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UK: Retailers face being "squeezed to extinction"
The Telegraph ^ | 1/1/2012 | Harry Wallop, Retail Editor

Posted on 01/01/2012 10:37:45 PM PST by bruinbirdman

More shops will collapse into administration or announce store closures in the next couple of weeks, afters suffering from "profits squeezed to extinction" as well as a fall in sales over Christmas, according to the head of Britain's retail trade body.

As many as 40,000 are expected to lose their jobs, with more forced to work on reduced hours, as the full force of the consumer slowdown starts to makes its effects felt on the high street.

After the collapse of Barratts Priceless, the shoe chain, Hawkin's Bazaar, the toy shop and D2 Jeans last week, a clutch of other names are expected to go to the wall, said Stephen Robertson, the director general of the British Retail Consortium.

He said that conditions were worse than at the end of 2008, a period acknowledged to be the worst in a generation for the high street and which saw the collapse of Woolworths, Zavvi and MFI:

"This feels, talking to retailers, that there is more pressure than there was back in 2008. Back then there had been a relatively good run up until that point, and sales were certainly down, but margins were holding up.

"This time, it's not just about the poor sales performance it's about the underlying profitability. We have seen a blizzard of deals and promotions, so gross profit margins will have been punished."

This week is the start of the retailers' reporting season, when chains reveal how well or poorly they have fared over Christmas.

John Lewis will be the first to report on Tuesday, with sales expected to be up a healthy 12pc in December, however this figure masks a likely drop in profits, because the department store chain's "Never Knowingly Undersold" promise means it was forced to drop prices to match competitors.

Later in the

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: Business/Economy; Crime/Corruption; Government; News/Current Events
KEYWORDS: uk

1 posted on 01/01/2012 10:37:51 PM PST by bruinbirdman
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To: bruinbirdman

That is the trouble with offering too many deep discounts, if volume in response does not pick up then you are really in trouble. Why is Britain having these problems, is it the decreasing lack of meaning in Christmas, the EU, the riots, or what?


2 posted on 01/01/2012 10:45:08 PM PST by dog breath
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To: dog breath

In Australia retailers are blaming the internet. Customers come in, look at a product and then go home to order it on the internet at cheaper prices, as the internet seller doesn’t have to cover wages, rent etc.

Maybe cities will have space freed up a little, as more stores close and are replaced by chains of internet warehouses with the occasional showroom.


3 posted on 01/01/2012 10:56:31 PM PST by B.Lyle
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To: B.Lyle
chains of internet warehouses with the occasional showroom.

Sounds kinda like the old Sears catalog showrooms from back in the day, updated for 2012. Might not be a bad business model actually, but those much more retail-knowledgeable than I can respond to that.

4 posted on 01/01/2012 11:04:09 PM PST by Ackackadack
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To: B.Lyle
In Australia retailers are blaming the internet. Customers come in, look at a product and then go home to order it on the internet at cheaper prices, as the internet seller doesn’t have to cover wages, rent etc.

My feeling is that if you need to see merchandise in person before buying, you need to by from from a retailer not a web site.

5 posted on 01/01/2012 11:04:17 PM PST by Paleo Conservative
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To: B.Lyle
In Australia retailers are blaming the internet. Customers come in, look at a product and then go home to order it on the internet at cheaper prices, as the internet seller doesn’t have to cover wages, rent etc.

My feeling is that if you need to see merchandise in person before buying, you need to buy from from a retailer not a web site.

6 posted on 01/01/2012 11:05:01 PM PST by Paleo Conservative
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To: Paleo Conservative

Salesmanship might correct some of that problem. If a good salesperson explains that here you can get service and inspect the merchandise it blunts the internet appeal. Everybody has some horror story of something they purchased by computer. A really good salesperson can also make the experience of buying enjoyable and convince the consumer that this local business is worth supporting. A great sales approach will have them feel like they are doing a fabulous thing supporting their community and country while making their life easier. Maybe they need more sales training in the UK.


7 posted on 01/01/2012 11:14:51 PM PST by dog breath
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To: bruinbirdman
I feel a song coming on.
8 posted on 01/01/2012 11:20:16 PM PST by dr_lew
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To: dr_lew
I feel a song coming on.

