Analyst Late to the Party: Pachter Confirms UK Retail is in Trouble

Wedbush Securities' Michael Pachter has proven that he has eyes, as he astutely comments on the UK retail market and its general health following the collapse of chains such as HMV and GAME in the past year. His analysis? "The UK games retail market is a joke, with retailers pricing below cost to drive traffic."

That's why they pay him the big bucks! Being an analyst must be a great job, if you can get it.

Pachter adds that below-cost pricing is "great for consumers, but retailers can't make any money on games, hence the bankruptcies of GAME, HMV and Blockbuster, and the refusal of GameStop to expand into the market."

Of course, the main problem with this statement is the assumption that such below-cost pricing has been the work of the aforementioned chains. In fact, the main culprits behind it all are the supermarkets, who quite honestly don't give much of a damn about the health of the entertainment retail sector. Low-price games are used as bait in Tesco and Asda to lure shoppers into buying more packs of bog roll and breakfast cereal.

Pachter continues his soothsaying by noting that consumers will be hit by a lack of retailers on the high street. "If all retailers go broke, or if games are dominated by mass merchants like Dixons, gamers are ultimately going to get fewer selections.

"Retail needs to make money to exist, and games retail in the UK doesn't make money." All well and good, but there doesn't seem to be any indication that Pachter has any suggestion to make the situation better. So what we're left with is confirmation of something we already knew. Thanks anyway, Michael, we know you mean well.

Source: Digital Spy