BHS is no more on the High Street and is now going on-line.
What are the implications of this trend?
The shock news of BHS's demise has been compounded by the decision to relaunch this business, in an on-line format only.
This raises the question why, if it couldn't make the High Street pay? Because the High Street retail business model is becoming too expensive. Bricks and mortar, rents, staff costs, retail staff not selling all the time in the main.
Lets look at some costs and facts.
Shop assistants might largely not be engaged in selling
for most of each working hour they are employed.
Suit you...
If we show some basic figures, we can see the benefits of changing to on-line only retail model.
We will use the quoted figures from the BHS wiki page of 11,000 employees and 164 stores, all other figures are estimated and for example only.
If you had 11,000 employees on the High Street, On-line you might exist with as few as 100.
At an example of paying £15,000 per employee, this could cost you:
£165,000,000.00 for 11,000 employees at £15,000.00
£1,500,000.00 for 100 employees at £15,000.00
Big saving.
Operating stores 164, value estimate £82,000,000.00 in bricks and mortar
Warehouse operation, value estimate £3,000,000.00 as a big shed
Neither value includes retail stock. Based on outright ownership.
Big savings all round and headache for Landlords if only leased and you do not renew.
The largest cost of a business is staff, which is also its best asset, apart from a good product or service.
Bean counters preferring the 'least cost option' are going down the 'on-line' approach and scaling back the retail 'boots on the ground.'
Many retail place jobs are being advertised as part-time only these days and they are
'optimising the staff to be there when the customers are' as the key driver.
Unlike the motor trade which relies on big profits from single sales, they can afford to have someone hanging about for 63 hours a week on low pay as they will make it up on commission.
Retail in shops is a different animal. Usually, multiple sales of lower value products.
The jobs problem is being hit by a double whammy
Yes, the real casualty of the BHS crash was the 11,000 employees hit by the sudden loss of their jobs.
They are in a poor position, having to enter a job situation that has been slowly sucked dry over the years.
The problem is that by 2026, 9 million jobs will have been lost to automation. That will not happen all at once, but is happening right now and the effects are being felt greatly.
Even 5 years ago the jobs market was healthier than now.
The 'record job vacancies' level is a false flag, the victim of vacancies being multiply counted as they appear on multiple agency and job sites.
When you scale down a work force 90+%, that was a fair size to start with, that is a real problem for those looking to get employed and quickly.
Many of the jobs that were there 5 years ago just are not now.
A vast swathe of lower end jobs right up to degree level jobs have vanished.
And that is also the problem perpetuated by the out of date education system we have, which is running on an irrelevant sausage machine mentality model.
The jobs they are educating children for now just won't be there by the time they leave school. The technical skills needed to fill the skills gap are unfilled too.
Basic Income Guarantee will have to take the place of Benefits
Because the jobs won't be out there to fill
The reality is that this creeping automation has been put to one side and not looked at, even though Norbert Wiener identified this situation as being likely over 60 years ago.
The Pick and Pack on-line model of retail is now the way things are going and it is sadly seeing off the High Street players one by one.
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