Armaggedon on the High Street

[David1962]

Unless your stock is all in prime pitches, i don't believe you.

Think you missed what I said, we are now in the service industry and have never had anyone haggle our prices bar one shopkeeper.

 

[mconridge]

Thanks for your comments mconridge. I must say though, that most of the shops that now stand empty in Torquay do so because they have been vacated by some of the Big Boys: Past Times, Monsoon, HMV, Dixons, Woolworths, Jessops and so on. It also hasn't helped with the likes of M&S and Next moving onto an out of town retail park with free parking.

However, generally speaking, I have been quite impressed with the (comparative) robustness of the non-food independents. We moved to Torquay to start our gift-shop business nearly six years ago now, and although some independents have been and gone along the way, I would say we now have a nett gain of independents on our high street. Trouble is, with things seeming to be getting tougher and tougher it's difficult to say how for how much longer that is going to be case.

May I wish you good luck with your new ventures anyway.

That's really good to hear. The high street's need more independent shops, well done for going for so long.

 

[buybetterbeds]

Interesting reading so many points of view, it certainly presents a different view to the one on the TV where all manner of so called experts pop up and tell us retailers what we should be doing.

 

[Talay]

I went around my supposedly well to do small town the other day and though I knew a few places were up for lease, I was quite astonished that the situation has got as bad as it is. The number of empty and soon to be empty places is very noticeable now.

I predicted that the end of the recession would not be the end of the problems for retail, irrespective of the internet issue, but I thought more people would be somehow forced to give their own business a shot due to the poor employment options available.

My updated prognosis is that landlords are, as I have discovered, simply holding out for too much rent and their unwillingness to reduce rents massively to fill up their properties is borne out of a reluctance to reboot the whole rental market to a much lower level of rents, which would ultimately undermine property values and consequently hit financing of the same.

 

[David1962]

I went around my supposedly well to do small town the other day and though I knew a few places were up for lease, I was quite astonished that the situation has got as bad as it is. The number of empty and soon to be empty places is very noticeable now.

I predicted that the end of the recession would not be the end of the problems for retail, irrespective of the internet issue, but I thought more people would be somehow forced to give their own business a shot due to the poor employment options available.

My updated prognosis is that landlords are, as I have discovered, simply holding out for too much rent and their unwillingness to reduce rents massively to fill up their properties is borne out of a reluctance to reboot the whole rental market to a much lower level of rents, which would ultimately undermine property values and consequently hit financing of the same.

Same here, independent shops that have been going for thirty years or more are now throwing in the towel, or being forced to. It's sad to see.

It's also easy for everyone to blame rents, but would a £5,000 or £10,000 reduction in their annual rent really be the difference between a viable business and a non-viable one? If things have got that tight then it's time to consider your options now before the decision is taken out of your hands.

 

[Doodle-Noodle]

Same here, independent shops that have been going for thirty years or more are now throwing in the towel, or being forced to. It's sad to see.

It's also easy for everyone to blame rents, but would a £5,000 or £10,000 reduction in their annual rent really be the difference between a viable business and a non-viable one? If things have got that tight then it's time to consider your options now before the decision is taken out of your hands.

You clearly aren't an independent retailer then!!!! A £5-10k reduction in rent would make a massive difference to my business and I'm quite sure I would not be alone in saying that.

 

[David1962]

You clearly aren't an independent retailer then!!!! A £5-10k reduction in rent would make a massive difference to my business and I'm quite sure I would not be alone in saying that.

So if you saved £5,000 your business would be great but without it it's not? What happens if your sales drop by £10,000 next year? Is that the end for you then?

If that really is the case then you are doing right by considering your options now.

That's a lot of the problem, to many independents hanging on with blind faith when they should have had the good sense to get out before things got so tight.

 

[mhall]

I know dozens of small Retailers for whom a £10k saving this year would make a major difference. Lots of small Retailers run "lifestyle" businesses. These businesees are often sneered upon and looked down on as "not real businesses" but they contribute tens of millions to the nations coffers every single year whilst paying the highest Business Rates in the country and recieve nothing but scorn from other "proper" businesses that just happen to employ ten people at minimum wage.

 

[fairdealworld]

You clearly aren't an independent retailer then!!!! A £5-10k reduction in rent would make a massive difference to my business and I'm quite sure I would not be alone in saying that.

