Woolworths enter administration

[Azam.net]

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It's all very sad. I loved Woolies.

[Rocky]

Here's a very good round up by the BBC today of the potential impact that the closure of Woolworths and MFI will have on those businesses and their suppliers and other dependent businesse:

BBC NEWS | Business | Worrying time for Woolworths staff

This begs the question of whether Woolworths are not too big to be allowed to fail?

Northern Rock employed 6,500 when it was nationalised, Woolies employs in excess of 30,000.

I know which one I would rather survive.

[lauriebred]

Here's a choice.
1) Defrost your car, drive down through heavy traffic to your local High Street, drive round for ages to find a parking space. Pay an outrageous fee to leave your car on a tiny space a long, long way from the shops. Trudge into the High Street, try and find a sales assistant who's literate, intelligent and a fluent English speaker. Discover that what you want isn't in stock because nobody ever asks for it but if you come back next week/month/whenever they may have it if you're in luck. March back to your car which has been dinted by the cars on each side because the parking spaces are so narrow.

2) Go online, find the cheapest price and the quickest delivery, pay by credit card and open a can of beer.

I read that Internet sales are up by 15 this year. Bye bye High Street, you've had your day but all things come to an end one day.

[Travel Pixel]

Here's a choice.
1) Defrost your car, drive down through heavy traffic to your local High Street, drive round for ages to find a parking space. Pay an outrageous fee to leave your car on a tiny space a long, long way from the shops. Trudge into the High Street, try and find a sales assistant who's literate, intelligent and a fluent English speaker. Discover that what you want isn't in stock because nobody ever asks for it but if you come back next week/month/whenever they may have it if you're in luck. March back to your car which has been dinted by the cars on each side because the parking spaces are so narrow.

2) Go online, find the cheapest price and the quickest delivery, pay by credit card and open a can of beer.

I read that Internet sales are up by 15 this year. Bye bye High Street, you've had your day but all things come to an end one day.

I totally agree. Although I understand some of the sentimentality around Woolies the way they ran their affiliate program left a bit to be desired. Progress and convergence.

[Rocky]

I think that you have to be careful when looking at the closure of Woolies & MFI not to disassociate what happens in the real world with what happens on the internet.

If 35,000 people are made redundant along with their associated support staff and businesses in one day, that is an awful lot of people suddenly claiming benefits and not having the confidence or the money to shop anywhere, the high street or the internet.

If you then factor in all of those newly unemployed bankers and their support staff you might safely expect to see a further fall in consumer confidence in the coming months. Remember that we are, or rather were, a nation of shopkeepers:

"In UK, 11% of all VAT-registered businesses are retailers; with the total number currently at 180,875.UK retail sales were 265 billion in 2007, which is much larger than the combined economies of Denmark and Portugal. The Retail sales of the country account for 1/5 of its total economy. The retail sector generates almost 8% of the Gross Domestic Product of the UK. More than a third of consumer spending goes through shops. The Sales over the internet account for less than 4% of total retail sales, despite there being a strong growth in recent years. Over 3.0 million people were employed by the retail industry by at the end of December 2007 which is almost 11% of the total UK workforce."

What is happening to retailers at the moment will undoubtedly lead to a massive shakeout of affiliate programs and the affiliates that depend on them. We shouldn't imagine that the closure of a business like Woolies is going to be anything but a disaster for retail sales for a long time to come, and retailers will undoubtedly pare back anything that isn't revenue positive over the short term.

My feeling is that Woolies might just turn out to be the UK Government's Lehman Brothers - with hindsight it's the business they wish they had saved - because the ripple effects of allowing it to go bust were very much under-estimated when it happened.

[geordiboyo]

Dragons Den, Theo Paphitis is a potential bidder for Woolworths. He has done it with Ryman and La Senza can this dragon save the huge brand?

BBC NEWS | Business | Dragon 'may bid for Woolworths'

Mark