Why all the fuss about highstreet sales decline?
Discussion
Maybe I'm a bit of a thicket, but does the highstreet prop up our entire economy?
http://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
What about business to business sales? Professional services? Telecomms? Financial Services (Insurance for example) the squillion and one other industries and companies that are in the UK ?
All I see in the press is Highstreet sales down, house prices down, car sales down and bankers are twits.
Is this representative of the whole economy?
http://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
What about business to business sales? Professional services? Telecomms? Financial Services (Insurance for example) the squillion and one other industries and companies that are in the UK ?
All I see in the press is Highstreet sales down, house prices down, car sales down and bankers are twits.
Is this representative of the whole economy?
Bill Carr said:
Ah yes, but didn't you know? If we don't witness growth EVERY year, it's a disaster. Our whole economic system is predicated on the need to keep buying/spending more and more. If that doesn't happen then it's armageddon.
Run, run, RUN for the hills gentle townsfolk!
grabbing any Findus pancakes you can find as you run!!Run, run, RUN for the hills gentle townsfolk!
davido140 said:
Maybe I'm a bit of a thicket, but does the highstreet prop up our entire economy?
http://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
What about business to business sales? Professional services? Telecomms? Financial Services (Insurance for example) the squillion and one other industries and companies that are in the UK ?
All I see in the press is Highstreet sales down, house prices down, car sales down and bankers are twits.
Is this representative of the whole economy?
But its not just the 2% its often more. Each year Business rates increase, NI increase, many taxes increase the overheads of running a business, more red tape requiring more staff or less time earning money.
So its a cummiltive effect less income more expenditure -(often paid to the govt)
http://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
What about business to business sales? Professional services? Telecomms? Financial Services (Insurance for example) the squillion and one other industries and companies that are in the UK ?
All I see in the press is Highstreet sales down, house prices down, car sales down and bankers are twits.
Is this representative of the whole economy?
But its not just the 2% its often more. Each year Business rates increase, NI increase, many taxes increase the overheads of running a business, more red tape requiring more staff or less time earning money.
So its a cummiltive effect less income more expenditure -(often paid to the govt)
superlightr said:
davido140 said:
Maybe I'm a bit of a thicket, but does the highstreet prop up our entire economy?
http://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
What about business to business sales? Professional services? Telecomms? Financial Services (Insurance for example) the squillion and one other industries and companies that are in the UK ?
All I see in the press is Highstreet sales down, house prices down, car sales down and bankers are twits.
Is this representative of the whole economy?
But its not just the 2% its often more. Each year Business rates increase, NI increase, many taxes increase the overheads of running a business, more red tape requiring more staff or less time earning money.http://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
What about business to business sales? Professional services? Telecomms? Financial Services (Insurance for example) the squillion and one other industries and companies that are in the UK ?
All I see in the press is Highstreet sales down, house prices down, car sales down and bankers are twits.
Is this representative of the whole economy?
So its a cummiltive effect less income more expenditure -(often paid to the govt)
tter (thanks to increasing taxes/rates/etc) but does retail really prop up every other business in the country?I'm becoming more and more convinved that this current "crisis" might be a pain in the arse for many, but certainly will NOT be the disaster that the press (and a few tinfoil hat wearers on here) keep banging on about.
davido140 said:
I'm becoming more and more convinved that this current "crisis" might be a pain in the arse for many, but certainly will NOT be the disaster that the press (and a few tinfoil hat wearers on here) keep banging on about.
Believe what you like but the recession only really started hitting retail sales at the end of the year and they were already 1.5% down on the year before. 2009 will almost certainly be the worst year for the world economy since the great depression. JagLover said:
davido140 said:
I'm becoming more and more convinved that this current "crisis" might be a pain in the arse for many, but certainly will NOT be the disaster that the press (and a few tinfoil hat wearers on here) keep banging on about.
Believe what you like but the recession only really started hitting retail sales at the end of the year and they were already 1.5% down on the year before. 2009 will almost certainly be the worst year for the world economy since the great depression. I dont work in retail, nobody I know does.
Hows does this affect me? Does retail REALLY prop up the entire economy? I know there will be some knock-on effect, but I cant see how it can bring down the whole economy?? can it?
Will Cisco no longer sell hardware to ISPs if topshop doesnt hit its sales target?
Will Shell stop drilling for oil if New Look doesnt shift all those tops with the sequins?
Will Samsumg/Sony/Pioneer/LG/Panasonic/etc go bust if they dont sell 10,000 new LCDs this month?
I think thats a no to all those, sure they will restructure thier business models but complete economic meltdown?
Really?
I am expecting to be flamed, but I think it might be the following:
Sales (revenue)is down 1.4%, but to achieve this, I think (opinion only) that retailers have sold much more volume at a lower price, so margins and Profit has been hit. With profits hit, many of these chains have debts which they cannot service which will mean they go out of business.
