Yet again, it appears that a combination of savvy shoppers willing to buy goods online rather than through a bricks and mortar retailer, together with increasing rents and weak consumer demand are behind their demise. In addition, GAME has also had to deal with the increase in digital delivery for games through systems such as Steam and Origin, which allow gamers to buy games online and download the code without the need to physically purchase a DVD copy. In a way, this is no different to the challenge iTunes poses traditional music and entertainment retailers, such as HMV.
I have been warning investors for some time that retail stocks are not in great shape generally, and whilst some, such as John Lewis, continue to post impressive results, others may find 2012 to be just as tough as last year. It is likely that the extended Sunday trading hours during the Olympics, and expected surge in spending around the Jubilee may help a little, so long as household budgets remain so constrained - at least from an investment viewpoint - there are better sectors in which to invest.
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