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Is Apple to blame for the High Street's struggles?

Ashleigh Allsopp | Feb. 18, 2013
The recent failure of retailers such as HMV, Jessops, Blockbuster, Game, Comet and Play.com, and reports suggesting that 600 shops closed last year, have raised the question about what's to blame for the high street's struggles. Apple on the other hand is seeing huge success. What is Apple doing right? And is its success to blame for the failures of others?

- Is iTunes to blame for the death of HMV?
- Has the iPhone 5 led to the closure of Jessops?
- How can the High Street compete with Internet shopping?
- Apple's retail success: What can competitors learn?
- The future of shopping

The recent failure of UK retailers such as HMV, Jessops, Blockbuster, Game, Comet and Play.com, and reports suggesting that 600 shops closed last year, have raised the question of what's to blame for the high street's struggles, and some are pointing the finger at Apple.

Struggling chain HMV's estimated debt was about £176 million, and has now been bought out by restructuring specialist Hilco. It's not clear exactly where Hilco will take HMV in the future, but it's likely that a bigger online presence or prices that can compete with Amazon and supermarkets will be needed in order to give the chain a hope for long-term survival.

Hilco is also thought to be in negotiations with Jessops' administrators about acquiring the brand. Jessops was forced to close all of its 187 branches in January, leaving 1,500 out of a job. It looks like Jessops might be making an online comeback in the near future, however, with the company's website now displaying a message which reads: "new website launching soon."

Already an online retailer, Play.com has announced that it will become marketplace only from March due to the UK government's closure of a loophole for transactions under £15 from the Channel Islands, which meant the Jersey-based site could sell CDs and DVDs without paying VAT. The added costs mean that the site would be forced to increase its prices, leaving it unable to compete with the likes of Amazon.

In January, rental store Blockbuster placed its UK subsidiaries into administration, and last year, Game entered administration, closing 300 of its retail stores, but managed to report better-than expected revenue over the Christmas period.

In December, electrical retail chain Comet closed its 236 stores after failing to recover after entering administration.

Despite the struggles faced by all of these entertainment and technology retailers, Apple certainly doesn't seem to be having any trouble on the high street, with an average of $1.25 million in revenue made every week from Apple's retail stores in the first quarter of 2013, up 52 per cent from the previous quarter.

Digital downloads are killing physical copies

In June 2012, digital music downloads outsold physical CD and record sales for the first time, and there's no doubt that Apple's iTunes has contributed to the increase in digital format's popularity, therefore playing a part in HMV's decline.

Plus, the lack of an optical drive in Apple's newest Macs means transferring music from CD to iTunes, and ultimately to an iOS device, is becoming more difficult. (An external USB SuperDrive is available to buy from Apple for £65, though).

 

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