The Retail Bulletin has today drawn our attention to a piece in the Observer (28.06.09) that adds weight to my own suspicions that those who have the capability will milk the downturn to the long-term detriment of local economies right across the nation. It is a matter that all those who understand the importance of encouraging local trade must be concerned with.
Governments and increasingly, large business, utter a mantra about sustainable development without, it would seem, actually understanding what that phrase encompasses or means. In most cases it is vaguely related to 'going green', or in ensuring fair trade with less developed nations. Perhaps it is about making sure that wood from which has been constructed the latest garden patio set is sourced from 'sustainable plantation'. All of these things are quite laudable in their own way but the problem is not simply complex, being global, relating to climate, human impact and a whole host of other inter-connected issues not least of which being tran-national corporations and supra-national regulatory frameworks - it is also considerably closer to home in economic meaning.
The Observer, or specifically Nick Mathiason, has highlighted the opportunistic land grab that is currently being undertaken by the 'big four' supermarket chains. They are targetting 'distressed' locations and buying the properties for future use, and given past performance, to ensure that rivals are excluded from the area. The impact of this will directly affect the price of property locally - any 'sale' will determine a 'renewed confidence' and push prices up; it will remain unutilised as a shop because the chain concerned had not actually planned this particular expansion into its development plan - consequently because of the Government's richly stupid policy to have empty shops pay full business rates it is likely that a large proportion of these recently acquired premises will be demolished pending the eventual gathering together of the neighbouring plots to enable a 'viable' megastore or 'local convenience' store to be developed successfully.
The premises will no longer be available for local businesses, the local authority will not benefit from rates income, the rival major chains will be excluded (thus killing off any real competition arguments) and when the great day does arrive and the major chain sets up shop, they are likely to employ tactics to undercut the local stores to such an extent that they simply cease to be. Local areas do not benefit directly from large chains in the same way that they do directly benefit from locally own stores (even local chains!). The benefits do acrrue from the salaries that are paid to locally based staff, but the likelihood is that these are the lowest paid employees. The local economy does benefit from the business rates paid into the local authority's coffers - but these are based upon space occupied and a similar pot would have accrued in the event that smaller businesses occupied the sites in larger numbers. It is arguable that the local retail economy benefits where these stores have opened because they draw people in from further afield who might otherwise have been attracted elsewhere, but this is usually at the cost of the local specialist and non-specialist alike who is in direct competition, so it is only those stores not in direct competition with the supermarket who benefit - and that's only until the supermarket adds a new string to its bow and expands into non-traditional areas. In contrast, locally owned stores and chains ensure that even the profits and dividends from these enterprises get back into the local economy.
The long term effect will be the withering of the retail offer on the vine of local shopping towns. Market towns have traditionally served as places of public socialising as much as market activity and the advent of the one shop town is diminishing that; the idea of public space is undermined and the town centre loses its importance in the life and development of local communities. The longer term effect is that the very arguments currently being put forward as reasons for our Government to support people in so-called 'less developed countries' will become commonly used as cogent arguments for the support of some of our own towns and cities.
Sunday, 28 June 2009
Thursday, 11 June 2009
Astounding discovery - customers are important
Has anyone else noticed? There seems to be a theme coming from the global sages of retailing that it is important to listen to and to repsond to customers. Well there's a novel idea!
Has it really taken the shell-shocking, mind-numbing, business threatening recession for retailers to discover that their cuistomers are all important? I find it hard to credit, yet these are the words coming from conference after conference. Is it really me, or did I miss something by not paying huge sums of money to attend these mutual back-slapping events. All I do know, is that the reports being published in the trade press over the last couple of months suggest that the really hot news that customers are important. I am amazed!
Having been in and around retailing for almost half a century it was to my mind at least the very bedrock of what retailing is all about. Perhaps someone will offer me a lucrative deal to speak about those other shockingly newsworthy discoveries such as - you need to supply the right goods at the right price and at the right time! We'll keep the location bit until you're all ready for it - perhaps in the next lesson?
Has it really taken the shell-shocking, mind-numbing, business threatening recession for retailers to discover that their cuistomers are all important? I find it hard to credit, yet these are the words coming from conference after conference. Is it really me, or did I miss something by not paying huge sums of money to attend these mutual back-slapping events. All I do know, is that the reports being published in the trade press over the last couple of months suggest that the really hot news that customers are important. I am amazed!
