The JEP has made quite a feature of the thoughts of Mr Tony O'Neill the MD of Sandpiper and his belief that the high street will be 25% empty in the next five years, but I mean, really?Yes I know Jersey people love to avoid placing the blame squarely on the main culprits when these problems arise, the very same people they look to for solutions, have you guessed who it is yet? The States of Jersey.
Regaled on a regular basis by tales of Jersey in the 1980's a time when the shops opened from 9am to 9pm throughout the Summer, when it was nigh on impossible to walk down King Street during the day and when turnover in a day was enough to buy a house.
So what happened? The answer is simple Frank Walker listened to his Civil Servants.
Tax has risen from 20% income tax with very generous allowances and 5% social security with next to no Impots and user pays charges were non-existent. Today tax will shortly be 21% with most allowances phased out and no inflation linking for thresholds, social security is 6.5%, GST is 5% (and due to be increased the year after the next election), landing fees, Impots which have been relentlessly increased at more than inflation, virtually every time you are forced to use the government's 'services' there is an additional charge. The regulatory burden is now immense, regulations and undertakings, ITIS, employment laws. The taxes have taken money straight from people's disposable incomes, relentlessly forced up prices and made business a risky and unprofitable venture.
Internet shopping is not the way of the future. Back in the 1980's there were hundreds of mail order catalogues there is very little real difference between these and Ebay/Amazon or any internet site. It quite simply is NOT a better way to shop or shops would have closed when the mail order catalogues were at their height.
The Tourism industry was destroyed by the government; they changed the licensing requirements in too short a space of time to allow hotel operators to adjust to the new standards forcing them to convert to lodging houses or sell out to built accommodation. 2 million people each year would come on holiday spending a year's worth of savings on their two weeks; numbers were still high until the government interfered.
The most amusing thing is that the JEP has a centre page spread telling people to shop online, but then who is going to advertise in the JEP if there are no local businesses to advertise? Talk about shooting yourself in the foot.
Now I do agree with Mr O'Neill that UK chains will not be in Jersey, oh well, what a pity, never mind, good riddance to bad rubbish. Mr O'Neill is not a retailer he is a company MD who would probably not be able to work the floor in one of his own enterprises preferring to sit in a office generating his income off the backs of his slaves (or employees if you prefer).
A proper retailer deals directly with his customers. As long as you are willing to do the work yourself there is a living to be made. Jersey businesses simply need to change their focus, forget selling in Jersey, concentrate on the internet - sell your goods at lower prices in store (and there is no reason why local customers should have to pay the same price as is on Ebay, after all you do not need to post it or pay Ebay fees) and local trade is an additional string to your bow rather than your main focus.
The crunch is coming an awful lot of internet retailers are late paying bills as prices are driven down by all the recent bankruptcies, survive the next couple of years and prices will be higher online than they are in store as business models shift or are put out of business.
Now if the government would stop trying to blame anyone and everyone but themselves for the complete idiocy that they have caused over the past 33 years then we may get something sorted, but I gave up long ago looking to government to solve my problems, I am an adult, I will sort it out all by myself.
That was pretty comprehensive Darius, it is simply rent that is crippling the normal man on the street. This should be sorted before anything else, a weeks wages for a weeks rent cannot be sustainable.
ReplyDeleteRent is high Ian, at least in part, because the payments from Income Support are there to enable these above market rents to be charged.
DeleteRent is also high because there are far too many people employed in Jersey by the government thus artificially inflating demand.
Rent is also high because there are so few families left so every person has to have bedrooms to house their children for half the week. So where a couple with two children might previously have required a two bedroom flat, now they require 2 two bedroom flats.
In my opinion the reason there are so many broken families is because of the high level of government support for single parents, therefore whereas previously staying together was necessary if you wished to be able to provide for your children, now the government will provide each parent with the means to house their children individually.
Let's not pretend that people don't try and maximise the benefits they receive after all.
When you look into it, every problem is caused by government.
Darius,
ReplyDeleteI am interested by your quote "2 million people each year would come on holiday spending a year's worth of savings on their two weeks"
I have no idea if the figure of 2 million is accurate. Seems high to me, I would have thought it was about 1 million, but I'm not here to argue that. I would be interested in your source though.
The point I want to make is that Jersey's tourism heyday was artificially boosted by circumstances that no longer apply and over which Jersey does not have, or ever had, much control. In the heyday, the Sealink ferries were owned by British Rail and employees and their families were given free passage, not only on the boat, but by rail from wherever they lived in the UK to Weymouth. Every day literally hundreds of holidaymakers were deposited on the Albert Pier, at no cost to them. Imagine saying to an employee today "we will fly you and your family to Spain for your holiday, you just pay the hotel". It will never happen again.
So, in that respect, the rise of Jersey as a holiday destination was artificially inflated. Those days of a busy King St are much lamented. But it was artificial business. Nobody had to "win" those customers. They turned up, begging to spend money!
