If you were, like I was, given a gift card for one of these high-street names from one of your relatives, then you are the collateral damage of an ongoing metamorphosis of the UK high street. Let’s examine the latest evidence:
Exhibit A: Comet
The store that once boasted ‘we live electricals’ has short-circuited itself. It had been struggling since the onset of the financial crisis in 2008. Retail profits plummeted 77% between 2008-09, partly the result of squeezed profit margins caused by a price war in an oversaturated market. In November 2011, the retailer was sold for less than the price of a pint. A year later, Comet filed for administration and within two months had closed all its stores.
The brand had one of the worst reputations for customer service of any major UK retailer, with website www.trustpilot.co.uk reporting an average satisfaction rating of 3.2/10. Shop floor staff are often described in customer re-views as ‘lazy’ and ‘lousy’, and delivery staff often give 12 hour windows for customers to wait in for their deliveries. In tough economic conditions, consumers will simply not tolerate sub-standard customer service. American tech-giant Apple has shown that it is possible to make large profits from electrical stores, even in tough economic conditions, but they do so in part by perfecting the customer experience with attractive stores and well-trained, and friendly staff.
Exhibit B: Jessops
Founded over 75 year ago, the photography company offered rapid film processing and sold a variety of cam-eras and photography equipment. A quick Google search will provide you with Photoworld, BonusPrint and other similar sites offering 100 photos printed and delivered to your door for just the cost of post and packaging. If you’d prefer to have your photos printed immediately, the obvious choices are Boots or the supermarkets. We all like having photos printed, but the majority of our photos are now taken on a smartphone and uploaded to Facebook. There is, and will always be a market for specialist camera stores. Jessops was built for an era in which taking and developing photos was by far the mainstream practice. Dragons’ Den star Peter Jones has bought the online business of Jessops, sensibly choosing not to acquire any of their 187 stores. The brand itself has value and is certainly workable as an on-line business, but costly overheads such as rent, utilities and staff are enough to make any sensible investor, let alone a dragon, declare “I’m out”.
Exhibit C: HMV
Earlier this week it was announced by administrators Deloitte, the people in charge of restructuring HMV, that up to 100 of the retailer’s 223 UK stores would be closed in a move that could result in the loss of 1500 staff. This follows the loss of 190 staff last week, an event that was tweeted live by angry staff using the official HMV account. Not many people buy CDs any more, and when they do they’re often from online retailers like Amazon or the supermarkets. Same old story. Sir Terry Leahy, former chief executive of Tesco, described the transformation of the British high-street as ‘progress’. It is always sad to see jobs being lost, but it is wrong to deplore what is happening to our high streets out of some misplaced sense of nostalgia. The ruthless but beautiful capitalist engine that drives our high streets will ensure that new businesses, better suited to our modern lifestyles replace these 20th century relics.
The loss of these three retailers can give us a glimpse into the future of the British high street. Since smaller companies can simply not compete in terms of price or convenience, they need to ensure that they are providing customers with a product and experience that is of a significantly higher quality. These are exciting times. Don’t be scared: the future is coming.