Yesterday Amazon announced it's Q4 2012 financial results and what a good quarter it has been.
Amazon reported nett sales for Q4 of $21.27 billion, an increase of 22% on Q4 of 2011. Its full year results were $61.09 billion for 2012 compared to $48.08 billion for 2011, a rise of 27%.
Amazon reported a $854 million unfavorable impact from foreign exchange rates, ignoring this charge, amazons nett sales grew by a staggering 29%.
Amazon's investor release can be found at:
http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle&ID=1779040&highlight=
With results like this, the question has to be asked, is there a future for the high street shops?
In the UK we have already had the likes of HMV and Jessops closing down, who will be next?
I think the High Street is changing, and needs to change.
ReplyDeleteWe still need it for day to day stuff, things we consume on a regular basis.
It's still nice to touch what you buy for expensive things, like fancy clothes and luxury items.
Where the biggest changes are happening are in the middle - DVDs, CDs, to some extent basic clothes. Here it's cheaper and more convenient to shop online, and people will continue to do so.
Generally speaking, if something's going to happen, there's not much point trying to stop it. You have to adapt to take advantage of it. For example making sure that online businesses pay tax in the country where the goods are purchased.
The other thing to bear in mind is how awfully inefficient retailing is. We pay a huge markup for the inconvenience of shopping in real life.
Based on the principle that people pay the cheapest price for goods, I think that is probably true.
DeleteHowever even for regular day to day things, like food, online sales increased by a far greater percentage than in-store sales increased. This would tend to suggest that, in the future, perhaps even the traditional 'weekly shop' will vanish. By that reasonning the demand for supermarkets in their current 'mega shop' form will vanish, replaced by 'metro' or 'local' stores for top-up shopping.
It is interesting that you say 'make sure online businesses pay tax...' do you believe large high street chains pay 'their fair share' of tax in the UK?
There have long been allegations that they themselves set up artificial financial structures to minimise tax exposure, BHS, Tesco to name a couple.
It's becoming clear that small businesses are at a real disadvantage when it comes to tax avoidance. I think they are the ones who will suffer most.
DeleteBut we've got to stop being sentimental. Shops need to be either essential, or exceptional. They can't assume people will just turn up and buy off them.
Have you ever tried to buy a last min bird table on the high street? It's not an easy task.
ReplyDeleteCan't say I have
DeleteApparently if Mr Osbourne asks nicely, and makes them coffee, Amazon executives may decide to pay some tax next year.
ReplyDelete