How could we try to recreate those conditions? Disband the airport quango, get rid of all landing fees at Jersey airport, make it a condition of a Jersey airport slot that the landing fees at the other airport are reasonable (to stop the other airport ramping up their fees in response) and operating out of cheaper regional airports. Remove all duty from booze and fags. Need I go on?
Jersey's tourism/retail success was based on a stimulus that nowadays would probably be called anti-competitive. A new similar stimulus needs to be found.
Based on Jersey's tourism figures (as quoted in a JEP article which the owner of La Cappanina provided to a fellow market trader) that is what was stated for the year in question. Sorry I cannot provide an online source. It may not have been that high every year, but that is not to say it was not higher some years.
DeleteI agree Jersey had many benefits and assistance in setting up its tourism industry, but many of those people who came then are still coming now year after year. We had all those 'customers' but the changes implemented by government persuaded them to go elsewhere.
It is a lot easier to keep customers than to get new ones so I agree regaining the seventies would be difficult. Cutting the cost of visiting Jersey would help, as would cutting impots but the infrastructure is just not there any more... i'm not sure it can ever be regained.
Which is why local businesses must take advantage of the current situation and if the tourists don't come here anymore, then local retailers must use the internet to go to the 'tourists'.
Presumably if 25% of commercial premises become empty the rents of all will go down - or is there a different rule of market forces that applies to commercial rather than domestic values? We are told that scarcity creates the domestic prices so what does glut do for Sen Ozouf's grand plans for the Waterfront, Old Town and even Market stalls...?
ReplyDeleteWell the problem here is that residential accommodation is so over-valued as a result of the income support landlord subsidy (it is the high level of income support that raises the price of domestic premises) that many will simply turn the property into accommodation.
ReplyDeleteThen Ozouf's grand plan for the old town (to shut it down and force everyone to rent from the government on the waterfront at ridiculous rents) will be in place.
Several people have made the incorrect comment that it is because the prices are too high in local shops, I am not publishing these comments as they are untrue and misleading. The prices in my shop are lower than online, I will not therefore propagate, encourage and continue such misinformation and self-delusion.
ReplyDeleteFirstly the price on the item is only an 'offer' you have the option to make a 'counter offer' rather than simply accepting the offer. This you cannot do online. Shop smarter not cheaper.
Secondly rather than just searching for price take some time to understand the qualitative difference between similar products - for example you can buy a £20 unbranded watch or you can get the exact same watch with an Armani or DKNY or some similar label for £200 to £300 but the quality of the product is identical. Shop smarter not cheaper and if you want to buy a watch buy a watch brand. You don't buy Seiko Jeans after all... I realise that some of you will just buy it because then everyone else knows you have been ripped off (I mean how much money you have spent) but really shop smarter not cheaper.
I challenge anyone to find the exact same item that I am selling for sale anywhere else at a lower price; several have tried but as with most items on Amazon what they are selling is cheap and inferior quality (anyone bought razors from pound world just £1 buy absolutely useless) and no one has yet succeeded. In the unlikely event simply ask if I will match the price... I will not if it is someone who is about to go bankrupt as many are at the moment. The worst that can happen is I politely decline to accept your counter offer. Shop smarter not cheaper.
In a couple of years time prices online will be higher than in store everywhere as manufacturer's fight back against brand de-valuation so I am in no hurry to sell stock which is only going up in value. As businesses go under and competition lessens then expect to see a more sensible approach to pricing from all online sellers. One that actually allows people to live. Shop smarter not cheaper.
Personally I only buy items which are the antiques and collectables of the future, the majority of Amazon tat is for those who cannot afford anything better. I never buy consumer electronics but then I guess that is why I can sell the things I buy for more later, whilst most people just have to throw them away. Shop smarter not cheaper.
I do understand that for some socially awkward and conversationally inept people the prospect of actually having to talk to a human being and maybe risk being told no is too much to bear so you should continue to shop online.
Darius,
ReplyDeletemine was one of the comments you refused to publish. I made no reference to your shop; we have never spoken nor have I bought anything off you. Understand one thing: I buy online because it is cheaper than buying locally. That's it; nothing to do with politics, progressive taxation or being socially awkward. I buy over the internet because I refuse to line the pockets of greedy local merchants. If that means online shopping spells the ends for local trading then I simply couldn't care less. If shopkeepers in the Island want to survive then they must lower their prices.
Well I can't speak for other retailers
DeleteBut I can assure you that not only are my prices the best on Amazon/eBay, but they are lower on my own website and lower still in my shop. That is the only way it makes sense to me given the additional costs of selling on Amazon/eBay and of posting things out.
I have honestly not found this to be the case, however I do ask for discount and I do only shop in shops where the owner is behind the counter, and I try to get to know them personally.
Your article in tonight's post was very good. For what it's worth, I suspect in the relatively near future (as towns all over the UK fall apart and unemployment in persons without skills begins to rise), the UK government will reconsider how competition law operates.
