Wednesday, 08 April 2020

Changing mobile landscape – not coronavirus – forces closure of Carphone Warehouse standalone stores

by Harry Baldock, Total Telecom
Tuesday 17 March 20

While the timing of this announcement, set to cost 2,900 jobs, is suspect, Carphone Warehouse bosses say the change has been coming for a long time

Carphone Warehouse have announced that they plan to close all of their 531 standalone stores in the UK by the 3rd of April.  The announcement comes somewhat smothered by the escalating COVID-19 healthcare crisis and this may be by design, since only two in five of the 2,900 staff to lose their jobs will be transferred to new roles within the business…

Carphone Warehouse have announced that they plan to close all of their 531 standalone stores in the UK by the 3rd of April. 

The announcement comes somewhat smothered by the escalating COVID-19 healthcare crisis and this may be by design, since only two in five of the 2,900 staff to lose their jobs will be transferred to new roles within the business. 

Carphone Warehouse bosses insist that the decision to axe the standalone stores comes as a result of the changing mobile landscape, with customers increasingly shopping online and in larger stores for their mobile needs. Visitation of the standalone locations is falling and this arm of the business is expected to make a £90 million loss this year. 

The company instead intends to focus on its online market, as well as its larger stores which also house other technologies, such as televisions, cameras, and computers.

“We must follow our customers,” said group chief executive Alex Baldock. “They want help with all technology, all in one place, and this trend is only going to accelerate in a more connected 5G world."

This move comes as part of a strategy devised in December 2018 to return the mobile arm of the business to profitability. 

Baldock emphasised that the coronavirus outbreak was not a factor in the decision, saying “the coronavirus and uncertain outlook ahead has underlined the importance of acting decisively, but no, the driver here is what we're seeing from customers."

However, if not explicitly a direct factor in the decision itself, it seems likely the coronavirus accelerated the process: Carphone Warhouse is expecting its profits to be down by a further £5 million as a result of the virus’ impact. 

In an increasingly digital world, where customers are used to platform services offering everything in one location, high-street mobile retailing is becoming increasingly difficult. This is a challenge facing the operators too. Vodafone, for example, is currently in the process of reducing its 7,700 stores by 15% by 2021, with plans to upgrade and/or expand the rest to increase their appeal.

With customers taking longer than ever to replace their old phone and turning to the internet for choice, the strategy of mobile retailing must change. Like so many businesses, they too must pivot to meet the demands of an increasingly digital society.

 

Also in the news: 
French telcos’ “discipline” over COVID-19 will hit OTT services
Free high-speed internet hubs to be deployed ahead of Ireland's National Broadband Plan
French anti-trust regulator slams Apple with €1.1bn fine

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