Yes indeed! For many of us even £1K or 2K would make a massive difference:

if you talk to people who run small businesses over many decades there is a recurring theme. They make money in the good times and they try to survive the bad times. Especially during the bad times even a very small reduction in rent can make the difference between staying solvent or not;

also that small reduction put to good commercial use could have profound long term effects on a business. You can do a lot of advertising and leaflet dropping for £10K or £5K and you can even do something worthwhile with £1K

 

[Doodle-Noodle]

So if you saved £5,000 your business would be great but without it it's not? What happens if your sales drop by £10,000 next year? Is that the end for you then?

If that really is the case then you are doing right by considering your options now.

That's a lot of the problem, to many independents hanging on with blind faith when they should have had the good sense to get out before things got so tight.

It's not nearly as simplistic as you imply but yes, a £5k reduction in my rent would have me staying on for another 5 years whereas a £5k increase and I shall exercise my upcoming option to break without question.

As you are dropping in such large figures as though it's a packet of Smarties I assume your business yields such massive profits it would be difficult for you to appreciate that £5-10k would be a huge sum to many of us mere retailers who regularly slog it out for less than that in a whole month.

At the very least a £5k windfall would enable me to hire a temp for a fortnight and go on holiday .... I would love a break!!!

 

[Esk247]

It's also easy for everyone to blame rents, but would a £5,000 or £10,000 reduction in their annual rent really be the difference between a viable business and a non-viable one? If things have got that tight then it's time to consider your options now before the decision is taken out of your hands.

It would allow a retailer to spend another 10k on stock..which could convert in to 20/30k increased turnover...is that still a drop in the ocean to you?

When running our shop we would spend anywhere from 2k to 3k a month on stock (we kept to a budget) so to have an extra 1k on top free every month...wow...dreamland. That would possibly create another job position the following year for a part timer.

 

[DJR51]

It does seem that the way forward for a lot of high street retail locations is for them to be used for goods/services that can't be easily purchased off the internet - hence the proliferation of coffee shops and convenience stores.

However, organised high streets with determined local retailers can fight this trend, and seemingly be successful. For example, Forest Hill is becoming more and more vibrant as a shopping community, and it is entirely down to the attitude of the local retailers - they each advertise the existence of other retailers nearby, encourage everyone to buy local, and between them offer just about everything any customer could ever want: and it's usually at a reasonable price, together with the warm fuzzy feeling the customer gets from "buying local".

Other initiatives such as "Totally Local" are also great for encouraging local business...

http://totally-locally.co.uk/foresthill/

So all is not lost, quite.

 

[pen2670]

I wondered if the landlords rent is still high because as a landlord you are better off with a profitable business in your unit that can afford the high rent rather than a newbie independent who is going to go down the pan in three months.

Just playing devil's avocet here.

Would have thought it would work the opposite way around. That a new start up might assume that it was set at a fair level that they could pay as well as making a living. Whereas an experienced retailer would take it as a starting point for negotiations or look elsewhere

 

[David1962]

It's not nearly as simplistic as you imply but yes, a £5k reduction in my rent would have me staying on for another 5 years whereas a £5k increase and I shall exercise my upcoming option to break without question.

As you are dropping in such large figures as though it's a packet of Smarties I assume your business yields such massive profits it would be difficult for you to appreciate that £5-10k would be a huge sum to many of us mere retailers who regularly slog it out for less than that in a whole month.

At the very least a £5k windfall would enable me to hire a temp for a fortnight and go on holiday .... I would love a break!!!

Hi Doodles, you have made the point I was trying to make perfectly. I wasn't dropping the figures like smarties, £5k - £10k is more than likely half the average rent most retailers on here are paying, so we are talking about a massive 50% reduction in rent. Now that is never going to happen.

At an educated guess I reckon your rent is somewhere between £9k and £12k per annum. So this £5k would be about half your rent. What would it pay for? A holiday and temp cover. Not exactly a business saving amount. Now if somehow rents were reduced by 20%, a more realistic figure, you wouldn't even be able to afford that temp and the holiday with the savings.

So what, where and how would reducing rents by 20%, or even that 50% really help businesses. Maybe it would pre-long a slow death by a year? Would it make a new business suddenly viable?

Yes, obviously it would be nice to have cheaper rent. But nice is about the only benefit it would have.