Having been in and around retailing for almost half a century it was to my mind at least the very bedrock of what retailing is all about. Perhaps someone will offer me a lucrative deal to speak about those other shockingly newsworthy discoveries such as - you need to supply the right goods at the right price and at the right time! We'll keep the location bit until you're all ready for it - perhaps in the next lesson?
Friday, 17 April 2009
The Wonder of Woolies
Although Woolworths' demise from the high street is now one-quarter of a year past, not many days pass without comment or reflection about the post-Woolworth impacts on town centres and upon other businesses. Today we hear from the Retail Bulletin that "Original Factory Shop" is to take various post-Woolworths sites and is also aiming to recruit former Woolworths colleagues into their ranks. They argue, so it is inferred, that the sites lend themselves to the "Original Factory Shop" trade and that the Woolies people will be well trained retailers who will need little or no input to help the "OFS" to gain market share and increasing business.
I can see no fault in the idea; on behalf of the town centres who once hosted a Woolworths, I welcome the plan that will do much to help fill otherwise darkened spaces amongst many shadowy places - not to mention the good news for the people who lost their jobs, a light at the end of their tunnel too!
Not for the first time, what I am wondering is whether, and by how much, the local SME retail communities have sought and gained business that had hitherto been captured by Woolworths. It seems to me that a good number of other, larger, businesses are making their mark. With the exception of the well publicised efforts of the manager and her colleagues at the renamed Wellworths in Dorchester, I have not seen much other evidence for small businesses making hay in the Woolworth meadow. But, perhaps it is because these businesses are so local that those of us a distance off simply fail to see it - if you know otherwise, leave a comment!
I can see no fault in the idea; on behalf of the town centres who once hosted a Woolworths, I welcome the plan that will do much to help fill otherwise darkened spaces amongst many shadowy places - not to mention the good news for the people who lost their jobs, a light at the end of their tunnel too!
Not for the first time, what I am wondering is whether, and by how much, the local SME retail communities have sought and gained business that had hitherto been captured by Woolworths. It seems to me that a good number of other, larger, businesses are making their mark. With the exception of the well publicised efforts of the manager and her colleagues at the renamed Wellworths in Dorchester, I have not seen much other evidence for small businesses making hay in the Woolworth meadow. But, perhaps it is because these businesses are so local that those of us a distance off simply fail to see it - if you know otherwise, leave a comment!
Thursday, 12 March 2009
New schemes under threat
The development of new retail centres seems, over the past decade or so, to have viewed by many authorities as a bit of a cash cow - certainly in the case of town centre or near centre developments they have often been promoted as economically essential improvements that also impact positively on the visual amenity and upgrades to local public space, something that I believe to be more than just slightly disingenuous.
It seems that the farm-yard animal has changed and it is now the chickens that are coming home to roost. Ben Cooper in 'Retail Week' has today reported on the fact that the City of Wakefield near the eastern fringes of West Yorkshire is having to come to terms with the fact that the principal financers (Anglo-Irish Bank) of the proposed new centre named 'Trinity Walk' have withdrawn the funding. In the current climate it is difficult to see how replacement finance will be procured. I have not had the time nor inclination until now to investigate how this scheme was originated nor how it was to have been implemented, but to judge by the already secured anchor store and those other retailers committed to the scheme it is not difficult to imagine that this was to have been another scheme that was dominated by the usual brands. I am left wondering what role Wakefield's SME retail community were to have played and what impact the development was likely to have had on their existing businesses upon completion?
In the same 'Retail Week', Ben Cooper's report has made mention of the fact that one of the the joint developers, Modus, had already last December announced that it wanted to sell its 50% share which is hardly a ringing endorsement of the scheme - but then they already had had the finance withdrawn on two other schemes in Warrington and Crewe. Is this trend telling us something?
