Just what needs to be done to revive Britain’s high streets?
Retail consultant Mary Portas has called on retailers to come forward with their views after answering the government’s call to lead an independent review into the future of the high street. Her website — maryportas.com — has been inundated with comments about the biggest issues retailers face and possible solutions to revitalise the high street. Professional Jeweller takes a look at some of the most interesting posts about a subject that has got everybody in the retail chain talking. Add your voice to the great retail debate by commenting on this story.
VAT threshold the biggest burden
"The VAT threshold is a real obstacle to small shops like mine taking a leap into a bigger and better future. As I near the threshold I sometimes close for a couple of weeks so I don’t go over, as I would have to give the VAT man £7,000 if it’s £1 over. I think it’s £74,000 at the moment and I would have to turn over another £14,000 to make it worth my while. As my shop is in Middlesbrough — not an affluent area — this is stifling any growth that I try to encourage. If the threshold went up to £100,000 and my turnover went up to that, I could then afford to pay VAT with the knowledge that all my hard work wasn’t going into government coffers with nothing left for me and my family.”
Jeannie (surname withheld)
The frustrated retail start-up
“I have been trying to open an independent shop in our local town. I have had so many barriers put in the way it makes a joke of all the supposed ‘help’ available for new business. However the main one is the astronomical rates. We tried to lease a shop which had been standing empty for over a year but the rates were £10,000 plus a further £365 per year for a ‘local business improvement donation’. In the meantime, three more charity shops have opened adding to the huge number already there — because of course they don’t pay rates. It seems large retailers and charities are the only ones who can afford to open new shops. No wonder all our high streets look the same and are no longer a focus for our community.”
Shop sharing is the sensible solution
“How about the possibility of a number of small brands ‘sharing’ a shop and contributing to the rental payments? Small brands can’t afford the costs that come with having a store, so by sharing the costs it gives them presence on the high street and brings with it creative, unique products to consumers’ doorsteps, rather than the usual raft of high street goods. Perhaps management companies could purchase the shops as an investment opportunity, then ‘sub-let’ the space inside.“
Jenni (surname withheld)
The gift shop fighting farcical council rules
“Our problem is poor borough and county council planning. I own a small gift and lifestyle shop that has traded successfully for 20 years in Colchester. The latest bombshell was the introduction of a 1.5 metre wide cycle lane into an already narrow street! The width of the remaining carriageway means that our suppliers cannot legally unload vehicles; neither can we load our vehicles to make deliveries. Whilst we all support moves to increase cycling, this particular scheme has attracted few users and threatens the existence of the very shops that make this part of Colchester attractive. No effective consultation was sought with retailers and although we have raised the matter with the council nothing is happening.”
Parking restrictions are the real problem
“Lots of high streets have been pedestrianised and parking is a walk away at extortionate prices. Local parades of shops have silly double yellow lines and inadequate numbers of parking bays. Sort the parking out — make it free or more accessible, or both. I think councils up and down the country should be called upon to scrap all parking charges in and around high streets.”
Manda (surname withheld)
Limit out of town retail parks
“The problem is very simple: supermarkets and out-of-town retail parks. Planners have killed the high street by allowing so many of these. Any new out-of-town development needs to be stopped. Glasgow has finally done that. Bulky goods parks are ok, but opening A1 retail parks with all the high street names is a killer. The other important thing is parking. People like to use their cars, which is why out-of-town is so popular. The new wave of super safe, female friendly car parks is a big help, but more needs to be done to improve parking.”
Steve (surname withheld)
Rethink the real estate model
“The way people spend money has changed in the last 10 years. Polarisation to high-end prime and deep value is putting middle market retailers out of business; and large spends in out-of- town or edge-of-town retailers like Tesco and Asda where you can buy everything. Granted, the planning system (opening out of food-only consents) and business rates have not helped but there has been a fundamental shift in lifestyles that the high street has not yet responded to — empty shops are the same as the derelict factories of the 70s. My view is that we need to think constructively about alternative use and encourage the real estate valuation profession to support higher alternative use values and not perpetuate the outdated Zone A and comparables system which is at the heart of much of the high street vacancies.”
