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Weep for Woolies

Robert Peston | 08:19 UK time, Thursday, 27 November 2008

The manner of Woolworth's demise as a going concern was almost as shocking as the fact of its collapse into administration.

Woolworths storeAlthough Woolworth had been one of the UK's weaker retailers for years - propped up by a decade of benign, debt-fuelled trading conditions which we now know to have been unsustainable - it was done in by a sudden deterioration both in the real economy and in financial markets that took hold four weeks ago.

And it's the suddenness of how everything turned bad that shocks - and means Woolies will not be the last casualty.

Up till then, Woolies sales had been broadly flat. Then, on an underlying or like-for-like basis, sales dropped off a cliff, falling by double-digit amounts in percentage terms.

Around the same time, many of its suppliers found they could no longer insure against the risk that Woolies would no be able to pay its bills. So Woolies was forced to pay suppliers in cash for all that important Christmas stock.

In the process Woolies maxed out its borrowing facility: its debt rose to the £385m limit imposed by its lenders, led by GMAC and Burdale (part of Bank of Ireland).

Perhaps unsurprisingly, GMAC and Burdale - each of which is owed around £70m - yesterday decided enough was enough, and pulled the plug. Other financial creditors include Bank of America, Barclays, GE, Wachovia and KBC, with GE owed the most of this bunch, or £50m.

Now what's significant is that Woolies is far from being the only retailer pummelled by the sharp contraction in Britain's economy and also by a sharp and painful rationing of credit insurance.

Many thousands of British businesses have had their insurance cover withdrawn for supplies to companies perceived by insurers as poor risks - and that's causing havoc on the high street.

Unless something can be done to persuade the big providers of credit insurance to reinstate cover - and that would probably require taxpayers to provide some kind of guarantee - Woolies will not be the last substantial victim.

Also, just because Woolies has been something of a lame duck for years, that does not mean its demise is somehow a self-contained episode, with little consequence for the broader economy.

The inevitable loss of jobs, perhaps 20,000 of them, will cause misery and hardship in itself.

There's a hole in the pension fund of £100m, so the Pension Protection Fund will have to pick up the bill for some of the group's pension liabilities - which drains the resources provided to the official protection scheme by other pension funds.

And then there's the knock-on to companies that supply Woolies stores with more than £1.5bn of goods every year. At a time when the UK economy is shrinking fast, the loss of these orders will be painful for hundreds of businesses.

Also Woolies owns a substantial wholesaler of books, music, games and DVDs, Entertainment UK, whose turnover is well over £1bn. Entertainment UK has also gone into administration, which has raised the alarming prospect for some big supermarkets and high street stores that they won't be able to get hold of vital stock during the all-important Christmas selling period.

The corollary is that publishers and music businesses are anxious they won't be able to get their stock on the supermarkets' shelves.

What's more, as Richard Fletcher points out this morning in the Telegraph (and on Tuesday night he made the correct call that neither Woolies or MFI could avoid administration), Woolies' collapse will probably spark a price war - since the administrators will probably keep the stores open for the next few weeks, and slash prices to shift all the stock.

That would be good news for shoppers, very bad news for weak competitors.

So perhaps we should all weep for poor, lost Woolies. As it happens, I love its eclectic mix of light bulbs, pic'n'mix and gadgets you never knew you wanted. And for many kids, it's a treasure chest.

But even if you wrote it off years ago as an anachronism, you can't be wholly insulated from the indirect damage inflicted by the manner of its end.


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  • Comment number 1.

    Forclosure on retailers.

    Currently we are only taking 2009/2010

    production orders with hefty deposits.

    There is no viable CREDIT INSURANCE

    I wonder in any event if the Insurers can

    pay out.

    So sadly Woolworths is just the begining.

    So the noose tightens on all sectors.

  • Comment number 2.

    I followed all your logic until you got to the statement that suppliers would lose orders. Surely we, as customers, will still be buying our essentials, we'll simply be buying them from another store. I think that's a bit of a specious argument.

    Well, except I suppose, that Woollies never really sold essentials, and that's probably why it was one of the first to do...

  • Comment number 3.

    No political points to make, just sad to see Woolies go. Coldly part of the restructuring of the UK economy, yet part of the fabric of the country like the mining villages, fishing harbours and big ports like Liverpool & Port of London. We will adjust eventually, but the painful adjustment will blight many lives. Where is the leadership that will explain the implications of the change to the country and describe what the future may hold (however painful)?

  • Comment number 4.




    So we all borrow borrow lend lend spend


  • Comment number 5.

    Shops come and shops go. If a particular trading model no longer works, it will fail. It's called evolution.

    A question for everyone out there.
    If Crash Gordon were to step down or get forced out before the next election, will he be the first PM never to have even contested a general election?

  • Comment number 6.

    PC World and BandQ appear to have been jacking up prices recently and a non-scientific perception is that there are few customers in the stores. Think they both have to reduce prices and cut stores and fast. BandQ has huge stock carrying so expect even more bad news as buyers dry up almost completely and they get caned on stockholding costs ... do they rent or own the stores?

  • Comment number 7.

    Yes a sad, even poignant event and very symbolic: the government will have cause to lament this as keenly as individuals do.

    But only the first of several in the retail sector: and who knows how many other iconic names elsewhere in the months to come.

    Wll people really think that reducing VAT by 2.5% is a masterstroke ?

  • Comment number 8.

    Robert - sometimes you write some sense, but other times you mix emotion with commercial reality. You don’t weep for the banks but you do for a shop that could never compete in the free market given no discernible retail identity or hook – what did Woolies do?

    I’m sad to see them go, but I’m also to blame – I haven’t been there for years instead I preferred to buy light bulbs and cd’s in Tescos while doing my weekly shop. Come clean and tell me when you last went shopping there.

    Now I go to Morrisons shopping as Tescos appears to me to be the giant and is taking advantage. I’m more careful about what I shop for and I also want to give more retailers a chance. It was too late for Woolies and perhaps I should have spread my pound around more on the high street – perhaps we all should. But don’t pretend to feel sorry.

  • Comment number 9.

    A lot of High St retailers are going to struggle in the next 6 months, mainly due to what they are likely to sell this Xmas.

    Most of these stores bank on huge sales duing the seasonal period to subsidise their quieter periods. Unfortunatley Santa isnt coming to a lot of households this year.

    This is what the VAT cut was all about, to try and stimulate our thirst to have a typical Christmas, but it came to late for Woolworths. The main problem is consumer confidence is shattered and many people are questioning the modern ideals of Christmas. You all must know people who say they are cutting back this year.

