East Anglia: Will region’s shops survive the changing face of the high street?

Mark Cordell, chief executive of Bid4Bury

THIS isn’t a great time to be a retailer.

An increasing number of people are apparently shopping online, and supermarkets and online retailers appear to be trying to price the independents and high street retailers out of the market.

And if that’s not bad enough, Government efforts to cut planning red tape to help get empty buildings back into use have incurred the wrath of the Local Government Association.

It fears that this risks creating a planning free-for-all, “draining the life from high streets” turning independent gift shops into “payday loan companies” while greengrocers “could become betting shops” without the need for planning permission or public consultation.

A recent report by the Centre for Retail Research looked at how retailing will change in the next five years – and it did not make pretty reading.

The Retail Futures study predicted that total store numbers will fall by 22%, bringing with it around 316,000 job losses, while online sales are expected to rise from 12.7% in 2012 to 21.5% by the end of the decade. In the East of England, store numbers are expected to fall from 23,600 to 18,484.

Many businesses also complain of a red-tape burden dragging them down – whether it’s business rents, rates, HR legislation, or town-centre parking. These are all squeezing already shrinking margins and prompting fears that the high street is becoming a place which is not for profit.

Yet there are some signs of hope that retailers are adapting to the changing world.

Mark Cordell, chief executive of Bid4Bury, the Business Improvement District development organisation charged with breathing new life into the town centre, believes that the high street is adapting to changing needs.

He admits that high street retail businesses are severely hampered by unrealistically high rents, which don’t reflect five years of economic downturn, and the unrealistically high business rates associated with them, while online businesses appear to breeze through a business rates system which favours them.

However, he doesn’t see this Government or any future one grasping the nettle and accepting that there needs to be a complete overhaul of the “inherently unfair” rates system.

A number of landlords appear happy to have an empty premises rather than lowering rents, he says. He estimates that for a good, medium-sized shop premises in the town, even before the costs of hiring anyone is taking into account, a retailer must be able to clear a figure approaching £100,000 to cover rent, rates, and all the services.

“Rent is not coming down, not in our town. You would think during a recession that would be the case,” he says. “Bury is so vibrant people want to come here but the rent is putting them off.”

He is trying to encourage more landlords to look at filling their shops, even temporarily. In his town the number of shops vacant is below the national average, but most worrying for him is the six shops he can name off the top of his head which have been empty for more than a year.

Car parking charges also put high street businesses at a disadvantage, he adds.

“The Government will talk about regenerating the high street. They know what the problem is, and are choosing not to do anything about it,” he says.

But Mark and his counterpart at Ipswich, Paul Clement, chief executive of Ipswich Central, believe that high street retailers can and will prevail, despite the obstacles. Humans are social beings, they argue, and town centres offer them a space in which to come together, interact, and experience a host of activities.

Both believe the Government’s relaxation of planning laws is to be applauded and that despite the Local Government Association’s dire warnings, will lead to town centres having more of the diverse mix of human activity, from doctor’s surgeries to cinemas and cafés, which is needed to keep them alive.

“It’s got to be a social hub and somewhere to meet your friends,” says Mark. “Humans are social animals and that’s what we’ve got to maximise. I have been here two years and the number of cafes and restaurants here have increased by about 50%.”

Paul believes that town centres can no longer just be “a line of shops”, and must be much more.

“The high street is changing dramatically and it’s changing very fast and it’s changing because we as consumers are changing,” he says.

“We want a more rounded experience now.”

Planning classifications and how they are applied are completely out-dated, he believes, and he wholeheartedly welcomes the Government shake-up.

“If it’s a shop or a doctor’s surgery and it’s occupied, it’s serving a purpose,” he argues. “It’ll regulate itself in the end.”

High street retailers are beginning to adapt to changes in society, and hi-tech innovations such as “click and collect” services, allowing mobile phone users to select an item online and pick up the physical product shortly thereafter, are beginning to have an effect, Paul and Mark believe.

Paul points out that while there was an initial boom in online retailers, that was at a point when shoppers were reliant on ordering from fixed personal computers.

Savvy consumers can now place orders or check prices on the move, using mobile phones, he points out.

The challenge now is to use that mobile transaction in a much more dynamic way, he says, using apps, for example, as a means of bringing town centres to life.

Some town centre retailers are also responding to changing customer habits by altering opening hours to suit working consumers, says Mark. Footfall in the town went up last month by 4.6%, a much higher percentage than the national average of 0.4%.

He believes that high street retailers must and are becoming more forensic in their decision-making and the good ones are adapting to suit their consumers.

“The approach we take with our businesses is all we can do is control what we control,” says Mark. “Let’s have a moan about what’s unfair, but we could die waiting for that change. Let’s be proactive at what we can change.”

Putting on events, improving the general environment, looking at opening hours and offers are just some of the ways the high street is fighting back.

Mark believes that the recession has caused consumers to change their priorities. Yes, they may be putting off a decision to buy clothes or footwear, but they are putting family and friends high on their list of priorities –thus the increase in popularity of cafés and restaurants.

Robert Hughes, managing director of Hughes Electrical Group – which has expanded its Lowestoft outlet while also opening new stores in Beccles and Spalding, Lincolnshire, says the business has been repositioning itself in the last few years to make life easier for customers – particularly in the wake of “click-and-collect” services.

“Online has had clear effects which have been quite significant for retailers,” he says.

“Firstly it has improved price visibility for customers, which is a great benefit for customers, while businesses are selling at a lower margin than ever before. The only way to stay in business in that case is by increasing your turnover, but there will be less retailers.

“The other thing is click-and-collect. Customers want it and want to be able to come in and park their car. High streets aren’t very well situated for that, so we have been re-positioning ourselves so that customers can do that.”

Neither Paul nor Mark at Ipswich and Bury believe that the dire predictions contained in the Centre for Retail Research report apply to their towns and they question the basis for the study.

High street businesses will need to be innovative and to change, but its retailers believe there is still cause for optimism in people’s social instincts. Amid the doom and gloom, it may be the human touch which will keep our high streets alive.

“I think they’ll survive, but I think they’ll be very, very, very different places than they were in the past,” says Paul.