The fact that garbage such as that can get 4.5m views is part of the problem.

The sheeple get the government they vote for, and the sheeple's brain is riddled with prions.

9 posted on 01/01/2012 11:29:11 PM PST by cynwoody
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To: bruinbirdman

The dismal Obama economy has repercussions globally. Until America recovers its rightful place of dominance in the world, the UK will continue to founder. Change is coming in a year when Conservatives led by Newt Gingrich restore free-market capitalism here.


10 posted on 01/01/2012 11:41:55 PM PST by re_nortex (DP...that's what I like about Texas.)
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To: cynwoody
The fact that garbage such as that can get 4.5m views is part of the problem.

Ummm. I doubt that I account for many more than 0.01m of these . Bwa ha ha ha ha!

As many as 40,000 are expected to lose their jobs,
Woo Hoo!
with more forced to work on reduced hours,
Woo Hoo!
as the full force of the consumer slowdown starts to makes its effects felt on the high street.
Woo Hoo!

11 posted on 01/01/2012 11:42:50 PM PST by dr_lew
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To: blam

(( ping ))


12 posted on 01/01/2012 11:47:12 PM PST by Lancey Howard
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To: cynwoody

Just for the record, I first heard this song in the Nissan ads for its Sentra model, circa 2000 AD. I bought one ... my wife always says because I liked the song, which is hard for me to deny.


13 posted on 01/01/2012 11:52:57 PM PST by dr_lew
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To: bruinbirdman

We went to a well-known outlet center in the Twin Cities metro to shop the after Christmas sales today. Hadn’t been there since last March. Prices have tripled, even on sale, and a fourth of the mall was shuttered having gone out of business.

That was just plain scary. I made sure to thank 0bama.


14 posted on 01/02/2012 12:03:41 AM PST by mplsconservative (Impeach Obama Now!)
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To: re_nortex

America had dominance in the world. Then greedy corporations thought they can make even more by teaching China and India how to do the jobs Americans used to do and blunt enforcement of immigration laws to bring in cheaper labor to do jobs Americans used to do. Our technology advantage was given away, our manufacturing was given away, and the US who once was the only place to buy the most advance and best is now off shored to every nation in the world. The only thing the US kept is the knowledge how to pump and dump and sell toxic assets to unsuspecting investors, over and over and over. Greed and lack of patriotism is killing America. The one percent scheme and screw the 99 percent. Makes me laugh when the one percent claim they help produce jobs, but in the last several years their schemes killed 11 million jobs. In Shakespeares time it was “kill all lawyers”, in the 21st Century it will be “kill all bankers and politicians”. That is how the 21st Century will begin, don’t know how it would end. That is for my son and grandson’s generation to deal with.


15 posted on 01/02/2012 12:04:50 AM PST by Fee
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To: re_nortex
"Change is coming in a year when Conservatives led by Newt Gingrich restore free-market capitalism here."

Change will come when Newt Gingrich begins to represent the Conservatives who elected him.

yitbos

16 posted on 01/02/2012 12:21:38 AM PST by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation. - Vladimir Ilyich Lenin


17 posted on 01/02/2012 12:33:57 AM PST by SpaceBar
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To: Paleo Conservative

“....you need to by from from a retailer not a web site. “

I would generally agree with that. Plus I’m impatient so if I went somewhere to look at something I’d probably just buy it.

But I am also not the biggest bargain hunter either.

This year I had ZERO Christmas spirit and so started my shopping very late. I did almost all my shopping in actual stores.


18 posted on 01/02/2012 12:40:20 AM PST by jocon307
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To: bruinbirdman

So who’re you going to call?

I’ve looked over all the Republican candidates carefully, and only one seems to have the knowledge of government and leadership capabilites to change the way Washington works.

Newt Gingrich had an epiphany. He had to, or he would have self-destructed.

As a small child he witnessed his father beating and abusing Newt’s mother. She divorced him, remarried, and Newt was adopted by his step dad. Later he was sexually molested by a high school teacher. Yeah, the first wife he married.

This man was carrying a troubled emotional burden while serving in Congress but he sought counseling, joined AA and eventually turned his life around after a religious conversion.