    Not exactly in the festive spirit, but this is the hatsh reality of our current situation.

  • Comment number 10.

    Woolies hasn't known what business it was in for years. This is more a marketing disaster than anything directly to do with the current economic climate.
    I'm deeply sad for the staff losing their jobs as its happened twice to me, and may yet happen again. (I'm in engineering).
    Chin up and best wishes folks!

  • Comment number 11.

    The economy is going to unwind quickly because teh systems in place are computerised and efficient. Many PLC companies has borrowed up to the hilt, sailing as close to the wind as possible, to maximise short term profits. Their shareholders are mainly the pension funds run by the same banks that lend them the money and extract huge fees. The tail is now wagging the dog and there is nothing anyone can do about it except "Brace! Brace! Brace!" Thanks Gordon...

  • Comment number 12.

    It is very sad that Woollies is in this position, but having visited some of their smaller stores, that look like dirty car boot sales, then it is really no suprise.

    Having worked for the company, it is also no suprise that this day has come - they have not moved with the times and are stuck in the late 80's with thier ideas and structure. There are so many managers, that some of them don't even have any staff to manage, there are little empires all over which do not work for the good of the company. They accept failure as part of daily life and everything they do is a tactical, short-term fix, there seems to be no clear strategy and long term plan as too many managers have their own little agendas.
    I for one will be very sad to see this much loved retailer disappear from the high street.

  • Comment number 13.

    Can someone point out to Alexander Curzon that caps are rude and his comments incoherent?
    Ditto bliarwatch, NuLab (old hat, rude as doubtless intended) etc etc.

  • Comment number 14.

    The miracle is that Woolworths (and WH Smiths) have lasted so long... they try to sell a bit of everything and therefore do nothing well. Their main trade are in items such as CD's and books which can be found far cheaper online. The range they sell is 'top 20' only and so are also underpriced by Tescos on one while Waterstones etc beat them on choice. The rest of their range (clothing, homewares etc) is virtually poundshop quality yet they try and maintain hundreds of large high street stores.

    Woolworths were a dinosaur and have gone the way of the dinosaur. Hopefully the stores themselves can be bought up and a better CEO can employ their staff to sell things that people want and can't get better & cheaper elsewhere.

  • Comment number 15.

    Its good that the administrators are trying to work to sell the retail trade and shops of Woolworths, Good luck to them. I don't think the board should see a penny of any monies raised if all the debt gets cleared. There is no justification to pay a financial director £27,00 a month in salary under a situation like this and frankly the board needs a vote of no confidence and firing for what they have one to the company.
    Meanwhile Happy Christmas to the Woolies army of workers Good luck to them all.

  • Comment number 16.


    It is a bit rich for an employee of the BBC who is maintained entirely at public expense to pass jugement with phrases like:

    'weaker retailer', 'lame duck'

    It was a businsess that for many years created wealth to provide livlihoods for many people, it made profits and paid taxes.

    Contrasted with the BBC and the rest of the public sector - who consume wealth generated by (and forcibly extracted from) the private sector - just how weak/lame do you consider yourself and the BBC?

  • Comment number 17.

    Woolies has been damaging well run businesses, discounting heavily in its death throws. The sooner Woolies and other poorly run chains go out of business, the better it will be for the high street - currently companies like Woolies just dilutes a very difficult market making it more difficult for everyone.

    I am amazed anyone is surprised that Woolies has failed so fast, it hasn't! The righting has been on the wall for months, credit insurance was withdrawn because insurers knew it was no longer viable

  • Comment number 18.

    Alex Curzon, yesterday you were writing like a shouty kid, today you are attempting the form of poetry. (try reading the posts as if they were poems, works quite well)

  • Comment number 19.

    Robert, I understand from your blog that the Woolworths on our high street has a parent company.

    How is it possible for them, presumably, to benefit if they had sold the chain of stores and, yet, the parent company doesn't pick up the tab if it goes under?

    Is this something for both media and government to look at?

    Great blog btw

  • Comment number 20.

    Re Post 5 by eddixon

    "A question for everyone out there.
    If Crash Gordon were to step down or get forced out before the next election, will he be the first PM never to have even contested a general election?"

    I believe that Sir Anthony Eden succeded Churchill and then resigned after Suez without contesting a general election as PM.

    You're all doing very well !!!

  • Comment number 21.


    You acknowledge like-for-like sales plumetted as economic uncertainty took hold. Why could that be, I wonder? Could it be that shoppers became more price-sensitive and realised just what poor value Wollies had become?

    And why do you think that "around the same time" suppliers found they couldn't insure against Woolies' bad debts? Could it just be that the suppliers of this insurance check out the sales stats on a rather more timely basis than you do? Maybe someone had the novel idea that it isn't smart to provide insurance against bad debts for a firm whose cash flow is plumetting and which is close to its debt ceiling.

    As for some of your other points, all I can say is you seem to have reverted to "The Sun Says" mode. If Woolies' sales have plumetted, then two things have happened. Either retail sales generally have fallen sharply, in which case the effect on suppliers is the same whether Woolies survives or not, ie there are no sales therefore no purchases from suppliers. Or, sales have been at least partly diverted from Woolies to other retailers, and suppliers will be getting larger orders from them to compensate for the loss of Woolies business.

    Finally, oh no, other suppliers won't be able to get supplies of books, CDs etc from Entertainment UK. If this business is so critical at this time of year, it suggests it will be cash positive, which means the Administrator will keep it going. The banks behind the Administration will support it, ie provide credit and ensure if necessary supplies can be paid for upfriont, simply because positive cash flow is to their benefit. If it's that good a business, it will be attractive to someone to buy it.

    Alternatively, it's just another basket case company that failed to adapt to the internet age. Personally, I can't imagine going into a shop for a book, DVD, CD etc anymore. Have you heard of a company called Amazon? And does anyone buy CDs anymore? Doesn't everyone just download direct onto their iPod? It's years since I bought a physical CD.

  • Comment number 22.

    yes, thats right. its the credit crunch that has done for Woolies...conveniently ignoring the fact that they were an ailing company with an outdated business model, and the worst advertising campaign in years - really? a toy dog and sheep are going to to turn your business around?

    They sell tat...sorry, sold. Where will we get our low quality greetings cards, discount quality dvd's and one penny sweets now?

  • Comment number 23.