ReplyDelete'In a couple of years time prices online will be higher than in store everywhere as manufacturer's fight back against brand de-valuation so I am in no hurry to sell stock which is only going up in value'
ReplyDeleteCould you please explain what you mean here? I'm puzzled as to why online prices would become more than the High Street. Surely I could rent a larger space out of town (or in another country) for cheaper and by in more bulk as I'd have access to a much larger market and the space to store it. I would need less staff and less facilities for staff. Surely this all equates to much lower overheads with a bigger potential market so why would I not continue to undercut the High Street? I'm not a retailer :)
Certainly I can.
Delete1) When you apportion costs it is usual to apportion them largely to the main part of the business which at the moment would be the shop. Therefore the shop pays for everything and online is just an extra. If however the business shifts and all costs need to be apportioned to the online part of the business then the shop sales become the 'extra'.
You still require a shop to sell any branded goods as the brand owners do not just sell to anyone and certainly not to someone who only intends to sell online but if the internet sales rather than shops sales must pay the rent then the prices online must go up to cover it.
2) Add to that the increasing number of bankruptcies which is concentrating the supply to fewer and fewer retailers and competition is lessened so prices will rise. Prices are unreaslistically low at the moment as it is and it is only companies desperate to sell which is holding them down.
3) Brands do not want their goods sold at discount prices as it de-values the brand. If you could buy a rolex for £50 would you still want to buy it? Therefore the pressure is upwards.
4) The costs of selling on ebay or Amazon are exceptionally high compared to selling in store (I don't mean overheads I mean the direct costs of the sale) so why would prices be cheaper on those outlets? It makes no economic sense.
"Internet shopping is not the way of the future. Back in the 1980's there were hundreds of mail order catalogues there is very little real difference between these and Ebay/Amazon or any internet site. It quite simply is NOT a better way to shop or shops would have closed when the mail order catalogues were at their height."
ReplyDeleteThere is a vast difference between mail order catalogues and online shopping. To attempt to use the former as evidence of why the latter is "not a better way to shop" is a very misguided logic.
It's a bit like saying oranges don't work well in apple pies, therefore oranges are not a good fruit.
The fact is that shops are going out of business and losing trade as a direct consequence of online shopping, entertainment media retail currently being the biggest example.
Therefore if we return to your orginal argument of mail order catalogues not damaging high street retail, thus being proven to not be a bettter way to shop, we must also accept the visible damage done to retail by online shopping is solid proof of internet retail being a better way to shop.
Well the first point to consider is who shopped by mail order catalogue, which was generally the less well off as their were substantial savings to be made at the expense of the quality shopping experience. Clearly everyone is a lot poorer now than they were a few years ago and so it is hardly surprising that people are looking for ways to save a few pence here and there.
DeleteSecondly, businesses have always gone out of business if they have failed to keep up with the constantly changing nature of business or have allowed bureaucratic excess to increase unchecked.
What the internet has done is put pay to mail-order catalogues and therefore it is entirely sensible to see internet shopping as the substitute for mail order catalogues.
Online shopping despite having been around for 20 years or so is still only 10% of sale in the UK so your argument is not substantiated here.
In certain sectors it may be true that internet shopping is as good as shopping in a shop - this is particularly true of goods where you can be certain exactly what it is you are buying, such as a DVD of a film. The film is not going to change dependent on where you buy it. But take jewellery as an example, each individual item is different from the next. You cannot therefore be sure what you are getting without seeing it. Similarly clothes, you cannot be certain what you are buying without seeing the individual item.
In fact we can clearly differentiate between tangible goods (those which have a physical existence) and digital goods (those which are just electro-magnetic patterns) such as films, computer games etc.
So tangible goods will have additional services that are required at the time of purchase (such as having a watch bracelet adjusted to your requirements) this simply cannot be done over the internet, you receive a lower quality service at a higher price when you purchase a watch over the internet compared to coming in store.
Your final point is equally unsustainable, online shopping has been a boon to retail as it allows retailers to supply goods without having to provide the same level of service to their customers and enabling them to reduce the number of shops they maintain.
The success of retail is not measured by how many staff they employ or how many shops they rent but by how much profit they are making. It has forced them to re-examine their practises and make changes.
Take New Look as an example of a chain which has turned itself around to fit the new model outlined above.
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10239638/Online-sales-surge-for-New-Look.html
Online sales surge but they have begun to offer services in their stores and are reducing the number of premises they operate and enjoying great success. You buy online and are then tempted in store with goods at lower than online prices and you can get your nails done at the same time.
The shop offers better prices and additional services whilst online you can browse as you want in your own time and pay full price for the goods.
Shops are only going out of business because they will not adjust to the new normal I have outlined above, and that is bargains are in store not online.
You may also want to look up mail order shopping on wikipedia... who share the view that online shopping is the same thing as mail order shopping.
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