What I’ve found shocking is the enormous number of so-called Christians here at Free Republic who are nothing of the sort. Christians are not better than other people. They forgive others, ask forgiveness for themselves, and try to lead a better life by not sinning further. I’m not disgusted with Newt Gingrich, who I believe has honestly changed his life.

“...After only four years with his Party still in power, his own members forced him out...”

Oh yeah, and many of those Republicans are still in Congress. They are part of the ongoing problem of business as usual in Washignton, D.C. Under a Republican president, they added over $3 trillion to the federal deficit, shunned conservative policy in favor of Beltway influence-peddling, and so damaged the GOP brand that we lost the majority Gingrich had worked years to forge.

Do you really think I give a damn that Newt’s fabulous colleagues think his reemergence would be a disaster for Republicans? No. The elections of 2010 were NOT a merit promotion; the Republicans were the only alternative in town!

Newt Gingrich is pro-life, pro-2nd Amendment and loves America and understands its citizens. As a historian, he thoroughly knows the U.S. Constitution and our nation’s history.

He allied himself with Ronald Reagan to build the Reagan Coalition, the Religious Right, and the Republican majority (together the Reagan Revolution) which directly led the downfall of the Soviet Union, the Contract with America, government reforms, less government, tax cuts, a balanced budget, and the great, long-standing Reagan economy.
Washington is broken, it doesn’t work the way it is supposed to and Newt said, if elected, he will work to change the way Washington does business. You better believe the elitists who suck money off of government contracts are terrified he will be elected.

He knows where the bodies are buried.

He knows where the skeletons are hidden.

He knows about the secret ways and byways by which influence peddling moves in Washington.

When a middle-class citizen is elected to Congress and returns home 20 years later a multi-millionaire, it is due to corruption in government. And that influence pedaling corruption may even be legal!

We have to change Washington in order to get our nation back on the right track.

I believe that Newt Gingrich is the only candidate with true leadership ability who can and will change Washington, D.C. God knows, he isn’t perfect. Who is? But I believe at this time, at this juncture in in nation’s existence, he can lead this country away from the abyss of socialism and will right the ship of state.


19 posted on 01/02/2012 12:55:04 AM PST by SatinDoll (NO FOREIGN NATIONALS AS U.S.A. PRESIDENT)
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To: jocon307
This year I had ZERO Christmas spirit and so started my shopping very late. I did almost all my shopping in actual stores.

I think of myself as a great Christmas guy, and I love the Holiday, but over the last few years I've indulged a tendency, abetted by my station in life, to let it all happen around me, as much as I might "help out". What I'm saying is that I don't buy anybody any presents anymore. I used to get my wife some little thing, but last year I didn't even do that. Well, this year I had a huge resurgence of Christmas spirit and I bought my wife a scented candle that I saw at the grocery store. Whew.

Please believe me when I say that I do in fact cheerfully devote significant time and effort to the familial celebration of Christmas ... and Happy New Year!

20 posted on 01/02/2012 1:10:57 AM PST by dr_lew
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To: dog breath

60 years ago a good salesperson could enjoy a middle class lifestyle in retail. In those days many stores paid salespeople low base pay plus a commission. A good salesperson would stay with one store for a career and develop a clientele of loyal customers.

Unfortunately as retail shops were bought up by chain stores commissions were ultimately eliminated to save operating expenses. Chain stores have expensive overhead structures and distribution networks to sustain. Plus the senior management of the big chains doesn’t work in the store so it is disconnected from customers and the associates working with customers in local markets. These executives create value by standardizing and streamlining operations, not by tailoring product assortments for a local market. Sales associates to them are an expense item to be minimized, not a resource to be trained and deployed as a competitive weapon.

The American people in mass have voted for the low prices and efficiency of national chain stores versus the high service local store model. When Walmart entered new markets in the 1970’s, 1980’s, and 1990’s the local stores serving a town would be crushed.

Today pure play Internet retailers, such as Amazon, are the latest manifestation of the low price trend. Their distribution networks are highly efficient, smaller, and simpler than national store chains. They require fewer people to operate, and they don’t incur the rent expenses of brick and mortar storefronts, nor do the incur the cost of placing inventory in thousands of stores.

