The big challenge for bricks & Mortar Retail across the world & in Ireland ... Online

robut

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( That Irish retail in recession thread was inappropriate now for this topic. Wrong title. Let that thread sink :D )

Interesting article as the retail crash in the US develops, largely unreported this side of the pond.

It is mainly due to customers migrating to online vs bricks and mortar

Will the death of US retail be the next big short? -FT

For a small band of hedge funds that slapped down prescient bets against the tottering US housing market, the financial crisis was the biggest money-spinner in generations. Some investors think they have now found the next “big short” in the retail industry.
The impact is far-reaching. Credit Suisse estimates that as many as 8,640 stores with 147m square feet of retailing space could close down just this year — surpassing the level of closures after the financial crisis and dotcom bust.

The downturn is hitting the largely healthy US labour market — the retail industry has lost an average of 9,000 jobs a month this year, according to the Bureau of Labor Statistics, compared with average monthly job gains of 17,000 last year.

... But it is also likely just the first stage, with some investors predicting that every corner of commerce is about to experience a painful burst of creative destruction as shoppers migrate online.
THIS AMAZING BIT:

So far the S&P 500’s retailing index has held its head above water, climbing more than 10 per cent this year. But the only reason it is not doing much worse is because Amazon makes up a third of the gauge, and its shares have climbed more than 33 per cent already this year. The online giant’s shares are now worth $477bn, more than half as much as the rest of the listed US retailing world. Without Amazon, the index’s market capitalisation has largely flatlined since early 2015.
AND THIS:

Goldman Sachs estimates that ecommerce companies only require 0.9 employees per $1m of sales compared with 3.5 for a bricks-and-mortar store, and the sector is on course to lose about 100,000 jobs this year.
Copy this to google search & then click on FT link to read:

Will the death of US retail be the next big short?
I think Irish retail has not adapted well OR at all to this online retail thing? Mediocre, sometimes not mobile ready brochure websites will not cut it anymore.

This is a huge challenge that needs to be attacked head on AND PROACTIVELY. Whats happening in US is on the way here too, if not already .. in my opinion!
 
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robut

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This from 2015:

33% of last Christmas spend was online in Ireland. This will grow by a fifth to 40% in 2016. - Behaviour & Attitudes

33% of last Christmas spend was online in Ireland. This will grow by a fifth to 40% in 2016.

Last year a third of a typical Irish shoppers spend was online and our study predicts that this will rise by a fifth this Christmas, to 40%.

If €7 in every €10 continues to hit overseas, rather than Irish coffers, the Omnichannel drift could be fatal for many Irish retailers.
Re the rise to 40% xmas 2016 ... it was apparently, that and more! Cash going overseas ...
 

robut

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In Cork a very popular cafe/restaurant - FENNS QUAY - closed last friday after 20 years. Lack of parking, costs, rates, running just to stand still to stay open.

You see if people are mainly shopping online, then they are not coming into town either to drink coffee and eat lunch?

Thing with online is its cheaper, lower overheads, warehouse / stock can be stored way outside town centre where rates are low or none. Less staff needed also.

Apparently Trump as of today and last few days has Amazon in his sights .. go search Twitter. Many around the world are wrestling with this Online retail vs bricks and mortar but are struggling how to square it.
 
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publicrealm

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I bought a Dell desktop about 5 months ago on ebay for just over half of what I would pay in Ireland.

I just bought a laptop on ebay on Saturday - for about 30% below best Irish prices.

I would have bought previously in Peats - now gone - for the advice and after sales service. This service is not provided by the generic computer stores so I won't pay the premium.

And yet - I think retail is doing okay in the malls and retail parks - less so in the city centres (no stats - just my observation).

I hope you are wrong but you may be right.
 

robut

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I bought a Dell desktop about 5 months ago on ebay for just over half of what I would pay in Ireland.

I just bought a laptop on ebay on Saturday - for about 30% below best Irish prices.

I would have bought previously in Peats - now gone - for the advice and after sales service. This service is not provided by the generic computer stores so I won't pay the premium.

And yet - I think retail is doing okay in the malls and retail parks - less so in the city centres (no stats - just my observation).

I hope you are wrong but you may be right.
Me too :D

Please dont see this thread as a doom and gloom thing. As I said IT HAS to be seen as a challenge for Irish retail to proactively do something about this before its too late.

We have to take whats going on in Retail in the USA at the moment as a forewarning .. not to be ignored
 

PBP voter

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Goldman Sachs estimates that ecommerce companies only require 0.9 employees per $1m of sales compared with 3.5 for a bricks-and-mortar store, and the sector is on course to lose about 100,000 jobs this year.
Plus loads of builders will lose their jobs.

