UK loses 83% of department stores since BHS collapsed

I used to love chapters in Canada as somewhere you could go to sit and browse books casually in comfy chairs, and just loiter. I spent a ton on books back then. Now those chairs and tables are almost entirely gone. It doesn’t make sense, they can’t compete on convenience or selection, so why toss out the in-person shopping experience advantage?

> The demise of the department store is largely due to them squandering their biggest advantage which was customer service and customer experience.

And inventory. And different inventory.

It used to be that each department store had different fashions. As such, there was a difference between each chain. However, once they all started selling the same Chinese crap, there was no differentiation so why buy ono anything other than price.

And department stores used to have inventory and more than one of each size. How many times do you need to go into a department store and find that they don't have your size before you quit going in at all?

The fundamental trouble seems to be that market has collectively decided that the cost of good customer service is a value consumers are willing to lose in exchange for cheaper goods.

The endless consolidation of profitable businesses into ever larger corporations transforms places of business into inhuman constructs where comfort, care, and other aspects of good service get buried by unexpectedly perverse incentives: Avoiding litigation Maximize profit Higher costs of tracking employee misconduct leading to ineffective internal accountability. Once you have thousands of people acting as customer service agents, no amount of culture or rules or management can cure the natural distribution of human populations. People will find ways to do just above the minimum required effort to appear satisfactory.

Employee productivity becomes subject to pareto distributions with a tiny number of high quality workers and a majority being merely average. Throw in the modern "gig" culture where nobody stays for longer than 3 or 4 years, and good customer service becomes very expensive and vanishingly rare.

Capitalism, as she is wrote, contains fundamental structural incentives that keeps accountability to the consumer priced out. Society has imposed the burden of product safety (and other tangible effects) through legal means, but social niceties and good service are harder to legislate. Rebuilding capitalism into something far more human friendly will be one of the grand philosophical and economic challenges in the near future.

>If there is any hope for the high street it's in focusing on the customer experience rather than trying to compete on price.

Which the ma & pa stores that are taking smaller units provide - the problem is the big units that the department stores vacate; only supermarkets & discounters want them.

I think that the big hope for the highstreet is the coming correction in commercial property - eventually rents must fall, when they do the highstreet should repopulate.

I have recently moved from the United States to Sweden and was surprised that basically every store has great service. It was quite refreshing to go to a tech/PC hardware store and have the person behind the counter not only know what I was talking about, but actually be experts in the products they sold. So many times in the past I would go to BestBuy just to see if they had what I needed (I assumed the experience would be negative). When I got there, I'd have trouble finding what I needed, assumed correctly that the employee would have no idea what I was talking about, then I would find that they didn't have it or it was priced higher than the convenience was worth of having it right now. To be clear, I don't blame the kid trying to help because they almost always genuinely wanted to help, but it was BestBuy. Something they are doing doesn't bring me back.

I have no idea how well these stores in Sweden are doing, but it reminds me of the old experiences at a Sears where when you wanted a power tool, the rep behind the counter could give informed recommendations based on what it was you were trying to do. I suspect it has a lot to do with Sweden paying these folks a living wage. I scoff at the idea of going back to working retail in the US, but here it seems like there is actual expertise and more career options for it.

So much to say, I'm surprised how much the service aspect of the experience in stores matters and actually see myself leveraging in store service more in the future since Amazon isn't as convenient as it is in the US. Actually, I'd argue this may be preferable since it seems common that the employees can actually help me choose instead of wading through hundreds of fake online reviews.

It also went too far though as well.

I remember I stopped shopping at Circuit City because you couldn't walk 10 feet without someone asking you if you need help finding something. If you wanted to browse the CDs you would have to tell 3 people you didn't need any help and were just browsing. Walk to a different section, "no thanks I don't need help, just looking."

It was an utterly ridiculous shopping experience.

I found your answer very insightful. Did you research this professionally?

> UK towns are historically car unfriendly

What’s the alternative? Most town centres were planned in previous centuries. Councils can’t save the high street by tearing down the medieval streets and rebuilding them so they’re more like US cities. Besides, most towns have park and ride for precisely this reason.

London councils, with their predatory parking restrictions are helping to stifle the high street further.

> Local council planners mostly caused this, and the internet finished them off. The irony that every local council in England talks about 'saving the high street', without the self awareness that they caused the problem, and are still causing it.

