Retailer greed or corporate idiocy?

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Why does Carphone Warehouse need 3 outlets in Leeds City Centre, each of them 1 street away from the other? And why are there 3 Orange shops within 30" walk from each other? I can understand if a company gets hold of a store in a more prominent location than their other stores they'd want to rent it as soon as possible, but why not close down one of their other outlets and move the staff over to the new one? I've never seen any of those stores anywhere near full, so my guess is that their main function is to act like a walk-in billboards that each cost a bucketful of £50s in rent, probably close to £100k in staff salaries, and a lot of prime real-estate that could've been put to better use by a company with something more interesting to sell.

It's not just mobile phone retailers either, although it does seem to be particularly virulent with them, since each of the other major operators also has more than one store in close proximity to each other (at least in most places that I've been to in the UK). But what's doing my head in is that at the end of every year every major retailer in the country reports lower profits than they'd predicted and all the analysts forecast doom and gloom for the high street as online and mail/phone-order businesses eat away at their customer base like a cancer. Does it never occur to these people that their own incompetence is what's running them into the mire? Though of course it's not incompetence, it's the plague of disinterest that pervades corporate culture today, with everyone so dissociated from the day-to-day running of the companies they work for, so lacking in company loyalty and so unconcerned about helping the customer that their careers consist solely of concoting numbers that illustrate how well they are performing to their equally-disinterested superiors. No store manager in an Orange shop would point out the idiocy of running a store 1 street away from another Orange shop for fear that it's HIS store that'll end up being shut down if anyone listens; though of course no area manager would close down any of his stores as long as they're making a sliver-thin margin of profit, because having more stores in his area makes him seem more important to corporate HQ, and saves his area from being subordinated into some other area manager's jurisdiction; and no corporate executive will ever bother to go down into the streets to see how ridiculously close to each other his stores are and how his subordinates have been pulling the wool over his eyes in order to cover their behinds, so they'll never know how much they could've increased their profit margins by reducing the overheads of operating multiple stores. At least, not until the whole company's in financial trouble and someone discovers this idiocy and takes them to task for it, at which point they can raise their hands high and say "not my fault! my subordinates have failed me!"

Of course I don't have a solution to all this, the only purpose of this post was to rant. Discuss or ignore as you like.
 
Doesn't Carphone warhouse operate as a Franchise pretty much in the same way that Mcd's, Starbucks & Subway operate ?
 
dont think so... but i think they just bought the link so they'll be CPW's too if not already :p

Although I do have to agree all high streets are just clones of each other these days... think theres more in manchester town centre than cash points :o
 
kibblerok said:
dont think so... but i think they just bought the link so they'll be CPW's too if not already :p
Great, so there'll be five of them in Leeds now, 2 of them literally 10m away from each other!!
Same happened when that well-known videogame retail chain which might be a competitor so I won't name them bought that other well-known blahblahblah: there's now two of there stores in every city I visit, because they never bothered closing up the outlets they acquired when they bought up their competitor. They're pretty much competing with themselves.
 
DB_SamX said:
Ah, Southend, that may explain it. :p


The only 1 in Southampton closed over a year ago. \o/

What about the one in West Quay..or the one down on West Quay retail park, or the one on Shirley high-street? There's still far too many of the blighters!

I've also noticed the multiple branch of a particular chain on the high-street and always wondered the sense in it all. I can understand that the more stores they have the more likely they dominate the high-street and get a higher number of sales, but like you say..running costs must be huge for these stores so surely they can't be making enough money compared to one larger store.

Andy
 
Reading has at least 6 subways and 3 stores of a computer game competitor in the town centre. Ridiculous indeed.

I believe the OP pretty much sums up why it happens.
 
eriedor said:
Reading has at least 6 subways.

Now Subway is one of those stores which is actually a franchise so you only have all those franchise-holders to blame for the large number of stores.
 
Round the corner from our house is two off licenses, "The Local". Opposite each other. That's right, one is directly across the road from the other. I honestly could not believe it when I seen it.

But the OP has hit the nail on the head with his analysis.
 
One of the only music shops to stock DECENT classical istruments was closed down because it was bought out by ANOTHER subway :mad:

And within 50m of eachother there are TWO computergames competitors stores, although this isn't so bad as the managers of both stores collaborated so that they'd have different stock but more of it. So it's not just the same thing for each store and it means that everything is always in stock.

(except for wii's but I don't anywhere in the UK has those :( )
 
Excluding franchises, the main purpose of big companies doing this is to eliminate competition, that includes your small business community, assuming it exists in your area.

The public are to blame for this because we buy from them and make them powerful, these companies don't mind inefficient stores making losses because other stores make up for that. They also try various tactics to destroy local small businesses and once they are gone, the big companies charge triple the prices because of the position they are in.

Two examples of using this are; Tesco and Comet.
 
in lakeside there are 2 major game retailers (exact same ones) 25 seconds walk from each other. one is just on the bottom floor!
 
zain said:
Excluding franchises, the main purpose of big companies doing this is to eliminate competition, that includes your small business community, assuming it exists in your area.

