The CEO of high street music retailer HMV and Waterstones bookstores has resigned after poor sales over Christmas period, citing increased online competition from Amazon and iTunes. Once sales from new stores are stripped out of HMV’s numbers, sales fell 2.4% compared to the same period in 2004. In an interview Giles said that ‘one of the winners in 2005 was the
Internet’.
It’s good to see that the internet is finally having a real impact on the fortunes of high street stores. For too long they have been able to artificially inflate prices, even sometimes colluding with ‘rivals’ to maintain margins.
It’ll be interesting to see some studies in 2006 on what proportion of household income is spent online. I do almost all of my shopping online and I think about 60% of my expenditure is done online. All of my big ticket items – mortgage, car, loans, credit cards, insurance etc were arranged online. The only things that I buy offline are clothes and food, although I do use Tesco home shopping occasionally. I know I’m a bit of an internet fanatic, but I’m sure that there are a lot of people in the same boat as me.