Many town centres are now full of cafes and restaurants. I think with a few "quirky" shops mixed in it can work out quite well. Ie going to the town centre is something you do at the weekend to enjoy a few hours out the house.

The US went through exactly the same phase after WW2: suburbanization, increase in car transport led to the death of single-location department stores which were concentrated in the city centre.

This didn't occur in the UK because of better public transport, and less suburbanization (marginally).

All of the stuff you say is correct but local councils, generally, didn't approve retail parks...they just couldn't find a good enough reason to say no or they were built just outside the council area. And now councils are reaping what they sowed because they stopped houses going up in cities...now the locus of money has moved to the suburbs as new houses get built (and, somewhat unbelievably, councils made this worse but shutting down car parking on high streets during Covid...the economic mismanagement is staggering...but all due to their greed around house prices and trying to restrict cars to boost house prices in the areas local councillors live).

For a roadmap, look at the US after WW2 (we are somewhere in the 60s when independent department stores started failing en masse). We had department store chains built up in inner city areas so the collapse is, if anything, more violent. Most high street areas/shopping centres will fold, Debenhams was an anchor tenant in so many shopping centres. Tier 2 cities/towns high streets will be literally deserted in a few years. Most retailers that anchor shopping centres will fail (the big one that hasn't failed already is M&S, even Sainsbury's is vulnerable because I believe they anchor some small shopping centres), and you will see new chains thrive as retail parks spring up. I live near a town with under 10k people, they have put a retail park there with 4 stores, and before they all opened they added another two units. Aldi, Home Bargains, Food Warehouse...all fast growing chains offering products that undercut all the old economy shops.

It is really great to see. A lot of these chains are offering real value. In the town I mentioned, it was only Tesco who was known for gouging in locations where they were the only shop in town. Now they are being overrun: Tesco, Sainsburys, Aldi, Home Bargains, Food Warehouse.

When I was young the nearest town (my parents lived outside in a village) had a bustling high street and everything was in the town centre. You could go there and spend hours shopping in different places without issue. There were supermarkets, department stores (yes multiple), bakeries, butchers, toy stores, etc. This is a town with a population of 20,000, but the wider area it covers is easily 3-5x that. It was a small town though, so if you wanted something else you needed to go to the city (1.5 hours drive away).

20 years ago Tesco opened a new store outside the town centre, it's still quite small compared to some stores though, with very little non-food. A McDonalds opened outside the town on a main road, which was the final nail in the coffin for Wimpy. Other than that, not much has really changed. The town has expanded a lot, with lots of new housing being built (the population has gone up by around 25%) but no new retail parks have appeared.

Today the town center is pretty much dead though. This started maybe a decade ago, a Starbucks opened and within a couple of years it shutdown. A few years later banks started closing or relocating to smaller units. This past year even charity shops closed down or relocated to industrial units outside the town centre. Business owners say the problem is the rent is too high. I'm not sure it's just that, but yeah, in the UK the high street seems dead today...

The problem with many town centres though is that they were never designed to accommodate a large volume of cars. Placating car drivers has the effect of alienating pedestrians so you lose either way.

Fellow Brit here and I mostly agree with this assessment.

> The irony that every local council in England talks about 'saving the high street', without the self awareness that they caused the problem, and are still causing it.

I'm not one to stick up for local councils (pretty much ever) but I think the writing was on the wall regardless of what they did. You're right that they started the demise of the town centre with everything you've outlined, but frankly the internet was the tidal wave that shortly followed and it really wouldn't have cared too much what local councils had done or not done. This shakeup was going to happen one way or another anyway.

As we progress forwards, everything trends towards being commoditised. We automate, scale up, and what was once specialised is now general.

The supply and retailing of goods used to be a much more specialised endeavour. Just owning a business (eg. small highstreet shop) which sourced goods from disparate suppliers and made those goods available for you to browse and purchase used to be a more specialist/niche pursuit. That's no longer the case. Almost all retail has been fully commoditised now, and retailers (particularly small shops in town centres) can no longer survive if they just think of themselves as "retailers". These businesses need to think "what is it that we provide to customers, _other_ than our physical goods?" And if you're in a competitive area (eg. book sales) - is the value that you're adding, on top of the baseline service of "commodity retail of books" enough to differentiate you from your competitors, both online and off?

The mistake that some of the larger retailers have made, is that they've seen the efficiency benefits and economies of scale, and the commoditisation of their industry, and taken advantage of them aggressively, without realising that by doing so, they were slowly eating their own business model.