The public are to blame for this because we buy from them and make them powerful, these companies don't mind inefficient stores making losses because other stores make up for that. They also try various tactics to destroy local small businesses and once they are gone, the big companies charge triple the prices because of the position they are in.

Two examples of using this are; Tesco and Comet.
In fields where the market is dominated by a handful of big companies, then yes, that's a valid strategy. For example, the music business, where there are two large chains and a small handful of independents. Ditto for businesses where space is at a premium, such as coffeehouses: if there are two Starbucks and a single Nero store in the same street, the Nero store will fill up first, luring more punters to the Starbucks.

But in the mobile phone business, where the practice is most common, this doesn't work! There are four major operators (five if you count 3), and then there's other places like CPW where you can buy contracts for all networks. Orange can't hope to muscle-out their competition simply by opening more stores: even if they have a higher visibility than, say, O2 by virtue of having more stores, you'll still be able to get an O2 contract through CPW! So, in fact, having more stores amounts to the equivalent of an incredibly expensive PR campaign - it gets them more visibility through a higher presence on the high street, but it doesn't eliminate the competition, and it's far cheaper to buy a few billboards to achieve that purpose, wouldn't you say?

The other glaring example is the games business, where that-chain-we-cannot-name has actually bought out their main competitor, so they have a high-street monopoly in most shopping districts across the country (as far as specialised games retailers go at least, since the music stores also stock games usually, albeit in smaller quantities). Nevertheless they still insist in having 2 stores in each town, because they never bothered to close down the stores that they bought when they bought out the other retail chain. What makes it most ridiculous is that, due to the intense competition between these two rivals, many of their stores are ridiculously close to each other - I remember seeing 2 of them in the same (small) shopping centre in Cambridge!
 
manveruppd said:
In fields where the market is dominated by a handful of big companies, then yes, that's a valid strategy. For example, the music business, where there are two large chains and a small handful of independents. Ditto for businesses where space is at a premium, such as coffeehouses: if there are two Starbucks and a single Nero store in the same street, the Nero store will fill up first, luring more punters to the Starbucks.

But in the mobile phone business, where the practice is most common, this doesn't work! There are four major operators (five if you count 3), and then there's other places like CPW where you can buy contracts for all networks. Orange can't hope to muscle-out their competition simply by opening more stores: even if they have a higher visibility than, say, O2 by virtue of having more stores, you'll still be able to get an O2 contract through CPW! So, in fact, having more stores amounts to the equivalent of an incredibly expensive PR campaign - it gets them more visibility through a higher presence on the high street, but it doesn't eliminate the competition, and it's far cheaper to buy a few billboards to achieve that purpose, wouldn't you say?

The other glaring example is the games business, where that-chain-we-cannot-name has actually bought out their main competitor, so they have a high-street monopoly in most shopping districts across the country (as far as specialised games retailers go at least, since the music stores also stock games usually, albeit in smaller quantities). Nevertheless they still insist in having 2 stores in each town, because they never bothered to close down the stores that they bought when they bought out the other retail chain. What makes it most ridiculous is that, due to the intense competition between these two rivals, many of their stores are ridiculously close to each other - I remember seeing 2 of them in the same (small) shopping centre in Cambridge!

Aaah me and my vagueness, of course it does not apply to all industries. Though there are faults from Mobile Phone companies an up to date example being prices, they are being forced to cut them.

I am a bit lost on the 2nd point though! One thing I love about big companies going against each other is theres only one benefit: the consumer (us :D)
 
just a minor correction
CPW don't do vodaphone contracts anymore, so its wrong to say that they can get you contracts with all the major providers
 
VeNT said:
just a minor correction
CPW don't do vodaphone contracts anymore, so its wrong to say that they can get you contracts with all the major providers
Didn't know that! How come? Bust-up with Vodaphone or pay-up from their competitors?
 
eriedor said:
Reading has at least 6 subways and 3 stores of a computer game competitor in the town centre. Ridiculous indeed.

I believe the OP pretty much sums up why it happens.

If i stand in picadilly gardens in manchester there are 7 subways within 5 mins walk, and if you stand in the right place you can see 4 of these at the same time (just)

If you include my walk in from uni to town i pass a total of 10 subways! You can quite literally always see one in both directions.

There are two black and pink music stores within 100 meters of each other on market street, as well as three of the same travel agents. There are two Ann summers within about 50 meters (one just for underwear though), two boots stores, loads of mobile phone shops, two JJB sports almost opposite each other and an addidas shop under one of them. Its ridiculous. I actively avoid shops that do this, they are the reason that the pound shops keep closing!
 
Using large numbers of long words cannot mask your lack of knowledge on the subject of retailing. Put simply, a large chain will not open an additional store unless it's pretty sure the returns from doing so will prove advantageous.
 
I think it was Oxford Street in London I walked down last year and there are at least 4 each of shops devoted to Carphone Warehouse, Orange, Link etc.
No doubt some shandy drinking southerner will be able to tell a more accurate story.
 
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