As a headline, it was rather scary: "Many high streets are doomed to die". Taken from last week’s Daily Mail, it quoted figures issued by the Local Data Company, which scours 800 town centres throughout the country every six months, checking on each independent shop closure and opening.
In fact, the news is not all bad: 70% of independents are doing well and independent bakers are matching closures with openings. But that still leaves 30%, nearly one-third of all types of independent shops that are not doing well. Surprisingly, the Scottish government is pumping £60m into the high streets, while England is pumping in a mere £5m.
So what is to be done? Matthew Hopkinson of Local Data Company says: "Local shopkeepers need a more powerful voice." This is echoed by Barry Gilbertson of analysis and finance firm PricewaterhouseCoopers, who says: "Independents need to pull together and organise via the web. Just look what happened recently in Egypt and now across the Middle East!" He adds: "They need to drive to local meetings in their region, meet together, find a way to get a stronger voice."
The proportion of shops sitting empty has risen from 12% to 14.5% in a year. While over 10,000 firms are said to be in ’retail distress’. "Talk to your landlords more," urges Gilbertson "Many will choose to listen rather than be faced with an empty tenancy."
There’s a reason for that. In April the abolition of rate relief on empty properties comes into effect. Until now, vacant properties with a rateable value of less than £18,000 a year have been exempt from paying local property taxes. From 1 April the threshold will drop to £2,600. That’s a big drop, and a good negotiating point.
According to the report, northern cities and towns around the fringes of the south east will feel the impact of the 2011 public sector cuts most. Job losses will inevitably result in less spending. In Sunderland, public sector workers account for 40% of all jobs in the city and there is already a 20% shop vacancy rate.
McDonald’s is starting to move out of 20 town centres into ’drive-thru’s. Will KFC, the fast food chicken retailer, follow suit? Marks & Spencer seems set to follow Next to out-of-town in order to maintain a growth pattern.
So what should be done with empty high streets? Develop them fast? Turn them into housing? Use more for wine bars or coffee shops to lure others? These are just some of the suggestions but, above all, it’s important to get rid of the eyesores!
However, one thing local shoppers highlighted in high streets that were thriving was that they like ’local’ and ’fresh’ from their independent bakers and butchers. Long may it continue, but how long, one wonders, before the first out-of-town drive-thru Greggs?
Vacancy rates (Local Data Company)
Note: Small town centres (50-199 shops within communities and local government retail core) June 2010