It seems that in UK retailing these days nowhere is safe. The demise of some of Britain’s high street giants, with Woolworths being the key figure, certainly shows that this form of traditional retailing must be on its last legs. However retailing chains that have placed themselves “off the high street” and instead in the major industrial areas and business parks in the peripheral areas appear to be doing better. But , in most cases, not well

As the dust settles on the Christmas rush and January sales periods, major UK superstore operators are gathering to lick their wounds and praise the situation for the coming months, which are bound to be tough

One retailing group who were unimpressed by their sales during December and January sale time are the DSGi group; owners of the Currys electrical retail chain as well as PC World DSGi reported that sales were less them impressive, with the bulk of major purchases being made at sale time when margins were low.

During a recent interview, the group chief executive of DSGi John Browett, remarked that the trading patterns being witnessed at present ” were following the “normal patterns” of previous recessions dating back to 1929″ He summed up by adding “It is not a slump of biblical proportions. We are planning for the recession to last into the first half of 2010.

For the quarter ending 10 January, the DSGi’s group reported that their like-for-like sales fell by ten per cent, with gross margins slipping by 0.8 per cent.

The trend in electrical retailing over the last eighteen months to two years is a dramatic reduction in sales of white goods, such as fridges, washing machines and major other kitchen and laundry appliances, undoubtedly caused by the unstable housing market. Entertainment centers, especially flat-screen TVs had shown a particular rise in demand before Christmas, a sign that the UK public are planning to stay home and hibernate for most of 2009.

In response DSGi plan to reduce their overheads by a further £20m this year, through measures that will include the non prevention of staff erosion and cutting back on promotional activity. The signs are that the DSGi group, like many other superstore operators, are digging in for the long haul They plan to be around when the UK eventually hauls itself out of recession.

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Tags: Currys, Finance, Financial News, Money, Retail, UK Recession, Woolworth

Fears that unemployment will soar in coming months intensified as Marks & Spencer laid plans to shed 1,000 staff and other big companies prepared to cut their staffs and close stores as well.

The Council of Economics and Business Research is forecasting that between 100,000 and 135,000 shop workers will lose their jobs this year.

With the last Woolworth store closing, 27,500 staff have joined the job queues.

Other major retailers such as JJB Sports are expected to announce job cuts in the coming months as the scale in decline of retail sales is revealed.

M&S confirmed plans to cut 1,230 jobs from a 70,000 strong workforce and that 25 of its Simply Food stores and two smaller M&S branded stores will close following a decline in sales.

For the 13 weeks to December 27, M&S sales fell by 7.1% .

Hotel group InterContinental, with brands including Holiday Inn, Crowne Plaza and Indigo, is rumoured to be drawing up plans to shed up to 200 jobs in the UK, where it has about 240 managed and franchised properties.

Bellway Homes, the house builder, that said in November that it would consider job cuts in the run-up to its annual meeting next week, is also understood to be preparing to cut staff in response to the tough housing market.

The Stag Brewery at Mortlake, London, is to close, with the loss of up to 182 jobs.

The brewery, which produces Budweiser, Bud Ice and Michelob Ultra, will shut next year as part of £690 million cost savings strategy announced by US brewery giant InBev after its $52 billion takeover of Anheuser-Busch.

Markets

FTSE100

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4579.60 4638.90 + 59.30 points 1.29%

DOW

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8952.89 9015.10 + 62.21 points 0.69%

CURRENCY –

Pound v Euro

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1.04 Euros 1.05 euros +0.01 cents 0.96%

Pound v US Dollar

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$1.45 $1.46 +0.01 cents 0.69%

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Tags: Bellway Homes, Credit Crunch, Crowne Plaza, Holiday Inn, Indigo, InterContinental, JJB Sports, M&S, Retail, UK Recession, Woolworth

The recession is laying waste to Britain’s high streets amid fears that following Christmas and the January sales, more stores will go in to administration and thousands of workers will lose their jobs.

Home furnishings chain The Pier appointed administrators yesterday but continues trading for the time being. The firm employs 400 at 31 stores and department store concessions across the UK.

Men’s fashion group Envy, with 55 stores, also appointed administrators – for the second time this year.

City speculation suggests Zavvi; the music retailer with strong connections to Woolworth’s, clothing chain Phase Eight and sportswear group JJB are also facing financial problems.

Zavvi – the former Virgin Megastores – is supplied by Woolworth’s wholesale arm Entertainment UK.

Woolworth’s is turning up the pressure on the rest of the high street by launching a savage half-price sale in a bid to shift huge volumes of stock.

Bidding for Woolies’ 800 stores closed yesterday.

Dragon’s Den retail magnate Theo Paphitis dropped out saying he could not reach an agreement with the administrators and that Woolies’ is worth more in parts rather than a whole business.

WH Smith is playing down rumours that the firm is ‘interested’ in picking up 400 Woolies’ stores.

The City is expecting 2 Entertain, Woolworth’s joint publishing venture with the BBC, could also be put into administration. Woolworth’s holds a 40% share in 2 Entertain.

Meanwhile, in the markets, the FTSE closed down 0.2 pct at 4,163.61 and the DOW fell 215.45 points down to 8,376.24.

The Pound had a bruising day, closing at 1.148 Euros.

The UK currency also dropped against the dollar, to $1.447, the lowest level in almost seven years, before recovering to $1.465.

In July, the pound traded at more than $2, but it has lost ground as a number of economic reports forecast a particularly severe downturn in the UK.

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Tags: Dragon’s Den, Theo Paphitis, UK Currency, WH Smith, Woolworth, Zavvi