Is On-line shopping killing the High Street?

[goose2010]

boots will be next apparently so if you have any vouchers and if anyone has points on their cards get them spent.

[Rocket-Ron]

boots will be next apparently so if you have any vouchers and if anyone has points on their cards get them spent.

Boots would suprise me to be honest.

They have nailed all other competition and all of the stores seem full.

Apart from Superdrug they are pretty much the only chemists in any town centres.

[MooseBreath]

Could see boots closing a few stores because they have shit loads and some of them are massive, but overall I'd be surprised if they are in any serious trouble.

HMV deserve to go. No sympathy for them whatsoever.

[digitalalba]

There was a piece on sky news about 6 days ago that said high street christmas sales are down, but total christmas sales were up, thats staggering, online shopping is tearing into high street shops, only the bigger stores will ever survive. I can see a time when either town centres become smaller, about 12 big stores, or shops bigger than a typical terrace house wont exist outside charles street, humberstone gate, st margrets way, welford rd. In the report, Amazons sales were so good they hadn't finished counting.

As for those who've lost their jobs at Jessops, its sad, i don't think Frank Jessop would've seen that coming in 1935.

[MooseBreath]

Not really "staggering" though is it. Online shopping is cheaper and easier. Obviously it was always going to take off. The high street will still be there while people still want to go there. When nobody wants to go there then it will die off, at which point nobody cares because nobody goes there anyway. People starting to treat this as if we're being forced to part with some valuable aspect of our culture need to get a grip.

[21st Century Fox]

I assume this means Fopp are going under as well then, being part of the HMV Group. That's a shame as they actually seemed to be mildly, competitively priced. HMV was surely only ever used by parents and grandparents who had no idea about the pricing of DVD's and games.

[Monk]

If you look around the high street the only place that's doing outstandingly well is John Lewis.

Theres plenty of shops out there who must struggle in the online age:

WH Smith - what do they stand for anymore? Chocolate bars at the till is not a sales strategy. If they're saved by anything it'll be their airport branches

Waterstones - I did my christmas book shopping here and avoided Amazon for a change. Their website is riddled with errors and isn't a great buying experience. They have a new CEO who is trying to re invent the store experience, so it's a wait and see - but it's another shop with large amounts of slow moving stock. Cash could become an issue perhaps.

House of Fraser - do that many people by overpriced shit in volume? Strikes me as an outdated business model, and their running costs must be sky high

Currys - what do they really have over and above being the only high street electronics only business? Most of their stuff you can get cheaper elsewhere, and whilst they once had a specialism in accessories, this really seems to have dropped off, and they employ staff who haven't got a clue what they're talking about.

Wouldn't be surprised to see another clothing retailer go too.

Boots I disagree with. Yes, they may have too many branches, but they are an institution to many, high customer loyalty, and fulfill a large % of the UK's prescriptions. Most cosmetic shopping is done offline. They'll be fine.

[Guest MattP]

I actually didnt mind paying a few quid extra HMV rather than send it to those tax dodgers at Amazon, I enjoyed the experience of walking around a music shop as well when I was younger. Think its a shame personally. I dread to think what the town centres could look like in 20 years time.

[Monk]

Going back to HMV - trying to move into electronics was a massive mistake. They had a great opportunity to cement their position as a music specialist, and instead they tried to compete directly with online competition selling iPads etc.

[The Doctor]

I assume this means Fopp are going under as well then, being part of the HMV Group. That's a shame as they actually seemed to be mildly, competitively priced. HMV was surely only ever used by parents and grandparents who had no idea about the pricing of DVD's and games.

Nope, I use it up here because there isn't a single other CD shop in Bradford city centre - if I want physical music rather than downloads then it's my only real option. I'll miss it, if only because browsing through a CD store is far more enjoyable than going through internet stores.

[Guest MattP]

Nope, I use it up here because there isn't a single other CD shop in Bradford city centre - if I want physical music rather than downloads then it's my only real option. I'll miss it, if only because browsing through a CD store is far more enjoyable than going through internet stores.

[Captain...]

I actually didnt mind paying a few quid extra HMV rather than send it to those tax dodgers at Amazon, I enjoyed the experience of walking around a music shop as well when I was younger. Think its a shame personally. I dread to think what the town centres could look like in 20 years time.

I think that is the most worrying thing, it is not online shopping, HMV had an online presence, it is the fact that Amazon can under-cut the high street, partly by economies of scale, but largely through avoiding tax.

[MooseBreath]

I think that is the most worrying thing, it is not online shopping, HMV had an online presence, it is the fact that Amazon can under-cut the high street, partly by economies of scale, but largely through avoiding tax.

Largely through avoiding tax? Any numbers to back that up?

Thought not.

How much tax did they avoid in the UK, divided by total sales will give you what I would expect to be a miniscule figure

[The Doctor]

Largely through avoiding tax? Any numbers to back that up?

Thought not.

How much tax did they avoid in the UK, divided by total sales will give you what I would expect to be a miniscule figure

They paid £1.8m of corporation tax on profits of £74m, when the corporation tax on that would be £17.76m. Their total sales in the UK was £3.35bn.

However, their tax per sale percentage means very little - the point remains that they skipped out on paying 90% of the tax they were required to pay.

