Whatever the experts say, the high street is recovering
Straight-talking, common sense from the front line of management
Q Is it just me or are economists and government statistics giving us only a vague idea of where the economy is going? I thought it seemed clear that we are heading for a recession, but the statisticians claim we are still technically ahead of last year (by less than 0.4pc). The forecasts of inflation are also confusing, with the Bank of England sticking to its long-term target of 2pc, while prices rise by 10pc. Only three weeks ago, I read that the high street is slowly dying because of increases in online shopping, with official sales figures showing retailers struggled in December. But Next, Greggs, and B&M Bargains experienced strong sales over Christmas and Marks & Spencer is doing so well it is opening a number of new stores. Who do I believe and how do I set a budget for my business?
A Don’t be too hard on the economists and number crunchers who use figures from the whole economy, while our perspective is based on personal experience. But I agree that expert commentators have been slow to detect the changes that are now taking place on the high street.
I have the advantage of seeing sales on a daily basis (the figures arrive in an email at exactly 7pm, seven days a week). Even better, every week we see the detail of where those sales have come from – by shop and according to the category of business. Sales really come to life when they are broken down between shoe repairs, key cutting, watch repairs, dry cleaning and photo processing.
You learn even more by visiting shops, talking to colleagues and customers, and observing the level of activity – the number of shoppers on the street and the volume of vehicles in a supermarket car park.
Lockdown was traumatic for most high street retailers. At Timpson, we had to close all our 2,000 shops and, despite the generous government support through the furlough scheme and rate rebates, the company was losing £1.5m a week.
It was a sharp shock that made us think through our business model. When we reopened we did so, in most places, with just one colleague in each shop and they surprised us by providing a new level of personal service. We discovered what can be done by a “10 out of 10” colleague with the freedom to run their shop as if it is their very own.
Other retailers learnt similar lessons. While online retailers concentrate on better systems, bricks-and-mortar shops can employ great people to make a difference. Lockdown transformed online retailers who saw a huge increase in demand, but some customers missed the social contact that comes with high street shopping, and, while they weren’t watching, our shopping centres have changed.
The media concentrate on the bad news – shop closures and significant redundancies at chains including Debenhams, Arcadia and Peacocks – but they haven’t highlighted how our shopping scene is changing with more service shops like hairdressers (not something available online), more cafés and some brand new independent retailers.
Pundits who plot the future have an impossible task – it is very difficult to make accurate predictions in the face of unexpected consequences.
A good example occurred in 2007 when the UK banned smoking in public places. As a result, our dry cleaning business dropped by 15pc. Since Christmas, our passport photo sales are booming, simply because customers are keen to beat a future increase in the cost of passports. Stranger still is a sudden surge in demand for our laundry service, because customers are mothballing their washing and drying machines to save energy.
Our sales were so good in the first week of January, I visited my local Chester shops to see what was going on. John, who runs our shop in the city centre, made an interesting comment: “Lockdown seems to have kick-started business in the city.” Andrew, the manager of the Boodles branch who had popped in to have his dinner jacket dry cleaned, totally agreed: “We have had a really good run, Saturdays are back to what they used to be.”
Chester still has some empty shops but there are plenty of reasons for optimism. The new market hall is creating more activity, plans are in place to redevelop Debenhams and to revive the failing Grosvenor Centre. In addition, some of the retail space will be replaced by two new hotels. The city will finish up with fewer shops but be better for it. Like most shopping centres, Chester has had more retail premises than the area needs.
It is becoming clear that past suggestions of the high street being in terminal decline are way off the mark. Suddenly. I sense a buzz that hasn’t been there for some time.