Well it was very close… and there are a few towns and small cities that will never be the same as the vicious cycle continues on the high street and shopping malls up and down the country.
As lots and units become vacant, especially larger ones such left by Woolworths, MFI, Adams, Zavvi etc… and no one to fill them - the landlords will try and up their rents, rates and other such utilities to ensure that they, as businesses keep turning over. In turn some of the retailers that may have just scrapped through Xmas – and lest face it with the discounting that was made not many would have made any profit by cutting costs so much to drive footfall into their stores that when the figures were calculated, and footfall figures showed that a record number of shoppers passed through their door and cash in the tills – the profit margins were weak and almost non-existent!
Tough times indeed and if the added increase in 2009 from the landlords does go ahead as expected – we’ll see even more closures on the high street – and in some cases the death of the high street in some towns!
So what was the last quarter all about and who else could be hanging in the balance?
The biggest had to be Woolworths, MFI & Adams – then with the demise of Woolworths and EUK brought Zavvi to its knees. Whittards followed suit and as we readied the chime of Big Ben to usher in 2009 and for many to forget what happened in 2008, rumblings came from Land of Leather, Iceland, WH Smith and Jessops – as well as Land Rover/Jaguar and the biggest shock was the car company that had never made a loss, Toyota, suddenly found that after 70 years of gains, a $1.66 Billion loss would be entered on their books.
So what will happen in 2009 and what lessons did we learn from the fallout of 2008??
Yes there was an economic turn down and credit crunch that pushed the house prices down (and will continue to do so throughout 2009) jobs were cut throughout, and expect more with companies continuing to struggle against the growing uncertainty. Big companies such as Tesco, M&S, Ikea etc.. will continue to push ahead, perhaps not as strong as they were in the past 3 years – but push ahead they will. A lot more ecommerce and value tracking will be done – as the high street empties more people will start to either head for large out of town complexes or bigger city centres but ultimately online and ecommerce will be even stronger in 2009 – and looking at the companies that fell away at the end of last year – you will se that either their online strategy or online presence was weak, poor and ill-equipped to compete against the stronger and more focused pure play e-tailers (Amazon, Play….)
So 2009 how can a company like EMC help out retailers that find themselves wondering how and where to move and ultimately survive the belts and braces of “Retail 2009”
- Its going to be about a strong retail focus and business case – how is your business equipped for the
- Suppliers, distribution, local vs national vs worldwide?
- ecommerce – can and does your platform fulfill all your needs and wants – if not now is a good time to review what you have and look at either a new build or enhancements (take a look at my blog from last year for an in-depth review of what e-tailers should do with their ecommerce direction)
- 360° Retail – stack up your business models and review the channels that you use, how you use them and get the most of out of them
- Customer..Customer..Customer – understand your customer, how they want to shop your store and give them the service that they expect and want
2009 is going to be a very tough year for retailers and will be a fight for survival for a lot – but it doesn't need to be the end – some reviews, honest appraisal of your retail vision and 5 year plan – and especially reviewing your high street portfolio (why run 100 stores that lose the company money when you could be more profitable by running 30 stores and a phenomenal ecommerce site?)
As long as CEOs and MDs realise that success is measured on the number and size of stores footprint – it is and always should be about the profitability and sustainable growth of the business. Let 2009 be the year that your company steps up, to scale down in order to survive – there is no room this year for egos or “size matters” management.
If you want to know or understand what you need to do in order to keep on track email us: talktous@conchango.com