Electricians and plumbers wont be need to maintain the Bricks and Mortar shops.
:) :)

People who decided to educate themselves will be fine as more IT jobs will be about.

:)

Poor old builders. So sad. :)
 

publicrealm

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Plus loads of builders will lose their jobs.

Electricians and plumbers wont be need to maintain the Bricks and Mortar shops.
:) :)

People who decided to educate themselves will be fine as more IT jobs will be about.

:)

Poor old builders. So sad. :)
It's an issue that goes way beyond the construction industry. Retail vitality and viability is important - it's one of the main engines of city centres for a start
 

robut

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It's an issue that goes way beyond the construction industry. Retail vitality and viability is important - it's one of the main engines of city centres for a start
As I mentioned above .. city centre retail disappears then their is no reason for people to come into cities which means coffee shops, restaurants and all that will suffer too?
 

JacquesHughes

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In Cork a very popular cafe/restaurant - FENNS QUAY - closed last friday after 20 years. Lack of parking, costs, rates, running just to stand still to stay open.

You see if people are mainly shopping online, then they are not coming into town either to drink coffee and eat lunch?

Thing with online is its cheaper, lower overheads, warehouse / stock can be stored way outside town centre where rates are low or none. Less staff needed also.
Next..the whole operation becomes robotised.

It reached a peak when 'shopping' became a recreation- I wasn't sure that was sustainable.
 

robut

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For anyone interested THIS was the main topic for last two mornings on Cork Station RED FM.

A local multipub owner Benny McCabe started the conversation initially on Facebook but its expanded out to much of what this thread is about. Im sure the discussion on both days would also apply to DUBLIN and many other towns and cities around the country.

Here is a link to the podcasts of todays and yesterdays shows:

July 24th 2017
Callers react to publican Benny McCabe’s call for free parking for the city centre to revitalise business and trade. Listeners also give their opinion on the crazy decision not to open the Park & Ride yesterday despite matches held in the new Pairc Ui Chaoimh.
http://www.redfm.ie/on-air/podcasts/neil-prendeville-on-redfm/1335.mp3

July 25th 2017
Neil talks to publican Benny McCabe about ideas to transform Cork City Centre.
http://www.redfm.ie/on-air/podcasts/neil-prendeville-on-redfm/1338.mp3

( from - Neil Prendeville on RedFM - Cork's RedFM )
 

Niall996

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As I mentioned above .. city centre retail disappears then their is no reason for people to come into cities which means coffee shops, restaurants and all that will suffer too?
Maybe not. I certainly hope not. People will always want to socialise. Buying online means less time shoving a trolley and queuing to pay. If town centres have lots of cafes and bars instead of retail stores it can make for a vibrant social space. Cheaper online purchases mean more funds towards social activities as well. And where there are people, other little shops that cater for spontaneous purchase might pop up. We'll have to wait and see how it evolves. It could work out okay.
 

robut

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Amazon shouldn't be blamed for retail apocalypse - Business Insider

There's no single driver behind the decline of retail stores in America, and the effect of online sales growth certainly can't be ignored.

But there are two other factors that arguably play an even bigger role: excess retail stores and shoppers' changing consumption habits.
BUT THIS I FOUND INTERESTING:

Many retailers expected sales to bounce back after the recession. But that never happened for a majority of mall-based stores, primarily because people changed their shopping habits.

"People are making more discerning decisions about what they buy, where they spend, and how they spend," Stephens says.

Specifically, shoppers are buying more experiences than things.

Stephens says this trend, which has been particularly devastating to apparel retailers, is due in part to the rise of social media.

"Experiences make a better story on social media than things," he says.
So .. EXPERIENCES .. is this where its now at in Retail? Have you seen anything like this in Irish Retail yet?
 

dizillusioned

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Irish Retail will die.

The costs of Rent and Rates for most bricks and mortar stores is too high to be in anyway competitive with online stores. Councils in Ireland are going to woe the day they put rates so high. Currently Irish retail is bearly existent in Ireland. Most stores are foreign owned and this will continue to be the case.

I live in the country and have not been to stores in months, I shop online. I know what I want, have security when purchasing with a credit card and save on gas as the nearest stores are 30 miles away.

When you see Macys closing stores, when you see Walmart closing over 200 stores and purchasing an online retailer for something like 3 billion, you know the days of retail are gone.
 

robut

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A sort of connected thing I have been wondering about.

