Comment: You can’t put online retail genie back in bottle

By MARTIN FLANAGAN
Published on 18/01/2013 00:00

A DIGITAL dystopia is one way of looking at the wave of recent retailing failures. Through this pessimistic prism, the high street is being ­destroyed by the malign advance of online sales.

Such evidence is not entirely ill-founded. HMV, Blockbuster, Jessops, Comet, Clinton Cards, JJB Sports, Game Group, La Senza ... all these collapses were contributed to by changing ­consumer trends.

The systemic change in the retail industry has been exacerbated by a chronic and a virtually unprecedented British austerity programme that has consumers counting the pennies and fearful of the P45.

As the book publishing industry among others can also testify, simultaneous systemic change and cyclical downturns are deeply challenging. ­Include the temptation of cash-strapped suppliers to pull the plug on retailers when there is any hint of blood in the water and you can see that the sector is almost experiencing a “perfect storm”.

But the gloom can be overdone. Highly-resilient trading updates came yesterday from firms such as electricals retailer Dixons, Argos-owner Home Retail Group, discount fashion retailer Primark, cash-and-carry wholesaler Booker and online fashion outfit Asos.

Most of the supermarket groups – from Waitrose on the moon-lit upper deck to Aldi and Lidl travelling steerage – have also proved their robustness recently despite the headwinds of higher food prices.

Food retailers are not going to become entirely cyberspace businesses for obvious logistical reasons, even if their online sales are rising by double-digits from lower bases and click-and-collect is becoming more popular.

Most likely is that the future of ­retailing will be multi-faceted. The ­online sales genie can never be put back in the bottle. We are never going back to a 1960s-style high street.

There are likely to be fewer shops, with councils set to become more ­lenient on other planning permissions, such as residential and leisure next to the proliferating coffee shops, mobile phone outlets and opticians.

The high street is what common land was in medieval times, and society’s cohesion will demand from the authorities that it does not flounder. It is likely to be squeezed, but not die.

As this trend continues over years, it should accelerate the physical offering of most of Britain’s retailers moving to out-of-town centres. But retail park shopping is far more likely to complement, not be supplanted by, growing online sales.

Think of the now well-established multi-channel delivery of the new banking model. Some people use branches, some bank on the internet, some the telephone.

It is co-existence of trading templates, rather than any zero-sum game. And, after the inevitable sadness of leading British retail names going into administration fades to a memory – does anyone still mourn Woolworths’ demise? – and austerity does eventually come to an end, the altered retail sector will also move on.

Ethics will be good for banks, badges less so

Barclays staff are told they have to adhere to an ethical code of conduct, or leave. Sounds reasonable, although the image of employees deliberating whether they feel able to is diverting.

But I have also noticed some of the bank’s staff sporting “I love Barclays” badges. They do not look self-made. Oh, please don’t. Ethics good, embarrassing bad.