Is Brexit destroying the retail sector? Watch

richard10012
Badges: 10
Rep:
?
#1
Report Thread starter 11 months ago
#1
Bargain Booze, new look, carpet rights and many more have gone bust or had to close stores. If the major retailers are cutting jobs. Has brexit caused this?
0
reply
Andrew97
Badges: 19
Rep:
?
#2
Report 11 months ago
#2
No. Firms went bust before Brexit, firms will go bust after Brexit. Firms go bust all the time.
1
reply
cockapoo
Badges: 5
Rep:
?
#3
Report 11 months ago
#3
yes brexit is going to destroy everyone and everything in the uk
Posted on the TSR App. Download from Apple or Google Play
0
reply
jbrdodd
Badges: 18
Rep:
?
#4
Report 11 months ago
#4
No, it's due to online shopping. For example, Toys R Us shut down as people are now just shopping on amazon instead as it's cheaper.
1
reply
Rakas21
Badges: 21
Rep:
?
#5
Report 11 months ago
#5
As has been alluded to above the retail sector as a whole is still growing at a fairly normal pace but the structure of that consumption is causing casualties with businesses reporting high street sales falling and online sales rising. Those who are not focusing online to a sufficient degree are losing out.

Next and Dixons Retail for example have made less profit but are still holding strong.

You also have to consider the wider actions of a firm. When Staples left the UK for example, the UK retail arm was close to flat while the European arm was making heavy losses. The firm that owns Poundland is crashing and burning overall despite the fact that Poundland itself is going from strength to strength. The same is true for Bargain Booze which in itself is not really in trouble, but the firm that owns it is drowning in debt. Peacock despite selling rubbish was slightly profitable when it went into administration because again, debt.

Retail is dynamic and chaotic and your fate can change from market leader to almost dead within a decade. Nokia in 06 was the dominant market leader, by 2014 they had disposed of their entire mobile arm. Sony in the 1990's was an electronics giant while today they are under constant threat of acquisition with only the Playstation keeping them afloat. Apple and Nintendo prove that the reverse can also occur.
1
reply
nulli tertius
Badges: 21
Rep:
?
#6
Report 11 months ago
#6
(Original post by Rakas21)
As has been alluded to above the retail sector as a whole is still growing at a fairly normal pace but the structure of that consumption is causing casualties with businesses reporting high street sales falling and online sales rising. Those who are not focusing online to a sufficient degree are losing out.
Retail is also cyclical with products going in and out of fashion and with "value" and "premium" sales also going in and out of fashion.

Carpetright hasn't been threatened by the the internet. The problem for carpetright has been wooden flooring. Then as the market for carpet has picked up again, it has been at the premium end of the market. Carpetright will sell you a top quality carpet but if you are buying a posh carpet, you might prefer to buy it from a shop with a different ambiance.
0
reply
ByEeek
Badges: 19
Rep:
?
#7
Report 11 months ago
#7
(Original post by jbrdodd)
No, it's due to online shopping. For example, Toys R Us shut down as people are now just shopping on amazon instead as it's cheaper.
Nah - Toys R Us shut down because it was a terrible store. I mean absolutely horrendous. You couldn't find anything you wanted and it was always way more expensive than other shops. By comparison, Smyths Toystores has a similar business model and is doing ok for the time being. There is nothing wrong with destination stores, but they need to hit the mark.

Same with BHS (sh1t store) and Woolworths (really sh1t store).
0
reply
nulli tertius
Badges: 21
Rep:
?
#8
Report 11 months ago
#8
(Original post by ByEeek)
Nah - Toys R Us shut down because it was a terrible store. I mean absolutely horrendous. You couldn't find anything you wanted and it was always way more expensive than other shops. By comparison, Smyths Toystores has a similar business model and is doing ok for the time being. There is nothing wrong with destination stores, but they need to hit the mark.
Toys R Us was a toy store for adults. It was a means to enable adults to buy and take home the toys parents wanted to buy, particularly for Christmas. That market has been taken over by the internet and delivery/pick up away from home.

Currently successful toy stores have reverted to the traditional model of entertaining and selling to children.
0
reply
TCA2b
Badges: 19
Rep:
?
#9
Report 11 months ago
#9
(Original post by Andrew97)
No. Firms went bust before Brexit, firms will go bust after Brexit. Firms go bust all the time.
b-b-but trump and brexit and muh russia
3
reply
TCA2b
Badges: 19
Rep:
?
#10
Report 11 months ago
#10
(Original post by Rakas21)
As has been alluded to above the retail sector as a whole is still growing at a fairly normal pace but the structure of that consumption is causing casualties with businesses reporting high street sales falling and online sales rising. Those who are not focusing online to a sufficient degree are losing out.

Next and Dixons Retail for example have made less profit but are still holding strong.

You also have to consider the wider actions of a firm. When Staples left the UK for example, the UK retail arm was close to flat while the European arm was making heavy losses. The firm that owns Poundland is crashing and burning overall despite the fact that Poundland itself is going from strength to strength. The same is true for Bargain Booze which in itself is not really in trouble, but the firm that owns it is drowning in debt. Peacock despite selling rubbish was slightly profitable when it went into administration because again, debt.