Retailers are not stupid. I’ve worked in retailing and sold to retailers. The the good ones are constantly experimenting with new staffing concepts, new store designs, and product assortments. Unfortunately in most product categories adding to stre staff levels and training rarely delivers sufficient sales to justify the higher cost. Customers consistently vote with their dollars for low price and self service over high service.


21 posted on 01/02/2012 1:32:18 AM PST by Soul of the South (When times are tough the tough get going.)
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To: bruinbirdman

If this article is true....
The simple reason is people just don’t have the money to spend. There are a thousand reasons why but money is tight so the retail sector is not getting their discretionary spending. Same thing has hit here but not as bad yet. I can drive around and see malls with lots of occupancies.

America has been over_malled and over_real_estated for years as we turned from a producer economy to a consumer economy. We built way too many houses and shopping malls. We built temples to consumerism instead of productive enterprises and factories. You can blame the EPA and other Gov’t regulators. You can blame free trade. You can blame cheap China imports. You can blame the rise of the paper shufflers and skimmers in the FIRE sector http://en.wikipedia.org/wiki/FIRE_economy You can blame idiot liberals and policy wonks who see Gov’t as the savior.

We have two very productive sectors. Agriculture and energy/oil/gas we should build on them but that’s the last thing the Obama EPA will let us do. So getting rid of Obama is imperative and I could care less if it is Mitt Romney who does it (though I really like Perry and Gingrich)


22 posted on 01/02/2012 1:36:06 AM PST by dennisw (A nation of sheep breeds a government of Democrat wolves!)
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To: re_nortex

There are bigger factors than US consumer demand affecting the UK economy, such as problems with its largest trading partner.


23 posted on 01/02/2012 2:03:17 AM PST by Stolly
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To: dr_lew

“I bought my wife a scented candle that I saw at the grocery store.”

It IS the thought that counts!

Seriesly, we have gone overboard at Christmas, and I like to do that, but I think any little gift can be just grand.

A couple of years ago hubby gave me a set of stainless steel steak knives. I have some dental issues and I’d gotten into the habit of always using a sharp knife at table. Well these are very nice and look fine with the rest of the silverware, they don’t have that steak knife look.

It was my fave gift that year and we use them ALL THE TIME.

Hubby had gotten me a lot of jewelry and stuff over the years, and I love my jewelry (don’t get me wrong) but that gift was so thoughtful and useful.

I must thank him for them again tomorrow!


24 posted on 01/02/2012 2:15:59 AM PST by jocon307
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To: Fee

I surmise from your rant that the threat of “cap and trade”,huge health cost increases and volumes of new regulations both on the state and federal levels, corporate income taxes which close to the highest in the world and many other costs have nothing to do with outsourcing. If labor costs were the only reason for outsourcing, outsourcing would shrink to a trickle.


25 posted on 01/02/2012 2:54:59 AM PST by monocle
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To: dog breath
shame on your for being part of the solution...lol.

A great cartoon of years ago said, "If we live in a service economy, how come I can't get any?" Go to any major retail store and search for the answer to your qeustions. I spent nearly 30 minutes with two guys at Home Depot trying to find the correct nails for a nail gun to do a cedar fence. I could ahve done that on the web in half the time. But I thought they could help...wrong - until soeone came along with some skill and wisdom.

26 posted on 01/02/2012 4:03:38 AM PST by q_an_a (the more laws the less justice)
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To: Soul of the South
Perhaps I am naive, but I refuse to believe that a person can't make a difference, that smaller smarter more efficient retailers can't arise to compete with the big chains. I have seen independent sales reps of such quality that they open up entire markets that the corporations were unable to do. I believe the same about manufacturing that will be be a demand for a better made and more customized product. I would pay six times as much for a pair of Red Wing shoes understanding that they will last six times as long. l I don't want to accept despair for despair accomplishes nothing. Think of the South after Sherman's March the infrastructure was destroyed down to the last warehouse in some areas. The people rebuilt, the human spirit is greater then mere things, my country is greater. The heck with government, it is more of a problem then a solution in many cases, it is us that matters.
27 posted on 01/02/2012 5:34:30 AM PST by dog breath
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To: q_an_a

You should use screws on your cedar fence.

