HMV yesterday became the latest retailer to issue a profits warning due to falling shopper numbers and online competition.
The music retailer that also owns bookstores Ottakars and Waterstones said it was likely to hit the lower City analysts’ estimates of £70 million, compared with profits of £98m last year and £131m the year before.
HMV chief executive Simon Fox said not as many albums were being sold this year in comparison to last year overall and that fewer shoppers hitting the High Street before Christmas had also dented sales. The entertainment retailer has also fought to boost its own online business in response to competition from e-commerce competitors like iTunes and Amazon.
Although Fox said the company had successfully integrated its acquisition of Ottakars the bookstore from earlier this year, sales at its counterpart Waterstones were down 3.7% in the last three months.
He said there was ‘everything to play for’ over the Christmas shopping period. But the company’s outlook was bleak according to City analysts who pointed to the fact that music sales had dropped by 14% overall during October and November, including digital downloads. The DVD market is following a similar downward growth trend.
Woolworths was another retailer issuing a profits warning earlier this month after slumping sales and overheads associated with its expanding online and catalogue channels take their toll.