According to Forbes.com, the worst seems to be over, but retailing is still a tough business. In 2009, Waldenbooks/Borders was forced to close 110 of its book stores. Blockbuster took even a bigger hit, having to close 300 of its video stores. The company I was most surprised to see on the list was Starbucks, which closed an astounding 566 its coffee shops. According to the article on Forbes.com, these three companies are likely to be closing more of their stores this year as well, and might even go under as a result. The outlook for Waldenbooks/Borders may prove to be fatal according to the article which explains:
"Amazon.com continues to wreak havoc on traditional booksellers. The Borders unit says it will close an estimated 200 stores during the three months ending January 31, for a total of roughly 300 Waldenbooks stores over the past 13 months, close to 70 percent of all outlets. Retail analysts at Davidowitz & Associates give Borders Group, plagued with losses three years running, a 50-50."
Going to the book store isn't the only way you can purchase books, and it has been this way for quite a while now. It is now beginning to catch up with book stores, because looking online for a book is much easier. It takes less time and effort, as all you have to do is search it and click purchase if you want it. Going to a book store requires the drive to and from your home, which some people are unwilling to do anymore because of high gas prices. Also, there is the uncertainty that the store will have it, which could result in time wasted. When taking a look at Blockbuster and Starbucks, their prices have always been known to be relatively high. Near my home, more and more Caribou Coffee shops have begun to pop up, as well as Family Video stores, both of which have cheaper prices than their competitors. Starbucks and Blockbuster have always been household names in their respective markets, but are people beginning to settle for what's cheaper rather than what's known to be a quality product? Is it competition, like Waldenbooks and Borders are having to deal with, that is taking away business from Starbucks and Blockbuster? Also, could it be that people are just straying away from renting and buying these companies products because of the economy? I find that hard to believe for coffee, as for a lot of people it is a necessity.
It's a sad truth about book buying these days; the internet scene I mean. I love the culture of bookstore going, and spending hours in a big chair with a hot cocoa and a book that, just maybe, you'll end up buying.
ReplyDeleteI grew up going to Borders, and when I moved to Michigan, I found out about Barnes and Noble, which overall seems to be better off. I know that Borders has made some pretty awful financial decisions in the past, even in times where the national economy was well off. I suppose I can only hope that they don't go under. After all, just because the stakes are higher in this recession, doesn't mean that the big shots at Borders got any smarter.
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ReplyDeleteI went abroad for a year after high school. When I came home I was saddened to discover that my favorite book store had closed. It was an incredibly small independent store where a lot of artsy drop outs came to hang out, play chess, and make their artsy stuff. I used to go there all the time during my last two years of high school. I noticed that I never saw more than one or two actual paying customers in a given day, and that whenever I asked for the price of a book, the guy behind the counter would say something like, "I don't know, just give me $.75" or "You can borrow it and bring it back when you're done." This may have contributed to its closure. Thankfully, the independent book store down the street still exists, but Barnes and Noble is right next to it. I don't have much personal stake in this store's existence, but I grew up buying books there. I would hate to see it go. As much as it is bothersome to see giant franchises have to close stores, it hurts me so much more to see the smaller stores close their doors. At the very least, I hope that the closure of franchises will have a positive effect on independent stores.
ReplyDeleteAs for Blockbuster, I can really understand how it may be closing stores because of Netflix; I got Netflix earlier this year, and I will never rent movies from a store again. It's 10 bucks a month for them to send you unlimited DVDs and there are hundreds of movies that can be viewed right on your computer. In contrast, it costs 5 bucks to rent a new release for 2 nights at Blockbuster, and a movie you want could be all checked out when you get there.
ReplyDeleteThe companies mentioned such as Blockbuster and Barnes and Noble seem to be a bit overrun by new technology like the kindle and netflix. I think these companies will continue to exist, but only if they adapt to the new market trends. There is no reason why blockbuster can't stream movies online or via xbox 360 like netflix let alone ship them to people. Furthermore, Barnes and Noble can make ebooks and sell them. I hope it happens soon though, because unfortunately the Barnes and Noble by my house went out of business. Hopefully they will get into the internet market.
ReplyDeleteI'm actually not surprised at all to hear of Starbucks' difficulties. The fact of the matter is that Starbucks coffee is very expensive, and in a recession, people are looking to cut expenses wherever they can. Also I'm pretty sure that I heard that they had overextended and were facing financial troubles before the recession.
ReplyDeleteMy personal feelings put aside, I'm actually slightly worried to see Starbucks go. They boast paying top dollar particularly for Costa Rican and Columbian coffees, which they've been doing this for several years. This no doubt created incentive for poverty-stricken countries to start growing high quality coffee, and now that Starbucks is down-sizing, it will be slowing their purchases to Latin American countries that have been becoming more and more dependent on them.
ReplyDeleteSuddenly farmers will be left with a cup full of supply and no one to drink it.
was that cheesy?
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Oh how the market is this constantly changing force in the world. Coffee and books are elastic in that they can be easily substituted. Instead of a cup of a coffee there is pop and tea, instead of buying books you can go to your local library or borrow them from a friend. People are trying to cut costs in every way possible starting with goods and services that can be substituted. T
ReplyDeleteTo be honest I think a lot of these businesses were struggling for a long time. I used to be part of a bookclub that met at Borders in Ann Arbor where the first location was. About five or six years ago there was a big worker's strike and it resulted in about an 80% change over in employees. Ever since that time I can remember the atmosphere of Border's changing. No longer did I like to linger among the shelves of books. Things got really franchised and there was a bigger sense that Borders was only interested in quantity of books sold and not the atmosphere in which they were sold or the quality of what they sold. I think that in this current economic outlook a business has to do more that just sell a good. It is also necessary to create an entire pleasing experience to the customer. This is something that I don't think Borders knows how to do anymore.
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Starbucks closing was inevitable and should not have been that suprising. It "overspread" and provided so much supply of the luxury brand that Americans were so willing to gobble up, that should any blip in demand occur drastic revultions would be felt throught the company.
ReplyDeleteThe company was built on the monicher of luxurious and expensive coffee and even though price decreases and offerings of breakfast sandwiches (in order to compete with McDoanlds for the morning market share) are simply not going to be succesful forcing stores to close.
We can look easily at the state of our luxury economy by how quickly starbucks appear and dissapear? someone should try and turn that into a new index, SBUX jumped for points today on birghter economic news? sounds like a valid measurement lol..
Actually I purchase books online a lot rather than go to local bookstores, but it's really sad to see them closing down since I enjoy their academic atmosphere a lot. Maybe it'll be a good solution if the stores develop online services, just guessing.
ReplyDeleteIt's probably going to take some time for consumer confidence to return. Take a look at the people who suffered through the great depression. My great grandma lived through it, and when I look at how she lives, she is the best at saving money in my entire family...and she always thinks she's going to run out of milk. Economic hardships affect the mentality of those who live through it... despite certain aspects of this Great Recession starting to look up, we still have a long road of recovery ahead of us, especially concerning consumer confidence.
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