Is there a connection?

We've all seen the news that big stores are driving small high street retailers out of business, and I've often thought that high street retailers are an important part of a towns’ financial well-being.

However after visiting my local small electrical retailer I think I might have an idea why so many of them are going out of business. Picture the scene, I'm on my merry way home from one of those dastardly out of town electrical stores after a bit of a shopping spree when I realise that I've forgotten to buy a small but essential audio connector. Never mind I think, I'll pop into my local electrical retailer and pick one up; I've heard that they can do with my business.

Now the connector I need is pretty cheap and I've paid as little as 89p for one and up to £2.99, which I thought was pretty steep considering the wholesale price is likely to be less than 50p.

I park up and enter the retailer, whereupon the polite man asks me if I need some help. Turns out that they have exactly what I need and he goes to the till to ring up my connector. Which, as it turns out is £6.99...

Minutes later I find myself driving back home wondering what's happened and why I've just parted with the best part of £7 for something that I could get for 89p!

Now I know there are those among you who will point out that I could have driven to my local out of town retailer and paid half the price if I really wanted to, and the local retailer was a great deal more convenient. But it still leaves me wondering that the local high street retailers are making a rod for their own back when they add a mark up of over 1000% on an item like this.

It also makes me think how much extra they add onto more expensive items and whether all that local knowledge and service is actually worth the extra....

Comments

[Silvio Figeac - Galindo]

There seem to be evident reasons for this difference of price, first of all with the very different business models of both kinds of retails.

Big stores are so cheap because their logistics and their supply chain are squeezed to the least expensive the costs can be. It's also a matter of store size and the wide array of offer.

It's no surprise that small retails are much more expensive, given the fact that they cannot compete with the big stores in supply chain costs, and that they're much smaller. (Paradox : the bigger you are, the more competitive you get - at least in the world of retail) Plus, there's maybe the real need of increasing prices, since there are less and less customers going to buy to these retails !

On the other side, I'm willing to pay (just a bit) more and buy in local retails, in exchange of real expertise, honest advice and a shorter trip. Correct me on this if I'm wrong ...

Silvio