    The big surprise regarding Woolies is that it has taken so long for them to come to this position. A firm that had lost it's total direction and could find no viable reason for existence is sure to fail. Sad that an 'old friend' has gone but not it's not the end of the world.

    Neither will it be the last of the big names in the High Street that will bite the dust after the Christmas season.

    As for suppliers and their insurance guarantees, their position is surely their own fault. They contracted with Woolies knowing that they had been in a perilous state. If they did not take this business risk into account whilst contracting then they only have themselves to blame.

    The question now is will the fire sales start before or after Christmas?

  • Comment number 24.

    It is sad to see Woolies go but it will not be missed as the current format was a dead duck. If only the Directors had the vision they could have made it a profitable business as it still has alot going for it.

  • Comment number 25.

    It's almost comical some people take their personal digs at Labour party and Gordon Brown and company when businesses fail. If the businesses are unsustainable they will fail no matter who the PM or chancellor is and there's little they can do about it. They are not individually responsible for running these businesses so blaming them everytime some business entity goes under is silly to say the least. The other parties have hardly come up with any resolution of their own and they don't seem to have answers to the economic problem either so please take out your personal grudges at the time of voting and spare everyone the same old whining.

  • Comment number 26.

    GMAC part of US firm General Motors, Burdale part of Bank of Ireland, GE part of US firm General Electric, Wachovia the failed US bank which was taken over by Wells Fargo, and Bank of America decided that they had no reason to listen to Gordon Brown's cry for banks to lend. Just about every single one of the lenders mentioned is a US firm and has got into trouble with bad lending practices. By bad lending I mean they undercut lending costs of more prudent banks and completely mispriced the risks of the loans going into default.

    We could blame the banks for making risky loans to Woolies without forcing them to make sure they were better structured but the real demise started started some time ago when the buffer against hard times was removed. When woolies actually owned their shops then during a downturn they had the option to sell a few shops to raise some money. Modern retailing business practice though is for commercial real estate to be seperated from the retail business as it limits expansion with money being tied up. Many modern retailing businesses now operate within such fine parameters that a 5 percent downturn for any protracted period puts them out of business. Once we get past christmas we should expect more news of retailers getting into problems as they spent the last few years rushing to get more highly leveraged just like the banks, government, councils and other big firms. Small and local will survive just as it always has.

  • Comment number 27.

    I will buck the trend here, I think that in January the bulk of chain stores will report record numbers through their doors.

    Why, because as mentioned, stockholding has to be reduced, suppliers paid, debt burdens slashed. In-store prices will continue to drop and people want a good xmas, maybe the last for a while.

  • Comment number 28.

    The collapse of one badly-run retailer does not mean that all the consumer spending that would have taken place there has gone away. Most will be diverted into better run businesses, and make them healthier,

  • Comment number 29.

    Why should the government step in at all? Why mention it? The more they step in the worse it will be.

    We need to clear all these crappy shops out of the way - I'm sad to see Woolies go, a friend will lose their job. But we have an economy with 70 odd % consumption. That will have to drop below 50%, surely. So we'll no doubt see the back of many, many more, especially those that thought it was a good idea to mortgage themselves to the hilt.

    It's a good job many private companies don't run the same way as they might be the only ones left standing when this finishes.

    Very hairy.

  • Comment number 30.

    Excellent analysis Robert. Much food for thought.

    This is the most frightening bit: "...administrators will probably keep the stores open for the next few weeks, and slash prices to shift all the stock.

    That would be good news for shoppers, very bad news for weak competitors."

  • Comment number 31.


    Great piece. I too will be sad to see woolies go. I hope something can be done to save it. Many a great day out with my late grandmother to the pic n mix section.

    Thanks for the memories woolies!!!

  • Comment number 32.

    The taxpayers can not pay anything to any company, enough is enough.
    I for one shall not weep for insurance companies, they are the bane of all our lives and should not get any tax funds.

    We should have let the banks fail, we have to let our insurance companies and their greedy shareholders fail.

    It is a great shame that Woolies will go, many fond memories include that place.

  • Comment number 33.

    Forgive me if I sound naive, but if this is a "Global credit crunch" and the government are trying to encourage further debt, sorry borrowing, to keep the economy bouyant - who are we to borrow from as it seems to me everyone is borrowing from everyone else. I was utterly shocked to hear Woolies has fallen, less surprised at MFI, but clearly we are heading for uncertain times as if the Banks caving were the snowballs thrown, what is to follow in the avalanche that has taken Woolworths with it? The Government needs to find a better solution.

  • Comment number 34.

    Did Alan Sugar ever complete his purchase of 4% of the shares?

    One way or the other not the time for an Apprentice "you're fired".

  • Comment number 35.

    Sadly (for the staff and suppliers that have lost money) Wollies has been a busted flush for years - just compare their shops to Wilkinsons for how to run a "Premium Poundshop" and you;ll see their problem.

    All this turmoil may have an eventual good effect on the high-street - we may end up with the emergence of more businesses with a less short-term profit-driven view of doing business. Not good for shareholders but pleasing them was the cause of much of the short-term nonsense in the first place. Has anyone else noticed that the discount supermarkets from the continent (Lild & Aldi) always seem to do very well and are private busineses with no shareholders......

  • Comment number 36.

    Farewell £1 bags of Haribo. You shall be sadly missed. Where now shall my mother go to purchase those cheap kitchen utensils that were a feature of my student years? Those odds and ends that somehow were all found under one roof.

    It has been a long time in coming. Woolworths has for many years appeared well worth avoiding if the brightly lit but deserted aisles were any indication. Should we mourn its passing for nostalgia's sake when we did nothing to keep its heart beating, save for the occasional 'emergency' purchase?

    The sad sight of an empty site will no doubt have an impact on the local shops around the fallen retailer; perhaps a scavenger with an eye for an opportunity will pick those bones from its carcass and make something of it. Perhaps not.

    This will come as small comfort to those who will find themselves unemployed as a result, however, we should not shed a hypocritical tear. If you didn't buy from Woolworths, you can hardly cry for the place. Those whose lives are impacted maybe. Ultimately though it was the relic of a bygone age, a retail dinosaur that had failed to capture the minds and business of the modern consumer, who had apparently little concern for the price tag, only that they get exactly what they want.

    In one of life's little ironies, as we enter a recession, the need for somewhere like Woolworths may be resurgent. An inexpensive retailer where you can get all the little things you need without breaking the bank (sic).

  • Comment number 37.

    We are all to blame to a degree for Woolworth's demise.

