/ Technology

Are high street electrical stores doomed to fail?

The electrical chain Best Buy is closing its UK stores. Home entertainment sales are slumping. Death is knocking on the door of physical formats. Are we seeing the death of high street entertainment and electrical retailers?

It was announced today that all 11 of Best Buy’s UK stores are to close. The chain, a partnership between Carphone Warehouse and US electronics giant Best Buy, launched in 2009.

Its doors are closing just 18 months later.

There are over 800 Best Buys in America, offering everything from TVs and computers to video games and Blu-rays. It hoped to compete, where others are failing, on UK high streets, but it’s lost money ever since it set foot on our shores.

It’s definitely a shame – Best Buy offered much-needed competition in a sector that’s dominated by Dixons Retail (PC World and Currys). But perhaps this is just a sign of things to come? Maybe PC World, Comet and HMV will soon follow?

Home entertainment has been hit hard by the recession, since we’re all cutting down on luxuries. In its Global Home Entertainment market report, Verdict Research found that consumers are spending 21% less on things like music, films and video games than in 2008.

Competing with online sales

The question is whether these are symptoms of a short-term illness or signs of something more serious? Personally, I think we’re seeing the start of an epidemic as electrical stores struggle to keep their sales healthy.

Why buy CDs on the high street when you can buy them cheaper online, or buy digital copies, or even better, stream music for free?

And as far as electronics go – stores like Currys have been feeding off the boom of people upgrading their CRT TVs to flat screen tellies. As this market declines, what have they got to hold on to? 3D TVs? I think not.

Personally, I buy all my electrical and entertainment goods online. It’s cheaper, delivery is usually free and you can get cashback with services like Quidco. In fact, I only recently spent money in an HMV store because my gift card wasn’t accepted on its website.

Bye, bye physical formats

Physical formats are also entering their last hurrah, with reports (albeit shaky) that music studios are planning to turn their backs on CDs and go download-only from next year. In our previous Conversation about the demise of CDs, commenter Smcrae argued that even if he was to buy CDs on the high street, he wouldn’t do so in a store like HMV:

‘When I buy, I do it from good record shops if I can – primarily to support them. The CDs are in the cases on display, and there are lots of players around so you can listen first. A great variety of music, quiet atmosphere, space. I will go out of my way to go there and find things to buy. HMV doesn’t generate the same loyalty – it’s “fast food” retail.’

Smcrae’s got to the heart of the problem. High street stores need to bring the pleasure and excitement back to shopping.

After recently holidaying in Brazil, I was impressed by the technology offered in entertainment stores. TV screens and listening stations were dotted around, but rather than being limited to the store’s music and film selections, barcode scanners would let you scan the boxes to preview any of the films or albums on their shelves.

Electrical and entertainment stores need to bring the advantages of shopping online to the high street if they want to survive. The question is whether they’ve got the guts to innovate, or whether they’ll simply jump ship like Best Buy?

Which of the following places do you buy electricals?

I buy electricals online (42%, 519 Votes)

I buy electricals in department stores (like John Lewis) (25%, 310 Votes)

I buy electricals in high street specialist stores (like Comet or PC World) (22%, 269 Votes)

I buy electricals in supermarkets (11%, 142 Votes)

I don't buy electricals (0%, 5 Votes)

Total Voters: 726

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Comments
Member

I my eyes, high street shopping has been slowly been killed off ever since Councils started to charge for parking even down side streets. That just forced me to shop online. Once you’ve found an online shop, why bother paying to park just to shop in the high street.

And with regard HMV I’m surprised they’re still going. I have always found them to be very expensive and even with a large selection in the stores I’m still not going to pay more for something.

Member
Katharine says:
7 November 2011

The Best Buy store in Bristol is right next door to John Lewis, so I’m not surprised it’s closing. Its car park was always deserted, and there was never anything to tempt you to look inside.

Member

I am generally prepared to pay a bit more and buy electrical goods through shops. It makes it much easier to deal with problems than when buying online. If I do buy from Internet traders I do my best to check feedback on the company, as well as reviews on the items I plan to buy.

I also value being able to see electrical goods before purchase. I always look for poor design and often find it. If goods don’t conform to the description then it is easy to return them, though manufacturers and shops are much better at providing accurate descriptions than they were 20 years ago.