This has the impact of giving debt to suppliers and other businesses which means everyone suffers.
People are spending less despite the sales, the average punter is concerned and has battened down the hatches to pay off debts/save in case they lose their job, so it's a vicious circle.
How does it affect you? Possibly less choice on the high street (HMV monopoly?), fewer suppliers so less competition and the big boys like Tesco thrive and push harder on suppliers meaning Tesco make more and suppliers less.
This means less money to buy cisco routers etc and less spend in IT/marketing/PR etc
T-J-K
Sales (revenue)is down 1.4%, but to achieve this, I think (opinion only) that retailers have sold much more volume at a lower price, so margins and Profit has been hit. With profits hit, many of these chains have debts which they cannot service which will mean they go out of business.
This has the impact of giving debt to suppliers and other businesses which means everyone suffers.
People are spending less despite the sales, the average punter is concerned and has battened down the hatches to pay off debts/save in case they lose their job, so it's a vicious circle.
How does it affect you? Possibly less choice on the high street (HMV monopoly?), fewer suppliers so less competition and the big boys like Tesco thrive and push harder on suppliers meaning Tesco make more and suppliers less.
This means less money to buy cisco routers etc and less spend in IT/marketing/PR etc
T-J-K
Edited by The jiffle king on Tuesday 13th January 10:50
The jiffle king said:
I am expecting to be flamed, but I think it might be the following:
Sales (revenue)is down 1.4%, but to achieve this, I think (opinion only) that retailers have sold much more volume at a lower price, so margins and Profit has been hit. With profits hit, many of these chains have debts which they cannot service which will mean they go out of business.
This has the impact of giving debt to suppliers and other businesses which means everyone suffers.
People are spending less despite the sales, the average punter is concerned and has battened down the hatches to pay off debts/save in case they lose their job, so it's a vicious circle.
How does it affect you? Possibly less choice on the high street (HMV monopoly?), fewer suppliers so less competition and the big boys like Tesco thrive and push harder on suppliers meaning Tesco make more and suppliers less.
T-J-K
Now that does make sense. How the knock-on effect passes through different businesses, and this particular area of the economy could potentially change for good (big power shift essentially). Still not seeing the complete meltdown scenario though, surely for every degree of separation from the retail business the "damage" to the supplier/upstream company gets less and less or does it get greater?Sales (revenue)is down 1.4%, but to achieve this, I think (opinion only) that retailers have sold much more volume at a lower price, so margins and Profit has been hit. With profits hit, many of these chains have debts which they cannot service which will mean they go out of business.
This has the impact of giving debt to suppliers and other businesses which means everyone suffers.
People are spending less despite the sales, the average punter is concerned and has battened down the hatches to pay off debts/save in case they lose their job, so it's a vicious circle.
How does it affect you? Possibly less choice on the high street (HMV monopoly?), fewer suppliers so less competition and the big boys like Tesco thrive and push harder on suppliers meaning Tesco make more and suppliers less.
T-J-K
for example, direct supplier to topshop takes a big hit, suppliers to them take smaller hits, and so-on and so-forth.
So in that chain of supplieres, there may well be a cisco/shell/panasonic/etc but the net effect on them is small compared to the way top-shop is feeling it?
??
Edited by davido140 on Tuesday 13th January 10:54
davido140 said:
The jiffle king said:
I am expecting to be flamed, but I think it might be the following:
Sales (revenue)is down 1.4%, but to achieve this, I think (opinion only) that retailers have sold much more volume at a lower price, so margins and Profit has been hit. With profits hit, many of these chains have debts which they cannot service which will mean they go out of business.
This has the impact of giving debt to suppliers and other businesses which means everyone suffers.
People are spending less despite the sales, the average punter is concerned and has battened down the hatches to pay off debts/save in case they lose their job, so it's a vicious circle.
How does it affect you? Possibly less choice on the high street (HMV monopoly?), fewer suppliers so less competition and the big boys like Tesco thrive and push harder on suppliers meaning Tesco make more and suppliers less.
T-J-K
Now that does make sense. How the knock-on effect passes through different businesses, and this particular area of the economy could potentially change for good (big power shift essentially). Still not seeing the complete meltdown scenario though, surely for every degree of separation from the retail business the "damage" to the supplier/upstream company gets less and less or does it get greater?Sales (revenue)is down 1.4%, but to achieve this, I think (opinion only) that retailers have sold much more volume at a lower price, so margins and Profit has been hit. With profits hit, many of these chains have debts which they cannot service which will mean they go out of business.
This has the impact of giving debt to suppliers and other businesses which means everyone suffers.
People are spending less despite the sales, the average punter is concerned and has battened down the hatches to pay off debts/save in case they lose their job, so it's a vicious circle.
How does it affect you? Possibly less choice on the high street (HMV monopoly?), fewer suppliers so less competition and the big boys like Tesco thrive and push harder on suppliers meaning Tesco make more and suppliers less.
