Wednesday, July 6, 2011
CREATING A RETAIL STRATEGY FOR WALES
The last couple of weeks have not been good for the high street across the UK. Thorntons is closing 180 outlets, Jane Norman and Carpetright have gone into administration and TJ Hughes is closing its doors.
Not surprisingly, many are blaming the fact that consumers are now cutting back on spending as a result of austerity measures, although others are pointing out that for every shop that goes under, others are actually increasing their market share - John Lewis’ sales were up 20 per cent as compared to a year ago, whilst Debenhams announced that it is creating 600 jobs across its stores.
However, it is generally agreed that the high street across the UK is changing and that a number of key factors are largely responsible for the changes. For example, there is increasing use of the internet by consumers, who are able to sit in the comfort of their home and surf the web to find the best, and cheapest, bargains, across a range of retailers. Not surprisingly, internet retail sales in the UK hit over £22 bn in 2010 as compared to £9 bn in 2006. Although this is less than 10% of all retail sales, it is set to grow by a further £14bn by 2014.
Of course, the problems for the retail sector actually started well before the current round of closures took place. Many of the shops across the UK that closed a number of years ago have yet to be re-occupied. Indeed, it is estimated that more than 300,000 small shops have been closed across Britain’s high streets during the last 30 years.
Some commentators have placed the blame on these closures of small independent retailers firmly at the door of the large supermarkets that sell not only food, but a range of other goods and services from clothing to televisions to insurance.
However, these supermarkets can only be built with the permission of planning authorities that have allowed them, with little resistance, to extend their premises to sell non-food items. Indeed, each additional 3000 sq ft of space granted to large supermarket will kill off at least one shop in the high street, according to some experts.
The changing face of the high street across North Wales and other parts of the UK is best exemplified by a recent study which showed that whilst there is a growth in hairdressers and beauticians shops, newsagents, butchers and independent fashion stores are closing down in droves as a result of having to compete directly with the larger chains and supermarkets parked on their doorstep.
Given this declining situation that many of us witness daily across towns in North Wales, I am sure that small retailers will welcome last week’s call by the Federation of Small Businesses (FSB) to the Welsh Government to set up a retail strategy for Wales.
The wide ranging proposal is suggesting compulsory independent retail impact assessments on all supermarket developments, affordable or subsidised retail units to be a condition of new shopping developments, and more powers for planning authorities to hold off large developments and to preserve small local firms. It is also making the case for town centre business rates to be affordable so high streets can compete against out-of-town retail parks.
It is a radical strategy that could begin to revitalise the small retail sector across Wales.
In fact, given that politicians across all four political parties at the last Assembly elections were so keen on emphasising their support for local business, it shouldn’t be too difficult to get them to persuade the new Business Minister of the importance of supporting local business communities in this way and ensuring that high streets across North Wales have a viable and positive future.