Is Amazon Destroying The High Street? (And online shopping in general)

So another company has gone into Administration today, Blockbuster, The Video and Video Game Rental Company. They are the latest in a long line of companies who have, in the last few years, really struggled with both the 'Economic Downturn" and the growing popularity of online shopping.
Britain has seen some of its most iconic and oldest high street names disappear over the last few years and there are many more teetering on the edge of folding.

They're falling like flies.... Jessops & now blockbusters!!! (And Probably HMV)

We've already had

Comet
JJB
Clinton Cards
Game
Peacocks
Habitat
Carpet Right
Woolworths



And probably many others as sell.

Something like one in nine shops lay empty in towns and cities across Britain and in some towns, it's much worse.


Now whether you feel sympathy for these companies or not, you should feel for the staff who have now been added to the growing mountain of unemployed people.

Online is obviously cheaper and much more convenient, but I wonder what the high street will look like in the future? will it just be a row of Tesco stores? McDonald's and Starbucks?

One of the main reasons is not only the online ease of shopping, but also the corporation tax issue of some of these companies.... Amazon who don't pay Corporation Tax, whereas HMV do pay for example, how can companies compete fairly?
The only reason Amazon can undercut everyone is not only that "they don't have shops so they don't have to pay all of those wages" which most people just assume, It's the fact that they're not paying their fair share.

Much can be said for these businesses moving with the times and so on, John Lewis have managed to integrate their online and physical stores together really well... same with Tesco with their Click & Collect.

One in every 8 pounds spent on retail in Britain is spent in Tesco.

Is this the way of the future? Everything online? What do you think of it? Where will retail people work?


Amazon: £7bn sales, no UK corporation tax

Online retailer's British operation owned by company in Luxembourg which receives all payments for books, DVDs and other goods

www.guardian.co.uk...



Just wanted to get some opinions.

Blockbusters closed down in Canada, like 2 years ago.

Way more cheaper online companies are out there.

Originally posted by luciddream
Blockbusters closed down in Canada, like 2 years ago.

Way more cheaper online companies are out there.

Indeed, companies like Netflix & Lovefilm and many others too.
But what do you think about this? Would it bother you if there were no shops/stores in your town/city centre?

Just Walmart and Starbucks?


What will happen to the social/shopping areas in cities and towns?

The problem is the price of rents.

I work for a high street retailer and the store I manage pays something like £300k a year in rent alone. The building I work in isn't worth that.

Now, it's telling that the majority of the companies who close down do so at this time of year...just before their rents are due in March/April time.

It's pure greed on the part of the landlords with the tenant paying exorbitant rents and often having to service the property.

Also, it doesn't help if your business doesn't stay with the times which is the issue with HMV and Blockbusters.

reply to post by blupblup

Brick and mortar stores are sealing their own fate.
As Big Business releases more and more products to keep market share, more and more shelf space is gone for products that have been around for awhile.
And, often, that means the higher quality pair of socks.
Or the favorite flavor of gum.

Often, I just cannot get what I want or the choices are abysmal.

So, for me, Amazon fills that void.
I love Amazon...and I help keep USPS and UPS in business

I wonder what is going to happen to High Street when we have to get rid of this Smithy and his horseshoe repair shop, or the telegraph or the printing press...

reply to post by blupblup


I know what do you mean by that... no i actually like stores like this, even tho i don't buy from Blockbusters often... its nice to walk around and see the current latest stuff released....

Not only that... stores makes social structures look better. i mean.... last thing i want is Houses, Condos and Traffic lights....a plain looking neighborhood.

But certain things are redundant, Movie/Video/Audio stores are a good example... they can be done online.

I also feel that when i buy something at a store, i have a piece of mind, saying if its something wrong, i can come and talk and explain.. and return.

Online is too much hassle.

I had a very stressful November of 2011 when someone else's bankruptcy information was added on to my name(the other person had similar name and postal code).. the credit bureau does not talk to you straight, you need to follow the answering machine on the phone... and their branch does not solve anything for you, all they do is accept you legal documents and sent it to their headquarters, they pretty much don't talk to you about the issue..... i end up sending my legal information to prove that bankruptcy is not mine... it was sooo stressful.... if there was a actual real life entity i could talk, it would have been much easier to deal with..

It is and will continue to be a real problem. As you say all McDonalds, Starbucks with a liberal dose of charity shops and pound shops!