One thing is certain, the City of Wakefield and other local authorities should pay much more attention to the risk management aspects of the processes that they employ in furthering these schemes. The money is never guaranteed, even in good times - and now is not that! Perhaps as I have said in this blog before, it is time that planning authorities took a more balanced approach to these things and considered how they can help incubate high quality new businesses in their new developments, because even if Trinity Walk had actually opened it is arguable that some of the original lease signatories may well not have survived for too long in the current climate and a poorly populated centre is not one which sends out positive messages to the visiting public. By this time of course, the traditional areas round these new schemes are invariably shot to pieces with vacant plots and over-priced rents and business rates, all acting as barriers to any smaller business wanting to open in the centre - here's a thought, how about a business rates moratorium on locally owned businesses for the first two years of their trading from a town centre site?
It seems that the farm-yard animal has changed and it is now the chickens that are coming home to roost. Ben Cooper in 'Retail Week' has today reported on the fact that the City of Wakefield near the eastern fringes of West Yorkshire is having to come to terms with the fact that the principal financers (Anglo-Irish Bank) of the proposed new centre named 'Trinity Walk' have withdrawn the funding. In the current climate it is difficult to see how replacement finance will be procured. I have not had the time nor inclination until now to investigate how this scheme was originated nor how it was to have been implemented, but to judge by the already secured anchor store and those other retailers committed to the scheme it is not difficult to imagine that this was to have been another scheme that was dominated by the usual brands. I am left wondering what role Wakefield's SME retail community were to have played and what impact the development was likely to have had on their existing businesses upon completion?
In the same 'Retail Week', Ben Cooper's report has made mention of the fact that one of the the joint developers, Modus, had already last December announced that it wanted to sell its 50% share which is hardly a ringing endorsement of the scheme - but then they already had had the finance withdrawn on two other schemes in Warrington and Crewe. Is this trend telling us something?
One thing is certain, the City of Wakefield and other local authorities should pay much more attention to the risk management aspects of the processes that they employ in furthering these schemes. The money is never guaranteed, even in good times - and now is not that! Perhaps as I have said in this blog before, it is time that planning authorities took a more balanced approach to these things and considered how they can help incubate high quality new businesses in their new developments, because even if Trinity Walk had actually opened it is arguable that some of the original lease signatories may well not have survived for too long in the current climate and a poorly populated centre is not one which sends out positive messages to the visiting public. By this time of course, the traditional areas round these new schemes are invariably shot to pieces with vacant plots and over-priced rents and business rates, all acting as barriers to any smaller business wanting to open in the centre - here's a thought, how about a business rates moratorium on locally owned businesses for the first two years of their trading from a town centre site?
Tuesday, 10 March 2009
OK Mr Darling, let's see if I understand you correctly...
It's just that I'm struggling here Chancellor, and if you could just help me confirm my understanding...
You are quite adamant that the non-domestic rates rises planned for April will go-ahead as planned; you're putting the VAT rate back up to 17.5% in December and presumably there will be new measures to balance the books in the Budget in April too?
I suppose what puzzles me is the sheer scale of negative messages pouring from the Government and other agencies with whom they have a direct relationship with. You have told us Mr Darling that you intend making the non-domestic rate system fairer in the future, but the new ratings list will be published in time for the start of the tax year 2010 and many of us out here have warned often enough about the iniquitous rateable values and the real lack of fairness in the setting of these when comparing SME businesses with larger more erudite firms; yet here we are at the start of what is rapidly developing into the single worst depression since the dust bowl era and you assure us that the above inflation rise this year will magically be mitigated by a fairer system in the future - even though the next damaging blow is already well advanced in the planning and is already being readied for execution.
It would be interesting to measure the impact on all traditional town centres where the reduction in the overall number of SME retailers is already being trumpeted by employers' organisations. My guess is that the increase in rates, with the forthcoming increases in the rateable values (Of course I am guessing here that the Valuations Office Agency do not plan wholesale reductions in the 2010 lists) will all add to the general malaise in the SME retail world and will have the effect to scare quite a number of businesses away - to stop trading, to cease employing people! Then what? Under this Governments' regulations the landlord will have to pay the new rates on the empty properties - so the landlord, not being stupid, offers the premises to a charity at a heavily discounted rate and thus loses the burden of that cost. The sudden expansion of charity shops will in turn provide still further competition for the remaining small businesses, all of whom have to pay their rates and their staff as well as their stock! I am one of those who would describe this process as blight.
