Housing Minister Grant Shapps has announced the government’s official response to the 2011 Portas Review. You can read the Communities & Local Government Office’s full text here.
It’s been quite a week for retailers, with the government promoting local shopping by manufacturing a petrol shortage which will ensure we’ll only be spending at shops we can walk to this weekend. Much more seriously, the impact of channel change on established and historically successful retailers is being felt across the world – Game Group’s administration, the collapse of leading Dutch bookseller Selexyz, famous for creating the “world’s most beautiful bookshop“, and today the announcement from Best Buy that (a) it’s closing 50 US stores and (b), short of slashing costs and talking hopefully about online opportunities, it’s a bit short on strategy.
So, back in Britain, there are plenty of feelgood elements to Grant Shapps’ announcement: market days and Town Teams were particularly eye-catching back in December, so they get full support, but there’s relatively little money forthcoming – around £12.8m, which will fund a few more Portas Pilots, but is a tiny sum of cash – it’s rather less than, say, Foyles in Charing Cross Road turns over in a year, or under a third of the estimated cost of the Leveson Enquiry.
Paradoxically, though, I’m not calling for loads more cash; I’d prefer to see more real local power and accountability, with councils mandated to create a successful business environment for the communities they serve. This will be the acid test of the programme, as there is much promised on revoking archaic bylaws and reforning planning – will local councils have the guts to go the whole way, and will the government be prepared to devolve real decision-making and – at council level – revenue raising powers? Step forward the first council that wants to tell Grant Shapps that, actually, we think a 5.4% increase in business rates is a little steep in the current environment, so here in Tomorrowtown, we’d like to do things a little differently.
Well, I can dream. But beware of short-term revitalisation and too great a focus on heritage and bringing back “the old high street”. There is, understandably, much hand-wringing about the number of vacant shops across the country – 14.6% of total stock across the country, it says here.
But hang on just a second – is that the number of empty premises, or the volume of empty space? Or, to turn the numbers around (without knowing the answer) what is the total volume of trading square footage in retail today, compared to ten or twenty years ago? I’m going to bet that the number has gone up, but that old stock has been allowed to rot on the vine.
As retail commentator HatmanPro has observed on Twitter, much of our empty retail space exists because newer space has superseded it. In too many town centres, successive new developments – blocks of stores, little shopping centres – have been dumped into vacant spaces, increasing the total volume of footage and laying waste to older shopping streets and districts, on the assumption that, as the population grows and we all become wealthier, more and more shops can prosper. Even without the internet, this is patent nonsense – I’d like to see new shopping centre openings accompanied by a structured reduction in dead space; a recognition that, with 10.7% of all retail spend now online (and that number will grow and grow), even the most Pollyannaish assumptions of future economic recovery will not merit the number of old shops cluttering up our old towns.
Will Town Teams and local councils have the ambition, the power and the cojones to repurpose spaces? Will they be able to do so, and maintain the variety of chains and independents, generalists and specialists, commodity sellers and boutiques, that a thriving town centre needs? I really hope so. But the “beating heart of the community” needs to be strong and vigorous, and must look beyond the reduction of street furniture and controls on levels of parking fines – if 15%, 20% of all retail spend is going online (because that’s what the consumer wants), then those high streets need to reflect tomorrow’s needs, rather than yesterday’s longings.
And having said all of that – if this comes off, when those first Town Teams cajole their councils into really making a change and doing things differently, this is going to be damned exciting. Retailing is one of the things we do best in the UK, and everyone who’s committed to a retail career wants to make it better.
Pictures: The Sun; bhbeat.com
This short piece was originally published earlier today by My Retail Media, in their “Insight” section. myretailmedia.com is a website dedicated to the Retail Sector, covering all the major retail categories, and offering finance news, videos, comment and insight. They also produce News at Nine, a free daily eNewsletter, and offer bespoke subscription services, aggregating retail news from over 4,000 sources, and tailored for individual subscribers.
As we enter 2012, we asked Philip Downer, the owner of retail consultancy Front of Store and former CEO of Borders UK to tell us where he thought the major trends and shifts for the year ahead would appear.
The retail industry enters 2012 in the throes of profound change driven by two factors:
- The continuing belt-tightening of Britain’s consumers, which will continue into the mid-decade, as cuts in government spending and the rebalancing of the global economy continue to change our working lives.
- Along with this, the channel shift from physical stores to online provision, in which the UK – according to Bain & Co – leads the world, with over 9 per cent of all retail transactions now taking place online. None of us can predict where or when retail behaviour will “settle” as technological change continues to accelerate.
Many established retailers found themselves in difficulties in December 2011, with profit warnings, administrations and rumours of collapse circulating across the industry. Here are some key pointers for 2012 – all equally applicable to major chains and to indies/start-ups:
First up, it’s no longer feasible for any retailer not to have an active online presence. And “active” doesn’t simply mean an online store; customers expect integrated online and instore browsing and purchasing. The rise of click-and-collect underlines this change.
Thanks to the power of web research, consumers are now often better informed than sales staff instore, both on product specification, price and value. Poorly trained or unmotivated sales staff are a greater liability in physical stores than ever – some retailers are recognising this, others still don’t “get it”.
What’s more it’s become a truism that a chain now only needs 50-80 stores to achieve national coverage – where 20 years ago they needed 300 or above. Understanding which centres or towns will be winners, and which are the also-rans, is going to be critical for retailers and for legislators. It’s telling that Grant Shapps, the new “Minister for Retail” – who has to deliver the Government’s response to the Portas report – is attached to Eric Pickles’ Communities and Local Government department, and not to the Department for Business, Innovation & Skills. High street revival is, perhaps rightly, viewed as a whole-community strategy, rather than simply a commercial challenge. This should at least mean that a holistic approach is taken to the many good points that Mary Portas raised.
Finally, things will get worse before they get better – but as the structure of the retail industry undergoes a once-in-a-generation change, the opportunities for entrepreneurs and visionaries to create retail success stores for next decade is wide open.