House of Fraser is to close more than half its stores – including its flagship store in London’s Oxford Street. Poundworld and Maplin are in receivership. Mothercare is restructuring. And many well-known names still present pepper their reports and trading statements with cautionary tales on how their results are being impacted by internet shopping.
Fashion chain New Look is the latest to announce a range of price cuts to help stave off disaster. With nearly 600 shops in the UK, it has already had to enter into an arrangement to help restructure its debts and with sales falling both in store and on line, urgent action is clearly needed. It seems that the way in which we now buy a whole range of items is threatening traditional retailers like never before.
Otherwise there has been little of note for investors to get their teeth into, despite the optimistic noises coming out of the US/North Korea summit and the rather less optimistic outcome of the recent G7 meeting. The inflation numbers we saw recently suggested the upward pressure on prices has abated, though that did little for the pound which has remained unloved.
Amongst the other figures published recently were those on jobs, where it appears that wage rises in this country are less robust, despite high employment. Meanwhile, the Brexit talks grind on and uncertainty builds over whether the House of Commons will reverse the amendments to the leaving bill introduced by the Lords. Fortunately, the very international nature of our leading stock market index means that these concerns have not been translated into profit taking and shares continue to remain close to their all-time high.
With the Football World Cup approaching fast and summer holidays just over the horizon, perhaps investors will have other things on their minds. But one cannot but help wonder just what the high streets of our towns and cities might look like in a few years’ time. Even though big picture issues remain the dominant influence on investor sentiment and behaviour, such subtle changes as the drift towards on-line shopping can upset a whole raft of business models.