retail news in context, analysis with attitude

The Dallas Business Journal reports that Blockbuster Inc. has informed the US Securities and Exchange Commission (SEC) that “it may have to file for Chapter 11 bankruptcy protection if unable to generate enough cash flow to meet or restructure its debt commitments. In the filing, the Dallas-based movie rental chain attributed its weakened operations and cash flow to increasing competition.”

The company lost almost $560 million last year.

“To compete,” the Journal writes, “Blockbuster said earlier in the year it intends to grow its by-mail video rental channel and continue to expand its digital movie offerings through On Demand to compete against new movie rental mediums.”
KC's View:
I hate to beat an almost-dead horse, but...it wasn’t that long ago that the executives at Blockbuster probably thought they had a near unassailable advantage in the video business. They didn’t see Netflix coming. They didn’t see Redbox coming. They didn’t see downloads coming.

And now, they are on the verge of bankruptcy and irrelevance.

There is a broader lesson here for every retailer...especially the ones who may be feeling complacent, who say things like, “We’ll survive because people gotta eat.”

That isn’t a survival strategy. It is wishful thinking.