    We seem to be getting out of the shopping habit, big-time, and I cannot see us going back.

    I last went into a Woolies shop 10-15 years ago, and have never been in one since. Same for MFI, Do-It-All (Focus Group now?) and so on.

    There is an inner resistance to buying big-ticket items that has reflected onto the smaller retailers as well, so if we don't go out to buy something large, we won't go out for something small at the same time.

    Ebay has a lot to do with it; We buy a lot of kit on-line. Prices there are never going to be matched by the High-Street so why bother looking?

    We just have our roof off, literally, new trusses arrive tomorrow morning. We got a lot of the materials on-line rather than the builders merchants who traditionally would have supplied us, another potential problem looming as building slows down.

    As the high streets become just a row of Building Societies and Video Hire shops, nobody wants to go there any more.


  • Comment number 38.

    Sad day for Woolies - yet more retail woe will come.
    Beyond that what about UK plc? Mr Brown says that our debt (43% of GDP) is lower than that of Germany (65% GDP) but what about the private finace debt, unfunded public pensions and the bank bail-outs. According to EH Amory in the Daily Mail this amounts to £2,366billion (157% of GDP). Who is right and when does UK plc become technically bankrupt. Need to act now and cut cloth accordingly. Can we all please get real.

  • Comment number 39.

    Derek53 - Your argument that suppliers won't lose orders because we will simply buy goods from other stores isn't so simplistic as that I'm afraid.

    Take a bag of own brand teeth and lips sweets for example. Woolworth's, Tesco and Morrisons all sell them, but they may well be supplied by different companies in different areas of the country. Therefore, a supplier has lost its main/only customer and may be forced to close with the loss of further jobs. In turn, a haulage company will have also lost a customer at a vital time (delivering the sweets from the factory to Woolworth's), as will the producers of the sweet's ingredients.

    Even if Tesco and Morrisons do raise their order, it will probably do nothing to help the redundant staff from the Woolworth's factory or replace the lost business further down the supply chain.

  • Comment number 40.

    #19 "How is it possible for them, presumably, to benefit if they had sold the chain of stores and, yet, the parent company doesn't pick up the tab if it goes under?"

    Limited liability means that shareholders in a company are not liable to make good that company's losses out of their other assets.

    Adam Smith thought that all limited liability companies were a fraud perpetrated against the public. But the system was originally designed to protect individual shareholders not involved in the day to day management of a firm. It could also be argued that if a firm sets up a limited liability subsidiary, it encourages innovation and enterprise because failure of that company will not destroy the parent company.

    However, the system is open to great abuse and has indeed been abused many times in history.

  • Comment number 41.

    MFI deserved to go to the wall years ago as it failed to innovate. It started the self assembly chipboard revolution in the 80's. Whilst IKEA boomed in the late 90's early 2000's MFI should have followed the market trend to simple, low cost, stylish products and use it's huge network of stores to reduce IKEA's market penetration.

    Woolworth's may be the butt of many jokes but it is the cornerstone of many High Streets and they'll be much duller places without it.

    Whilst I don't think that any one business deserves special favours, we do need to solve this 'confidence' issue where as soon as there is any whiff of a problem the credit drys up and business ceases. Therefore the rumour becomes a self fulfilling prophecy.

    I struggle to understand how a retailer with prime real estate and a £3bn TO can't make a profit, even with debt at 12.8% of TO.

  • Comment number 42.

    I swept up on an evening after school at my local Woollies, very sad to see it go.

    But like a lot have said and will no doubt say today - it was inevitable

    I'm starting to think the High Street is to Labour what the Mines were to the Conservatives..... only without the union leader

    Back then we had an industry producing coal that no one wanted (the idiocy of Scargill bringing his guys out on strike with nearly a year’s worth of coal above ground still astounds me)

    Now we got high streets employing hundreds of thousands of sales staff dependent on lending that isn't going to happen again in our lifetime - get ready to see the ladies from Pick n Mix become the next Flying Pickets....

  • Comment number 43.

    Oh no! Not woolies! The poor sheep has finally collapsed and died from it's financial ovine AIDS

  • Comment number 44.

    In your article you mention the pension deficit. How long before the government has to step in and support the Pension Protection Fund? As taxpayers already underwrite generous public sector pensions the government could not morally refuse.

  • Comment number 45.

    #25 From what iv read people are blaming woolies for the collapse of woolies.
    Take the blinkers off!

  • Comment number 46.

    So now I get it. It's less the banks' willingness to lend than credit insurance drying up. Who can blame the insurers when they have to price their risks on the basis that someone like Woolies is a cert to go under?

    It's a great shame, part of how the retail scene is changing, but there it is. Not just competition from people like Tescos but the internet. I doubt we'll see too many domestic electronic shops on the high streets in 10 years' time.

    Looking down the line, all these "town regeneration" schemes will probably fall flat unless regeneration means downsizing of high-street shopping facilities.

    My thoughts go to all those who face the festive season with the knowledge that they'll be out of jobs very soon.

    Yet, elsewhere in this morning's business news I see car markers are hoping for a bailout. It would be extremely unfair for them to get it, not to mention protectionist which is not what we want right now unless we're turning the entire nation over to communism.

  • Comment number 47.

    Robert, I will tell you what really shocks me. It is that any professional commentator such as yourself can write 'a decade of benign, debt-fuelled trading conditions which we now know to have been unsustainable '. Anyone with half a brain has known that the apparent success of Brown's policy has been no more than a consumer boom based on easy loans. Yet the general public have been told for years, by your colleague Evan Davies as much as anyone, what a brilliant job Brown has done and what a great bloke he is. We deserve better.

  • Comment number 48.

    While I agree it is sad to see a household name like Woolworths on the precipice, one also has to have a sense of reality. Businesses fail because they lose their customers and this is precisely what has happened at Woolies.
    Many years ago, a major re-structure of the business helped to re-launch Woolies back on to the High Street, concentraating on its major strenghts. But since then, nothing has changed. Woolies has stayed exactly the same, competition has increased dramatically in that period particularly from the supermarkets.
    Woolworths hasn't died due to credit problems or global factors, it has died due to bad management and lack of customers. The problem with the current crisis is that there are too many bad businesses using it as an excuse to lay blame away from themselves. Dare I suggest we could include a few banks in this list?

  • Comment number 49.

    even by your own melodramatic standards, your performance on last night's BBC 10 o'clock news took the biscuit.
    Please stop patronizing us and start to treat us as reasonably intelligent adults.....or was I the only one that felt patronized?