Then there's the VAT rate - with much cockolorum the government's announcement of the VAT rate reduction was met (as predicted on this blog) with an understandably muted welcome from the buying public. Surely it was never a serious idea that the 2.5% rate reduction would encourage spenders out into the shops? What is serious though will be the impact of the reversing of that process. Any retailer will tell you that a 10% discount off of the price of goods has a disproportionately smaller effect on sales than the negativity of a 1% increase in price. Imagine - you want to put 2.5% on just at the critical period for many retailers in what looks from my perspective to being another seriously low point in what will, by then, have become a growing depression.
We have all heard the mantra of the Prime Minister that this is a global problem, but what did the former Chancellor do in the relatively good times that the country experienced in the earlier days of New Labour? Did he reverse the policies of the previous Governments and invest heavily in new manufacturing industries that would actually provide real and sustainable growth - no, rather he continued to watch them reduce and decline. It is impossible now for the Government of the UK to avoid the criticisms and time for them to be honest and respond accordingly.
You are quite adamant that the non-domestic rates rises planned for April will go-ahead as planned; you're putting the VAT rate back up to 17.5% in December and presumably there will be new measures to balance the books in the Budget in April too?
I suppose what puzzles me is the sheer scale of negative messages pouring from the Government and other agencies with whom they have a direct relationship with. You have told us Mr Darling that you intend making the non-domestic rate system fairer in the future, but the new ratings list will be published in time for the start of the tax year 2010 and many of us out here have warned often enough about the iniquitous rateable values and the real lack of fairness in the setting of these when comparing SME businesses with larger more erudite firms; yet here we are at the start of what is rapidly developing into the single worst depression since the dust bowl era and you assure us that the above inflation rise this year will magically be mitigated by a fairer system in the future - even though the next damaging blow is already well advanced in the planning and is already being readied for execution.
It would be interesting to measure the impact on all traditional town centres where the reduction in the overall number of SME retailers is already being trumpeted by employers' organisations. My guess is that the increase in rates, with the forthcoming increases in the rateable values (Of course I am guessing here that the Valuations Office Agency do not plan wholesale reductions in the 2010 lists) will all add to the general malaise in the SME retail world and will have the effect to scare quite a number of businesses away - to stop trading, to cease employing people! Then what? Under this Governments' regulations the landlord will have to pay the new rates on the empty properties - so the landlord, not being stupid, offers the premises to a charity at a heavily discounted rate and thus loses the burden of that cost. The sudden expansion of charity shops will in turn provide still further competition for the remaining small businesses, all of whom have to pay their rates and their staff as well as their stock! I am one of those who would describe this process as blight.
Then there's the VAT rate - with much cockolorum the government's announcement of the VAT rate reduction was met (as predicted on this blog) with an understandably muted welcome from the buying public. Surely it was never a serious idea that the 2.5% rate reduction would encourage spenders out into the shops? What is serious though will be the impact of the reversing of that process. Any retailer will tell you that a 10% discount off of the price of goods has a disproportionately smaller effect on sales than the negativity of a 1% increase in price. Imagine - you want to put 2.5% on just at the critical period for many retailers in what looks from my perspective to being another seriously low point in what will, by then, have become a growing depression.
We have all heard the mantra of the Prime Minister that this is a global problem, but what did the former Chancellor do in the relatively good times that the country experienced in the earlier days of New Labour? Did he reverse the policies of the previous Governments and invest heavily in new manufacturing industries that would actually provide real and sustainable growth - no, rather he continued to watch them reduce and decline. It is impossible now for the Government of the UK to avoid the criticisms and time for them to be honest and respond accordingly.
Friday, 27 February 2009
Rates Supplement Bill
This blog tries to avoid being partisan political but there are rimes when it is difficult to understand the machinations of a government whose meanderings seem confused and ill considered. The most consistently ill-considered has been the policies relating to transport.
Transport policies that have been considered include the Cross Rail project which is intended to link to far west of Greater London with the far east, taking in the centre along the way. It will serve, should the bill be passed a heavily congested and populated area - but then it will also be an area that has a huge amount of, albeit disjointed in parts, transport infrastructure already in place. Were we not treated in the west to years of building with the Heathrow extensions to the tube services? Did the Docklands Light Rail not do great things linking the east end and the developing docklands to the centre and the underground network? But what about those other schemes whoch were proposed that never saw the light of day because the government policies of the day ruled them out?
