Saturday, 27 December 2008

Woolworths and recession on the high street

Today marks the last day of my local Woolworths. Like most people I have memories of the place, such as being accused of stealing sweets when I was about 10 (I was innocent!) and buying my first 7" singles, but I can't remember the last time I bought anything there, which has ultimately been the downfall of the store.

It's interesting to see the recession in action. The retailers that are going under are the one's who were already struggling. Woolworths had been in the shit for years, as had MFI. While Zavvi's demise was expediated by that of Woolworths, it was in trouble before that anyway, caught between the rock and the hard place of cheaper online retailers and expensive high street rents it was only a matter of time.

The recession is taking out the 'low hanging fruit' of the retail sector, but we're probably still in early days, so it's going to be interesting to see who else goes. Will the likes of HMV, Waterstones and WH Smith, all of which have had their problems, fall by the wayside? HMV and Waterstones probably have some strength in the fact that in many places they don't have competition. There are fewer and fewer independent book and record retailers these days. WH Smith seem a likelier victim. Their smaller stores don't have a selection that much bigger than Tesco and often they're a lot more expensive, especially in DVDs, CDs and stationery. I think we could see smaller branches closing and the company focusing on its larger stores and lucrative railway station outlets.


radiac said...

I just can't see why anyone would want to buy anything from WH Smiths; everything's available cheaper elsewhere, often substantially. I bought a game from last week for almost £30 less. Like you with Woolworths, I can't remember the last time I actually bought anything from there. I'd wager the only thing keeping them in business are the 500ml bottles of water they sell for £1.79 in railways and motorway services - although I personally go round the corner to Sainsburys and get 1.5l for 60p.

HMV, Waterstones and Game have better stock at better prices, and often even beat online retailers, so I can see them lasting a bit longer - at least until electronic delivery takes off. They seem to have been consolidating their stores over the past couple of years, so my guess is that although they'll see their profits drop, they should be ok for the next few months.

My prediction for 2009 is that WH Smiths and Comet will downsize or shut down. I don't see the Currys/PC World/Dixons group disappearing altogether, but wouldn't be surprised to see them shut stores, merge brands, or even get bought - in fact, I'd be surprised if we don't.

So speaks the master of the economy! Still, should be an interesting year.

Dan Brusca said...

I see on the news that Adams, retailer of childrens' clothes is now possibly on the way out.

Again, this is a basket case company that probably deserves to go. Indeed, it was in administration in 2007, so it's been on shaky ground for a while.