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business focus


Could restaurants be the next high street victim on the menu?


There’s no doubt that the retail environment is forever changing, writes John Kirkpatrick, partner, Southampton office, Wilkins Kennedy.


A combination of the recession and a growth in technology has made people’s attitudes differ towards the way they are spending their hard-earned cash. At the moment in most towns and cities around the UK, footfall is generally high and there are very few empty units. But, for others this is a very different story.


The recession has been relentless and no matter how large or small the shop – from the independents to the larger chains – the change in people’s spending has ultimately claimed victims from across the retail landscape.


But, it seems that one of the reasons for recovery has actually been the way people spend their money and it has caused quite a radical shift in the


education & business It never hurts to know ...


The business and education sectors work together to create growth and prosperity for the local area. Indeed, they are often the heart and soul of an area and completely interdependent. There are a few things though that need be born in mind if you do not want to fall foul of the law, says Claire Merritt, employment solicitor at Paris Smith LLP.


Participation age


From September 2013, the Government changed the law so that young people are required to stay in education or training until the end of the academic year in which they turn 17. This will rise to 18 in 2015. The obligation to stay in education or training for a longer period falls squarely upon the individual student. However, the education and training includes entering into a valid apprenticeship or remaining in full-time education. Therefore, employers may see more young staff looking to work, train and receive payment at the same time. Your business should be prepared for this.


www.businessmag.co.uk Apprenticeships


The Government has tried to make apprenticeships more straightforward. Public policy supports learning on the job as it helps both businesses and the individual. It is important for any business to remember that historically apprentices have special legal protection not afforded to other classes of workers. The law has developed to mean that it is very difficult to terminate an apprenticeship prior to the end of a fixed-term period. Also, if an apprenticeship is terminated early by an employer, they risk being sued not only for compensation until the end of the fixed-term period but also any losses arising from the loss of training opportunity. However, the Apprenticeship, Skills, Children and Learning Act 2009 brought in a new concept of an apprenticeship agreement. The agreement must cover the legal requirements for an employment contract but also covers an apprenticeship framework. This type of agreement creates a


rate (for workers aged under 18 but above the compulsory school age who are not apprentices) will rise by 2% to £3.79 an hour. Finally, the rate for apprentices will rise by 2% to £2.73 an hour.


Work experience


binding relationship for training, but only as an employee, not with the extra protection of apprentice status. This means you will be able to terminate the agreement as with any employee.


National minimum wage


Businesses engaging younger staff or apprentices may be encouraged by the lower limits on earnings. The national minimum wage is set for a modest increase in October 2014 with the youth development rate (for workers aged between 18 and 20) rising by 2% to £5.13 an hour. The young workers


We have a vibrant work experience programme, and find the scheme helps us identify talent, and give something back to the local community. It is important for businesses to know the difference between work experience and establishing an employment relationship. If an individual is not being paid it could fall foul of the national minimum wage. The Revenue are cracking down on sham arrangements. You need to be careful, at the very least, that you properly consider the status of anyone offered work experience.


Details: Claire Merritt 023-8048-2112 claire.merritt@parissmith.co.uk www.parissmith.co.uk


way the high street performs. New phenomena such as “showrooming”, which allows a customer to try out products in a store of their choice before completing their purchases online, has allowed for retailers to adapt their strategy to embrace this new way to shop – even setting up specially designated “pop-up shops” for this purpose.


Customers are also getting much savvier, and they know that if they shop around, they can get the best price – this applies to both the high street shops and online. Again, retailers have been able to adapt to allow for this, even able to offer online-only deals or omni-channel strategies, which means they can cater to their customer’s demands much better.


Therefore it appears that whilst in some areas, the retail environment is almost reviving itself, other areas continue to fall into decline.


Yes, many areas have a thriving town


centre, but on the outskirts where footfall is much lower, there is often more unoccupied premises. But, this brings mixed blessings, as not only do these bring cheaper rents, they can also provide more cut price goods as the lower overheads are passed on to customers. Therefore, units that become free in that area tend to get snapped up quickly.


There’s no doubt that in an area like Southampton where there is a high volume of shops, there is massive competition for other businesses, such as independent retailers or restaurants, and this makes it all the more difficult for them to survive.


Here at Wilkins Kennedy, we have seen a steady increase in the number of restaurant insolvencies in the area in the past 12 months or so. In the main they have been new entrants to the market which have been unable to take enough business from the established restaurants and have struggled particularly against the large chains.


It is difficult to imagine the situation improving for many restaurants in the foreseeable future, although the same could have been said for the retail landscape as recently as a year ago. The decline of the high street presence for retailers should in theory mean that there is more space for other businesses to move in, and there could even be lessons to learn from the retail sector in terms of offering customers better technology, better offers and a smoother checkout process.


Of course, there’s no place for the restaurant online, but it can still be interchangeable with the physical presence – there is also space for incentives to offer for returning customers. But, in order to improve such figures, restaurants of the future will have a lot to learn.


Details: John Kirkpatrick 0118-9512131 John.kirkpatrick@wilkinskennedy.com www.wilkinskennedy.com


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MAY 2014


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