In south Greater London there was a scheme that would have linked Croydon to Greenwich, to complement the Croydon Tramlink scheme which links Croydon with Wimbledon in the west and Beckenham to the north east of the borough. This scheme's real merit was that it was to offset the historically problematical transport geography in the capital which can be likened to the spokes on a bicycle wheel - their were plenty of routes providing you were travelling to the central hub. Try going around the wheel east or west north or south if you happened to be in an outer London Borough (where a huge amount of the commuting population actually live) and you'd be stuck. Consequently the hub gets congested because of the throughput of people trying to get elsewhere, alongside those whose destination happens to be the hub. No, that scheme was dropped along the way.
How about South Hampshire? There the scheme was actually winning the argument for integrated transport - even with the government. The scheme which would have joined rail, road and passenger ferry services, was proposed in a number of stages; the first was to link Portsdmouth city centre and the towns of Fareham and Gosport just across the harbour. This stage was important for two reasons - the economic future of the two smaller towns was certainly in doubt given that they are set, as are so many central southern coastal towns, on a peninsular with the limitations of road access that peninsulars always provide - in this case with the A27 and M27 running east west at the top of the peninsular and the A32 running down its length. These roads, along with the minor roads, are frequently congested and the movement of goods and people is a significant problem.
The second stage was to have provided a link to Waterlooville, a dormitory town just up towards the downs and also this stage would have linked Fareham to Southampton central. This last named city, like the town of Gosport, is on a penisular - I forgot to mention that Portsmouth has it even worse because it is actually an island (the Island of Portsea). These towns and cities are an economic powerhouse for the south (that is the south outside of London) and the congestion in the area is frequently the subject of radio traffic reports.
The third stage would have linked Southampton with Totton and the waterside towns on the western side of the Southampton water adjacent to the New Forest - another important trade route (Oil refinery and dockside works), commuter towns for Southampton and beyond and the holiday traffic would all have benefitted from its completion.
So why was it that the scheme was scratched - because of a lack of evidence of the social and economic benefits to these communities? The South Hampshire Rapid Transit system would have provided a relief and the only viable alternative to road transport in the region linking these places. No, the decision was taken by the then Deputy Prime Minister to scrap it on the basis of cost! Not an altogether unreasonable position one might think, except that there had been strong government support at all levels for a great deal of time and the project team were well advanced - but then it happened. This same government's integrated transport policy was shattered by another conflicting government policy - one must presume that the Deputy Prime Minister and the Secretary of State for Defence never actually spoke to each other - the Navy decided that it was to make Portsmouth its home port for their aircraft carriers. The greater draught required by these huge vessels meant that the tunnel under the harbour would need to be deeper and therefore incur far greater costs.
So it was a government decision that adversely affected the costs of the proposed project upon which they based their opinion that the costs were too great. At the time the costs for the project would have equated to about 4 miles of new motorway construction. Is this not perverse?
For the retailers in Fareham, Gosport and Portsmouth they must now face a far more uncertain future and with this new bill before Parliament they will have the double whammy of seeing London, once more, becoming the beneficiary of taxpayers money for which the only possible and frankly dubious benefit will be the London Olympic games of 2012, and they for their part being saddled with the possiblility of further rates charges being sneeked in on the back of Cross Rail. They wonder why people do not trust them anymore?
Transport policies that have been considered include the Cross Rail project which is intended to link to far west of Greater London with the far east, taking in the centre along the way. It will serve, should the bill be passed a heavily congested and populated area - but then it will also be an area that has a huge amount of, albeit disjointed in parts, transport infrastructure already in place. Were we not treated in the west to years of building with the Heathrow extensions to the tube services? Did the Docklands Light Rail not do great things linking the east end and the developing docklands to the centre and the underground network? But what about those other schemes whoch were proposed that never saw the light of day because the government policies of the day ruled them out?
