of the same sin when it goes against you. Taking the definition of global warming from your favourite and often quoted source, Wikipedia, it actually says:

"Global warming is the increase in the average temperature of Earth's near-surface air and oceans since the mid-20th century and its projected continuation. According to the 2007 Fourth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), global surface temperature increased 0.74 ± 0.18 °C (1.33 ± 0.32 °F) during the 20th century....Other likely effects include changes in the frequency and intensity of extreme weather events"

as in:
https://en.wikipedia.org/wiki/Global_warming

Or have you just decided the inconvenient (but main) bits of the definition are just not right?"

Absolutely classic.

AVERAGE TEMPERATURE - do you know what that means Ian? Like the previous blogger it's a shame you think average temperature increases means that everywhere will warm up. This is a bit embarrasing but.....

What happens Ian is the countries near the equator see huge temperature rises while others see falls in temperature - however across the world the rise in equatorial countries outweighs any falls in other countries temperature.

"Other likely effects include changes in the frequency and intensity of extreme weather events"

"Alas, it means mainly temperature increases (the giveaway word here is: "warming"...) so Johboy911 is right. I don't recall having extremely warm summer last year (as in extreme weather event - you would expect weather going to extremes on both sides of the spectrum, wouldn't you?)...."

Ian, you're just embarrasing yourself - and there was me thinking at one stage you were a worthy adversary.

"A bit like your loose definition of revolution - so now a demonstration outside the Top Shop qualifies too? Well, if that is all what your famed revolution is all about then we, "capitalists" can sleep peacefully for many years to come. After all, we had plenty of those "revolutions" over the last 50 years...."

Really? - how many protests outside TopShop have you seen before Ian? I can't remember a time when protests were aimed at corporations - Governments sure - but never corporations and we're not even really skint as a nation yet.

What a shame Ian - after embarrassing yourself by not understanding the world average temperature rising not being a rise in the average temperature in every country - you have followed it up with your usual "I can't see the revolution so it's not happening"

You can't see electricity being generated - but you know it's going on all the time - otherwise the lights wouldn't work.