Supply and demand is perhaps one of the most fundamental
concepts of economics and it is the backbone of a market economy.
Or, in High Street vernacular, when the hordes go down the boards
go up. That's the prediction in new research from The Local Data
Company (LDC) who say UK High Street vacancy rates will increase in
2012 because of weak consumer confidence, rising unemployment and
growing online sales.
We need only examine our own shopping habits to see how we're
contributing to the High Street demise. From the North East's
Metrocentre to the South East's Bluewater, millions have swapped
the congested town centre for a free parking out-of-town shopping
experience. Even more of us have deserted the High Street to buy
books, music, films and holidays online. LDC report that
out-of-town and online together now accounts for more 40% the share
of shopping.
Given these rises, it is perhaps a surprise to learn that at
14.3%, the vacancy rates actually stabilised in 2011. How so? The
implosion of electrical, household and confectionery stores has
been overtaken by the explosion in mobile phone, charity and
convenience stores. At what price? LDCs research showed that 10,000
town centre shops closed in the past two years, with 183 retail
chains calling in the administrators, 11% up on 2010.
What can save the High Street? On Saturday, the government said
that 12 run-down High Streets in England could compete for a £1m
prize as part of plans proposed by their retail queen Mary Portas.
Local government minister Grant Shapps described the scheme as a
'golden ticket' and added that as part of the contest areas would
bid for support from a dedicated team and Ms Portas.
Predictably, there is already opposition to Ms Portas ideas with
Phil Wrigley, Majestic Wines chairman, urging the government to
relax planning laws and convert struggling town centres into
affordable housing, comparing the situation of many shopping
thoroughfares to the decline of the shipbuilding industry. The
government will publish its response to Ms Portas proposals in the
near future and it will be interesting to see how 'inclusive' this
is. Peter Box of the Local Government Association is concerned that
councils could be overlooked and says: "We urge Mary Portas to
enter discussions with councils on how they can boost local High
Streets."
In the meantime, trade suppliers will need to take heed, monitor their retail buyers, seek
payment to terms, and protect their margins. Challenging it is.
Impossible it is not.
(CT)