Thanks, that’ll be 15%


28 posted on 01/02/2012 5:57:35 AM PST by sbMKE
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To: monocle

Cap and trade, Obamacare, socialist taxation does impact businesses to move overseas. I agree with you on that. If all that did not exist, corporate America still wants to go overseas if a Chinese worker and Indian worker can do the work of an American at fraction of costs. Why? One percent are money junkies. Liberals can never answer what is a fair percentage for taxes, one percent types can never answer when is enough when it comes to making money. If they make enough money that it takes 100 life times to spend, they still want more. In fact psychologists just finished profiling US CEO’s and find at least 20 percent of them exhibit sociopath behavior that will eventually lead to the companies ruin.
Regulations have been effective used by corporate PR to excuse for moving overseas once Main Street Americans start to protest politically. Just like Wall Street bankers spin that the 1 percent produces most of the jobs in America when they already since 2008 killed 11 million American jobs with their reckless investing and leveraging. Problem is CEO are money junkies. Why? Remember in the old days if you went to a prestiges college, morality (religion) was part of your training. God has been removed from all of our education. All we now graduate is educated menaces. Talented, but amoral men who move up the ranks of gov and corporations who would lead nation and corporation to ruin. Unfortunately Main Street Americans are forced to pay the consequences of their evil.


29 posted on 01/02/2012 1:05:44 PM PST by Fee
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To: Fee

When did you return from OWS?


30 posted on 01/03/2012 12:23:24 AM PST by monocle
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To: monocle

Never was OWS. Just a numbers man. If you know the debt our nation piled up on, the losses on derivatives our banks got the taxpayers on the hook for and how the world is wobbling from the international dealings among the banks of every major nation as they brought leveraged derivatives on sovereign debt and other toxic assets, the situation will get worst not better. When large EU countries like Italy and Spain default, the central bankers and banks of the world will act out of desperation and seize customer money to plug the gaps to prevent a worldwide implosion. As more and more people lose their savings, 401k, mutual funds and etc, people will no longer ask are you a Democrat or Republican, do you believe in large or small government, they will latch onto anyone who had the guts to go after the bankers who took their money. Right now only the OWS is willing to fill that role. If the central banks and world banks at the behest of desperate national governments do what I think they will do, the OWS movement will grow.


31 posted on 01/03/2012 1:24:26 AM PST by Fee
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To: sbMKE

Oh yea - like I have an extra 7 hours to install them vs. a nail gun. I used screws in another section which was “only” 40 feet and it took all day. This fence is 120’ - screws ugh.


32 posted on 01/03/2012 4:44:15 AM PST by q_an_a (the more laws the less justice)
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To: Fee
If the housing bubble hadn't burst, most of the people who lost their homes or are under water would be bragging how smart they were because their homes had risen so much in value. Since these people lost so much money they are blaming the banks. Strange thing though I can't ever recall bankers putting guns to people's heads to force them to take such mortgages. Indeed in the mid to late 90's ppeople were screaming that mortgages should be easier to get.

One aspect of the financial collapse that has not been mentioned is the FDIC which was also involved in the earlier savings and loan scandal. By insuring deposits financial institutions can make more risky investments and most of their customers would not lose anything.

Whenever some risk is covered by insurance, risky behavior and fraud will follow like a shadow. Once Obamacare kicks in fully fraud will become a way of life for many. People will bemoan that shady people are scamming them but few, if any, will blame the government.

BTW I have an engineering degree, a MBA in finance and a JD so I can manipulate numbers with the best of them. Banks in any flavor of economy play a vital role and just like in any other profession are honest and dishonest people. Indeed, the Catholic Church is still reeling from its scandal.

33 posted on 01/03/2012 8:41:54 AM PST by monocle
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To: dog breath
There's probably a lot of reasons, but ultimately it comes down to having an economy driven by consumer spending. When people run out of money, the retailers go to the wall, and then they and their staff are ALSO out of money.

Running an economy like that is a bit like fueling your open hearth real fire with wads of paper. It burns very quickly and very brightly, but it soon fades away, because there is no substance to it.

34 posted on 01/04/2012 12:42:19 AM PST by Vanders9
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