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High streets in decline – but it’s nothing new

A guest blog by Phil Thompson, Greater Manchester Area Leader

Our Price, Blockbuster, Athena, Comet, Littlewoods, All Sports, Andy’s Records, Music Zone, Virgin Megastore, Maplins, Woolworths, BHS, C&A – remember them? 

Over the past few decades we have waved a fond farewell to every single one of these once familiar household names of retail. Big names that failed to make their way as the retail landscape changed.  

Phil-Thompson-Area-Leader-Greater-Manchester_list

Pictured above: Phil Thompson, Greater Manchester Area Leader

There can be no doubt that UK high streets are still feeling the pinch in 21st century Britain, but it’s nothing new. It’s been a slow rot for nigh on 30 years, perhaps with its origins with the introduction of out of town French style ‘hypermarkets’ in the 80s, then compounded by a rapid roll out of supermarket ‘express’ stores through the 90s and 00s which really ravaged smaller district town centres and destroyed high street diversity. 

Together both of these landmark moments really changed the way people shopped in the UK, and why they visited their local high street, and arguably hit the smaller independents hardest – your local butcher, green grocer, bakery, sweet shop, or hardware store – take your pick. When everything is under one roof, and cheaper, why wouldn’t you shop at Tesco Express, or your Morrison’s Mini? 

And very little was done then to stem the tide. Local authority planning department officials would shrug and say ‘nothing we can do’. So in fact the only thing that changed was generally the number of independent shops on our high streets. Looking back with hindsight, it’s amazing that we stood by and let it happen. 

More recently though, the real game changer has been the explosion of the internet, and for many, this has been the final nail in the coffin, but with bigger victims. Big name retailers this time around have been the ones hit hardest, which is perhaps why we are now seeing more concern from high up? No one notices when the minnows go, but when the big fish flounder, it’s a different story. Maybe? 

So what else is hammering our high streets? You can boil them down to the following: 
1.            Spiralling business rates
2.            High rents
3.            Out of town supermarkets (with free car parking)
4.            Car parking charges in town centres

Lump all these together though, and we have the watershed moment we’ve seen in the past year or so on high streets across the country, big or small, and things have come to a head rather quickly. But what can be done at this late stage of the game?

Business rates is a big issue. A malign, legacy tax introduced centuries ago, but still alive and kicking in the 21st century, but totally unfit for purpose, and making it almost impossible for bricks and mortar retailers to compete on a level playing field with online competitors. 

This is a tax that FSB has long lobbied government to either reform totally or ditch and replace. We’re hoping an Amazon tax may be on the cards to subsidise rates, and that’s long overdue. The Housing, Communities and Local Government Committee's (HCLG) report published in February, said the unfair business rates tax system were stacking the odds against bricks and mortar retailers. Amazon's bill amounted to around 0.7% of its UK turnover, while high street stores pay between 1.5% and 6.5%, according to the report. 

High rents also hit retailers hard. Unlike online competitors, who can run from home or an e-fulfilment warehouse, rents, just like rates, are a huge barrier to profit. Landlords need to balance between having an empty property making no money, or one that’s occupied and taking a rent. Many will need to re-evaluate what they charge, but that’s tough for them. The facts are, footfall is still declining. The British Retail Consortium and KPMG said total sales growth fell to 0.5% in the year to February, compared with 1.6% the previous year.  

Car parking is also an issue local councils should be addressing, but most aren’t – or won’t. There’s the old story of the Welsh town whose two car parking machines were left out of order thanks to vandals. Almost immediately traders saw an upturn in footfall and shoppers returning. This is not rocket science.

The same HGLC report, referred to above, said if the high street is going to survive, local retailers and councils have to do more to offer shoppers a bespoke shopping experience online competitors can’t offer. 

Local authorities must now also start to sow the seeds of change, and get to grips with the fact town centres have changed - they can’t keep doing the same things and expect change. They should start with free parking. Wigan Council should be commended for having recently extended a free parking scheme it ran over Christmas to weekends for a year. It will be fascinating to see the results.  

So, while we are starting to see encouraging signs here in Greater Manchester, we need more of that vision and enthusiasm for change, and not just in the main town centres, but in the smaller district centres too where there are the same issues for retailers. 

Small businesses are at the heart of our communities, providing jobs, bespoke products and a personal service. Yet, despite being key to the success of a town centre, confidence is now rock bottom and many independent traders are finding it difficult to stay afloat. 

Who knows how Brexit – whatever flavour we get – will impact? What is certain though, is that the future of our high streets remain very uncertain. And unless we see some radical changes by all involved, many will remain in turmoil.