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16 January, 2006

Now will you try harder?

It's ungracious to say 'I told you so', but I did.

HMV and its subsidiary Waterstone's have reported the worst peak-season trading figures of any major UK high street retailer so far. HMV lost 9% of its sales in the 10 weeks to 7 January and Waterstone's lost 5%. The chief executive has resigned, citing a 'quantum leap' in online retailing, which he failed to predict. He also admitted underestimating the downloads sector. However, I suspect the latter reason is still missing the point: maybe there has been a partial shift from CDs to mp3s, but even within the CD/DVD sector, HMV simply sets it prices far too high, so is uncompetitive.

Coincidentally, I visited a branch of HMV on Saturday, but wasn't tempted to buy anything. Even the sale prices were little better than Amazon's usual full prices, and the same items as in the HMV sale are also in Amazon's, considerably cheaper again.
I was in Manchester anyway, but ordinarily it'd be reasonable to consider the transport cost of even getting to a high street store, compared to Amazon's free delivery to my doorstep.

See my earlier posting for my proposed solution. In summary: drop all prices, not in a one-off sale but as a permanent price realignment. Compete or close.

Comments

I like browsing record shops, but I agree, most stuff can be found cheaper online. Sometimes I'll browse around for inspiration and then actually buy the CD at home, for example.

Posted by Neil T. at January 16, 2006 02:37 PM
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