Britain’s Amazon Obsession Puts Retailers At Breaking Point
The U.K. is leading the way into an online-shopping future, and that has the country’s traditional brick-and-mortar retailers fighting for their lives. With 18 percent of retail sales taking place online in Britain, the stakes are even higher than in the U.S., where the comparable figure is 12 percent — and where department-store owner Bon-Ton Stores Inc. has just become the latest victim of Amazon.com Inc. The shift online has opened U.K. retail to new entrants with low overheads, driven down prices and sucked demand away from stores, while the Brexit-driven drop in the pound has inflated retailers’ sourcing costs. Weak holiday-season sales prompted profit warnings from department-store chain Debenhams Plc, carpet seller Carpetright Plc and childrenswear retailer Mothercare Plc. Reported profits of leading retailers Tesco Plc and Marks & Spencer Group Plc have more than halved in the past three years. Department-store owner BHS failed in 2016. “The fallout we’re seeing now is just the beginning,” independent retail analyst Richard Hyman said by phone. “Our mess is much more spectacular than over in the U.S.” The Economist Intelligence Unit forecasts that U.K. retail sales will fall 0.4 percent in 2018, compared with a 2.4 percent increase in the U.S. Read more at Bloomberg.