[MooseBreath]

They paid £1.8m of corporation tax on profits of £74m, when the corporation tax on that would be £17.76m. Their total sales in the UK was £3.35bn.

However, their tax per sale percentage means very little - the point remains that they skipped out on paying 90% of the tax they were required to pay.

The point I was making is that avoiding tax makes next to no difference to the price they can sell products at. Doesn't mean they shouldn't pay of course, but it's clearly not the reason for their success.

[Monk]

The point I was making is that avoiding tax makes next to no difference to the price they can sell products at. Doesn't mean they shouldn't pay of course, but it's clearly not the reason for their success.

How do you arrive at that conclusion? If you avoid VAT like Amazon (on music, not on books), that's 20% saved, and then they pay 2.5% corporation tax, compared to the 20-25% that HMV would pay if they made a profit (obviously - they don't anymore) - that alone allows amazon to sell the same item at the same cost base for 30% less than HMV, and make the same margin.

That's a massive cost advantage, and an unfair one.

THEN take into account that Amazon probably bought it cheaper in the first place, and also they don't have expensive stores to run.

[James.]

The point I was making is that avoiding tax makes next to no difference to the price they can sell products at. Doesn't mean they shouldn't pay of course, but it's clearly not the reason for their success.

I was thinking that. Surely the primary reason they sell cheaply is because they don't have a shitload of incredibly expensive retail outlets located in prime real estate.

[MooseBreath]

How do you arrive at that conclusion? If you avoid VAT like Amazon (on music, not on books), that's 20% saved, and then they pay 2.5% corporation tax, compared to the 20-25% that HMV would pay if they made a profit (obviously - they don't anymore) - that alone allows amazon to sell the same item at the same cost base for 30% less than HMV, and make the same margin.

That's a massive cost advantage, and an unfair one.

THEN take into account that Amazon probably bought it cheaper in the first place, and also they don't have expensive stores to run.

To make the £80m required to pay full corp tax on £3b sales equates to an increase of approx 2.5p per pound, or about 25p on your average cd. An advantage yes, but one barely worth considering.

[Jon the Hat]

So the question is.... why is our corporation tax regime punative to the point that it is cheaper to warehouse stuff in mainland Europe and ship individual consignments to the UK than is it to operate warehouses here.

[Monk]

To make the £80m required to pay full corp tax on £3b sales equates to an increase of approx 2.5p per pound, or about 25p on your average cd. An advantage yes, but one barely worth considering.

Amazon avoid both VAT and Corporation Tax by being in Luxembourg. VAT is 3% in Lux - that alone is 17p per pound of price saved for VATable goods. You can't argue that's insignificant?

[Monk]

So the question is.... why is our corporation tax regime punative to the point that it is cheaper to warehouse stuff in mainland Europe and ship individual consignments to the UK than is it to operate warehouses here.

They warehouse their stuff in the UK, and it's distributed from the UK - that's why people are so bewildered as to how they can get away with paying tax in another country for UK sales.

[Trav Le Bleu]

I have to say - if I worked in town or had a reason to go there other than shop, I'd buy stuff (though when I did work in town I rarely shopped at HMV, whose selection was often poor and staff clueless.) The whole business of actually getting into town and it's costs - 15 mins each way at least; £3+ return by bus last I went, more to park car - is surely also a big contributory factor.

[Trav Le Bleu]

Amazon avoid both VAT and Corporation Tax by being in Luxembourg. VAT is 3% in Lux - that alone is 17p per pound of price saved for VATable goods. You can't argue that's insignificant?

And my guess is that Luxembourg, being pretty much entirely urban and condensed, can get away with lower taxes - not having to police remote Scottish islands and the like.

Git's - lets invade them and then they'll be sorry they didn't have enough taxes to pay for an army!

[digitalalba]

I actually didnt mind paying a few quid extra HMV rather than send it to those tax dodgers at Amazon, I enjoyed the experience of walking around a music shop as well when I was younger. Think its a shame personally. I dread to think what the town centres could look like in 20 years time.

Correct, and it might not be long before our town centre goes tits-up, i went into town today and did a ruff count of the empty shops, the Silver Arcade is deserted, scattered around are atleast another half dozen empty shops. What this could mean is a snoball (pardun the pun) effect as the more shops go bust etc, the less people will be atrracted, the more others that would normally survive could fold too.

Its no coincidence that in the last few years the £1 shops have flourished simply because shoppers are tightening their belts looking for bargins.

Another potential factor, is the atmosphere of town. Sometimes it looks like the outside of a university, sometimes preachers pitch up like its speakers corner in Hyde park, sometimes people trying to stop you in the street for "1 minute of your time", and of course the other shoppers who wont do their bit to avoid walking into you, these little things all add up.

I'd be interested to know the percentage difference in sales between the city centre and the out of town shopping centres like fosse park. Whereas 20+ years ago they didn't exist and that usually meant almost all went into town, people have left the city to the outer suburbs for more green grass and healthier air haha

[Rincewind]

You will still need City Centre shops for people that do not have cars. How and where I don't know. Would smaller shops spring up? HMV are going but what about small shops specializing in genres of music? OK they may not have stuff that you want instantly but if you order online it would take a week. Also smaller shops would mean friendlier and more personal service.

Or did all this just happen in the good old days?