Sunday, 28 June 2009

Land banking v local trade

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.

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?