talking trade The changing face of retailing

Industry commentator Gary Gordonreflects on the nation’s ever-evolving retail landscape


wenty years ago, one would go into town, complete the weekly food shop, take it to the car, and then wander

around the high street visiting favourite retailers. How times have changed! Supermarket chains moved out of town, into

green places on the edge. The extra space gave them more room for their stores - and easier access for both customers and delivery vehicles. Relocation gave them the opportunity to expand

into other retailing areas, so they were ‘playing in everybody else’s sandpit, without getting sand in their eyes’. As a result, many added non-food offerings to their selections. Consumers loved the thought of free parking - which is what the new breed of out-of-town supermarkets offered - and it encouraged them to complete all their shopping in one venue, without bothering to visit their local towns. When the big multiples applied for planning

permission, their slick commercial presentations would always woo the planning committees, with promises of hundreds of extra jobs, and a community donation to ensure that troublesome junction at the edge of the town could be improved. Of course, it ensured easier access for vehicles leaving town in the direction of their new superstore. Never was it mentioned how many existing retail jobs and businesses in the surrounding area would be put at risk. Following the installation of food retailers out-of-

town, many larger non-food stores wanted to follow suit. The planners then had a problem. They had set a precedent by allowing supermarkets to desert the town centre, so they couldn’t refuse the applications. If they said no, their decisions would be overturned on appeal - but appeals were expensive, and ever-tightening council budgets could not risk that cost. In 2008, the banking crash brought financial fears

to many, and also saw the growth of broadband internet accelerate. No longer did we have to sit for hours waiting while for one image to be downloaded; now, it happened in seconds. Online shopping was suddenly open to

everybody at the touch of a button. So there was less need to go into town, using fuel, and paying for parking. We could shop from the comfort of our armchairs. With online traders based in out-of-town locations, rents and rates became insignificant costs

October/November 2018 • • | 43

to these businesses. With lower overheads, and no salaries for sales staff on the floor, keener pricing became the norm, with many trying to undercut each other to become the leaders in their fields. The expression “I can get that cheaper online” became a daily uttering from customers visiting their local high streets, even if it wasn’t true. So, many in-town shops starting trimming margins to hang onto existing trade, while their rents and rates continued to climb. Successive governments have regularly promised

reviews and changes to the Landlord and Tenant Act and business rates. The problem is that large landlords are big investors in infrastructure (shopping centres and more) and often donate to the incumbent government to keep them sweet. As for business rates, it’s too easy for the Treasury

to collect tax on a building, as you can’t move it to an offshore hedge fund and you can’t hide it either! The £25 billion collected annually from the business community would be hard to make up, if the government started to be sympathetic to the retail community. So they have done little to change it. We were promised wholesale change to business

rates in the 2015 budget to assist small and in-town retailers. But the change amounted to very little - and actually seriously hurt many city-based businesses. So the pursuance of an even playing field continues. Bira (British Independent Retailers Association)

recently launched a new plan to make rates fairer while maintaining the continuing flow of funds into the treasury coffers at the same level as before. On October 9, a motion was raised on the issue in the House of Commons, by Sir Geoffrey Clifton- Brown MP. Speaker after speaker bemoaned that

their constituency’s town centres were full of empty units. Some complained of offshore landlords, more interested in maintaining property values than renting out their units at a rent that might jeopardise their investment value. Many cited rates as the main problem. As usual,

the Treasury spokesperson listed all the wonderful things that the Treasury has done to support retailers. It stressed that the rateable value for non- payment allowance had been doubled from £6,000 to £12,000. However, there are very few town centre units with rateable values of less than £12,000, and the average is about £36,000. So the fight goes on. Meanwhile we buy more and more online. And

with ‘white van man’ delivering our purchases, whizzing around pumping out diesel fumes in the process, we have an environmental problem. Plus, local councils have started monitoring what goes into every household’s recycling bins. Many have found that as much as 80% of the content is made up of cardboard packaging from mail order/internet shopping deliveries. This puts pressure on their diminishing budgets to process more cardboard waste, which no longer has the value it once did. Retailing has to change for the 21st century.

But it’s changing too fast, with not enough help, and with little thought to the problems caused by the changes.

• Gary Gordon has 48 years of retailing experience, comprising 39 years as a director of cookshopchain

Kitchen Kapers, and nine years as a buyer at Army & Navy Stores (now House of Fraser).

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