  • Comment number 50.

    Government policy is not to prop up lame ducks," our correspondent said.

    Robert you said this.

    If this is the case why did HM Government prop up the banks? They are the lamest ducks that we have and it they that are still dragging the rest of the economy down.

  • Comment number 51.

    To be borrowing that sum of money plus trade creditors on falling sales and lack of assets is beyond belief. Management and lenders must have been over optimistic for years. And now everyone losses more. No good everyone talking about buyibg things in woolies years ago, i doubt if todays youngsters would be seen dead in it!

  • Comment number 52.

    Robert says "Although Woolworth had been one of the UK's weaker retailers for years - propped up by a decade of benign, debt-fuelled trading conditions which we now know to have been unsustainable" and "And it's the suddenness of how everything turned bad that shocks"

    When do we get the blog from Robert which goes something like

    "Although NuLabour UK had been one of the UK's weaker Governments for years - propped up by a decade of benign, debt-fuelled trading conditions which we now know to have been unsustainable" while GB and AD say "And it's the suddenness of how everything turned bad that shocks"

    How can this be sudden when everyone was expecting this for years !!

    Woolies and NuLabour - 'Cheap and Nasty." !!

  • Comment number 53.

    Another doom fest.

    So Woolies could have limped on if sales hadn't fallen off a cliff 4 weeks ago. Not that is should have or be propped - it's in administration and pieces of it will be scooped up and rise again in a better more suitable form to survive in future.

    When did that nice Downturn logo and the doom laden media coverage really get going - when was bad news, the news every hour of every day. This is negative advertising - as oft stated if advertising didn't work then no-one would do it. Advertising doom sells doom which is why I return in this post to the theme. A part of this decline can be squarely placed on the media and the tit for tat political childsplay the Tories and Labour have engaged in.
    It wasn't going to be nice for everyone but it perhaps need not have been as bad as it is going to be for fewer.

    People with jobs do perfectly predictable things - they fear for the future and stop spending in case they need the money later becuase they lose confidence. The news has advertised that in future you may be worse off so people react.

    The new media and sorry but Mr P very particularly have accented all the bad news without the tempering of any sense of scale.

    I will give you a very clear picture that even now there are positives in the climate which are going to help bottom out the problem.

    An EU company manufacturing abroad sells in the UK (we are a big market) so gets lots of GBP from customers. Over the last years it was OK to swap these for Euro/Dollars or whatever currency needed to buy more raw materials. It would even force UK suppliers to sell in Euro as this transferred the one way strong pound pain to the UK supplier and the GBP they got could be swapped for more Euro/Dollars.
    Now - the GBP has declined in value. Today the company still has lots of GBP from customers but it not worthwhile swapping them for anything else - what to do - actively look to buy raw materials in GB.

    If we hadn't had the cityfest for so long we may well have more companies able to take advantage of this - but the strong that remain will start to benefit very shortly.

    To use an oft used analogy:
    The economy Titanic has hit the iceberg, it is damaged and worth less than before it sailed. There is a hole in it but the engineers haven;t yet established how badly she is holed. Certainly at least 2 possibly 3 compartments but not neccesarily the 4 required to sink the
    Repairs are being attempted to stem the flooding and the outcome is not yet known.
    But the media are suggesting that it is time to jump into the sea having advertised there are not enough lifeboats and even if you are lucky and get one you will probably freeze to death.

  • Comment number 54.

    High street shops had better take note of the demise of woolies ; a lot more will follow unless they realise that the customer comes first. People , thanks to the internet , now know how much they should be paying, and unless the high street shops compete, then they will be out of business. There is no god given right to make a profit in this world, if you do not compete you go under. I suspect unless M&S get their act together, ( no longer customer friendly ) they may well go the same way. Primark has shown the way ahead and it has nothing to do with ripping off the customer because you happen to have your shop in a town centre.

  • Comment number 55.


  • Comment number 56.

    To 20 Young Mr Grace

    Thanks for the answer, but I checked it out and it seems the first thing Anthony Eden did was call a general election in 1955 which he won with an increased majority over Clement Atlee.

    Anyone else have any thoughts on it?

  • Comment number 57.

    #12 - are you sure you were working at Woolies? Sounds more like you were at Downing Street to me.

    "...they have not moved with the times and are stuck in the late 80's with thier ideas and structure. There are so many managers, that some of them don't even have any staff to manage, there are little empires all over which do not work for the good of the company. They accept failure as part of daily life and everything they do is a tactical, short-term fix, there seems to be no clear strategy and long term plan as too many managers have their own little agendas."

  • Comment number 58.

    oh Bert bert bert - give me strength

    the credit crunch has done for Woolies - not likely

    its been a shambles for years and you know it

    there are vultures who will resurrect it so the job losses will not be as much as you claim

  • Comment number 59.

    I agree, Woolies has been past it's sell by date for a long time. The town where I live lost it's Woolies years ago to the poundshops and Wilco. Woolies used to be the sixpenny store, cheap, chearful and eclectic as you say; I can't remember the last time I went into one. It now belongs in the time of rose tinted glasses and long hot summers...

  • Comment number 60.

    Quote #30 sachaclarkson
    "This is the most frightening bit: "...administrators will probably keep the stores open for the next few weeks, and slash prices to shift all the stock.

    That would be good news for shoppers, very bad news for weak competitors."

    Doubt it somehow- they'll probably be low on any decent stock to shift to make a dent to anyone else!

  • Comment number 61.

    Chronic mismanagement has done for Woolworths in terms of its failure to modernise.

    It was treading water at best during a sustained (artificial) period of economic grow so why the surprise that it falls on its face when the going gets tough.

    Personally I cant wait until every shop is a Tesco.

    (that is irony btw)

  • Comment number 62.

    I just want to know who stocks Ladybird kids clothes apart from them? Because it's a fantastic, well priced brand and, apart from pick'n'mix, I'll miss it.

  • Comment number 63.

    "Woolies hasn't known what business it was in for years. This is more a marketing disaster than anything directly to do with the current economic climate"

    I could not agree more!

  • Comment number 64.

    According to my late relatives of previous generations, Woolies started out as a sort of pound shop, where nothing cost more than 6d (old pence). It gradually turned into something else and forgot its roots. I suppose a true modern equivalent would be Wilkinsons.

