The rescue of Game Group, a bankrupt retailer of computer games, by OpCapita, a private investment company, will save 3,000 jobs and provide a welcome boost to the UK high street. But the move looks risky: specialists like Game are particularly vulnerable given the structural changes affecting the UK retail market.

No doubt, OpCapita has done plenty of due diligence to secure the approval of six banks owed an estimated £85m by Game. It probably picked up Game for next to nothing, judging by the late timing of its intervention, and stands to inherit a leaner operation, considering the closures and redundancies already announced. Ultimately, Game failed because it lost the confidence of big video game makers, which refused to supply it. If OpCapita can restructure its debt and restore confidence, Game’s immediate situation will improve.

Unfortunately, computer games are increasingly being sold through online channels. With their bricks-and-mortar overheads, high-street retailers cannot easily compete on price, or, indeed, on the convenience of online sales. The growing popularity of app downloads for smartphones and tablets is an additional challenge. EuroGamer, a website, reckons UK videogame sales shrank by 13% in 2011 to £2.5bn. In future, consoles could well become the preserve of a dedicated core of gamers, too small to interest or support a mass-market retailer.

Even so, Games Workshop has somehow retained a high-street presence in the increasingly niche market for role-playing games, and could provide lessons for OpCapita. Games Workshop’s success owes much to the vertical integration of its supply chain; for its part, OpCapita could also explore synergies between Game and Comet, an electronics retailer it bought for a symbolic £2 late last year. More likely, OpCapita will attempt to diversify Game’s activities to appeal to a broader market. But that will require investment and rebranding, and it will expose Game to competition from more generalist retailers.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

Britain’s retail industry is sending mixed messages. Today, the British Retail Consortium reported a 1.6% fall in like-for-like November sales, despite “high levels of festive discounting”. But a few days earlier, department store chain John Lewis—often cited as a barometer of the performance of the UK high street—reported a healthy 9.6% hike in its latest week of sales.

John Lewis admits that snow disruptions during the same week last year may flatter the latest figures. At the same time, last week’s public-sector strike could have given some an extra day to get in some Christmas shopping. Also, and perhaps most importantly, the John Lewis brand may no longer be considered a reliable gauge of the health of British high streets.

In its latest fiscal year, John Lewis reported market-beating sales growth of 12%, boasting that its “never knowingly undersold” slogan struck a chord with British consumers. The retailer also benefits from robust online sales, which rose by 38% during the fiscal year. Offline retailers have been trying to bring forward sales to lure shoppers away from their computers during the UK equivalent of “Cyber Monday”. But whatever channel they use, retailers will approach the crucial festive shopping season with some trepidation, as extremely difficult trading conditions will ruthlessly separate the winners from the losers.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

According to a survey by the Economist Intelligence Unit, London is the most “shoppable” city in Europe. The survey, commissioned by financial services firm Global Blue, awards London top marks—67.3 out of 100—based on five categories: shops; affordability; convenience; hotels and transport; and culture and climate.

It is not surprising that London ranks highly as a retail mecca, given its allure to shoppers visiting from China, the Middle East and elsewhere. The capital’s appeal to locals, however, is not as apparent. Last week, the Bank of England revised down its forecast for GDP growth, unemployment hit a 15-year high, and consumer confidence plumbed historically low depths.

The EIU/Global Blue survey’s headline rankings are derived from an equal-weighted index. The survey website allows users to alter these weightings, however, and after some tinkering it becomes clear that London’s position is highly sensitive to one’s view on affordability. When it comes to affordability metrics, the British capital ranks 24th out of 33 cities rated; boosting the weight of affordability in the index sees London drop behind Barcelona and Madrid in the overall rankings.

London may benefit from a wide range of shops, but it seems increasingly reliant on shoppers from abroad as hard-hit, cost-conscious locals will probably keep a tighter grip on their wallets.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

Amid the general gloom for European retailers, the luxury goods market is a rare bright spot. As well as Burberry and other top-end brand stables like PPR and LVMH, luxury brands also boosted the recent results of L’Oreal, which usually trades on less exclusive names. Earlier in the year, some buoyancy in the US helped enhance results, but for Europe-based purveyors of luxury goods, the bigger picture has long shown that aggressive expansion in emerging markets, particularly China and India, pays off handsomely.

Annual retail sales in China grew by 17% in October, and the latest data for the luxury goods market there suggests even faster expansion at the top end of the market. The EIU expects a five-fold increase in the number of households earning more than US$50,000 in both China and India between 2010 and 2015.

One factor driving growth at Burberry, which reported buoyant profits today, was the decision last year to acquire its Chinese operations outright and embark on an ambitious store-opening plan in China and India. That said, the company’s shares are down by 15% from their July high; some of the fall is likely down to profit-taking, but fears of a Chinese slowdown are also weighing on shares. However, despite the pitfalls of relying so heavily on markets like China and India, their potential is too big to ignore, especially given the thoroughly depressing outlook for retailers closer to home.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

With droughts forecast to push up commodity prices over the coming year we look at where consumers are already getting a good, or raw, deal on one of the most basic staples, bread.

The Economist Intelligence Unit compares typical prices for a standard one kilogram white loaf of bread. Types will vary from city to city depending on tastes, but the fact remains that bread is an integral part of many diets. In Paris, where boulangerie offer a range of specialist loaves, bread can cost over ten times more than in Tehran, where flat Barberi bread is most common.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.