The retail industry in a given geographical area can be illustrated as 5 forces that determine the competitive intensity and therefore attractiveness of a market - in this case, urban retail:
ll The bargaining power of consumers – the key retail driver where consumer preference is paramount
ll Competitive rivalry at the ‘in town’ market place
ll The existence of substitutes – competing retail centres
ll New entrants into the retail market – product and new centres
ll Bargaining power of suppliers – products and production
a) The Bargaining Power of Consumers and “The Cake” Consumer preference and ability to choose is vital in retail demand. If consumers choose to ignore a town’s brand new retail offer at the centre and leapfrog out of the catchment area then that is their choice in a capitalist (mixed) free economy. The amount of spendable income in the economy, or catchment area, at any given time is finite and any retail development means an attempt to capture this revenue from somewhere/ someone else. There is only so much cake.
Specific capture of spendable income cannot be guaranteed and it always means winners and losers and resists policy. A shift in population to another area of a town may mean the creation of another centre to provide convenient access to retail even shifting from an existing out of town centre to a new one.
b) Competitive Rivalry and Bargaining Power of Suppliers The 28 recommendations of the Portas Report are significantly “supply” orientated seem not to be cognisant of the consumer demand. It is tantamount to saying that the solution is to create protected shopping centres. There are a number of problems with this:
ll Most high streets are not in single ownership.
THE TERRIER - Summer 2012
ll Urban dynamics and growth over time are ignored. It would mean reversing negative accessibility and convenience to and at the centre.
ll Provision of free parking is at a sacrificial cost.
l l Deliberately encourages congestion.
ll Ceteris Paribus. Portas appears to apply in practice the theoretic principle whereby all other things (in the retail hierarchy and distribution) can be held constant. This may be fine in analysing one business but all other forms of retail cannot be held constant whilst the centre receives a, perhaps, undeserved and questionable, priority.
ll Part of the argument for the traditional high street is that shopping patterns within it should be retained and conflict will ensue with the Portas orientated regenerators. Local independent traders in centres put profit directly back into the local economy whereas larger national multiples do not. The deregulation of on- street market traders operations suggested by Portas is in direct conflict with shopkeepers who have overheads.
ll A managed shopping centre / high street focused on retail delivery increasingly has the effect of creative destruction characterised by the destruction of smaller units to create others.
The CPO aspect is considered later.
c) The Existence of Substitutes There will always be substitutes of varying shapes and sizes including Off- Centre and out of town shopping and competition from other towns with their satellites also competing. Realistically the complete package of retail is no longer monocentric no matter how much politicians and environmental planners would wish it to be. In fact towns should now be considered by the purchasing public – composite, polycentric networks of retail offers.
d) New Entrants into the Retail Market These investors will have done their research and targeted the consumer. They realise, what policy planners fail to accept, that they must bring the market to consumers. Regeneration planning, in promoting unassessed replacement retail in town centres, attempts to bring more consumers to the market. Internet shopping is the classic example of targeting convenience.
2) ENVINRONMENTAL WELL-BEING / ROLE-
Urban Retail Location It is said that “there are three things that matter in property: location, location, location.” The urban economist would disagree in that location is just a position on the globe and say that it is those features within a location that provide its critical success or failure. Just because a town or city remains in an apparently good, proximate geographical location does not assist in assessing how that town performs in retail terms.
Urban Growth and Urban Change Management People readily accept corporate change but are unable to apply those features to urban change because they impinge directly on our lives and the time span is of generational proportions. The traditionalist would love to pickle and preserve our old high streets safe in our memories. The younger generation are unable to relate to this; the world has moved on.
The High Street’s Inability to Cope Urban growth happens organically and town centres just could not have coped with the size of population, changing modes of transport and shopping patterns. Diminishing returns had set in. Some bombed cities like Bristol and Coventry were able to cope for a while taking the opportunity to reinvent their centres. However, a characteristic of urban growth is the creation of sub- centres (towns become polycentric) servicing the indigenous residential neighbourhoods in close proximity.
Out of Town Given the constraints that characterise the centres of towns, out of town and out–of-centre became an essential
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