Companies That You Expect to Disappear Soon

[richw]

and it makes financial sense for me to reward retailers that choose to accept it with my custom.

Are you rewarding them though? The merchant fee for Amex is much higher than a Visa or MasterCard.

 

[GusB]

Surprised to learn that house of fraser will be closing some branches. Never expected that one!

It's not surprising to me - they seem to have been in retreat for some years. Perhaps some forum members will remember the Arnott's chain of stores which fell under the House of Fraser banner. My local branch was demolished to make way for a shopping centre.

 

[johntea]

Is a shame, I always used to consider them to be a step above Poundland with tidier stores, better staff, and more quality products; however the store format has changed significantly in the last year and a bit. When they initially started selling items for more than £1 they were a minority compared to the overall items for sale, in a defined area of the shop with clearly marked prices. In the past 18 Months that strategy seems to have been dropped, with all items mixed around the shop of a variety of prices; each marked with a price tag on the shelf; and many more non-£1 products being introduced; the availability of particular products also differing on every visit! I can't see how now they are any different from Poundstretcher / B&M / Home Bargains / et al.

I very rarely visit nowadays because of the above; I am even more put off by the fact that they don't take American Express whereas Poundland do.

The Yorkshire boss (Chris Edwards) ran a tight ship, spent a lot of time doing surprise visits to stores and the like to ensure they were kept tidy (he even managed to get a couple of primetime TV series on the BBC!) as soon as he left with his £150 million deal things started going rapidly downhill virtually straight away, he obviously knew things were going to get tight trying to source and profit on items selling for £1 and got out whilst he had the chance, I believe the multi price model was initially restricted to 'Poundworld Extra' stores run by his son (Quite a large one at Bradford Forster Square) but obviously all the stores seem to have just bought in to the same model these days.

I can do a bigger shop in B&M / Home Bargains and they also offer quite a lot of groceries etc. for under £1 too so even more choice.

 

[AlterEgo]

Goodbye Poundworld

Wonder if it’ll go on sale as a going concern...for a


Never mind.

 

[GusB]

Two for a pound, two for a pound...

 

[Mojo]

Are you rewarding them though? The merchant fee for Amex is much higher than a Visa or MasterCard.

In that case why would _any_ retailer take American Express?

It is a commercial decision for a retailer to take it or not; the advantage for them being increased custom, increased spend, and increased customer satisfaction.

If a shop doesn’t take Amex then I am less likely to shop there; unless they are offering something particularly unique, such as low prices for a certain profuct/service, or convenience (eg. location).

 

[Dai Corner]

Poundworld should have reacted to inflation by putting up their prices by 5% and rebranding as Guineauworld.

 

[richw]

In that case why would _any_ retailer take American Express?

It is a commercial decision for a retailer to take it or not; the advantage for them being increased custom, increased spend, and increased customer satisfaction.

If a shop doesn’t take Amex then I am less likely to shop there; unless they are offering something particularly unique, such as low prices for a certain profuct/service, or convenience (eg. location).

Of course they get the positives you mention, they also get the negatives. Amex charge retailers an average 3% fee, visa and MasterCard is 2% fee, Amex charge higher fees to certain business types. The fee to restaurants for example is 3.5% from Amex, but supermarkets only 2.3%. The higher fees are why small businesses often choose not to accept Amex because there isn’t room for that bigger fee in their margins, when they often already have higher overheads.

 

[nlogax]

Are you rewarding them though? The merchant fee for Amex is much higher than a Visa or MasterCard.

As an aside, it's been widely reported that Amex is in the process of lowering their merchant fees in order to make up the acceptance gap between them and Visa / Mastercard. It's pretty telling when Amex has a website helping you find merchants that accept their cards but I assume things should now start to improve.

Anyway, as you were..

 

[Mojo]

Of course they get the positives you mention, they also get the negatives. Amex charge retailers an average 3% fee, visa and MasterCard is 2% fee, Amex charge higher fees to certain business types. The fee to restaurants for example is 3.5% from Amex, but supermarkets only 2.3%. The higher fees are why small businesses often choose not to accept Amex because there isn’t room for that bigger fee in their margins, when they often already have higher overheads.

Sorry, I don’t understand the point you’re making. The above facts are already well known! My point is that I will choose a retailer that _does_ accept it over than one that does not, in the majority of cases provided I am not otherwise disadvantaged.

Retailers that accept it must consider it worthwhile, otherwise they would not take it.

