7 Reasons HMV Closed

by Carps

HMV was part of the fabric of the British high street but – like Woolworths, Jessops, Currys, C&A, Ethel Austin, Borders, Virgin Music and a slew of lesser known names – at some point in the last decade time caught up with its business model. A lot of people speculate as to why it failed.

Here are my thoughts.

  1. Tax
    I don’t want to sound like a stuck record on the subject, but the last 15-20 years has seen a steady increase in running costs for business. National Insurance was blithely increased from 10% to 11% by Gordon Brown back in the day and he was loudly cheered. For a company with thousands of employees though, that quickly means a few million extra quid. Chuck in the equally casual rise in VAT from 17.5% to 20% and who’d a-thunk it – economics 101 comes into play: supply and demand change as prices rise.
  2. Energy Prices
    No. It isn’t a merely function of higher wholesale prices. The price of energy is largely determined by Government policy – particularly subsidies to ‘renewables’, but also on exploration taxes, various duties and so on. Racheted up over several years on top relatively high wholesale prices, it becomes more expensive to keep those nice high street neon lights running. Those costs come to you the consumer in the form of higher prices. And seeing as you have less money yourself in the first place because of higher energy prices, then the effective is a double whammy that stifles demand on the high street.
  3. Parking
    Another familiar bugbear of mine. Whether stupidity is compulsory for councils or whether it results (as per) in some obscure EU directive or other, free parking has vanished from the high street. A trip to town now routinely results in you having to find £7 in coins. The motive of councils is ostensibly to raise money and to encourage the use of public transport, but in fact it just means you stay at home more often which is cheaper and more convenient than both.
  4. Personal Selling/Buying
    Anecdote: for under a fiver I recently bought Jaws 3, a phone cover and Silence of the Lambs. They were delivered to my door. I paid no VAT on these purchases. The sellers weren’t paying employment taxes or running expensive front of house. In fact, they were people like me who have a massive inventory of ‘stuff’ lying around the house and are either going to chuck it in the bin or flog it on eBay for nowt. Taken across the country, there are probably billions of books, CDs and DVDs that will eventually get sold by people who don’t want them to people who do. Amazon Marketplace and eBay will make pennies from each transaction, but so what: it costs them even less to facilitate and is thus profitable.
  5. Corporation Tax specifically
    I’ve mentioned this before too, but if you tax a business at a certain rate for being based in the UK and it can equally happily run its UK business from overseas and avoid tax, then it will. HMV, stuck unhappily and inescapably on the high street and rooted in Britain, could never compete with Amazon who can move their taxable HQ wherever is most beneficial. Again, those who complain about this miss the point: it’s just a fact whether you like it or not. Either you encourage people to base themselves in Britain and contribute to employment and all the benefits that brings, or you encourage them to locate in Malta.
  6. Technology
    Times change. Maybe 200 years ago we’d be lamenting another 4000 farm labouring jobs being lost because of the invention of the seed drill. The fact is that analogue formats for music, film and books alike are dying the death of a thousand cuts as people replace it all with more efficient storage means – i.e., digital. It may be that this alone will undo ALL music shops in the end.
  7. Demographics
    All of the above point makes HMV and similar businesses seem alien and weird to a new generation of customers. “You want me to either pay £3 on the bus or £7 in parking to visit a store that is more expensive, has less choice and no search facility to buy my music? Shut up Grandma!” Never exposed to the joys of a good record shop, it’s not in their blood and they don’t even place sentimental value on buying there – much less any actual cash value. The next generation will find it all amusingly quaint that we once had to go look manually through a fancy warehouse to find our Ned’s Atomic Dustbin records.


The Government won’t do any of the following, so it’s a moot point, but if they were genuinely interested in saving jobs and the high street they’d slash corporation tax to encourage companies to headquarter here. They’d end subsidies to certain energy sources and hack away at the duties on other sources. They’d cut parking fees. They’d lower VAT. They’d reduce business rates.

They won’t. Prevailing ‘consensus’ in our crony corporatocratic political cartel is against all of these things. Vote Labour, Lib Dem or Tory they will merely tinker with the margins until every business here has been eaten alive by China and the internet.

The argument against this is loss of revenue for the exchequer. Well, I’d rather have 4000 people in employment, paying tax and spending their wages than 4000 more people on the dole, wouldn’t you?

Still. No need to listen to me. I’m just a nobody and not one of the cunts currently intent on ploughing the country into the fucking sand.

5 responses to “7 Reasons HMV Closed

  1. It is quite true that taxes on doing business have, in one way and another, greatly increased.

    Sadly there seems to be no public outcry against this – indeed the media are full of stories about this or that business “not paying their fair share” (whatever that is supposed to mean).

    Instead of a campaign to lower taxes on doing business – we have a campaign to increase them.

    In Italy there was a similar such campaign (basically organised by the European Union and its friends) – and it led to a “technocrat” (i.e. unelected) regime comming to power.

    Italians were told that only “evil” big business would be targetted – of course all business enterprises were targeted.

    Yet the international media lie campaign (I can only judge by the English language media) continued – even describing businessmen who COMMITTED SUICIDE in protest against the ever greater tax burden as “committing suicide in protest against the cuts”.

    “against the cuts” – i.e. the (mythical) reduction in total Italian government spending, not the (very real) increase in the burden of tax (and sorry Inland Revenue – “tax DOES have to be taxing” – to tax, to burden).

    I fear it will be the same here. Government spending is still out of control – indeed government spending is actually higher than before the present crises started.

    And the Opposition?

    Their complaint is that government spending is not HIGHER – hence (logically enough) their demands for a tax clamp down, in the name of “fairness”.

  2. By the way – seven Pounds to park.

    Is that central London?

  3. You can’t park in central London unless you have a smartphone, several online bankaccounts, and are quick with a screen. And also if you can avoid the “congestion charge”.
    I don’t think there’ll be many shops left in “central London” inside five years.

    Paul is probably referring to Liverpool or Manchester.

    It is nearly two years since I have tried regularly to park in the main centre of my own home town here. In that time, I know from driving past that many places have gone bust. It can’t just be due to the loss of my own custom.

  4. The “official” reason was “the internet”.

    True, it didn’t help. But they don’t want to talk about the other reasons, which have to do with their anti-business agenda.

    All parties are as bad as each other.

  5. That is scary David. Come to Kettering – our “Pop and Shop” may not be perfect, but it is better than what you describe.

    Peter all parties are certainly “bad” – I am just listening to Mr Cameron saying (yet again) that Britain is better off in the European Union (I remain totally committed to the United Kingdom leaving the European Union as do most of my “tribe” as Mr Cameron may find out one day rather soon).

    However, the son of Ralph Miliband is even worse. Only a couple of days ago this gentlemen was demanding more regulation of private rented houses and flats – even Mr Cameron understands that this would destroy private renting – and end up with more people on the streets. As for rent control – see Milton Friedman.

    Of course if one wanted to really reduce the price of houses and flats (for sale and rent) would be to end the “cheap money” policy of the Bank of England (which has largely gone to prop up prices in the property market).

    Sadly none of the party leaders will make a stand against “monetary stimulus” so in this YES they are “all as bad as each other”,

    It must be fill decent M.P. (such as Steve Baker) with rage when they hear the same politicians saying they support the “monetary stimulus” AND saying how upset they are that people can not afford housing

    “But the funny money policy is needed for the High Street”.

    It does not seem to be doing the High Street much good – witness the fate of HMV.

    No the credit money is going into asset prices – indeed it is one of the reasons that commercial rents have not crashed (as they should with so many empty shops)..