UK Retail Economy - how are you finding it?

Discussion in 'Ecommerce Forum' started by antropy, Mar 2, 2018.

  1. antropy

    antropy OpenCart Experts Full Member - Verified Business

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    The UK economy seems to be looking a little shaky at the moment with various news such as:
    • Carillion has gone into liquidation
    • Toys R US has gone into administration
    • Maplin has gone into administration
    • House of Fraser is asking landlords to cut rent
    • Debenhams is shutting stores
    • New Look is shutting stores
    • Tesco, Sainsbury's and Morrisons each announce 1000s of job cuts
    • Carpetright issue profit warning
    And indeed we're hearing from some of our clients that conditions are tough.

    How are people here in the ecommerce forum finding it at the moment?

    Is this the tip of the iceberg for another 2008-esque financial crash?

    Or are things just a bit slow and likely to improve soon?
    Posted: Mar 2, 2018 By: antropy Member since: Aug 2, 2010
  2. Mr D

    Mr D UKBF Legend Free Member

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    Don't know about the others but the administration (and closure) of Toys R Us and House of Fraser closing stores helps my business.
    May pick up more customers. More stuff sold by us.

    And will likely strengthen or at least reduce threats to other companies selling similar things to those companies.

    Companies going under is nothing new, been happening for probably centuries.
    The weak, the unlucky, the overstretched, the under marketed, the poorly positioned, the unwilling to change - they may well be the ones who go under.
    Buyers still wanting the same items turn to other companies. Strengthening jobs in those companies and maybe even the companies taking on more staff to cope with increased demand.

    Nothing lasts forever.
    Posted: Mar 2, 2018 By: Mr D Member since: Feb 12, 2017
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  3. Page

    Page UKBF Big Shot Free Member

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    They are going under because of being B&M and ecommerce

    And you aint seen nothing yet of what is going to happen to the high street

    ecommerce is the most cruel of business and a lot of thinning out is starting to happen - this was always going to happen eventually and it is now starting at a serious level

    Following them will be the sectors that supported/developed sellers

    The good will survive

    But IMHO we have hard times afoot and some serious shake up going to happen

    We see ecommerce as currently in the era of to much stuff - from to many sellers - from to many places

    In the long run the market finds its own level but currently, it is swamped
    Posted: Mar 2, 2018 By: Page Member since: Jul 28, 2007
  4. Mr D

    Mr D UKBF Legend Free Member

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    Ecommerce - a threat so overwhelming it took over 20 years to kill off Maplins?
    How did it kill off Carillion? How has it caused major supermarkets to revamp staffing? I'd have said offhand that the likes of Aldi and Lidl were bigger threats to the supermarkets than the ecommerce they have embraced.
    How has it caused a carpet company to issue profit warnings?

    OK I get you don't like ecommerce. It has changed the retail landscape for some products. Improving the retail experience for buyers yet still only a fraction of the total retail sales.
    It is not a bogeyman, its a tool.
    Were the competitors of any of the companies listed able to compete? If so, how?
    Providing a better buying experience? Good stuff at decent prices? Enough staff? Decent trained staff?
    Posted: Mar 2, 2018 By: Mr D Member since: Feb 12, 2017
  5. Toby Willows

    Toby Willows UKBF Regular Free Member

    759 164
    High Street retail is a ever changing beast, always has been and always will be. Just look back over the past sixty years and you’ll see how it has changed, and that change is ongoing. The ONLY certainty for B&M is that it will continue to evolve. And that means current retailers will change or die.
    Posted: Mar 2, 2018 By: Toby Willows Member since: Jun 20, 2016
  6. antropy

    antropy OpenCart Experts Full Member - Verified Business

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    Indeed and is @Page claiming that Toys R Us don't do ecommerce? And Maplin have a good ecommerce website.

    The high street suffered a lot in the 2008 crash with many big names being undercut online and then being replaced by coffee shops - cups of coffee can't be sold online of course.

    But I get the feeling that's not what's at work here ...
    Posted: Mar 3, 2018 By: antropy Member since: Aug 2, 2010
  7. NewGardenStyle

    NewGardenStyle UKBF Regular Free Member

    373 82
    How about a retail success such as Flying Tiger. Steadily expanding over the last few years, medium sized stores with great design, enthusiastic staff, and great for browsing products you probably didn't know existed.

