Tuesday, 12 August 2008

Bad news for Oxford - or is it really?

Retail Week has run a report today by Ben Cooper about an announced delay in developing the Westgate shopping centre in Oxford. The report says that in the opinion of research group CACI that this will hamper Oxford's bid to achieve what would in their opinion be the 30th most important shopping destination in the UK.

So what? Have we become so enamoured with rankings and superlatives that they have taken on a life of their own and as such have sufficient real meaning that they deserve to be an end in their own right? Oxford may not achieve this apparently coveted position in the minds of those who give a damn (I have to admit that I am unsure as to who precisely covets it...) but it does not alter one iota the position that, in this case, Oxford holds in reality.

Oxford has significant standing as a visitor attraction and any retailer worth his or her salt ought to be able to make a perfectly good living in such a vibrant city if they target their audience accurately and ensure that their marketing mix is appropriate to the particular customer mix that the city offers. By being 30th in the rankings will not mean that potential customers in Arbroath are suddenly going to wake up on a Saturday morning and say "I hear Oxford's reached No 30 in the charts - I know! Let's go shopping there today". The good citizens of Arbroath will continue to make their way to those shops that they find convenient and which offers them the goods they want at the price they wish to pay - without the inconvenience of staying overnight.

One reality that is being imposed by the combined stresses of the effects of the global credit crunch and the cost of oil is that the hinterland of the average shopping destination is almost certainly shrinking. So to have national league tables of shopping centres is as meaningful as a national league table for car fuel prices at the pump - if it's too far away then it really has no meaning at all to the punter. Oxford, when compared to the centres that it currently is actually in direct competition with will be ranked far higher than 30th. Oxford has the strengths that are peculiar to Oxford, with its pull of visitors from across the globe as tourists - could Milton Keynes, for instance, ever really trouble Oxford as competition for the Pounds, the Euros, the Dollars and the Yen in the pockets of those visitors; yet MK is developing a significant and broad shopping interest in a purpose built modern centre and it is only an hour away by car from Oxford. No they are in different markets for those whom they seek to attract from a distance.

But this is not about Oxford, this is about meaningless comparators that presumably do mean something to someone. The point that I am labouring to make here is that local authorities, as lead authorities in planning matters and who in the modern age are largely responsible for the vision that is their town centres, ought not to be drawn into this charade of league tables for the sake of it. Your town will have its attributes, it will have its peculiar strengths and it will have a definable hinterland beyond which the hopes of attracting visitors are small, no matter how well placed you might be in the league tables. Individual stores may have a hinterland that are well beyond that of the town generally, but this will not mean that town is likely to attract significant general visitors from equal distances.

It is, of course, a fact that there is a gravitational effect for retail centres and generally speaking the larger they are the greater the hinterland they will achieve. It is also a fact that the greter the non-retail entertainment and leisure offer, the greater the hinterland - because it will become a day out. The rational plan is to ensure that your local shopping core has all the characteristics that will draw the bulk of the custom from that area surrounding the centre in terms of affordable travel distances and to be the best for your local residential population and those visitors who will be arriving anyway. Let us ditch the notion that a shopping destination will ever be anything but sub-regional in nature and ever likely to be in absolute competition with the other end of the country.

Friday, 8 August 2008

Boris Johnson has hit a chord!

It seems that landlords and organisations representing the larger retailers are not necessarily in favour of one particular sentence in the "Planning for a better London" report published by Mayor of London, Boris Johnson, in July.

I remember a conversation that I had a long time ago; it was a chance encounter on an aircraft flying into Leeds-Bradford airport. My passenger neighbour was the developer of what was then a new retail scheme being built in a North Yorkshire spa town. I asked him his opinion on the issue of anchor stores in this sort of scheme and I admit that I did start to preach to him just a little about the disbenefits of offering peppercorn rents solely to the 'usual suspects' from the corporate world of retail and suggested that there were many benefits to be accrued to the scheme and to the 'uniqueness' of the centre if a similar offer were available to a local 'anchor. I was delighted to hear his response; he told me that he had already been doing some work on precisely this notion and I could expect to see incidences of this phenomena in the future.

In my travels I have become aware of increasing numbers of independent retailers taking space in major centres but I am equally aware that they are not offered the same terms as their better known neighbours - yet they have to comply with the same conditions and standards of trade. In the case of one well known Mall in the north of England I know that one year leases are the norm. It is very restrictive on a growing business if the level of investment that you make in your store is premanently reflective of an investment of just one year. It is another example of the imbalance of opportunity that exists in the world of retailing. If you are able to convince a backer to loan you the capital to invest in a chain, then you would immediately attract better rates - notwithstanding the potential that your business might have if the economy was to suddenly find itself in a potentially recessionary phase. If, on the other hand, you are hard working and wish to grow your business organically in a way that is fiscally more sound then you will apparently be penalised by the landlords.

I, for one, think Mayor Johnson should be congratulated on his proposal to use section 106 agreements with developers to ensure that they provide affordable space for small businesses. I notice however that the landlords foresee doom and gloom and that all sorts of unintended consequences will issue forth from this decision - perhaps they will, the nature of unintended consequences is that they were not planned; I'd throw out the challenge to the landlords and their representative organisations - tell us what you believe to be the likely consequences that Mayor Johnson is leading us into, and let those of us without a directly vested interest in the issue make a judgement. Until then I will end by simply saying that I am still waiting to see the phenomena of local anchors in new schemes and "Well done Boris!"

Red Tape woes for SMEs

The Forum of Private Business (FPB) is welcoming apparent moves to reduce red tape for micro-businesses (i.e. those with fewer than 10 employees) according to the Retail Bulletin and they add that Brian Binley MP, a Conservative member whose name has appeared on this blog recently was the first Member of Parliament to sign the "Think Small First" pledge in the house. The idea behind the campaign initiated by the FPB in March is to get all forms of Government that affect our smallest businesses to think about the time that it takes to complete the forms that are associated with many new bits of regulation; the FPB claim, and I have no reason to disbelieve them, that Governmental organisations regularly underestimate the time that it takes to make the statutory returns that are imposed via law and regulation.

It does not take a genius to realise that if you apply a one-size fits all approach to gathering information then it must have the greatest effect in terms of proportion of management and staff time on those with the smallest work-force. I say that the FPB is absolutely right in their campaign and well done to Brian Binley for taking the lead in the House of Commons - now all that needs to happen is for this enthusiasm to be reflected in a dramatically reduced amount of red tape to micro-businesses.