 

[David1962]

It would allow a retailer to spend another 10k on stock..which could convert in to 20/30k increased turnover...is that still a drop in the ocean to you?

When running our shop we would spend anywhere from 2k to 3k a month on stock (we kept to a budget) so to have an extra 1k on top free every month...wow...dreamland. That would possibly create another job position the following year for a part timer.

Ten years ago yes that would have been a plan. Today though just because you carry another £10k of stock doesn't mean you are going to sell it. People today are on budgets and will go into a gift shop (for purpose of illustration) with £20 to spend on a gift, they no longer whip out the credit card and spend £40 just because the see two things they like, it's usually one or the other. All you will be doing is giving them more choice whilst burdening yourself with excessive stock levels.

I'm sure you'll agree that buying for retail these days is a far more streamlined, considered and precise affair, even more so if your goods are perishable.

 

[Doodle-Noodle]

Hi Doodles, you have made the point I was trying to make perfectly. I wasn't dropping the figures like smarties, £5k - £10k is more than likely half the average rent most retailers on here are paying, so we are talking about a massive 50% reduction in rent. Now that is never going to happen.

At an educated guess I reckon your rent is somewhere between £9k and £12k per annum. So this £5k would be about half your rent. What would it pay for? A holiday and temp cover. Not exactly a business saving amount. Now if somehow rents were reduced by 20%, a more realistic figure, you wouldn't even be able to afford that temp and the holiday with the savings.

So what, where and how would reducing rents by 20%, or even that 50% really help businesses. Maybe it would pre-long a slow death by a year? Would it make a new business suddenly viable?

Yes, obviously it would be nice to have cheaper rent. But nice is about the only benefit it would have.

Way off the mark with my rent - £17,500 per annum if you really want to know, with the probability of an increase to £23,500 next year (which is why I shall be getting out in all likelihood).

I cover all my outgoings currently and have not had to take out finance to do it, I make enough to maintain stock levels and introduce new ranges when I see something I think would sit well with what we do and I take a modest salary as well as selling my own work. A decrease in rent would make a massive difference to the direction I could steer the business in as I always have ideas I'd like to try - however, I would not be prepared to invest more er time & money into this shop when I know that the landlord will be hiking our rent up next year. Which is a shame.

 

[David1962]

I know dozens of small Retailers for whom a £10k saving this year would make a major difference. Lots of small Retailers run "lifestyle" businesses. These businesees are often sneered upon and looked down on as "not real businesses" but they contribute tens of millions to the nations coffers every single year whilst paying the highest Business Rates in the country and recieve nothing but scorn from other "proper" businesses that just happen to employ ten people at minimum wage.

Not sneering at lifestyle businesses at all, that's what I do myself now, in fact is so lifestyle many don't consider it a proper job let alone a business. And it only makes me just above the uk average wage so I'll never get rich from it but that's my goal in life now, much like many independent retailers. Anyone that can make a living wage off their own back these days deserves far more credit than they are generally given.

Doesn't alter my opinion about rent values though and the very minor benefit even a impossible 50% reduction would actually make. Lets face it, in retail today you spend at least ten months of the year working for landlords, HMRC, utility companies, insurance companies, your staff, the bank and suppliers. A reduction of a few grand in rent isn't the answer for a struggling retailer or new business.

 

[David1962]

Way off the mark with my rent - £17,500 per annum if you really want to know, with the probability of an increase to £23,500 next year (which is why I shall be getting out in all likelihood).

I cover all my outgoings currently and have not had to take out finance to do it, I make enough to maintain stock levels and introduce new ranges when I see something I think would sit well with what we do and I take a modest salary as well as selling my own work. A decrease in rent would make a massive difference to the direction I could steer the business in as I always have ideas I'd like to try - however, I would not be prepared to invest more er time & money into this shop when I know that the landlord will be hiking our rent up next year. Which is a shame.

That's ridiculous rent for the area you are in Unless you are 2,000 sq ft plus. Can see why you are getting out.

There's market towns not a million miles away from you where you can get 500 sq ft in top spot in the High Street for that money.

Guess the Co-Op's fair trade policy doesn't go as far as Hampshire!

 

[Doodle-Noodle]

That's ridiculous rent for the area you are in Unless you are 2,000 sq ft plus. Can see why you are getting out.

There's market towns not a million miles away from you where you can get 500 sq ft in top spot in the High Street for that money.

Guess the Co-Op's fair trade policy doesn't go as far as Hampshire!

97sq metres - and no, the Co-Op's fair trade policy doesn't appear to have reached us!

 

[David1962]

97sq metres - and no, the Co-Op's fair trade policy doesn't appear to have reached us!

That's about 1,000 sq ft, isn't it? Still seems excessive for the location and certainly not worth £23,500.

It is bloody frightening when you work out the rent you pay compared to what you could buy for. Hope you get the nerve to move and get a freehold with accommodation. Trouble with buying though is often the good ones never come up for sale because the leases are so valuable. Then again as the saying goes "if it was easy.....".

I'm sure you are aware of http://www.shopproperty.co.uk/ but if not it's well worth a look.

 

[PrestonLad]

I'm sure you are aware of http://www.shopproperty.co.uk/ but if not it's well worth a look.

For my town, that looks like an excellent way to find out the details of shops that used to be available to rent. Last year.

 

[David1962]

For my town, that looks like an excellent way to find out the details of shops that used to be available to rent. Last year.

Which can actually be very useful when gauging prices. I'd use it in conjunction with agents sites.

Another useful one is http://www.christie.com/en , even if you don't want to buy a business it can give you an idea of how a town is performing and what is going/being sold, again use it with other business for sale websites but it's a good starting point. As I said elsewhere just because a town looks fully occupied doesn't mean all is rosy.

 

[Doodle-Noodle]

That's about 1,000 sq ft, isn't it? Still seems excessive for the location and certainly not worth £23,500.

It is bloody frightening when you work out the rent you pay compared to what you could buy for. Hope you get the nerve to move and get a freehold with accommodation. Trouble with buying though is often the good ones never come up for sale because the leases are so valuable. Then again as the saying goes "if it was easy.....".

I'm sure you are aware of http://www.shopproperty.co.uk/ but if not it's well worth a look.

Exactly, which is why I maintain that a £5k reduction in our rent would be brilliant.

 

[David1962]

So the obvious question then is why did you take the lease?

 

[Doodle-Noodle]

So the obvious question then is why did you take the lease?

Because when we took the lease on it was only £14,500 per annum and we took a punt that as the economy wasn't going brilliantly the landlord would not impose a massive increase at the next rent review a year later. We were wrong.

 

[Stuart Bailey]

You need to your lobby local MP.

My local MP is Robin Walker (cons Worcester City) he is on the Business Select Committee and he has opened up a discussion about the retail sector.

Rather than lobby your MP you can email him your comments about the retail sector, he wants to hear how it really is.

 

[PrestonLad]

Which can actually be very useful when gauging prices. I'd use it in conjunction with agents sites.

Another useful one is http://www.christie.com/en , even if you don't want to buy a business it can give you an idea of how a town is performing and what is going/being sold, again use it with other business for sale websites but it's a good starting point. As I said elsewhere just because a town looks fully occupied doesn't mean all is rosy.

This had not escaped me... but I just felt like being a bit facetious!

 

[David1962]

Because when we took the lease on it was only £14,500 per annum and we took a punt that as the economy wasn't going brilliantly the landlord would not impose a massive increase at the next rent review a year later. We were wrong.

Sorry to hear that, guess you had a terrible combination of useless solicitor and rubbish landlord.

 

[David1962]

This had not escaped me... but I just felt like being a bit facetious!

Fair enough

 

[Duke Fame]

Way off the mark with my rent - £17,500 per annum if you really want to know, with the probability of an increase to £23,500 next year (which is why I shall be getting out in all likelihood).

I cover all my outgoings currently and have not had to take out finance to do it, I make enough to maintain stock levels and introduce new ranges when I see something I think would sit well with what we do and I take a modest salary as well as selling my own work. A decrease in rent would make a massive difference to the direction I could steer the business in as I always have ideas I'd like to try - however, I would not be prepared to invest more er time & money into this shop when I know that the landlord will be hiking our rent up next year. Which is a shame.

Wow, I know your shop very well and used to do my paper round from the shop at the other end of your row (now the chippy) - That rent is crazy, you'd be better off at the other end of the road in either direction.

 

[mhall]

Rather than lobby your MP you can email him your comments about the retail sector, he wants to hear how it really is.

Have we suddenly moved this topic to the Joke thread?

 

[Lunazzurra]

It's nice to know that the Government is taking the High Street problem seriously and really listening to the voice of the people.

http://www.bbc.co.uk/news/uk-england-kent-22904619

http://www.telegraph.co.uk/finance/...perstore-in-Portas-Pilot-town-of-Margate.html

If Margate is just one instance, where do the rest of us stand now a precedent has been set?

It would seem that this Government and it's representatives like to treat us with sheer and utter contempt to put it politely. Either that or, given the Government's very recent history, will Tesco now get the chance to ask some questions in the house? (IMHO only, of course). Otherwise, where is the considered and rational sense of this decision?

 

[kelvin1950]

I know Margate quite well, they would have been damned if they did and damned if they didn't really. The town has been dying for years and whilst I wouldn't have chosen to have Tesco there, it's better than a load of derelict buildings.

 

[David1962]

I know Margate quite well, they would have been damned if they did and damned if they didn't really. The town has been dying for years and whilst I wouldn't have chosen to have Tesco there, it's better than a load of derelict buildings.

You wouldn't say that if you were one of the remaining shops and had Tesco come and undercut you with the sole purpose of destroying your business.

 

[kelvin1950]

You wouldn't say that if you were one of the remaining shops and had Tesco come and undercut you with the sole purpose of destroying your business.

You know Margate well then?

 

[David1962]

You know Margate well then?

Not well no, although until about seven years ago I did spend between six and eight weeks a year, for thirteen years, working in and around Margate. It was never great then and now I believe it's one of the most depressed High Streets in the country. Tesco's will not help reverse that and their first aim will be to put any competition out of business, can't see how that is a positive for any High Street.

Of course if the plan is to have a supermarket or two, a few coffee shops and change the remaining units to residential then it's a positive I suppose.

 

[Esk247]

Of course if the plan is to have a supermarket or two, a few coffee shops and change the remaining units to residential then it's a positive I suppose.

That isn't the plan. The plan ends at 'lets build a Tesco cos its easier init'....after that..who knows what will happen to Margate :|

Run down? Yes. Empty shops? Yes. Instead of trying to regenerate it, lets just put up a giant slab of concrete that contains 50,000 products that will, at first, be cheaper than anything else within a 30 square mile radius. Once all competition has fallen to its knees ram the prices up by 300% over 6 months and make profits soar.

As for the empty shops, they will remain empty as the Council will take 4/5 years to decide on each individual case of turning them in to residentials to feed the Tesco monster that doesn't create full time employment, just lots and lots of part timers who need tax credits from tax payers in the rest of the country to support their family.

Not that I've got a problem with Tesco.....honest.....

 

[kelvin1950]

Margate, a town I've known for almost 60 years, isn't going to get any better without someone doing something. If it was such a great place for small business then why does it look like Beirut High Street on a bad day? Tesco may not be the right answer but IMO no-one knows the question anyway.

Thanet Council, the organisation who couldn't even blow up a derelict pier successfully.

 

[Esk247]

Margate, a town I've known for almost 60 years, isn't going to get any better without someone doing something.

Indeed. So why does nobody seem to have a clue? They all have lots and lots of meetings, lots and lots of tea, lots and lots of choccy biscuits and yet nobody can sort it out?

I dare say there are people in the Margate community who have some great ideas for regenerating the area and making it successful, but will they be listened to by the 'steering groups' and 'organisation committees' that tend to be operated by people who shuffle around all day wondering what to have for tea.

A vibrant, bustling, engaging high street is what we all want to see. Sure, you can have a Tesco Express if you want but only if it benefits the street and adds to it.

 

[Nuno]

Indeed. So why does nobody seem to have a clue? They all have lots and lots of meetings, lots and lots of tea, lots and lots of choccy biscuits and yet nobody can sort it out?

I dare say there are people in the Margate community who have some great ideas for regenerating the area and making it successful, but will they be listened to by the 'steering groups' and 'organisation committees' that tend to be operated by people who shuffle around all day wondering what to have for tea.

A vibrant, bustling, engaging high street is what we all want to see. Sure, you can have a Tesco Express if you want but only if it benefits the street and adds to it.

What do you think should be done, (in Margate, where you live or anywhere)?