I remember reading some time ago when the 'crisis' first hit that some cites and towns were allowing the increasing number of empty shops to be used as temporary informal art galleries. I couldn't find the exact story but here's a link to a similar endeavour... Temporary Art Galleries



It seems like a good use for these otherwise empty shops. As we increase our online shopping habits, the face and purpose of our town centres will change forever.

The high street is changing after a good 100+ years of the same basic model due to the simple fact that most people these days consume mass market products so quality and service are pretty much left behind as who cares how nice the guy in the shop is if his baked beans are 20p more than those at Tesco's and now moneys tighter the flexible bit of people salaries has gone down a lot so when you fancy watching a DVD and paying £15 at hmv or £10 on amazon its hardly surprising that people will wait a few days extra when there's a 1/3rd or more saving

Having ran a small corner shop the personal touch is what separates us from the big people by having the persons paper ready for them as they walk to the counter or other small things which to a supermarket mean nothing as they show no value on a spreadsheet but to us mean repeat custom etc and quite often we could beat the supermarkets as they like to price fix between themselves but they don;t care about the smaller people and get a good deal on stuff like milk compared to a supermarket and you're quids in

Originally posted by Jykan
The problem is the price of rents.

I work for a high street retailer and the store I manage pays something like £300k a year in rent alone. The building I work in isn't worth that.

Now, it's telling that the majority of the companies who close down do so at this time of year...just before their rents are due in March/April time.

It's pure greed on the part of the landlords with the tenant paying exorbitant rents and often having to service the property.

Also, it doesn't help if your business doesn't stay with the times which is the issue with HMV and Blockbusters.

Well indeed, It's a mixture of things of course.... but certainly in the UK, how are companies supposed to compete with other companies paying no taxes?
I remember chatting to a guy working in HMV a year or so ago and he was pretty cool, I was ribbing him about the prices and how I exclusively shop online for my media and we got chatting about the tax issue... and it really is an issue.

Amazon.... £7bn... no taxes.

How much tax do you think HMV has paid in the last 3 years?

I think this is a bigger problem than rates but it all adds up.

I actually think in the future it will be just like a 100 years ago, where in the city center its all just foods shops like Tesco, the bakery, maybe the cinema, swimming baths etc... like everything else we will adapt and so will business models I'm really not worried about it to be honest I think this sort of change always benefits the customers.

Sadly it does look like online retail is killing the high street. I love HMV its where i do most of my music shopping and sadly it is slipping away along with Blockbuster. But how can companies with overheads such as blockbuster really compete with online sites such as Love Film or Netflix which don't have many fixed overheads.

But in my opinion online isn't the only factor killing these stores. Mankinds laziness is contributing as we as a species get lazier we find we don't have to go to these stores as we have substitutes online. It is a shame but its the way its heading more people would rather save a buck and shop online whilst living in a ghost town full of vacant lots than spend a couple bucks extra and head into town where the shops are full.

I don't think online shopping has to change, Just our attitudes towards.

Originally posted by DontTreadOnMe
reply to post by blupblup

 

So, for me, Amazon fills that void.
I love Amazon...and I help keep USPS and UPS in business

Me too, well ebay mostly but yes, online shopping is amazing.
This thread is absolutely not me criticising online shopping or saying I'm against it... But it is me asking questions about what this means for our towns and cities? The look and shape and feel of our social centres and high-streets.

Whether or not companies should all be on a level playing field when competing against one another.

These huge corporations do not pay their share, yet smaller high street stores forced to close, do pay their share.

Blockbusters closed because their business model was out of date. They seized a window of opportunity to rent physical objects that was displaced by a more efficient model where you no longer had to worry about "overdues." This, in turn, is about to be completely replaced by online streaming. It really had nothing to do with Amazon and everything to do with technology forcing change.

Blockbusters is probably a bad example to illustrate your broader point, which is online shopping in general. You'd like to couch it in terms of "fairness," but as any parent knows, claiming something is "unfair" only means you disagree. One of the issues is taxes. We could go a number of different ways here depending on exactly what taxes you want to discuss, but the point is that taxes are complex. I'll give you one example involving sales taxes.

In my small county there are about fifty different locations where the sales tax varies, sometimes by only a tenth of a percent. Taxing districts overlay each other in strange ways resulting in this complication. Amazon is expected to collect the appropriate amount of taxes based on address. Now multiply this by 39 counties, then by 50 states, most of which have more than 39 counties, and you see the task is nothing short of herculean.

Amazon does not collect sales taxes in most states and the states are unhappy about this because they feel they are "losing" tax revenue that is "rightfully" theirs so it is "unfair" that they can't easily collect it. Remember, though, that taxes are a form of extortion by government, which forces you to pay them under circumstances they dictate. It's YOUR money they are taking and they certainly don't play fair either.