    A big problem now is that other firms, who started out with a "pile 'em high and sell 'em cheap" strategy are so huge that they dominate the market. They squeeze producers on the one hand, bully government (national and especially local), and overcharge (almost) captive consumers. No names mentioned for legal reasons but we know who they are. They really do restrict choice. The middleman is king. They should be broken up and, where possible, boycotted.

  • Comment number 65.

    Very sad to see another old name go. Another example of a company being passed around with no real passionate true owner. Piled with debt and, like the country. no substance or assets to call on.
    The problem with the withdrawal of credit insurance obviously speeded up the process and this is one factor that will bring many more companies down. I work in construction supplies and the credit insurers
    have withdrawn almost ALL cover, despite having taken the premiums for years. The choice is, do you continue taking the orders or simply reject the risk and downsize the business. Many are doing just that instead of finding themselves with a massive debt and their own company going to the wall.
    Massive job losses are the result.
    Still Gordon doesnt GET IT !

  • Comment number 66.

    Robert you wept for Woolies did you?

    That sounds a little too Barbara Cartland for my taste. Perhaps you should get together with a few theatrical types at the BBC and produce "Woolies" the musical. Perhaps you could get the dog and the sheep from the advert to do a poignant duet about a love lost.

    For most of us we don't care except perhaps about people losing their jobs and pensions.

    I have been in Woolworths just once in the past 5 years and it was pathetic. Woolworths had become emblematic of why our midsize high streets have been lsoing out more and more to the internet.

    Nasty Junk. Poor Value. No service.

  • Comment number 67.

    @ 49

    I thought Robert was trying to impersonate Rory Bremner last night. He was ridiculous and patronising. Nice to drop a reference to the blog though, as subtle as a self publicist on a talk show!

  • Comment number 68.

    Wooworths has been a bust business model for years. It's a mess. It has / had no clear identity. What do you go to Woolworths for, for heavens sake?

    What is alarming is that Woolworths became an unworkable business as soon as its credit insurance was withdrawn. That is when it should have pulled the plug. There is no way on God's earth that it could have got itself out of that hole. Questions need to be asked.

    Is credit insurance necessary? It's very expensive and is a business health indicator...but it's not always accurate. If it remains a prerequisite for businesses trading with each other, everything is going to come to a grinding halt because there is going to be a wholesale withdrawl of credit insurance from thousands of businesses in the next few months.

    Perhaps it's time for companies to save money and forget about credit insurance. It's certainly not part of the insurance industry that should be propped up.

  • Comment number 69.

    So the poor old banks pull the plug. Their secured lending is fine.

    That just leaves SUPPLIERS not getting paid then. Unsecured creditors will be £500M at least in stock they cannot get back. They have no choice in the "pulling the plug".

    How much does Woolworths owe VAT and NIC? Back of the queue Mr Brown for your cheque I am afraid - unsecured creditors now.

    Whilst Woolworths, MFI, the Car Industry are all big names, the cost to smaller suppliers with good business models is IMMENSE. They are the ones who will not get paid by the Administrators, or get some very small % in £.

    Up and down the UK on industrial estates in towans and cities, manufacturers, wholesalers and distributors are dying and their job losses in the 10's and 20's are only about to start. Thats the real news to report here Mr Peston - the local losses most of us can relate to.

    Banks lend recklessly to Woolies flawed business mdoel,

  • Comment number 70.

    And what about MFI? One word...IKEA

    MFI was really boring. IKEA is interesting and vibrant.

    Let's not cry too much!

  • Comment number 71.

    Didn't anyone at the top level of Woolworths management think to stream-line their stores years ago, close un-profitable ones and re-invent themselves by setting up 'Mini' Woolworth Stores with products maybe not found in other shops? Re-invention - a business practice successfully used for over 40 years in Western Europe!

    Who were ‘they’ the management board, kidding when they thought all their mounting debts could be solved by borrowing more money?

    Remember C & A Stores? Refused to change with the times and went the way of the dinosaurs!

    In a nut shell and I am now going to mention ‘names’. Curry’s, Pc World, T J Hughes and Argos – Streamline, re-invent and re-focus, quickly! Or the now defunct slogan ‘the wonder of woollies’ will quickly morph it’s self to become ‘the blunder of follies’ for you lot as well!

    I’m sorry but that’s the way I feel!

  • Comment number 72.

    I remember going into Woolies as a nipper and buying a pound in weight bag of broken biscuits for fivepence. Perhaps if they had stayed selling that sort of thing rather than filling the shelves with Chinese produced tat, they might have survived. The true fact is that this should have happened some years ago.
    Who next i wonder? Surely at least one of the DIY chains may fall. And the news from electronic sector this morning is not good.

  • Comment number 73.

    Alexander Curzon

    You have a massive beef with 'new' labour. Do you really think the Tories would be any better?

  • Comment number 74.

    The common link between Woolworth's and MFI is that they are not very good and have not been very good for some time. Current conditions may have influenced the timing of their demise but have not caused it.

  • Comment number 75.

    # 66

    Brilliant. Sale proceeds for the Musical tickets should go to the pension fund.

    BBC could also do an X Factor job to cast the lead role of Wooly: who should wear the wooly suit? Again, all phone call proceeds to the pension scheme.

    I can see a final eliminator between John Sarjeant and Bobby Peston.

  • Comment number 76.

    Media Doom Gloom or Enlightening?

    Ladies and gentlemen, I see many posts here about how the media are 'dragging the country down'.

    This is rubbish.
    In China the state media reports that the economy is doing well. So thousands of factories get closed at a moments notice. The employees, unaware of what is going on, get shocked, stung and (unheard of before) start demonstrating and rioting.

    In Russia, again the media is 'dissuaded' from objective reporting. So the stock market gets suspended, what? 4 times? And what of all those millions of Russians with small shareholdings that got told nothing. Yes, bankrupted.

    May I suggest that if you dont like free media then you should stop reading the news, turn off your TV and get an allotment..

    The media will NEVER be ideal, but freedom is paramount, and I respect your rights to post your rubbish.

    And seriously, if you all think Robert Peston is solely responsible for this crisis may I suggest you lobby parliament to give him 300billion so he can fix it.

  • Comment number 77.


    "And what about MFI? One word...IKEA

    MFI was really boring. IKEA is interesting and vibrant.

    Let's not cry too much!"

    You need to add as well - expensive! Most stuff in MFI was probably twice the price of an equivalent in IKEA and you couldn't pick it up on the day and still had to build it yourself.

  • Comment number 78.

    As businesses go bust, credit insurers will pick up the tab-question is, with repossessions at high levels too, just how long will the insurers be able to pay out?

