Stores Must Spend Big as Consumers Go Online

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Dec. 12 (Bloomberg) –- Bloomberg’s Charles Allen reports on the outlook for retail for 2014. He speaks to Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Traditional retailers?

Fear and greed always.

The traditional retailers, people fear that the internet retailers will eat their lunch, dinner, everything else and just take them away.

They are being reworded on sales growth rather than particularly on profit growth.

People are sort of investing in them as well.

They think these are proven winners were proven survivors and they have endless sales growth.

People want to be part of that.

It is feared you will not earn these stocks as they continue to outperform.

David was just telling us the story about metro not selling anything online and it seems quite startling, but where are the companies that are ahead of the curve and have so many platforms for multiple devices and the companies that are behind?

Retro is a really interesting example.

The electronics business had this great business model through the late 1990's and early 2000's with a gave ownership worth 10% to the store manager and he chose prices ended selection, which is great, but as soon as you go online, it creates this huge conflict because who is earning the online sales?

Who is setting the pricing policy?

Does the store have to match the range?

That was the problem.

They had tried it before but it had not worked.

I think if we are looking, there are some legacy retailers, some of whom are in trouble in other ways.

In 2014, it will be 20 years since tesco did their first online transaction from supermarket in gateshead.

You are you speeds things up you plug into a phone line.

You can look at next as well.

I remember them setting up their internet platform and they asked how much they spent on that and a few hundred thousand pounds and they said it was not enough.

You should have wasted loads more money.

You have some of these people who have been really embedded into the business and then you have people who are moving much more rapidly and have decided they need to get online very quickly.

What is the internet asset?

Or a long time, it was asset- light and amazon was the most obvious example with just one or two to warehouse and shipping everything but more recently as demand has gotten more competitive and people want things quicker, the accept amazon has just shot ahead and they need to build more warehouse is to where people are.

Asos bumped up their guidance for the next few years and now it's $55 million.

The to sales ratio is not that different from traditional brick-and-mortar now.

-- the cap x sales ratio is not that different.

Quebec shareholders are happy to fund the investment and sales growth.

The question is what happens to the margins?

Will we see margins beat all of the traditional brick-and-mortar retailers as the amount goes up the?

Thanks, john.

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