Shopper apathy and supermarket overkill
“I am an independent in Witney, which is David Cameron’s constituency, and have been trading here for nearly 14 years, selling good quality flowers, glass vases and cards. We have free parking in our town, including a multi-storey car park. In my opinion, even though we have free car parking for three hours, it does not seem to help trade. In the last one and a half years, at least 16 national shops have opened in our town. This is making it harder for the independents. Sadly, Witney is becoming a clone town. I believe there is a lot of apathy in the country and it’s badly affecting retail. No matter how hard we try to be different, unique or unusual, supermarkets have such a strong hold it is getting impossible. I don’t think the public really care about the independents any more. They have become lazy and want to shop under one roof. They need to be re-educated in the advantages of shopping independent. They also don’t think of the effect on the livelihood of the independent shopkeeper.”
Rents and taxes impeding small business owners
“As a young business woman who wants to start her own retail business, which includes a high street store, I have to say I am being increasingly put off because of the high rent and rates and VAT that I would have to pay. I just wouldn’t be able to afford to set up a fledgling store, which is why many people sell online, as the overheads are less — and I can’t blame them! I’ve also worked for major UK retailers and most of them are only interested in profit. Small stores can really deliver on service and experience which would greatly benefit the shopper and the future role of the high street. I know shoppers want choice from their high street and are actively seeking this, so surely the government should really practice what they preach and help small businesses more. They say we are the backbone of the economic recovery but we still aren’t being helped enough to start up. Small business initiatives are needed desperately if we are ever going to reverse the downward spiral of the high street.”
Kelly (surname withheld)
Blame the internet giants
“I think the biggest reason for empty high street shops is eBay and Amazon. They generate 80% of the UK’s online trade and turn over more money than what is turned over in the high street. I have opened a shop in the high street and my lease is £13,000 and I got a business rates bill for £6,000. It states it is for services which I do not receive. I think the government should reduce all the taxes for high street shops or make a tax-free first-year offer for small businesses to open .This would definitely encourage merchants to open shops. Secondly, these eBay and Amazon sites should be governed by a UK authority and heavily taxed. They are providing services to the UK — they have UK offices but they say they run their business from Luxembourg so they only pay 15% VAT. How can I compete with these companies if I have to charge 20% VAT?”
Ahmet (surname withheld)
Local authorities not listening to retailers
“We have been successfully trading in Frome as an independent gift and lifestyle shop for nearly 10 years. In all that time, the street furniture has not been painted once (despite requests). This gives a very poor impression to shoppers and visitors by making the town look run down. Surely there should be an obligation for the councils to maintain them on a regular basis and also to properly take into consideration the views of traders before changes to parking etcetera, not just listen and then disregard. We pay a fortune in rates but get little back, not even a general rubbish collection. We are fortunate in having a large number of independents still trading, but are now seeing more chains filling empty premises, and are very concerned that Tesco is negotiating to put a large store in the town. There is no mechanism by which they can be stopped. We have also suffered with the exodus to Bath and Bristol courtesy of the free bus pass, coupled with increases in parking charges. All these effects are beyond the retailers’ power to change.”
UK Retail: The facts
• In 2010, UK retail sales totalled more than £293 billion.
• The retail industry employs more than 2.9 million people, which equates to around 11% of the total
• 9% of all VAT-registered businesses in the UK are retailers, with the total number currently at 188,320.
• In 2010, there were 286,680 retail outlets in the UK.
• More than a third of consumer spending goes
• Sales over the internet account for around 8% of total retail sales, despite strong growth in recent years.
• The BRC-Bond Pearce Retail Employment Monitor showed that in the first quarter of 2011, retail employment was 0.5% higher than in the same quarter a year earlier, equivalent to 3,400 more jobs.
• The most recently available UK retail data (for May) shows that sales values were 2.1% lower on a like-for-like basis than May 2010, when sales had risen 0.8%. On a total basis, sales declined by 0.3%.
Source: British Retail Consortium