Is the High Street, in its current guise, dead? We’re not the first to ask and won’t be the last. Shopping from the comfort of home or office is eminently easier that travelling to our local High Street and this has now reverberated to the bottom line of retailers, who have traditionally been the bastion of our shopping needs.
With online not sharing the same overheads of their high street counterparts, Amazon and others, can offer a lower price per specific good because overheads do not have to be embedded in the RRP.
However, is there a Superpower in our midst? Retail heavyweight, Mike Ashley, is buying up much of the High Street and seems prepared to invest – Newcastle United FC fans looks away now – in entities that are failing. Debenhams, Sports Direct, House of Fraser, and latterly, HMV, has come under his gaze. What is he seeing that others can’t?
The presence of Mike Ashley is merely papering over the cracks. Shopping centres, high streets and even out-of-town retail units are failing on a daily basis. There doesn’t seem to be a common consensus about what to do. Jake Berry MP is the appointed Parliamentary Under Secretary of State at the Ministry of Housing, Communities and Local Government, with a direct requirement to revitalise the High Street. A year after his appointment, we’re still waiting for any kind of agenda of action.
At MRK Associates, we’re very interested in the future of the High Street because it’s traditionally always been an accurate barometer of the UK’s economic health. Yet, shops are closing, jobs are being lost and retailers are not equipping themselves for the changing shopping landscape. However, the jobs market continues to hold up well with unemployment currently standing at record lows. Why the disconnect?
Let’s have a look at some of the reasons that have been reported:
- Business rates are reportedly excessive for retailers compared with online counterparts
- Lack of interest from local & central Government
- Online dominated by Amazon, with little overheads can undercut – significantly – the high streets
- Technology is not being adopted by high street retailers to add to the experience
- Are online participants paying their fair share of tax?
In 2018, leading multinational shopping centre operator, Hammerson, pulled out of a £2.8bn merger with smaller competitor Intu; market conditions were cited. Is everyone packing up their tents and going home? Is Brexit providing the perfect excuse for retailers to trim their costs? In 2018, retailers cut 70,000 jobs in the UK.
Christmas is a key trading period for all retailers; yet many have reported poor figures. What can be done to turn the tide? Or is it too late?
- Government needs to put its weight behind the high street, not just to leave it to the respective Chamber of Commerce to promote.
- Taxes of the powerful online merchants must be clarified. Does an additional tax need to be applied to offset their lack of overheads to aid competitiveness?
- Retailers invest in technology that embrace online and the physical presence on the high street. For instance, make ‘click and collect’ the shopping of the future and also offer more cost-effective local delivery options a real alternative to counter Amazon Prime.
- One of the reasons why Mike Ashley’s empire has grown is because his Sports Direct offers £5 vouchers to online customers – redeemable only in shops where they’re picking up a parcel. This £5 is added to the shoppers online buying.
- More partnerships; many WHSmith outlets feature Post Offices in its outlets, Costa Coffee have partnered Next and other retailers in specific locations – retailers should think creatively. Could this be Mike Ashley’s plan? One building with all the brands under one roof and one set of overheads?
At MRK Associates, we’ll continue to champion the High Street as long as they help themselves. The High Street isn’t dead just yet.
Roland Seddon, Managing Director, MRK Associates.
MRK Associates is a recruitment and career advisory company specialising in three distinct areas of professional employment – finance/accountancy jobs, office support/administration jobs and revenue management/yield jobs. Our main geographical focus is in the Northern Home Counties area (Buckinghamshire, Hertfordshire, Oxfordshire and Bedfordshire) where we provide a personal, knowledgeable and professional service within these markets.
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