Last Christmas in Ireland, particularly, there was a massive surge toward online purchasing pre christmas. Apparently most of this online buying was done at ( and still is ) Foreign, non Irish Ecommerce sites. Of course we can mention AMAZON.CO.UK as a big example.

The interesting thing is since 2015, though the sale and the profit from these online purchases by Irish is going abroad .. the VAT is not.

As of 2015 the VAT applied to purchase on likes of Amazon is AT THE RATE of the country of the buyer. This VAT is then sent back to IRISH REVENUE.

So revenue are getting there 23% regardless, the local indigenous Irish retailer / sme gets nothing.

What I have been wondering about & I dont think it gets published? - is a split in the VAT figures between VAT from local Irish bricks and Mortar retailers/businesses and then the VAT from all that online sales via NON IRISH ecommerce sites.

This would surely be a very revealing figure / breakdown?
 

Catalpast

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I must say Blanch SC looks as busy as ever

But there is no doubt that online shopping is the Future

- esp for anyone under 25
 

gerhard dengler

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I've been following a similar story in the UK for the best part of the last 10-15 years, and this story concerns the pub industry.

Over there, pub industry is dominated by tied-houses. This is where pubs are owned by breweries such as Whitbread. In a tied pub, the pub is usually restricted to only selling for example Whitbread products.

Tied-pub concept operated for the best part of two centuries in the UK. However breweries began to realise that the property assets of these pub premises might offer better value to the brewery. So the breweries began to seek breaking the tied-arrangement with pub landlords because the breweries realised that a pub without a sitting tenant might make the disposal of such property more convenient.

The real decision for these breweries is : do these premises provide value to the brewery as a (pub) going concern, provide value being disposed of, or provide value as a premises providing some other retail service as a going concern?

Greene King Pub group is one brewery which has been particularly aggressive in the past
decade or so.

This is why the Queens Head pub in Nutfield has closed and what is planned for its future | Surrey Mirror
 

Dearghoul

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I've been following a similar story in the UK for the best part of the last 10-15 years, and this story concerns the pub industry.

Over there, pub industry is dominated by tied-houses. This is where pubs are owned by breweries such as Whitbread. In a tied pub, the pub is usually restricted to only selling for example Whitbread products.

Tied-pub concept operated for the best part of two centuries in the UK. However breweries began to realise that the property assets of these pub premises might offer better value to the brewery. So the breweries began to seek breaking the tied-arrangement with pub landlords because the breweries realised that a pub without a sitting tenant might make the disposal of such property more convenient.

The real decision for these breweries is : do these premises provide value to the brewery as a (pub) going concern, provide value being disposed of, or provide value as a premises providing some other retail service as a going concern?

Greene King Pub group is one brewery which has been particularly aggressive in the past
decade or so.

This is why the Queens Head pub in Nutfield has closed and what is planned for its future | Surrey Mirror
I think you're a little out of date there.

The UK pub market was dominated by breweries some 20 years ago.
 

gerhard dengler

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gerhard dengler said:
I've been following a similar story in the UK for the best part of the last 10-15 years, and this story concerns the pub industry.

Over there, the pub industry is dominated by tied-houses. This is where pubs are owned by breweries such as Whitbread. In a tied pub, the pub is usually restricted to only selling for example Whitbread products.

Tied-pub concept operated for the best part of two centuries in the UK. However breweries began to realise that the property assets of these pub premises might offer better value to the brewery. So the breweries began to seek breaking the tied-arrangement with pub landlords because the breweries realised that a pub without a sitting tenant might make the disposal of such property more convenient.

The real decision for these breweries is : do these premises provide value to the brewery as a (pub) going concern, provide value being disposed of, or provide value as a premises providing some other retail service as a going concern?

Greene King Pub group is one brewery which has been particularly aggressive in the past
decade or so.
I think you're a little out of date there.

The UK pub market was dominated by breweries some 20 years ago.
Fish in a barrel stage.
 

Dearghoul

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Amazon shouldn't be blamed for retail apocalypse - Business Insider



BUT THIS I FOUND INTERESTING:



So .. EXPERIENCES .. is this where its now at in Retail? Have you seen anything like this in Irish Retail yet?
The 'Experiental High Street' is a term bandied about on social media in the little corner of South London where I live.

I can't see exactly what they mean by it yet.

More gyms? They can't surely want another bloomin coffee shop.

These guys reckon they're pretty cutting edge.

I'll report back if they come up with anything to replace shops with.
 


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