How can small retailers in the UK compete?
Yesterday's revelation that John Lewis smashed its 2007 weekly turnover record, even though we are not at the busiest end of the festive period, has highlighted the potential problems which small retailers in the UK are likely to experience. While there has been no mention of any reduce profit margin from John Lewis over the festive period so far, we can surely assume that due to the economic environment and a massive sales and promotions program, profit margins are likely to be lower than "normal".
When you also take into account the fact that many UK retailers have been left in limbo due to a lack of liquidity in the corporate money markets, it seems only a matter of time before we see further problems in the sector. The likes of Tesco, John Lewis and other well-known names in UK retail sector appear to be trading better-than-expected while many of the smaller operations must be struggling during these highly competitive times.
A number of consumer groups have for some time been concerned about the growing power of the larger UK retail outfits which appears to be at the expense of the smaller scale operations. However, what, if anything, the UK government can do to help in the short term is unclear.
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