The fire at the old headquarters of Littlewoods served as a fitting visual to the slow downturn in the prosperity of department stores and there physical premises. Homebase recently announced the planned closure of 42 stores putting around 1,500 jobs at risk. This comes amid a climate where Marks and Spencer (whose share price has dropped 6% in the last year) and House of Fraser have also been forced into store closures and can be placed within a broader picture of the closing of British Home Stores and Woolworths.
Their recession is predominantly down to the changing of consumer habits and its impact goes well beyond the financial stability of the department store to affect whole town centres. Architects have indeed been inspired by the pulling power of department stores in their designing of shopping centres – John Lewis is the linchpin in Birmingham’s Bull Ring and Manchester’s Trafford centre. These stores bring an increase in footfall that attracts local business. Applicants for Economics and Land Economy should consider the impact that the receding of physical department stores will have on local economy.
The rise of online retailers that fulfil the same role as department stores has led to the restructuring of department stores to put much greater emphasis on their online presence. This can in part be put down to the same behavioural activity that made department stores successful, browsing. Applicants for Psychology can question whether online retailers are able to provide a comparative shopping experience for the consumer that will lead to an equal or greater level of purchase.
The owners of Homebase, the Australian corporation Wesfarmers, recently sold the company to Hilco for £1. This is an enormous loss on their purchasing of the company in 2016 for £340 million. This can in part be put down to their attempt to rebrand the company on structure of their successful chain, in Australia, Brunnings. Was there failure due to not considering the habits of British shoppers compared to their Australian counterparts? Is the local nature of department stores to blame for their being usurped by international companies like Amazon?