For example, an area in my county called "Silverdale" wants to incorporate. Proponents of the plan say they want to get out from beneath the County and "manage their own destiny." It's touted as a "local control" issue. That means they want to add another layer of government so that they can have their own police force, their own mayor, their own City hall, etc. It's up for a vote this year.

The proponents of Silverdale incorporation feel they can do this because they just happen to be the center of retail shopping in the county. There is a big enclosed mall there and hundreds of peripheral stores which have been built around it. Everyone in the County--and a couple of other counties, too, goes to shop there. Right now all the sales tax money from purchases goes to the county for "redistribution," so everyone in the county benefits from the county "services" that are provided with that tax money--including residents of unincorporated "Silverdale."

But Silverdale figures if they can incorporate, they will get that sales tax money now going to the county, so this will result in county residents giving money to now incorporated Silverdale at the expense of the County, which will grow poorer as a result and be less able to provide the same services to its residents who are shopping at the mall. Silverdale itself will be relatively "rich" because it is collecting a huge amount of sales taxes relative to its size.

To me as a County resident this is completely unfair! Silverdale is stealing my tax money, so for me an online model where Amazon taxes me by address would restore fairness and balance to the system. The taxing authority here doesn’t care about fairness. They’ll scream it just like they say every tax increase is “for the children,” but this is an emotional appeal. It’s not about fairness as much as it is about maximizing the tax they can collect.

The real issue here is that our taxing model was built on a world that no longer exists. The questions we should be asking are, “Why are you taxing us as much as you are and what are we getting back from that in terms of services?” When you complain that Amazon is “unfair” because it doesn’t collect taxes from X, you’re on the side of government helping them maximize their tax take. What if the question were why government is so large that it needs all these taxes and what, exactly, are they doing with that money? Voting themselves generous salaries and pensions? Taking money from you who have earned it and simply giving it to people who have not?

This idea that corporations must pay “their fair share” is a false argument because corporations pay nothing. You do. When you raise taxes on corporations, the price of their products goes up. They simply pass the cost of taxes through to you. A tax increase foisted onto a corporation may make you feel good, but you are the one ultimately paying those taxes.

It’s all a shell game, and you are the victim.

Originally posted by luciddream
reply to post by blupblup

 

I know what do you mean by that... no i actually like stores like this, even tho i don't buy from Blockbusters often... its nice to walk around and see the current latest stuff released....

Not only that... stores makes social structures look better. i mean.... last thing i want is Houses, Condos and Traffic lights....a plain looking neighborhood.

But certain things are redundant, Movie/Video/Audio stores are a good example... they can be done online.

Well indeed, it's nice to walk around and I do it too... But Amazon sell EVERYTHING and they pay next to no tax.

So it's not only Media stores they're putting out of business..

We've had

Sports shops/stores
Home & Furniture shops/stores
Electrical & TV shops/stores

All close down..


When you can buy everything online, it's not only one sector that is under pressure, it affects retail in general.

Both Amazon and Ebay have avoided tax... plus many other Huge corporations.

Originally posted by Maxatoria
The high street is changing after a good 100+ years of the same basic model due to the simple fact that most people these days consume mass market products so quality and service are pretty much left behind as who cares how nice the guy in the shop is if his baked beans are 20p more than those at Tesco's and now moneys tighter the flexible bit of people salaries has gone down a lot so when you fancy watching a DVD and paying £15 at hmv or £10 on amazon its hardly surprising that people will wait a few days extra when there's a 1/3rd or more saving

Oh for sure, I understand how and why people are shopping around and all the power is now with the consumer.
But shouldn't Amazon have to pay their way? Is it fair that they are undercutting HMV by not paying their share of tax?


It's a very complex issue that has many factors.

reply to post by blupblup


The companies employ very good legal/accounting teams who know the relevant laws very well and are paid to find holes in it, now really any government will always play a 2nd fiddle as they will have to respond to the current state of affairs and once we add in international treaties etc it becomes a right mine field

I’d like to continue the idea that online is somehow being unfair because they “don’t pay tax.” I’ve shown above that the issue is a lot more complex than that and further, that it is YOU who pay the taxes—not Amazon. In fact, it’s YOUR responsibility to pay the taxes—not Amazon’s. My state has a “sales tax” and a “use tax.” Other states have similar schemes. If you buy something out of state that you use ”in state,” you are required to pay “use tax” on it in lieu of “sales tax.” In theory you are required to fill out a form quarterly listing everything you bought out of state, then remit the equivalent “use tax” to the state.

