Archive for February, 2011

Morrisons, On-Line Shopping and the High Street

Tuesday, February 15th, 2011

A couple of news items caught my eye today. Firstly Supermarket giant Morrisons bought Kiddicare for £70m and 1 in 7 high street shops were vacant at the end of 2010.

Morrisons is paying a sum which is almost twice the figure of Kiddicare’s last-years  £37.5m turnover! Morrisons are one of the few major retailers still not to benefit from an e-commerce site. It is, therefore, thought that Morrisons’ rationale for the purchase is to get hold of the technology and management expertise in order to provide the Supermarket’s push into non-food items and on-line sales. Certainly, as a business, they are paying well over the odds.

There is a precedent  for this strategy when 10 years ago this month, John Lewis paid £2.8m for Buy.com only for it to close the operation 1 year later after integrating the technology into JohnLewis.com. The website is now considered once of the best on-line shopping experiences and very profitable, accounting  for 20% of J.L.’s turnover.

Morrisons have been very slow to adopt an on-line policy but now the new Chief Executive, Dalton Philips is in place we can expect an acceleration in the bid for a greater share of non-food and internet sales.

The steady increase in empty High Street shops is not unconnected to the above.  There have been many reasons for the decline of the High Street and the growth of the major Supermarkets, usually sited in retail parks is one of them. As well as fulfilling the role of butcher, greengrocer, fruiterer, fishmonger, flower shop and bakery, the larger ones provide banking, insurance, music, audio visual, travel agent, bookshop, stationers, phone shop, computing, restaurant, coffee shop, dry cleaning and even a doctors surgery. They have become their own High Streets which they ultimately control.

They can be no going back on this, the consumer enjoys the one-stop shopping experience in a nice clean, temperature controlled environment with plenty of free parking.

Many councils have hastened the High Street exodus  with their refusal to sanction changes of use, the exorbitant parking charges and over zealous parking wardens intent on increasing the councils income.  The High Street’s which are surviving and thriving have become leisure areas for food and drinks with cafes featuring outside tables, restaurants, trendy bars and milk shake vendors. They offer pampering with hairdressers , tanning shops, nail bars and facials.  They still include the traditional banks, building societies, estate agents and financial services along with newsagents and a late night convenience store.  Maybe there can be the discount book stores and charity shops and, I know this is contentious, they should allow more Adult Gaming Centres (Arcades) and Bookmakers.  After all, since the smoking ban they are no longer the ‘seedy dives’ of the past.

Probably the High Streets will never again become  ‘destination’ shopping  but can continue to be a pleasant way to walk down and while away a few hours.