A tale of two retailers with contrasting fortunes in the slump
Friday, December 19, 2008
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Two pieces of contrasting news from well-known retailers provide a telling insight into the effects of the economic slump…
The administrators of MFI finally admitted today that they cannot find a buyer to continue with the business. 111 stores are to close with the loss of around 1,400 jobs. It wasn’t so long ago that MFI was the UK’s largest furniture retailer. But it has been unable to cope with the downturn and, perhaps more importantly, tough competition from much lower-cost and better managed businesses like Ikea.
In stark contrast, discount retailer Poundland has announced that it is to accelerate its store opening programme to take advantage of strong growth in demand from consumers looking for a bargain-basement price! 1,200 new jobs will be created by a retailer that has quite an appealing and simple pricing strategy. The price is always £1.
Add these two news stories together, and the job losses from MFI are broadly matched by new jobs at Poundland. The problem is that the MFI experience is more common, with many more thousands of jobs set to be lost as retailers enter the traditionally troubled new year period.
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