Retail is dynamic and chaotic and your fate can change from market leader to almost dead within a decade. Nokia in 06 was the dominant market leader, by 2014 they had disposed of their entire mobile arm. Sony in the 1990's was an electronics giant while today they are under constant threat of acquisition with only the Playstation keeping them afloat. Apple and Nintendo prove that the reverse can also occur.
Strong online competition, diverging patterns of consumption of Millennials and generation Z relative to older generations and an economy that is good on paper but still weak in certain fundamentals are all biting. Retail has allegedly been in a crisis since 2006 now.

If Brexit is at all related, it isn't so much the event itself as it is uncertainty about how the government is going to deal with it, both during and after the fact, if it goes ahead at all and is not watered down beyond all recognition.
0
reply
CountBrandenburg
  • Political Ambassador
Badges: 16
Rep:
?
#11
Report 11 months ago
#11
Retail has by my guess been suffering a crisis for the past decade... can we stop blaming Brexit for everything
Posted on the TSR App. Download from Apple or Google Play
1
reply
NonIndigenous
Badges: 17
Rep:
?
#12
Report 11 months ago
#12
Higher tariffs will hurt some businesses. Natural. On the other hand I don't care if people pay more for booze because of it.

Why are we taxing alcohol so high in the first place? That's not EU's doing. And why do have some of the worst over-consumption of it in Europe as well?

Not Brexit's fault, that's certain. Besides the EU also has tariffs on imports outside it's borders that hurt some businesses.
1
reply
nulli tertius
Badges: 21
Rep:
?
#13
Report 11 months ago
#13
(Original post by TCA2b)
diverging patterns of consumption of Millennials and generation Z relative to older generations
Generational shift has always happened with the retail sector.
0
reply
nulli tertius
Badges: 21
Rep:
?
#14
Report 11 months ago
#14
(Original post by NonIndigenous)
Higher tariffs will hurt some businesses. Natural. On the other hand I don't care if people pay more for booze because of it.

Why are we taxing alcohol so high in the first place? That's not EU's doing. And why do have some of the worst over-consumption of it in Europe as well?

Not Brexit's fault, that's certain. Besides the EU also has tariffs on imports outside it's borders that hurt some businesses.
But none of this has yet happened and retail has such a short time horizon that no business has gone bust because of what might happen to retail prices when (if) Brexit occurs.
1
reply
the bear
Badges: 20
Rep:
?
#15
Report 11 months ago
#15
of course. it is too late now.

now i think the deckchairs would look nice in a circle ?

:captain:
0
reply
scorpius14
Badges: 5
Rep:
?
#16
Report 11 months ago
#16
All these companies are analog players in a digital world, sooner or later there will be an amazon shop in every town or people will just resort to online shopping, even the main supermarkets seem to be following suit with their fulfillment centres which have invested more in automation than employees. Brexit might have something to do with it like EU workers as farmers who might return to their home countries if they inevitably face deportation, as they might have been sending resources to various retail businesses because seasonal work seems unattractive to the native population.
0
reply
TCA2b
Badges: 19
Rep:
?
#17
Report 11 months ago
#17
(Original post by NonIndigenous)
Higher tariffs will hurt some businesses. Natural. On the other hand I don't care if people pay more for booze because of it.

Why are we taxing alcohol so high in the first place? That's not EU's doing. And why do have some of the worst over-consumption of it in Europe as well?

Not Brexit's fault, that's certain. Besides the EU also has tariffs on imports outside it's borders that hurt some businesses.
Yes, it's only a managed "free" trade zone internally. Protectionist vis-a-vis the rest of the world, though.
0
reply
Jimbo1234
Badges: 18
Rep:
?
#18
Report 11 months ago
#18
(Original post by richard10012)
Bargain Booze, new look, carpet rights and many more have gone bust or had to close stores. If the major retailers are cutting jobs. Has brexit caused this?
Nope.
This was predicted pre Brexit. Iirc, 1-1.5 MILLION retail jobs will be lost by 2025.

The reason is due to the change in how we shop (internet), lack of expendable income, and the rise in the cost of housing (landlords are less likely to buy new carpets and kitchens compared to homeowners).
1
reply
ByEeek
Badges: 19
Rep:
?
#19
Report 11 months ago
#19
(Original post by nulli tertius)
Toys R Us was a toy store for adults. It was a means to enable adults to buy and take home the toys parents wanted to buy, particularly for Christmas. That market has been taken over by the internet and delivery/pick up away from home.
If that is the case, as a parent it failed miserably. In fact it was about the most depressing, miserable place I can imagine, just in front of Dunelm.
0
reply
nulli tertius
Badges: 21
Rep:
?
#20
Report 11 months ago
#20
(Original post by ByEeek)
If that is the case, as a parent it failed miserably. In fact it was about the most depressing, miserable place I can imagine, just in front of Dunelm.
When it came to Britain, it was a breath of fresh air. A toy store where parents could get round in half and hour; where other people's children didn't get under one's feet, where there were sufficient stocks to get this year's must have toy. That sort of shopping is now done online.
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Where do you need more help?

Which Uni should I go to? (131)
18.02%
How successful will I become if I take my planned subjects? (73)
10.04%
How happy will I be if I take this career? (126)
17.33%
How do I achieve my dream Uni placement? (105)
14.44%
What should I study to achieve my dream career? (70)
9.63%
How can I be the best version of myself? (222)
30.54%

Watched Threads

View All