I imagine that, in the panic of trying to compete with online retailers, a lot of big department stores have focussed too much on cutting costs and streamlining (in order to offset their rapidly falling profits) and not enough on actually changing/updating their model to add value to the customer experience in ways that online retailers cannot.

A business like John Lewis needs to decide if they're in the commodities business or the customer experience business. If the former, then fine, outsource away, mass produce, cut your staff training costs, but then all you have is your baseline retail, which means you have to compete with EVERYONE else that sells the same things, and a chunk of those people just sell them online, without the overhead of physical stores.

If you're in the "customer experience" business (which arguably any business that has a physical presence is to some degree), then you need to be very careful about the things you choose to streamline and cut costs on. Staff training and retention needs more focus. Additional value-add services need more focus (and not just bullshit low hanging fruit psuedo value-add, like "extended warranties"). The design of the physical environment itself needs more focus.

There is a way to get people back into town centres. It does (in the UK at least) require some focus on infrastructure but it also needs the businesses that populate those town centres to become very clear about what their priorities need to be in order to attract customers and to provide something that their online counterparts can't.

As a side-note, Apple stores have done particularly well over the years partly because the experience you get in them (and it's admittedly not always good) is totally unique. You literally cannot go to any other place on earth and get the same experience and service that you get from an Apple store. Now it's a bit of an unfair comparison to small high-street retailers - Apple have an advantage because they have such a tight control over their retail experience and their service/repair options (don't want to get into that debate) but the fact remains that Apple stores consistently still draw massive footfall because there are very specific and unique reasons for customers to go there. And they invest, heavily, in the training of their retail staff, the physical environment, and provide high value in-store services that are demonstrably worth the trip for their customers.

An alternative way of phrasing your first point is to say supermarkets are turning into department stores.

There's that and there's the notion that in a lot of countries, struggling department store chains have ended up in the hands of hedge fund investors, who promptly started squeezing them for money. It's a parasitic form of company ownership where the share holders enrich themselves and then eventually ditch what little remains of the companies they get involved with. One of the financial constructions you see a lot when that happens is the hedge-fund selling off the buildings, funneling the gains to shareholders, and leasing back the building. This raises cost which they then compensate for through "restructuring" rounds (i.e. layoffs). Once all value is squeezed out, they sell for a small price or bankruptcy is triggered. Everybody looses, except the hedge fund investors. Once companies get to the stage hedge fund investors get involved, the writing is on the wall. I think of them more as a symptom then a cause. Weakness through eroded business and failure to adapt come first.

More reasons:

* To enjoy free AC on hot summer days.

In southern European countries were summers are very hot, humid and electricity is expensive it's nice to let someone else pay the bill.

Still, most department stores on western countries are being slowly closed since they aren't profitable. There's a mix of reasons like online websites (Amazon, Aliexpress), smaller middle class... They call this the retail apocalypse [0].

[0] https://en.wikipedia.org/wiki/Retail_apocalypse

* To go to toilets when traveling

Same here, with the exception of John Lewis, who are just plain great. Good prices, great selection, and a worker co-op to boot!

Another millennial here, shsrig some memories from way, way back in my youth:

I remember toast in the cafe at the top of Beatties, and looking out the window to the streets below.

Going in to Debenhams to get an original chunky Xbox.

It's weird that I have memories from my early teenage years of the high street (had to go through it from secondary school to the bus stop), and there's no new memories as it's all vape shops, poundlands or franchise cafes now. :/

I've lived in the UK 21 years, and only been in one once. It's decline was long and slow.

They were more commonly known at the end as BHS (unless you happened to live in the center of Edinburgh where the large British Home Stores shown in the article dominates Princes Street). They were a very mid-tier department store, better than say Woolworths but a lot worse than John Lewis. It's not especially surprising that they went bust, but it was not helped when the last owner infamously flogged off the assets, loaded the stores with debt, then awarded his wife an enormous one-off dividend.

Edit: The Philip Green dividend debacle. I forgot that the cheque was not only enormous, but was tax free because his wife resides in Monaco. https://www.theguardian.com/business/2005/oct/21/executivesa... Many of the statements in that article haven't aged well.

> 50+ years ago people dressed like their parents

huh? I think teenagers in the 70s would not agree..

Many department stores catered to the middle market, which post-war become very large.

