7 December, 2005

I'm no economist, but...

Something's been puzzling me.  If traditional high street retailers are anticipating another very poor peak season this year, whereas their online rivals seem to be on their way to a record performance, why don't the high street chains seem to be even trying to compete?  Why are CDs and DVDs so much more expensive in, say, Lancaster's branch of HMV than from, say, Amazon?

I can appreciate that the requirement to rent, dress, staff and stock shops will boost prices. I can particularly understand that this will be significant for an individual small, independent shop, but a company the size of HMV has the advantage of bulk buying and its own supply network, so the magnitude of the price difference between HMV and Amazon makes limited apparent sense. An extra pound or so would be reasonable, yet the average price of a mainstream current or back catalogue CD album seems to be around £16-17 in HMV Lancaster and around £10-11 at Amazon. Why even consider buying from HMV?

Wouldn't it be better to make deep discounts (I mean routinely, on all items, not one-off sales of excess stock) and maximise sales at break-even prices, rather than alienate customers and create a section of the population who'd no longer even bother to visit HMV? They might be offering wonderful bargains at this very moment, but I wouldn't know, as I've already been driven away by their usual prices.