Anxiety vs. optimism: the state of the UK high street in 2019

  1. Melissa Tredinnick

    Melissa Tredinnick UKBF Regular Staff Member

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    According to the British Retail Consortium, 70,000 retail jobs were lost in 2018, and the trade body expects the number of people employed on the high street to keep on tumbling in the next decade.

    There’s a general sense of anxiety around the loss of town and city centre shopping, and we’ve all seen boarded-up shops, and mourned the loss of brands we didn’t know we loved until they disappeared.

    Just after Christmas it was announced that high street media retailer HMV had gone into administration for the second time in six years, prompting a conversation about the value of this kind of shop that was at times downright sentimental.

    We see the effects of this decline in the UKBF community, from one member whose retail business was struggling to the extent that they needed to claim universal credit to make ends meet, to the cynical tone that often accompanies bright-eyed requests for advice on new retail startups.

    Rapidly increasing digitalisation is often cited as the biggest reason behind the high street’s decline, with online sales accounting for 20% of total retailing in December 2018.

    So-called ‘showrooming’ is a particular issue, with consumers using shops to look at and handle products, before ordering them at the lowest online price from their smartphones after walking out of the door.

    Less directly, HMV’s struggles have been blamed on the rise of streaming services such as Netflix and Spotify, just as HMV was once blamed for the plight of independent record shops.

    At the same time, Brexit worries and wider economic factors have led to low levels of consumer confidence: even if they hope for the best, people are just that bit more reluctant to spend in case they’ll need the money down the line.

    Describing his experiences of Christmas shopping in 2018, UKBF member The Byre gave a severe judgement: “The High Street is not dying – it's dead.”

    If that’s true, can it be brought back to life?

    Resurrecting the high street

    The Government certainly doesn’t believe high street retail is a lost cause, or at least recognises its political value, as along with a series of other measures to help retail businesses, it is currently consulting on proposals for its £675 million Future High Streets Fund.

    The aim of the fund is to restructure and regenerate local high streets, by shifting the focus away from traditional retail alone and instead creating social spaces that communities can enjoy.

    A paper on the fund published by the Ministry of Housing, Communities & Local Government said:

    “People want local high streets to provide convenience, a sense of community and to add value through services not offered online.

    “High streets can and should continue to play an important role in the life of communities – they are the locus for some of the highest levels of social interaction in places and can be important drivers of growth in local economies.”

    This ethos is something designer Wayne Hemingway agrees with, having written in his blog about the changing role of shops, arguing that we should drop the term “high street” altogether, in favour of the more community-focused “town centre”.

    Losing the retail focus in town centres doesn’t have to mean the end of shopping outside of the internet, though. In fact, Hemingway sees it as an opportunity for smaller businesses to offer what chains are unable to:

    “There is a welcome embracing of independent retailers in the knowledge that these shops point towards a fulfilling and productive life and your hard-earned money doesn’t go to some pension fund or fat cat set of retail directors.”

    Changing values

    Addressing the many closures of high street chains in 2018, UKBF member Highland Spring described it as a “commercial form of natural selection”.

    “Back in the 1970s there was no online competition and having the commanding position on the high street was the main way to succeed,” they said. “Now, to survive, retailers have to grow their online sales faster than their peers, otherwise they are edged out.”

    Others have argued the answer is more complex, though, and there are other ways for retailers to remain competitive that aren’t necessarily centred on e-commerce.

    Aldi, Lidl, Selfridges, Morrisons and Tesco were a few of the success stories to come out of the 2018 Christmas period, as they all reported increased sales on the year before. How do they do it?

    It’s strange to think of Lidl or Aldi having much in common with Selfridges, but both share a laser focus on serving their target markets. For Lidl and Aldi, that means cost-conscious shoppers, which in turn means shaving overheads, squeezing out margin, and throwing your shopping at you at pace to minimise the number of checkout staff required.

    For Selfridges, it means selling exclusive products that can’t easily be bought online, and adding value to the shopping experience with beautiful surroundings and lavish attention from sales staff.

    As Hemingway puts it, “the public are not stupid”. He argues that, due to factors like smaller housing and lower disposable incomes, younger generations in particular are simply choosing not to buy things they don’t need.

    With less money to spend, the way many people think about brands and retailers now has a stronger ethical focus, making it more important to know your customer and align your business’s values with their own.

    If a total upheaval of the high street structure is to take place, it seems likely there are still more retail casualties to come. But for the businesses that do adapt, it could bring with it an opportunity to play a greater role in their customers’ lives and communities.

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  2. ÜZEYİR

    ÜZEYİR UKBF Newcomer Free Member

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    thank you
     
    Last edited by a moderator: Jan 25, 2019
    Posted: Jan 25, 2019 By: ÜZEYİR Member since: Jan 25, 2019
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  3. The Byre

    The Byre UKBF Ace Free Member

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    That reads like a platitudinous school essay and misses what is really going on completely. The retail trade INCREASED significantly in 2018. It's just that the chains and the High Street continue to miss-out on this increase, largely because they are bloated debt-monkeys, addicted to rent and long payment targets of 120 days and more.
     
    Posted: Jan 28, 2019 By: The Byre Member since: Aug 13, 2013
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    HomeWrking and Ryan Hilton like this.
  4. Graana

    Graana UKBF Newcomer Free Member

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    Informative! Thank you for sharing this stuff
     
    Posted: Feb 1, 2019 By: Graana Member since: Mar 21, 2018
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  5. Oui Madam

    Oui Madam UKBF Newcomer Free Member

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    Really interesting article and comments too.
    In my business, shoppers love that they can try, feel and see the products before buying.
    The problem comes when you ask them to make a commitment and shop local. Price and available choices is a huge deciding factor and many shoppers will overlook this in favour of savings - something many small retailers simply cannot compete with.
     
    Last edited: Feb 4, 2019
    Posted: Feb 4, 2019 By: Oui Madam Member since: Jan 30, 2019
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  6. HomeWrking

    HomeWrking UKBF Contributor Free Member

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    Exactly - could not put it better myself - also restaurant sector/ fancy shoes (LK Bennet etc.) will collapse when young women are married with kids, old people need their pension for keeping the heat on...
     
    Posted: Mar 10, 2019 By: HomeWrking Member since: Mar 9, 2019
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  7. FD Capital

    FD Capital UKBF Contributor Full Member

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    For me the high-street is on its way out. Probably it will take another 40-60 years to fully work through, but in its place I see niche retail and recreation experiences such as restaurants and other attractions. Smart shopping will grow with augmented selection of things based on your known preferences.
     
    Posted: Mar 19, 2019 By: FD Capital Member since: Mar 4, 2019
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  8. Joe H

    Joe H UKBF Newcomer Free Member

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    Interesting thoughts – please could you elaborate on how "they are bloated debt-monkeys, addicted to rent and long payment targets of 120 days and more"?
     
    Posted: Jul 19, 2019 By: Joe H Member since: Jul 19, 2019
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