DEATH OF A SALESMAN
As consumers continue to favour online shopping, local authorities must act decisively to prevent further decline of Scotland’s high streets
Urgent action is needed by local authorities to halt the speedy decline of Scotland’s high streets
Of all the business woes of recent years, few have been louder and more insistent than those of the high street retailers. It is a relentless litany of gloom. Major stores are in retreat. Shops everywhere are closing. Squeezed households are spending less.
Online shopping is sweeping all before it. And what sane person wants to spend time in our ever-more depressing high streets? This winter has brought the now-normal wail of pain from some of our biggest chain stores. Marks & Spencer had a poor Christmas, with sales down 1.4% over the final three months of the year.
Sales at Debenhams were also down while House of Fraser has pleaded for cuts in rentals. Mothercare has been miserable. Carpetright shares almost halved after it issued a profit warning amid a ‘sharp deterioration’ in trade, while Bonmarché shares sank by a quarter.
Small shops, according to accountants PwC, have been disappearing at a rate of 15 per day, while the British Retail Consortium says high street footfall declined by 3.5% in December – the steepest fall in five years. The ONS warns the longer-term picture is one of slowing growth, with retail sales expected to contribute almost nothing to economic growth in the last three months of 2017.
A few more years of this and our high streets, which are in a state of profound flux, will be unrecognisable. This is important because
total retail shopping across the UK runs in excess of £358 billion a year.
‘A few more years of this and our high streets will have changed so much that they will be unrecognisable’
There are 290,000 retail outlets in total, and the sector employs 2.8 million people. After sleeping and watching television, shopping is the country’s biggest weekly activity. Each of us spends the equivalent of 18 days a year trudging round the shops and especially supermarkets, where we typically spend two hours a week buying food and another two on clothes and footwear.
Online shopping is growing apace. In the run-up to Christmas 2017, an estimated 24% of sales were online, 6.2% higher than a year ago. And little wonder – who wouldn’t prefer sitting on the sofa while shopping online in front of the fire, to venturing out in the cold and snow?
Yet, what of the continuing squeeze of austerity on household spending? What, indeed. According to the ONS, household spending last year hit its highest level since before the financial crisis. Between April 2016 and March 2017 average weekly household spending was £554.20, up 4% on the year before, helped by low inflation and rising employment.
Car purchase and package holidays abroad were notable stand-outs, with £73.50 a week spent on recreation and culture (up 7.3%), and £50.10 on restaurants and hotels. This reflects the trend towards greater spending on ‘ experiences’ rather than ‘stuff ’.
The resilience of spending in these categories, when linked with demographic trends, explains the dynamics driving high street change in the decade ahead. For example, 20% of spending by 65-74 year-olds is on ‘recreation and culture’ items. Conventional retail is not about to disappear, with store number expansions by Waitrose, Aldi and Lidl pointing to confidence among food retailers, albeit through a growing number of more diverse, localised and specialist outlets.
‘Click and collect’ sales are expected to grow, especially for clothing and footwear where online shopping can prove tricky when the size, texture or colour is difficult to gauge. But the layout and amenity available within high streets and shopping centres will see change.
The majority of the high streets in Scotland’s small towns have been in decline for years thanks to out-of-town shopping centres and supermarkets, but local authority clean-up and street improvement only takes us so far. That said, a let-up in rapacious car parking charges would help greatly, although that will never be more than a part of the solution.
John Parmiter, director of Future High Streets is campaigning for greater adaptability by our town centres in the face of online and demographic challenges, arguing that more fun and fewer shops can save the high street. He summarises the transformation by way of four ‘Ls’: living, learning, leisure and local services.
Many high streets, he argues, ‘need to offer a significantly better experience if they are to prosper. They are not adapting well to the changes all around them; many need restructuring. Most need new investment which they struggle to attract.
‘The internet, shopping centres and retail parks are not going away. Conventional streets are at a disadvantage in terms of parking, business rates, ease of construction and adaptation compared to retail parks, which can offer bigger boxes. Development is no longer the fix it was and can have unintended consequences.
‘We have too many shops. We have too little investment. We see too many places which are depressing or reflect poorly on their local community. Services are closing down, shops are vacant and there seems no way, to the local community, to fix it,’ continues Parmiter.
‘Conventional streets need a new or on-going viable purpose and that might be more about living, learning, leisure (food and beverage), local services or local enterprise than retail. Town centres need to be able to deliver that.’
It is hard to argue with this but even harder to see how to effect such a transformation in the face of fractured site ownership, rent-maximising local authorities and retailers lacking the will – or the means – to undertake change.
Retail destruction is already underway and is set to accelerate. The status quo is not an option, but the longer local authorities ignore the high street challenge, the greater and more painful the ultimate cost will be.