    Link here in case you haven't seen them
    Posted: Mar 3, 2018 By: NewGardenStyle Member since: Jun 26, 2014
  8. Page

    Page UKBF Big Shot Free Member

    3,554 265
    Yes it has taken 20 years to kill off maplins and toysRus
    ecommerce sales slowly/rapidly climb up and so take market
    20 years ago it was near nothing and the technology was new and simply - now it is massive and mature

    (I am not saying it is the only factor - toysrus was outdated as a retail concept)

    It is whether they adjust in time to the changing market

    Mothercare now gets 42% of all sales from its online operations
    (I am sorry I do not know if this figure is UK only etc)

    So it either has to be getting all that 42% of its sales as extra from someone else - in which case that someone else is being hammered
    And/or - it is losing those sales from its own stores

    And so what Mothercare are doing is closing lots of stores - but they are signed up to different leases and it all takes waiting time to get out - or compensation - it all depends what is in the agreements with the landlords

    They are having to do this because those stores are no longer taking enough to cover their costs
    And then they look forwards a bit and what do they see when they look forwards ...
    And so they react

    Sprinkle on top some extra issues - wage rises lower than inflation - brexit - and the problems accelerate and are increased

    Then in terms of ecommerce - what do toysrus and maplin offer over what you can get on ebay and Amazon - the beast that keeps on growing

    So it is not having an ecommerce offering that matters - (or a B&M one) - but an ecommerce offering that people want to visit and spend with - (or a B&M one)

    The supermarkets have had to adjust due to the discounters and local smaller units
    Both of which have proved popular with consumers

    So now what ?

    They either react in time or they go under

    (Carillion is a totally different matter and one I have not followed nor do I know much about that area of business - but dire management seems to have been the killer there)
    Posted: Mar 4, 2018 By: Page Member since: Jul 28, 2007
  9. Page

    Page UKBF Big Shot Free Member

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    I have no idea how you managed to deduce that from my comments

    (I was an early adopter of ecommerce - and used the internet before the web existed and bulletin boards before that)

    I love it - I hardly ever go to a shop - except local food shops and poncy food shops - and I am a mega Amazon spender and have been for years

    With this I accept my local shops are going - me doing my bit of putting a nail into them

    But the world changes

    I found it quicker to get stuff online than wait until I got around to going to a local shop - and then they might not have it in - etc etc
    Amazon and click click click - it is here tomorrow
    That will do me
    Now add in the choice and price and away we go

    I realised that B&M was stuffed some years ago when I was xmas shopping - I was a solid internet shopper by then but still liked to do my xmas shopping in person because it was reliable and ecommerce was still iffy - and I was stood in a queue with the item in my hand waiting to pay
    When I thought stuff it - I would rather get this delivered than have to carry it around and so put it back and left the shop
    Last edited: Mar 4, 2018
    Posted: Mar 4, 2018 By: Page Member since: Jul 28, 2007
  10. Mr D

    Mr D UKBF Legend Free Member

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    That kind of gave me the idea you didn't like ecommerce. My mistake if I got it wrong.

    Some stuff I'll never buy online.
    If I was to go and buy a mandriola for example, a musical instrument, then I'd want to go to a music shop and examine it before dropping several hundred / a few thousand on one.
    Cars - I might find what I am looking for on the internet but I'd want to see it, check it out, in person.
    Both of those things the internet helps to find what I'm after but I'm not going to buy on the internet.
    I don't order certain things from the supermarket. I'll order drinks, dry or tinned food. I won't order cakes, milk, meat or veg - those are things I prefer to check dates myself, choose the decent looking stuff, not picking the bad looking stuff.

    Currently (past few days anyway) it appears that offline shopping is better - couriers are having a hard job even getting goods to their sorting points never mind delivered.

    So local shops are getting a benefit. Of course with the weather conditions its local shops or nothing - I can walk to my corner shop, cannot get my car out to drive anywhere. Maybe not even Monday depending on road conditions.
    Posted: Mar 4, 2018 By: Mr D Member since: Feb 12, 2017
  11. marcus_bond

    marcus_bond UKBF Newcomer Free Member

    22 7
    UK's GDP Growth for the 4th Qtr was just 0.4%, compare that to say the 4th Qtr of 2014 which was 2.2%. It's easy to see that all is not well with the UK economy at present. Just a quick look at the London Gazette will show you the sorts of businesses that are going into liquidation.

    There are a complex range of factors at work, but it seems clear to us that Brexit's effect on the currency has further increased pressure on disposable income; the BOE's decision to start raising interest rates has affected future plans and triggered a rise in unemployment; and continuing Brexit uncertainty (that is the idea that the public and more importantly businesses cannot forward plan effectively), which is having a major effect on business investment within the UK, it's collapsed.

    We've looked at everything... and decided that things are not likely to improve soon, and that the UK economy is likely to remain fairly bleak for some years... downside risks could be quite bad, but we don't see much in the way of upside for at least 3 years, and probably for at least 5 years.