In south Greater London there was a scheme that would have linked Croydon to Greenwich, to complement the Croydon Tramlink scheme which links Croydon with Wimbledon in the west and Beckenham to the north east of the borough. This scheme's real merit was that it was to offset the historically problematical transport geography in the capital which can be likened to the spokes on a bicycle wheel - their were plenty of routes providing you were travelling to the central hub. Try going around the wheel east or west north or south if you happened to be in an outer London Borough (where a huge amount of the commuting population actually live) and you'd be stuck. Consequently the hub gets congested because of the throughput of people trying to get elsewhere, alongside those whose destination happens to be the hub. No, that scheme was dropped along the way.
How about South Hampshire? There the scheme was actually winning the argument for integrated transport - even with the government. The scheme which would have joined rail, road and passenger ferry services, was proposed in a number of stages; the first was to link Portsdmouth city centre and the towns of Fareham and Gosport just across the harbour. This stage was important for two reasons - the economic future of the two smaller towns was certainly in doubt given that they are set, as are so many central southern coastal towns, on a peninsular with the limitations of road access that peninsulars always provide - in this case with the A27 and M27 running east west at the top of the peninsular and the A32 running down its length. These roads, along with the minor roads, are frequently congested and the movement of goods and people is a significant problem.
The second stage was to have provided a link to Waterlooville, a dormitory town just up towards the downs and also this stage would have linked Fareham to Southampton central. This last named city, like the town of Gosport, is on a penisular - I forgot to mention that Portsmouth has it even worse because it is actually an island (the Island of Portsea). These towns and cities are an economic powerhouse for the south (that is the south outside of London) and the congestion in the area is frequently the subject of radio traffic reports.
The third stage would have linked Southampton with Totton and the waterside towns on the western side of the Southampton water adjacent to the New Forest - another important trade route (Oil refinery and dockside works), commuter towns for Southampton and beyond and the holiday traffic would all have benefitted from its completion.
So why was it that the scheme was scratched - because of a lack of evidence of the social and economic benefits to these communities? The South Hampshire Rapid Transit system would have provided a relief and the only viable alternative to road transport in the region linking these places. No, the decision was taken by the then Deputy Prime Minister to scrap it on the basis of cost! Not an altogether unreasonable position one might think, except that there had been strong government support at all levels for a great deal of time and the project team were well advanced - but then it happened. This same government's integrated transport policy was shattered by another conflicting government policy - one must presume that the Deputy Prime Minister and the Secretary of State for Defence never actually spoke to each other - the Navy decided that it was to make Portsmouth its home port for their aircraft carriers. The greater draught required by these huge vessels meant that the tunnel under the harbour would need to be deeper and therefore incur far greater costs.
So it was a government decision that adversely affected the costs of the proposed project upon which they based their opinion that the costs were too great. At the time the costs for the project would have equated to about 4 miles of new motorway construction. Is this not perverse?
For the retailers in Fareham, Gosport and Portsmouth they must now face a far more uncertain future and with this new bill before Parliament they will have the double whammy of seeing London, once more, becoming the beneficiary of taxpayers money for which the only possible and frankly dubious benefit will be the London Olympic games of 2012, and they for their part being saddled with the possiblility of further rates charges being sneeked in on the back of Cross Rail. They wonder why people do not trust them anymore?
Lapping up after Woolworths
The Retail Week has a piece by Nicola Harrison about how specialist toy retailers, having had a torrid time of it during the closing down sale when Woolworths were selling toys at or below cost price, are now reaping the benefits of their closure.
This blog discussed the probability of this happening and urged smaller businesses in close proximity to Woolworth sites to maximise their potential for generating new business; I wonder how many have done so - clearly from Nicola Harrison's article the toy group The Entertainer have capitalised, but then they have a higher profile as do Hawkin's Bazaar, who are also mentioned.
I know that within the toy retail sector there have remained a core of SME businesses around the country who now stand to gain local market share - but have they? If anyone reading this has any evidence then please post a comment. If they have not then the question must be asked why?
This blog discussed the probability of this happening and urged smaller businesses in close proximity to Woolworth sites to maximise their potential for generating new business; I wonder how many have done so - clearly from Nicola Harrison's article the toy group The Entertainer have capitalised, but then they have a higher profile as do Hawkin's Bazaar, who are also mentioned.
I know that within the toy retail sector there have remained a core of SME businesses around the country who now stand to gain local market share - but have they? If anyone reading this has any evidence then please post a comment. If they have not then the question must be asked why?
Subscribe to:
Posts (Atom)