 

[Puffing Devil]

Sorry, I don’t understand the point you’re making. The above facts are already well known! My point is that I will choose a retailer that _does_ accept it over than one that does not, in the majority of cases provided I am not otherwise disadvantaged.

Retailers that accept it must consider it worthwhile, otherwise they would not take it.

That all depends on their margins. I'd suggest that you are in a minority of Amex users (who are also a minority). For a tight margin business, it's worth losing £1K/month, or £20 profit after fees rather than taking a hit the spend that would have been put through Amex which other users put on different cards.

 

[cactustwirly]

In that case why would _any_ retailer take American Express?

It is a commercial decision for a retailer to take it or not; the advantage for them being increased custom, increased spend, and increased customer satisfaction.

If a shop doesn’t take Amex then I am less likely to shop there; unless they are offering something particularly unique, such as low prices for a certain profuct/service, or convenience (eg. location).

Except that the vast majority of people have a VISA debit card, so I don't think custom will increase that much.
What's the point in having an Amex card instead?

 

[Mojo]

What's the point in having an Amex card instead?

Because there are rewards for having one.

 

[FQTV]

Of course they get the positives you mention, they also get the negatives. Amex charge retailers an average 3% fee, visa and MasterCard is 2% fee, Amex charge higher fees to certain business types. The fee to restaurants for example is 3.5% from Amex, but supermarkets only 2.3%. The higher fees are why small businesses often choose not to accept Amex because there isn’t room for that bigger fee in their margins, when they often already have higher overheads.

Those figures are nothing like what the major card issuers are now charging offline merchants, and haven’t been for quite some time - but especially since the cap on interchange fees was introduced.

American Express is also, as it goes, a big promoter of the ‘shop small’ concept.

Generally-speaking, AmEx spend per cardholder (and bear in mind that AmEx cargecards do not have an official monthly spend limit) is significantly higher than per Visa and Mastercard cardholder. There’s also a historically strong skew towards corporate cardholders, who aren’t necessarily spending their own money on the cards. Those spending significant sums can earn significant rewards, and/or convert those rewards into other products or services which they may attach value to*.

If a merchant is keen to attract these higher-spending profiles of customer, then it’s one way of potentially doing so, and any acquiral fee differential could effectively be put down to a marketing cost.

This is rather off-topic, but it’s also being discussed on the Virgin Trains East Coast thread too. Maybe there’s worth in a generic ‘what do good loyalty programmes achieve and how do they work?’ thread.

*As an example, I recently redeemed an amount of AmEx Membership Rewards for a flight, and the nominal value of that reward exceeded 6% - ie the cost of the flight to buy was 6% of the spend that I’d put on my AmEx to earn the Rewards required. That’s not only a significant reward in itself, at the household budget level it’s effectively a bottom-line, tax and NI-free fillip ‘worth’ even more than the 6%; in fact more like 9% to a basic rate taxpayer.

 

[61653 HTAFC]

Plumb Center might be the next big-name to go, having been priced out of the market by the high-street fishmonger...

 

[Busaholic]

Plumb Center might be the next big-name to go, having been priced out of the market by the high-street fishmonger...

It'd serve them right for improper spelling!

 

[trash80]

Except that the vast majority of people have a VISA debit card, so I don't think custom will increase that much.
What's the point in having an Amex card instead?

I have both, i only use the Amex rarely though of course it did come in useful when i had to buy some train tickets a few weeks ago and the Visa system went down. My Amex is a (RED) one so i can feel better about myself for spending money too.

 

[Kite159]

I would put 10p on New Look closing a lot more stores in the next 18 months

 

[whhistle]

I would put 10p on New Look closing a lot more stores in the next 18 months

New Look is a good example of struggling for a market.

The younger generation still shop at Topshop, but with Next becoming more accessible and competitive, it's taken a fair amount of the market share. Asos and the like, plus supermarket clothing with their free returns have wiped clothing-only shops almost off the map.

 

[Kite159]

New Look is a good example of struggling for a market.

The younger generation still shop at Topshop, but with Next becoming more accessible and competitive, it's taken a fair amount of the market share. Asos and the like, plus supermarket clothing with their free returns have wiped clothing-only shops almost off the map.

Add in the rise of the super-cheap clothing retailers such as Primark, and in a market where disposable income is being squeezed so the 'youngsters' have less to spend on clothes, some middle-of-the-road clothing retailers are losing ground.

 

[Lucan]

What's the point in having an Amex card instead?

Because there are rewards for having one.