T-J-K
for example, direct supplier to topshop takes a big hit, suppliers to them take smaller hits, and so-on and so-forth.
??
What can happen is that your cash flow can be interupted and your payment terms on raw materials might be tightened from 90 days to 30 days. Your cash flow is directly impacted and banks are not willing to lend you as much money due to "restrictions", then business further down the chain will be impacted.
T-J-K
Edited by The jiffle king on Tuesday 13th January 11:01
The biggest problem for retailers is trade indemnity insurance.
Its disappeared, practically overnight.
So if your credit supply lines are removed, as they have been in lots of cases, Woolies probably being the highest profile example, then you can't buy stock, to sell, to meet your commitments be it debt/rent whatever.
The downturn in trade simply exacerbates this problem as there is even less money in the loop.
These insurance types have lost their appetite for retail because of the downturn.
Its all one big spiral.
Its disappeared, practically overnight.
So if your credit supply lines are removed, as they have been in lots of cases, Woolies probably being the highest profile example, then you can't buy stock, to sell, to meet your commitments be it debt/rent whatever.
The downturn in trade simply exacerbates this problem as there is even less money in the loop.
These insurance types have lost their appetite for retail because of the downturn.
Its all one big spiral.
The other reason which I haven’t seen much of in this topic is that retail is an indication of the state of the market as a whole.
If you think you are going to be made redundant, or have been you are going to buy less stuff.
You buy less widgets from the hardware store and eventually the owner has to make cost savings, cut down on staff, cut down on new equipment, etc and also, obviously, does not need to buy anymore widgets as he is trying to shift those in stock.
Because the hardware store owners are buying less widgets the widget factory has to make cost savings.
Because the hardware store owners are not upgrading their computer systems the hard and software suppliers are doing less business and so have to cut costs.
With all these people cutting costs there are less people out there who can afford to buy widgets, even if they need them.
When the bloke who was going to buy a widget looks at this they wonder about the security of their own position and even though they can easily afford to buy a widget today they will wait as they might need the money for something more important if they lost their job.
And around we go.
If you think you are going to be made redundant, or have been you are going to buy less stuff.
You buy less widgets from the hardware store and eventually the owner has to make cost savings, cut down on staff, cut down on new equipment, etc and also, obviously, does not need to buy anymore widgets as he is trying to shift those in stock.
Because the hardware store owners are buying less widgets the widget factory has to make cost savings.
Because the hardware store owners are not upgrading their computer systems the hard and software suppliers are doing less business and so have to cut costs.
With all these people cutting costs there are less people out there who can afford to buy widgets, even if they need them.
When the bloke who was going to buy a widget looks at this they wonder about the security of their own position and even though they can easily afford to buy a widget today they will wait as they might need the money for something more important if they lost their job.
And around we go.
the media is to blame for most of the crisis in my view. If I hear 'since records began' again I may have to throttle a news presenter.
The retail trade has for years been selling things far too cheap to sustain a business. My wife is just giving up on selling ladies fashions as in order to take a minimum wage she needs to turnover £50,000! She actually hasn't took a wage for 2 years! By the time the rent/rates/insurance/alarm/etc has been paid that's in the region of £500 to cover per week! In the old days you could double up on purchase price but not anymore. Doesn't take a lot of working out!
Too many people with their hand out!
There is also the problem that HM Custom take the 'Council Tax' for shops - therefore they don't give a toss about an area and wouldn't even consider lowering rates to encourage new business - I think the councils would given the chance.
The retail trade has for years been selling things far too cheap to sustain a business. My wife is just giving up on selling ladies fashions as in order to take a minimum wage she needs to turnover £50,000! She actually hasn't took a wage for 2 years! By the time the rent/rates/insurance/alarm/etc has been paid that's in the region of £500 to cover per week! In the old days you could double up on purchase price but not anymore. Doesn't take a lot of working out!
Too many people with their hand out!
There is also the problem that HM Custom take the 'Council Tax' for shops - therefore they don't give a toss about an area and wouldn't even consider lowering rates to encourage new business - I think the councils would given the chance.
davido140 said:
Maybe I'm a bit of a thicket, but does the highstreet prop up our entire economy?
http://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
no it doesn't prop up the entire economy but there are numerous industries associated with retail saleshttp://news.bbc.co.uk/1/hi/business/7825213.stm
Is a 1.4% drop REALLY that bad? surely any good business would still be making money with a less than 2% drop in sales?
- a dip in sales at the high end of the market has meant mrs envy has been made redundant - interior designer
- I've had a number of schemes pulled until the above client starts seeing positive numbers on their 4 year payback - quantity surveyor
plus contractors, M&E engineers, lighting designers, H&S consultants, buyers, project managers, fire consultants, etc, etc
it's a massive chain
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