To check that shop prices are reasonable I often go back to the car and look up Internet prices on my laptop if I have not already looked at prices before going shopping.

I recently used Comet’s online order system to order an item that I had seen in shops. I received a call to say that it was ready to collect the following morning, just 12 hours after placing the order and this gave a 5% discount on the store price.

I don’t like the pushy shop assistants that constantly ask if they can help. I have found that the best way to get rid of them is to ask politely if they will turn the piped music down.

Member

Best Buy UK closing down is a shame but I can’t see already established retailers dying off quite yet. It is more likely that Dixons Retail, among others will continue to merge their own stores together so all their products are under one roof whilst reducing costs. It is already rumoured that Best Buy UK will go down this route as they continue to supply gadgets to Carphone Warehouse turning them into more than just a phone shop.

Combine this with an increase in non-food items in grocery stores and unfortunately we will see the decline of specialist shops who won’t be able to compete on prices whislt online stores gain more of the market. I know from personal experience that you can save a lot of money by trying instore and buying online.

Member

I’ve just added a multiple choice poll to this Conversation in order to gage where you guys are buying your electricals and whether we still need specialist high street stores. For me, they’re only good for trying out something before I buy it cheaper online.

Member

I like the option: I don’t buy electricals

Those with steam-powered computers probably don’t have Internet access. 🙂

Member

Well, you never know – they might be given them as gifts, or steal them like the rioters 😉

Member

My answer would be wherever is cheaper, reagrdless of store type.

Member

In other news, electrical goods retailer Kesa has announced plans to sell off its troubled UK-based Comet stores to a private equity firm for just £2: http://www.bbc.co.uk/news/business-15650763

It’s not the end of the retailer, as the buyers have promised to keep it going for at least 18 months. But who knows what will happen after then…

Member

This is sad news. I hope the Comet stores that survive don’t land up in the hands of Dixons Retail.

Member
IrvSwerve says:
12 November 2011

They didn’t only get the business for £2 they also got paid £50 million to take it off the owners hands and also didn’t have to take on the troubled Comet Pension Fund.
Imagine paying someone £50 million just to get out of the Doo-Doo!

Member

I was walking down Tottenham Court Road recently and counted at least three independent electrical outlets that had closed down in the last few months. I buy almost everything online these days except for fresh produce and clothes. It’s a shame, but I find trips to high streets quite depressing these days.

Member

I agree Ben, it can be somewhat depressing. I’ve actually recently taken to online shopping for fresh produce too…!

Member

If I decide to buy an electrical item I research Which recommendations and decide on the make and model. Then it is all about price. If highstreet shops are within approx. £20 (or for small items 10% of the online price) I will buy there for the convenience of taking the item home immediately. Some stores, including my local Comet, will sometimes match online prices if asked.

I will only buy from online stores with good reputations. There are a large number with unhappy customers.

However, some items are only available online. The Canon camcorder M41 seems unavailalble in stores. Even online prices vary between £535 to £800. One online store are proudly offering it for over £1000 but I guess that is an error! I would pay up to £600 if I could see the item and purchase in a store, but it is not available. If popular items are not availalbe in the highstreet then surely these stores will struggle to survive.

Online stores are doing to the large electrical stores what they in turn did to the small family outlets that once traded in every town.

Member
we mo (oap) says:
11 November 2011

I’m 68 & this online shopping is just fantastic. I buy everything online & its brillient. Iv’e said this many times over the last 10 years, going to shops is a mugs game. Sooner, rather than later all shops will close for ever, I mean I sit here in me electric chair with a coffee & cigar pressing a few buttons & hey presto the doorbell rings & ther is me what ever it is I ordered.
The only downside is I buy some things I dont really want, so I just pass em onto
Me kids or grand kids. They all love me

[Hi we mo, we’ve just edited your comment as it was all in capitals. Check out our commenting guidelines for more info. Thanks, mods.]