Mojo must have quite a lifestyle I have an AMEX card, and consulting the rules I see the cashback is 0.5% (rising to 1% after spending £3500); however you get nothing if the cashback calculation comes to less than £25. So you need to spend over £4250 to get anything.

That might be plausible if it were not that there seems hardly anywhere that will take an AMEX card these days, other than up-market restaurants and hotels, which I do not see the inside of very often. I therefore would not find it possible to get any cashback from AMEX, so I have given up using it. For the last 5 years they keep threatening me to withdraw it, but they don't; I wish they would really.

I do get 0.25% cashback on a Nationwide credit card.

 

[AlterEgo]

Mojo must have quite a lifestyle I have an AMEX card, and consulting the rules I see the cashback is 0.5% (rising to 1% after spending £3500); however you get nothing if the cashback calculation comes to less than £25. So you need to spend over £4250 to get anything.

That might be plausible if it were not that there seems hardly anywhere that will take an AMEX card these days, other than up-market restaurants and hotels, which I do not see the inside of very often. I therefore would not find it possible to get any cashback from AMEX, so I have given up using it. For the last 5 years they keep threatening me to withdraw it, but they don't; I wish they would really.

I do get 0.25% cashback on a Nationwide credit card.

There are a variety of AMEX cards that come with various benefits. The British Airways ones which reward the holder with Avios (air miles) are reasonably lucrative and very popular.

 

[nlogax]

Amex also do a decent range of broadly marketed reward cards. Airport lounge access, bonus points miles for a variety of airline / hotel partners, referral bonuses on top of that, additional extended warranties and accidental damage protections on products bought with their cards.. this stuff makes sense if you're regularly spending on travel or expensive items, or at least plan to for a few months.

 

[Mojo]

Mojo must have quite a lifestyle I have an AMEX card, and consulting the rules I see the cashback is 0.5% (rising to 1% after spending £3500); however you get nothing if the cashback calculation comes to less than £25. So you need to spend over £4250 to get anything.

Don’t bother with Cashback cards, collect Avios myself. I can spend significantly more than the £4,250 you quote (presume this is some amount you have quoted based on a Cashback Card) is really easy by just putting all my normal expenditure through it; bills (it is possible to pay many, but not all, on it), holidays, food shopping, clothes shopping, rail tickets, restaurants, pub, etc.

That might be plausible if it were not that there seems hardly anywhere that will take an AMEX card these days, other than up-market restaurants and hotels, which I do not see the inside of very often.

That isn’t true at all. It’s accepted at the big 5 supermarkets, Co-Op, Aldi, Iceland; at pretty much every chain restaurant and many smaller ones; on the main hotel booking websites such as Hotels.com, Expedia and Booking.com; at a not insignificant number of pubs, including all branches of Wetherspoon; by railway operators at stations and online including TfL; on PayPal (so useful for eBay, and on numerous online retailers); and many many more places.

 

[trash80]

Yes its very rare to see somewhere that doesn't accept AMEX these days.

 

[Rail Blues]

If a merchant is keen to attract these higher-spending profiles of customer, then it’s one way of potentially doing so, and any acquiral fee differential could effectively be put down to a marketing cost.

That's assuming the person only has an Amex card. Given the hit and miss acceptance of Amex I find that unlikel, of all the people I know with Amex cards, they all have visa or mastercards as well.

On being told 'sorry we don't take Amex' , the person will presumably use a different method of payment be that another card, cash, PayPal rather than not buying the item.

 

[bnm]

Well, this thread has lost its way after the "look at me, I've got Amex" post.

Back on topic, I expect we'll see one of the big barn DIY chains fail in the next 18 months or so. Most likely candidate will be Homebase.

 

[Mojo]

On being told 'sorry we don't take Amex' , the person will presumably use a different method of payment be that another card, cash, PayPal rather than not buying the item.

Or if known that they don't take them... not go into the shop at all!

 

[richw]

Back on topic, I expect we'll see one of the big barn DIY chains fail in the next 18 months or so. Most likely candidate will be Homebase.

Isn't that a dead cert?

 

[Bromley boy]

Well, this thread has lost its way after the "look at me, I've got Amex" post.

Is that still a thing?

In a previous role I had a corporate AMEX simply by virtue of my job. It came in useful for booking flights for work trips. I don’t think you need a particularly high income for all AMEX cards these days.

Needless to say these days, as a wealthy train driver, I have a Jay-Z-style black Amex in my MontBlanc wallet. I also take the chopper to work on the days my chauffeur isn’t available.