pexels-photo-285172It could be boom-time for manufacturers of steel shutters and wooden hoardings – because the high street is gradually closing for business. ‘This town is coming like a ghost town’, as The Specials sang back in the 70s, even though folk still went to shops in those days, while trying to park their Hillman Avengers.

It seems the latest story from analysts is that the Internet is the place to go if you want to do your shopping. It’s open 24/7, nobody pesters you about needing help (nobody real, anyway) and you don’t have to remember where you parked the car.

Christmas trading figures suggest that the pressure is on for bricks-and-mortar retailers whose festive trading figures, set to be released this month, will look more deflated than a Christmas-Day balloon.

At online-only fashion retailer Boohoo, sales growth in the four months to the end of the year is expected to total nearly 40%. And analysts are predicting a rise of over 25% for Asos, as consumers shun the high street like a piece of toffee without a wrapper.

Our high-street stores continued in kerching-free mode during the holidays, with sales dropping 7% on Boxing Day and 6% in the two days before Christmas. According to HSBC, shopping malls were the worst affected.

HSBC analysts said, “Online will be the primary driver of like-for-like sales growth. This confirms the structural shift away from high-fixed-cost bricks-and-mortar retailing.”

The festive figures mirror those from right across the retail sector, excluding food, which is tricky to order over the Interweb and is best not left behind the bin, or in it.

Online numbers show an 18% growth last year and 27% in the last two years, accountancy firm BDO has announced, while real shops’ figures fell over both periods.

Retailers such as M&S, Next and Debenhams are seeing rising online sales, but this is devouring their profit margins like those final delicious deep-filled mince pies of the season.

Analysts at Liberum explain, “We have long believed that the move into online for mature retailers comes at the price of paying more to reach customers who are spending less.

“We do not believe that mature domestic retailers such as M&S, Next and Debenhams are doing significantly more than shifting customers from stores to online, but need to pay for both channels to market anyway. Pure-play online retailers such as ASOS and Boohoo are clearly the biggest beneficiaries of this trend.”

So now you know where to invest your cash. No, don’t mention it. It’s no problem.

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Author Chris Painter

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