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After Blockbuster and Barratts enter Administration within 24 hours of each other, whilst at the same time internet retailers were gearing up for Mega Monday on the 12th of November. And therein lies the reality

2013 has largely been a year to forget for the retail sector. Whilst Administrations are down by approximately 30% on 2012, the past 11 months have seen high profile collapses of HMV, Jessops, Modelzone, Dreams, Internacionale and Republic, to name some of the better known brands.



And yesterday brought the news that Barratts have called in Administrators for the third time in four years, and Blockbuster have appointed Administrators once again, just 8 months after being bought out of administration by the current owners.  The fact that Barratts and Blockbuster have gone under again highlights a number of issues.   It is clear that both businesses are unsustainable. Barratts are suffering from poor brand identity, an inability to shift away from the cut-throat discount markets, and at the same time face high property costs as a result of being in prime locations.   And their internet offer is appalling.



Blockbuster have tried to succeed with second generation technology in a third generation world. They simply cannot compete with ‘on demand’ streaming which is where the market now lies.  Once the dominant force in entertainment viewing, Blockbuster simply missed, and goodness knows how, the sea change in consumers’ tastes and needs.



It’s all about the internet. Fail to adapt, fail to survive. It is no surprise that those retailers doing well in these tough economic times are those with good multi-channel offers, and that has to include strong internet presence.  Blockbuster had the opportunity to dominate this market if only they had tapped into their once huge customer base and produced an E offer that was viable. They didn’t, and the results have been catastrophic.



Sadly I suspect this may spell the death-knell for the Blockbuster brand.  It will leave another hole on the high street and is unlikely to be the last.  Barratts may survive, but if it does it is likely to be with a drastically reduced presence if at all.  With the busiest time of year looming close on the horizon, you can guarantee that there will be more casualties in the New Year once retailers have had time to count their takings and wish that Santa had delivered, to some of them at least, a stronger online presence.



Julian Welch

Director

Barker Storey Matthews

13th November 2013