    Credit insurance will dry up quickly as their criteria are likely to be more stringent now. (echos of bank lending policy?)

    The next step in this upheaval is waiting for insurance companies to go to the wall. Watch premiums rocket!

    When all this hit the fan with the banks, I was wondering about insurance companies being next. Perhaps Robert, you could do some digging on this one?

    And please correct me if I'm wrong, but isn't Morrisons owned by Walmart? So not shopping at Tescos and shopping at Morrisons supports an American Supergiant company. Sainsburys would be a better pick maybe?

    We are in an economic revolution/reformation of a kind previously unknown. It will take more than a 2.5% VAT reduction to sort it out. Like it or not, the time to stop the chaos accelerating has past, and we've all got to do our best to hold tight.

  • Comment number 79.


    Very sad to see Woolies go, but basically it didn't sell what people want. Management had plenty of time and chances to correct course, but despite their best efforts failed.

    On another economics/business issue, I read in the papers this morning that the gov't is actually proposing to increase employers' national insurance.

    It's very simple: making it more expensive for any business/public sector body to employ workers means less of them will be employed.

    Shouldn't Labour have tried to actually cut employers' NI to encourage greater employment during the recession? This is what people really need, rather than the dole. Sorry, sickness benefit.

    The gov't seem to say one thing but when you look at the small print, do another. Surely we should be aiming to maximise employment even if this means taxes go up elsewhere? Lowering the cost of employment would also reduce the number of job outsourced overseas, etc etc.


  • Comment number 80.

    Totally unrelated to the retail sector, but just as worrying is this

    I run a company that provides services to our biggest construction and House Building Companies (Firms like Balfour Beatty, Taylor Woodrow, George Wimpey) and we are now struggling to get paid from them, which is obviously a bad sign.

    If any sector needs help now from the Govt now it Construction. These companies tried to cut their cloth 6 months ago with jub cuts etc, but now things are taking a turn for the worse and many are going to go to the wall as they are unable to service their debt.

    We are being asked to spend our way out of this recession. That WILL NOT happen.

    We could however build our way out of it, but if the powers that be dont act quickly there will be no one left to actually do this.

  • Comment number 81.








  • Comment number 82.

    # 69

    Suppliers have been demanding cash up front from Woolies for a while, so unlikely to lose much.

    It's actually the suppliers who appear to have been the catalyst for Administration. Cash up front seems to have caused Woolies to hit its debt ceiling.

  • Comment number 83.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 84.

    Woolies like Mfi and others were lucky and survived ONLY because of the credit bubble which maintained for awhile the fantassy that debt could be rolled to infinity and beyond

    Labours "things can only get better "secular religion was the "Tooth fairy " peddled to the mass fodder product of the enlightenment, who by their abominable actions[labour] scoffed at the word of the living God

    Politicians thought[they called it thought] fractional reserve banking and the pumping of easy credit was, a one way ticket to home owenerrs parrodice [for those already well up the housing ladder] instead it turned out to be a delayed day return to paloooooookahville
    about which they are still in a denial destined to turn to anger and blame etc etc

    Democracy that only pays lip service to overiding heavenly law whilst ,twisting its precepts ,is no more than a closed loop for the delusional insane, whos main wish is to bounce reality cheques until forced by mortality into oblivion where no further bouncing is possible

    The credit bubble allowed the Par lammentable lunatic fringe to be pulled over the ayes,the disapearance of "woolworth " leaves the mperrors once into sheeps cloathing looking for new tailerrs ,to spin their woolly balls with their nitting needles into the latest Armani [our money]transparent fasion statement

  • Comment number 85.

    It has suffered basically the same fate as Kwik-Save and for basically the same reasons.

    There is no room anymore for large retail outlets on High Streets if they are competing against outlets in out-of-town retail parks. And high street business rates are little short of outright theft.

    Watch out for the slow but sure demise of decorating franchise Fads over the coming months and one of either bargainbooze or boozebusters to wobble.

  • Comment number 86.


    Neville Chamberlain never faced a general election.

    John Major served 499 days until facing a general election. Gordon Brown has so far served 520 days. Its quite normal NOT to call a general election when you take office in the incumbent party.

  • Comment number 87.

    So sad! Today is market day in my little Cumbrian home town. Very wet. Off to get some fell bred lamb for a hot-pot, home made cakes & a browse round warm, welcoming Woolies to look for stuff I have forgotten I need, but definitely including a couple of egg-cups.

    Says it all I guess. I don't eat sweets, have a baby or play computer games so rarely need a lot more of what they offer.

    But market day will never be the same......

  • Comment number 88.

    "Take a bag of own brand teeth and lips sweets for example. Woolworth's, Tesco and Morrisons all sell them, but they may well be supplied by different companies in different areas of the country. Therefore, a supplier has lost its main/only customer and may be forced to close with the loss of further jobs. In turn, a haulage company will have also lost a customer at a vital time (delivering the sweets from the factory to Woolworth's), as will the producers of the sweet's ingredients. "

    You might be write but not necessarily true.

    I worked with a woman whose father was a director of a large food company in Sheffield. They made Christmas cakes for all the major supermarkets. The only difference was the packaging and the quantity of the expensive ingredients. M&S has more of the expensive ingredients than Tesco. However the cakes were all made in the same factory.

    I don't doubt many companies may go to the wall or have to lay off people as the knock on effect continues and I hope they get some support or new employment.

    'Govt policy doesn't support lame ducks'

    Not strictly true. As others have mentioned why are many banks being supported?

    The answer is obvious.

    People would be out on the streets and our politico's would be hanging from lamposts....

  • Comment number 89.

    The sharp drop in Woolies sales was a direct result of the marketing of fear by the politicans via the media in order to justify the intervention or 'bail-out' in the financial sector. A significant proportion of the public objected to the concept a 'gift' or 'free aid' to bankers. The bail-out was mis-sold both here and in the US. It was never effectively said that the taxpayers money would be secured or that the taxpayer could in fact make money on the deal if things went well. Because of this the fear had to be ramped up and up to gain intervention. It is a coarse mechanism and was bound to overshoot. If you put the fear of god into people you will stop them doing what they normally do. They will stop and look around, sit on their hands for a bit. You change buying habits, which in terms of the high street economy is the last thing you want to do. That is all you are seeing. It is governments job to smooth discontinuities, not exacerbate them, but both here and in the US exacerbation has been the story, both on the way up and on the way down. In a highly geared economy with tight coupled supply chains even a short discontinuity is disasterous. Any retailer who peddles goods seen as a deferrable purchase is vulnerable, and there are a lot that fall into that catergory. From the suppliers point of view the seizure of sales is compounded by the buffer of goods in flow in the supply chain so the subsequent loss of orders with the supplier is amplified and the supplier can be in very real problems very quickly. Both retailer and supplier cannot restructure quickly enough, particularly with an old school model business. Much of this situation is the direct result of poor policy and communication by government. It is an inescapable fact. Note - I posted that fear was being deliberately used as a tool prior to intervention and that its effect would overshoot so this comment is not with hindsight. This still has several months to travel, with businesses and therefore jobs to go. The sales are not made up elsewhere, because the purchases are deferred, and therefore may never be made. Having created the quicksand HMG is finding it has relatively little room fo manouevre, therefore little impact. This is probably true whoever is in government at this stage. The main contribution from the oppo to date has been negative messages. This shows the size of the problem. Politically the objective seems to be to chip away and discredit Brown, with some success, but the blowback is that as no perceived positive policy is proposed the opposition is not seen as providing a solution. This just further destabilses the situation and does not help the stunned public recover confidence. It is difficult to see divergent policies developing until economically progress is started to be made. That is when the bill will start to arrive. The public are reluctant passengers on a ship between ports at present, with some being cast astern in lifeboats on the way to ligthen the load.

  • Comment number 90.

    Whilst the loss of jobs is a sad thing, I can't say I'm too bothered to see the end of Woolworths. Their retailing methods are (were) completely outdated. By trying to sell a wide variety of things the staff were often clueless about much of what they were selling and crucially, I'd find things I'd want always out of stock.

    Whatever you might want to buy on the high street, there's usually a specialist shop nearby which would sell the same product as Woolworths, but with knowledgable staff selling it with cheaper prices. Except for the pick 'n' mix of course.

  • Comment number 91.

    As usual the BBC goes for the "crisis crisis, doom & gloom". Please be realistic "Woolies" have been failing for years it not a credit crunch or recession thing it that woolies are 10yrs out of date, the market and consumers have moved on woolies has stood still. Funny that theres no report on how many internet companys are having a bumper christmas, but heh good news doesn't sell

  • Comment number 92.

    # 53 - Good post - 90% of the current problems are media-induced, resulting from doom laden reporting undermining confidence in the general population. Couple this with Bankers reverting to type and behaving like a bunch of spineless, money-grabbing crooks and we are where we are.

    As I've said before on this post:


    A good start would be to suspend Stamp Duty across the board for a period of 12 months.

    Who knows, even a business as fundamentally flawed as Woollies could be re-structured and reconfigured to produce a profit - but only if customers feel secure about their property values and jobs.

  • Comment number 93.

    78. Tigerjayj
    Asda is owned by Walmart not Morrisons which is a UK plc.

    Credit insurance is already incredibly expensive and as note in the original piece the loss of this was a major part of Woolies problem. No supplier could get it so they demanded cash up front for stock - Woolies either had to borrow to get stock or the supplier took a risk. Can't imagine too many suppliers who would have done that with Woolies.

  • Comment number 94.

    For at least two decades the globe followed the business plan of easy credit and high debt and produced budgets accordingly.

    No one had the courage to march 'out of step' and present the alternative business plan.

    Now we are all wiser and 'in step'.

  • Comment number 95.


    "And please correct me if I'm wrong, but isn't Morrisons owned by Walmart? So not shopping at Tescos and shopping at Morrisons supports an American Supergiant company. Sainsburys would be a better pick maybe?"

    Close but not quite right - Morrisons is a British owned business (it absorbed Safeway a few years ago) whilst it it ASDA that it owned by WalMart so it you're allergic to big supermarkets they're one to avoid!

  • Comment number 96.

    Mr Peston and Comment No 44 Rangeray.

    Thank you for bringing to my mind the pensions timebomb.

    I had forgotten this issue,

    I am not 'au fait' with the pension fund market, however I feel that this is deep deep merde.

    Type 'Pension fund hole' into a search engine.

    I feel (but dont know) that as this crisis races towards its peak that there is a nasty 'double whammy' for employees and taxpayers alike.

    Maybe the subject of future comment?

  • Comment number 97.

    49 Sapperpj:

    ' ... was I the only one that felt patronized?'


    What do you want Robert to do, reel out endless abstractions that mean little to anyone? Yak-on endlessly in a semi-academic tone just to please the intellectual snobs out there? His conversational style is based on sound journalistic standards. He's good at his job, conveys information in a clear and lively way and has encouraged many people to think about wider economic issues. If you want a sermon or a lecture go to church or to university. If you don't like how he conveys his 'message' then don't watch him.
    He's not perfect but he's never boring. So give it a rest.

  • Comment number 98.

    #80 "Construction company woes..etc"

    It's a shame Robert and the rest of the media didn't notice the writing on the wall for these companies when they were busily talking the housing market down 12-18 months ago!

  • Comment number 99.

    #78 Tigerjayj "And please correct me if I'm wrong, but isn't Morrisons owned by Walmart?"

    No - it's Asda who's owned by Walmart. Morrisons is still (largely) British owned and still based in Yorkshire. They have a website which is quite informative.

    I must say I also have a lot of time for a couple of German owned firms who offer good value and treat their staff well by all accounts.

  • Comment number 100.


    The economy is shrinking the 3 billion thats was spent in wollies wont be spent in other stores because people are not going to have the money they did have.

    I think wollies have been looking in a bad why for some years, but the final nail in its coffin was the crash of the ftse and collaspe of the banks. i dont believe for one minute that wollies would of gone into adminisration so close to xmass if this had,nt of happened.

    Also why have the govt put money into the lame duck banks? Surely this is just throwing money down the blug hole. lets face it the banks have not been lending. Yet tens of thousands of people have been paid for really doing nothing. because these banks are not in a postion too.Surely the money should of been put into the better banks. Like HSBC for those to lend. nobody in the last great depression put good money into lame duck banks they where allowed to go to wall. at some 600 a week worldwide i think back in those days. Only citi group the other day needed bailing out, how many will fall before there is no more money to bail these banks out. I know it will mean great job losses, but to carry on in this way will be even worse.

    They should put the money in the good banks sending out a tsunami of good credit which meets the bad tsunami coming the other way.Somewhere down the line they meet and hopefully things .i.e economy starts to grow.



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