Could Woolworths’ end up being to the High Street, what Northern Rock was to Banking?

Today marks the start of the closure of Woolworths’ 800 High Street retail stores in batches. More than 200 Woolworths stores to close later today.

Locally the Woolworths in Aylesbury, Maidenhead and Uxbridge close today, Amersham and Windsor Woolworths’ close down on 30th December 2008, Slough and Watford on 2nd January and the Woolworths’ stores in Beaconsfield, Bracknell, High Wycombe, Reading and Thame close in the final batch of closures of Woolworths high street retail stores on Monday 5th January 2009.

Unless a last minute buyer is found over 27,000 jobs will go by Monday 5th January, not the greatest start to the New Year. However my concern is that just like Northern Rock was the tip of the iceberg for the banking industry, is Woolworths simply the start of our High Streets changing forever? Since Woolworths announced £385m worth of unsustainable debt, MFI and Zavvi (formerly Virgin Megastores) have gone into administration, with another 15-25 chains under threat. When will we learn that you can not build a successful business on debt? Something that is coming home to roost big time in not just the UK but the Western World.

Today is an extremely sad day for all the employees in Woolworths retail chain, but also for the entire retail industry, as I fear it will lead to the reshaping of the High Street in this country, and possibly affect how, when and where we shop in the future. When the banking crisis at Northern Rock became apparent, not even the City was expecting the Worldwide implosion of the banking system requiring governments across the globe to step in to prevent financial meltdown. It would not be prudent for the UK government to step in, as the management failures of Woolworths are now evident for all to see.  The difference between Northern Rock and Woolworths is that we now probably expect a collapse in the High Street? Deflation here we come?