But people now seem to want either very cheap or very fancy. Hence, in the UK, the death of stores like BHS, while, for example, Primark (bricks-and-mortar cheap fashion) and M&S food (fancy groceries) have thrived.

Sorry, but I remember 1971, 50 years ago. People in the UK most certainly didn't dress anything like their parents. My mum didn't wear hot pants and my dad didn't wear yellow and green striped flares like me! I would say now parents dress more like their adult children.

Covid didn't destroy local businesses - ham-fisted (or maybe even intentionally malicious) policies destroyed local business. Considering Bezos' regular sociopathic behavior, I wouldn't even be surprised if it came out that Amazon lobbied various local governments to severely restrict small businesses under the guise of public health during covid. It's what Bezos does in the space industry and he even owns a media outlet (Washington Post) to push his agendas.

> Covid destroyed

Not covid. The response to covid, which was a choice with tradeoffs.

The decision (taken before millennials were born) to offshore as much work as possible was taken to undercut the wages and conditions of UK (and more generally, western) workers. The quarrel shouldn't be with China though - our politicians chose this because it made the wealthy wealthier.

Quite the opposite in the town near where I live in Fife - the town centre has boomed since Covid. I suspect people popping out to shop during the day rather than commuting into Edinburgh.

Cannot confirm. My local farmer's market in London is stronger than ever, and two new ones opened up at walking distance from my house in the last year.

Working from home and allowing people to sneak out of work on a Wednesday noon to buy groceries was a boon for farmers' markets.

Places with cheap products and places with good products are striving. COVID is accelerating the death of shops that sell bad products at high prices.

This decline started decades ago.

In the 21 years I've lived in the UK, dozens of large chains have shut down, including several large, iconic department store chains.

The reality is the shift online have been going on for more 20 years at this point, and it's not at all just Amazon, and to the extent Covid had an effect it was to speed things along a ton little bit.

the department stores have been losing business for 10 years now

covid is just finishing them off

Nah most of it is people buying things online and the failure of these older establishments to successfully transition.

They lose revenue and the stores start to look dated and because they have to pay rent they cant compete with a big warehouse. Eventually everything looks dated and costs more so people stop going.

John Lewis is great, I buy from there over Amazon wherever possible. It's a worker co-op too, which is nice.

Debenhams used to feel pretty sad and run down even when the shop was pretty new - I think I only ever visited one of their shops once and that was walking through to get to the car park.

The irony is that those merchants were the Amazon of their day, bringing a wider range of choices and quality to cities they served.

From watching the Dead Mall series on YouTube [0], this has been going on for a long time, too, "even" in malls (i.e. where rents should be lower, and the audience generally more willing to actually buy items than in a general downtown type area).

[0] https://www.youtube.com/playlist?list=PLNz4Un92pGNxQ9vNgmnCx...

I had the same experience ordering online from Uniqlo. I’d say their jeans sizes have an inch variation in either direction, depending on who sewed it.

Also, the vast majority of websites for online clothing stores are complete garbage, slow, messes, that feel actively user hostile.

From what I witnessed from coworkers in the US, it was very common to order 5 variations of the same thing, then send 4 back.

"Free shipping/free returns" seems like an environmental disaster, but I think it's becoming the norm.

I remember Goldbergs from my time as a student in Edinburgh in the 1980s - never went in though.

The shop had a rather weird location which was apparently due to some planned roads at Tollcross that never actually happened:

https://www.edinburghnews.scotsman.com/whats-on/arts-and-ent...

It might have been the horrific plans for an inner ring road in Edinburgh - which I can say I'm very happy never got built:

https://www.gcat.org.uk/blog/?p=682

Edit: I never understood what the attraction of Jenners was supposed to be.

I wouldn't expect Brexit to make any difference to department store sales.

Yes, bloody Brexit. Yesterday I cut my finger while slicing a British tomato. Probably wouldn’t have happened if it was a Spanish tomato. Brexit is a menace. I mean, never mind that BHS went out of business years before the referendum. I’m sure Brexiteers were behind it somehow.

The department stores were on life support long before Brexit. It's part of the general decline of the UK High Street but also failure of the stores to stay relevant.

I suppose the collapse of US department stores Sears and JCPenny were also due to brexit?

BHS went broke before the referendum, and Debenhams were in trouble for years before it

the department store business model simply can't compete with online

A big store that sells everything.

https://en.wikipedia.org/wiki/Department_store

It’s a single store, which has loads of different departments in it - perfumes, clothes, electricals, homeware etc.