It’s been a while since I updated my blog – I’ve been busy working with our wonderful clients on some great concepts.
However - I felt compelled to write a short but poignant blog around what David Cameron announced on 11th Sep, with his “Out Of Town Parking Charges.” His proposal was that, "councils would be given the power to demand that big supermarkets and other stores on the outskirts of towns charge their customers for parking, to halt the demise of the traditional high street”
Now I never get into Political debates – but needed to vent some frustration on some of the ridiculous ideas and suggestions that come from political parties when it comes to anything to the world of retail. I’m allowed to have my opinion - as I spent over 14 years in high street retail – what experience has David Cameron (or whomever wrote this “masterpiece” of astuteness)
He did of course try and distance himself from the actual statement and proposal...
“Remember this is a report to the Conservative Party, not a report by the Conservative Party. We will consider all of their ideas and decide what to put in our manifesto. I fully understand the pressures that families feel in getting the weekly shop done and don't want to make that more difficult. But we do need to think about what is happening in some of our towns where the high streets are dying."
So firstly I have to agree that in a lot of areas the traditional high street has been in constant decline (particularly where I live) normally in towns rather than cities –but a fair share of cities also feel the pinch of the consumer’s purse to go spend elsewhere...
So why is the consumer not sauntering down their local high street, and where are they going to do their shopping? What can be done to turn this around? I’m not saying that I will be able to solve the issues of High Street Retailing – but here is my (not Conchango’s) opinion...
Q – Why has the consumer abandoned their local high street?
· In the situations that a town centre is in drastic decline – one has to look at the circumstances for this. