Fao: Ncc And West Bedlington Town Council

[Not Sir & Terry Leahy]

Posted by JohnHughman at 27/1/2011 11:53 AM GMT on investorschronicle.co.uk

Last week, the Ordnance Survey published the latest snapshot on the state of Britain's high streets, and it makes grim reading. There has been some good analysis of this from various broadsheets, not least our former property specialist Claer Barrett who's moved onto our sister publication, the Financial Times.

Large corporations always get the blame for this – supermarkets taking aim at just about every trading segment they can and forcing small and large retailers out of existence as shoppers instead opt for the convenience of the one-stop shop. Or chain retailers opting for the improved store configuration and scale economies in out of town retail parks.

It's a compelling argument, especially if you're in the anti-supermarket brigade. But I think it's a convenient oversimplification of what's really going on. Rising demand for locally sourced goods should mean that today should be a boom time for the high street- but it's the short-sightedness of our landlords, local authorities and Whitehall mandarins that has instead stacked the odds strongly against the little local guy.

Take the smallish high street where my parents live. In the grand scheme of things, it's a pretty bustling small town high street – it doesn't have too many, if any, empty shops, and has a fair smattering of chains and pleasant local retailers, cafes, and restaurants. There are, of course, a fair few charity shops, too, but this is nothing like the horror stories usually used to illustrate the high street's demise – like Margate, for example, where the OS says nearly a third of shops are vacant.

How much longer this remains the case is a different matter. A photographer friend, who runs his business from home told me at the weekend that one of his local rivals had been forced to shut his studio on the high street as a result of soaring rent and rates. Who knows what will replace it. It certainly won't be the delicatessen that's glaringly absent from this particular locale – an acquaintance has already taken a look at setting one up, and decided that the overheads mean it's economically unfeasible. It won't be a new restaurant from a well-known TV chef either – the council decided that the high street already had too many restaurants, and rejected a change of use application, oblivious to the economic benefits that could rub off on the street as a result of the arrival of such a prestige establishment.

No small wonder that high streets across the country have become unsightly clones of one another – or boarded up eyesores - when it is only chains that can afford to be there and petty bureaucracy ignores common sense. And that heightens the risk that, when a group like Mothercare makes a strategic decision to move out of town, or a badly run chain goes bust or decides to shut stores, high streets are left with gaping holes.

I'd argue, then, that government – local and central - must accept much of the blame for the plight of Britain's high streets. Local authorities have frequently pandered to the planning peccadilloes of major retail groups, seemingly oblivious to the well-documented impact on local trade – according to the Association of Convenience Stores, 12,000 local stores closed last week and 90 per cent of all planning permission for new retail space went to large supermarkets.

And let's not talk about parking charges – why are councils asking for £2 to leave your motor in a rough car park for an hour when you can park at Bluewater or Lakeside for nowt? Some councils are planning bumper price increases to plug budget shortfalls, a move which organisations like the Forum of Private Business could drive yet more shoppers away and deepen the high street slump. And if the government is serious about reducing emissions surely it should be encouraging people to avoid driving long distances to large retail parks. From my own perspective, the cost of petrol makes me think twice about a drive to one of the bigger shopping centres.

Special mention has to go to landlords, too, who have not exactly been models of restraint when it comes to racking cash from their retail tenants – nor, in fact, models of common decency, as my mother-in-law found out with her own small shop. Upward only rent reviews have meant that, on a legal basis, rents should never go down, which seems odd given the fact that bricks and mortar retail is arguably in structural decline as internet shopping rises in popularity. Landlords have to make a profit, of course, but so often it seems greed prevails.

Central government, meanwhile, manages the business rates that are proving an increasingly crippling burden on independent traders. Because last April's rise was pegged to the new rateable value in April 2008, when the economy was still in full swing, the rise was huge. And with September's RPI used to calculate the coming increase in April at an eyewatering 4.6 per cent, retailers are bracing themselves for further increases – surveying group Gerald Eve says 50,000 could face increases of as much as 23 per cent. Retailers have called for the annual increase to be linked to CPI rather than RPI, as yet to no unveil. Unless the government starts paying attention, surely more shops like this one will surely close.

The plight of the high street most certainly isn't a trivial matter – as well as providing community's heartbeat, they perform an important economic function, too. Despite the expansion of supermarkets, retail employment has fallen by 145,000 over the past five years. No wonder youth unemployment is at an all-time high; retail is frequently the first work experience many young and inexperienced people get - it certainly was for me – and those jobs are disappearing, fast. If the government is serious about job creation, saving the high street would be a good place to start.

Edited January 27, 2011 by Not Sir Terry Leahy

[Keith Scantlebury]

Bloody marvelous........... I was just gonna say that!!!!!

[Merlin]

Funny you should say that!!!!!! :dribble:

[Brian Cross]

Just on the tip of my tongue .........

[Brian Cross]

i thought that..........

[Malcolm Robinson]

I think that really is a compelling argument and highlights concerns some of us have with the Tesco development here. I think the best thing to happen recently is Morrison's taking the Netto store on as that at least counterbalances Tesco and stops us being a one supermarket monopoly Town.

I still think the commercial future for small towns such as ours lies with niche retailers, traders with a high degree of knowledge in their products and able to offer a more personalised service. That carries its own needs of course, one being the overheads during what could be a long start up faze. I will be very interested in the rents and rates associated with the new 'start-up' shops currently part of the Tesco development as even those niche retailers will have to compete with internet sales. Course if they have their heads screwed on they will develop their own web sites to grab regional, national even global trade!

I do think we are just about to see some places decimated and secondary market towns such as Bedders will be in the front line and that's why I believe an holistic commercial strategy is a necessity.

[sizsells]

I think that really is a compelling argument and highlights concerns some of us have with the Tesco development here. I think the best thing to happen recently is Morrison's taking the Netto store on as that at least counterbalances Tesco and stops us being a one supermarket monopoly Town.

I still think the commercial future for small towns such as ours lies with niche retailers, traders with a high degree of knowledge in their products and able to offer a more personalised service. That carries its own needs of course, one being the overheads during what could be a long start up faze. I will be very interested in the rents and rates associated with the new 'start-up' shops currently part of the Tesco development as even those niche retailers will have to compete with internet sales. Course if they have their heads screwed on they will develop their own web sites to grab regional, national even global trade!

I do think we are just about to see some places decimated and secondary market towns such as Bedders will be in the front line and that's why I believe an holistic commercial strategy is a necessity.

I sincerely hope its not to little to late

[Merlin]

No Sizells, it's too late and it's too little!

[Malcolm Robinson]

http://uk.news.yahoo.com/britains-high-streets-reach-crisis-point-003705028.html