Member

I would be very much against music going to download only unless it was available in uncompressed form. Even with my snail like broadband a full album would not take that long to download. MP3 was an invention of necessity when we only had dial up and hard drive sizes were measured in Megabytes. High street music stores lack the choice of online stores. I love loud music, both live and, when the neighbours are out, at home; but in store I don’t need someone else’s choice rammed down my ears whilst I am trying to make my choices. I guess the changing of the VAT rules for imports from Jersey may change the balance. Comet has always served me well going back to the early 70s when my first steps into hifi were taken at a very basic Comet warehouse on an industrial estate in Mitcham. Since then they have moved into high street shops and out of town megastores, my guess is that with high rent, rates and fancy displays they stand no chance of competing with an online retailer like Amazon who sell their stuff out of a (probably a very high tech computer picking) warehouse on an industrial estate……. Ironic really

Member

Like Peter, I remember when Comet sold decent quality HiFi separates in the 70s, and the prices were worth the trek out of town. Most people value convenience over quality, so the HiFi sales have moved to the Internet and some specialist stores. Richer Sounds reminds me of the early Comet warehouses and sells some reasonable separates at sensible prices.

Member
moaner says:
12 November 2011

I sort of did both. I purchased my TV on-line but from an independent high street retailer that was too far to visit. I have the usual complaints about the big electronics retailers and gave up asking staff for advice many years ago after being told “facts” that I knew weren’t true as I’d read up on manufacturers own websites, on several occasions. Delivery slots are the only bug bear for me. If it were cheaper or free to pick a slot like the grocery sector offers then I’d be much happier. I don’t like using Royal mail though as I’ve had over £100 of stuff disappear over the last 4 years with the retailers immediately putting the blame on me and obviously implying I had received the goods but didn’t want to pay.

Member

I wonder what will happen to Comet stores now that the company is now in administration.

I have ranted about their overpriced and unnecessary extended warranties in the 80s and 90s and tried to explain the Sale of Goods Act to sales assistants who were not interested, but I will miss Comet. I feel that rival stores are a lot worse.

Member

@Wavechange, Maplin’s will cherry pick a handful of sites and I suspect the rest will just end up being boarded up.

I wonder if anyone will explain what happened to the £50m OpCapita were paid to buy Comet for £2. This is at least the 2nd ( OC had a similair deal for MFI which later went under).

Member

Thanks for reminding me of this Convo Wavechange. Seems I predicted well…

Member

Indeed. I challenge Which? researchers to try to claim their rights under the Sale of Goods Act in stores operated by Dixons Retail or with well-known Internet retailers. I think I can predict the results. 🙂

Member

It appears that Comet are planning a large sale to clear their shops. What would happen if:

1. An item was unsuitable and I wanted a refund.

2. An item was faulty when purchased.

3. An item developed a fault during the guarantee period or within a period when it could be considered to have failed prematurely.

I am interested to know what rights we have when purchasing from a company known to be in administration.

Member

If it anything like the Woolworths everything upto 70% closing down sale, with the 70% about 6 foot tall, yet the only thing I could find at 70% were the greeting cards, I wouldn’t get too excited.

And I read on twitter that one manager said his staff would be getting all the best deals.

Member

@wavechange, 16 and 17 on here seem to answer several of your questions …

Member

Thanks William. I had not seen your message but found the same information on the Comet website. I have saved it as a pdf just in case it disappears.

I feel sorry for those who will be made redundant.

Member

When companies go into administration, the companies that handle their affairs make plenty of money, and whereas creditors may receive nothing. That seems morally wrong.

Member

And in this case, the company that bought Comet for £2, was given a £50m dowry to do so, so I doubt they’ll be going without either. FYI The same company that didn’t do too well with MFI after being given a hansom dowry

Member
Member
Malc.Moore says:
4 February 2013

It seems to me now comet has closed there is very little competition on the High street Curries/PC World now all under Dixon’s group of course the supermarkets&Argos have a little to but virtually no competition is bad news for the consumer.I was very disappointed to see Empire Direct go bust they offered savings and forced some prices down.When ASDA was bought by Walmart i thought customers might gain and pay cheaper as its American but NO still run separate from Walmart they don’t want us Brits paying American prices and the goods we get are usually dated when compared to what the Americans get.We get old TVs; computers;etc;etc at Top prices when compared to America.

Member
Malc.Moore says:
4 February 2013

Why one cannot go on name looking at TVs Finlux one would have thought its made in Finland wrong they have a massive Factory working 3X8hr Shifts in Turkey i was shocked to read about it buying a TV one must do research 1st.

Member
Malc.Moore says:
2 March 2013

With the DIXONS GROUP now owning most of the Electrical Stores i suddenly remembered Britain did have a monopolies commission how on earth did they allow such Dominance of the Electrical Retail Trade? or has the monopolies commission been disbanded?.