So in fact when you don’t pay the use tax, you are the one breaking the law. This is not up for dispute or argument. You are breaking the law, period. You get away with this simply because the State does not have the mechanism in place to track your purchases. The only place they do this is for automobiles because cars have a “title” and if you bring a car into the state an apply for a title, they’ll get you for “use tax.” You can drive from Seattle to Portland (Oregon has no sales tax) to buy a large screen TV set for $4,000 and save $300 in sales taxes, but you can’t do the same thing with a Prius.

So this idea that Amazon is the Bad Guy™ here is really foisting the blame off on Amazon when it’s your responsibility. If you really were concerned here you’d pay the state every time you made an online purchase. My guess is that you don’t. Eventually the states will figure this out and they’ll begin to extract “their” taxes. It’s just a matter of time.

But this begs the question. Is the lack of YOU properly paying YOUR taxes really the reason for retail failures? Could it be that the model is simply wrong for today’s world and that these retailers would fail anyway? And is this a bad thing? It seems a bit contradictory to me.

On the one hand we are told we must consume less energy, drive less, be green, use less gasoline, protect the Earth and so on, so I sit home and order online, thus accomplishing all those things, and then you say I’m not supporting local business. Hello? Just exactly what do you want me to do here? Seems to me I’m damned if I do and damned if I don’t.

So are we supposed to support boutique retail stores charging artificially high prices so that they can spend thousands of dollars on fancy displays showing off a product while paying for light, heat, and employees whose major job is standing around when there are no customers, when I can order from a warehouse online for half price? Once again you are asking me to pay to use up resources I’m not supposed to consume so that we can continue to support an outdated model of doing business. This isn’t just taxes here; it’s an entire infrastructure devoted to using resources to promote sales.

OK, well, what about people? Don’t a lot of retail people stand to lose their jobs? I think probably, yes, THOSE jobs, but retail doesn’t pay that highly and if you want people to have “living wage” jobs, driving a UPS truck is a lot more lucrative, and we still need to get those products shipped to your door. To most retail clerks, ANY other job is a step up.

My overall point here is that when we speak of “fairness” I think it is unfair for you to blame corporations for not paying taxes as the reason for local retail failures. As far as sales taxes are concerned, it’s your responsibility to pay them’ the corporation simply collect them FROM you to pay to the government. Further, you pay all the taxes anyway. Saying corporations don’t pay their fair share is really saying you want YOUR taxes to go up.

And secondly, the failure of local retail has very little to do with an unfair tax advantage and a whole lot to do with a consumptive resource-intensive model that artificially raises prices far beyond this cost of goods. Retail acts as yet another middleman extracting a profit from the flow of goods that savvy consumers are learning to circumvent. If retail is not providing any value-added services, why do we continue to pay them? If you are paying retail, you’re being overcharged.

reply to post by schuyler



Not sure what you're waffling on about, I'm pretty sure the OP is talking about the UK high street and in the UK VAT is already added, it isn't added at the cash register.
Also corporation tax is a tax for all businesses operating in the UK, however companies like Amazon and most of the FTSE 100 companies avoid paying taxes by registering their companies and banking in tax havens overseas.
They use all of the facilities, the roads, the police and all manner of other services, but they do not pay their fair share of corporation tax, like they should.

Your entire post is just unrelated nonsense to be honest.

Originally posted by stargatetravels
reply to post by schuyler

 

Not sure what you're waffling on about, I'm pretty sure the OP is talking about the UK high street and in the UK VAT is already added, it isn't added at the cash register.
Also corporation tax is a tax for all businesses operating in the UK, however companies like Amazon and most of the FTSE 100 companies avoid paying taxes by registering their companies and banking in tax havens overseas.
They use all of the facilities, the roads, the police and all manner of other services, but they do not pay their fair share of corporation tax, like they should.

Your entire post is just unrelated nonsense to be honest.

Sigh. I spend a couple of hours trying to show you what taxes are really doing and this is the kind of reaction I get. It doesn't matter of you are talking about a VAT or a sales tax. It amounts to the same thing.

Please just try to understand this one, simple fact that goes across all boundaries and all nationalities. It doesn't matter what country we're talking about here or what the specifics of the tax structure are.

Corporations don't pay taxes. People pay taxes.

Once you get that through your head you may change your mind about what is "fair" and what isn't. And you CERTAINLY won't be blaming Amazon for inefficient retails shops going broke.