    We think protecting cash, and cutting costs is our best strategy over the next 12 months, and as a small business, that's about our only advantage compared with larger companies... we can move quickly. We think the cut's we should make can be fairly brutal...
    Posted: Mar 4, 2018 By: marcus_bond Member since: Nov 12, 2017
  12. Mr D

    Mr D UKBF Legend Free Member

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    Good advice for any business.
    We are going the other way, expanding and spending money. The plan we have has external factors that cannot be altered from this end. Side effect is it makes our business more efficient as we grow.
    Buying 50 boxes is one price, buying 400 boxes is cheaper per unit.
    And cost effective if using 400 boxes in similar timeframe as had been using 50.
    Posted: Mar 4, 2018 By: Mr D Member since: Feb 12, 2017
  13. Page

    Page UKBF Big Shot Free Member

    3,554 265
    FYI - the reason I say that ecommerce is the cruelest of businesses is that there is no geographical protection - either local or larger scale

    Before a shop might be the only shop in the area that sold or stocked a certain product and so was protected from margin squeeze by geography

    You could also be protected with the local area by the "hassle" of looking around the other shops for something better and cheaper

    Online is a very different ball game and always was going to be

    You compete with the whole of the UK sellers and now international also

    And then the channels have changed it again - so easy to shop and compare

    It is what Amazon realised right at the start- it was a race and only the best would survive and they would have the game in the long run
    And they thought only about that long run and not short term profits and managed to persuade their shareholder to stick by them long enough to get there
    Posted: Mar 5, 2018 By: Page Member since: Jul 28, 2007
  14. Mr D

    Mr D UKBF Legend Free Member

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    Ecommerce has protection built in by geography.
    You can buy from a Chinese seller on a website and get your stuff in 3 weeks, or get your stuff same day from a few companies. You may prefer price over delivery speed, you may prefer ease of return over price.

    Of course its easy enough to store stock within a country and compete with the locals on time. There are a few other downsides to that not least ability to deal with returns. Still has higher costs for you to do some things than the locals.

    A shop may be the only shop in an area selling a particular item only until another shop started stocking it. There are trade fairs, there are reps, there are sellers doing their own research.
    At one point we had a market stall and near as we could figure we were the only seller of that brand of item (it was a good item) for a radius that included 2 cities.
    Then a shop in that town started stocking the item 2 weeks after a major trade fair. We were there and open for 6 hours a week, he was open 48 hours a week.

    Online has the hassle of looking for something better and cheaper too.
    Before Christmas I was after a tablet for the wife. You likely know there's a LOT of search results for tablets, its a hassle searching dozens of sites. Ended up buying based on a TV advert. Collection was easy, out of the store in under a minute after entering.

    Amazon achieved a lot but took them considerable amount of money to learn the lessons. They are now pretty good at what they do, so much so that they are trying to do B&M shops.
    Posted: Mar 5, 2018 By: Mr D Member since: Feb 12, 2017
  15. antropy

    antropy OpenCart Experts Full Member - Verified Business

    3,267 567
    I like this story!

    Yep, looking dodgy indeed.

    What business are you in?
    Posted: Mar 6, 2018 By: antropy Member since: Aug 2, 2010
  16. Page

    Page UKBF Big Shot Free Member

    3,554 265
    I am not talking in terms of absolutes - I am talking generally

    But your local shop was never competing with a seller from China before
    Or anywhere else other than local
    Except maybe the odd mail order catalogue at times

    A lot of brands would only supply one shop in an area as a strict policy
    (And some would never supply market traders)

    And if you think it has to take 4 weeks nowadays for stuff to arrive from China you are out of touch
    Posted: Mar 7, 2018 By: Page Member since: Jul 28, 2007
  17. Mr D

    Mr D UKBF Legend Free Member

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    Yes, haven't ordered anything from China since middle of January.
    I would agree I'd be out of touch if I thought it took 4 weeks.

    Which is why I said 3 weeks. The time stuff actually takes to get to me after ordering.
    Not out of touch with that timescale, that has happened.
    Posted: Mar 7, 2018 By: Mr D Member since: Feb 12, 2017
  18. Page

    Page UKBF Big Shot Free Member

    3,554 265
    Now now calm down dear

    I am getting a lot of deliveries a lot faster than that

    I dont know how they do it for the price
    Posted: Mar 7, 2018 By: Page Member since: Jul 28, 2007
  19. Mr D

    Mr D UKBF Legend Free Member

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    I rarely get any quicker than 2 weeks, 3 weeks far more common.
    You and I order from different companies, may well be in different areas even.
    Posted: Mar 7, 2018 By: Mr D Member since: Feb 12, 2017
  20. marcus_bond

    marcus_bond UKBF Newcomer Free Member

    22 7
    Those GDP figures I gave are wrong btw,...

    Comparing UK Quarterly GDP 'this year vs last year'

    Qtr4 2014 was 3.27%
    Qtr4 2017 was 1.39%

    We 're one but last from bottom from the 17 countries of the Euro Area (Denmark is at the bottom with 1.22%)

    We're in Construction consumables (overlaps into DIY a bit).
    Posted: Mar 7, 2018 By: marcus_bond Member since: Nov 12, 2017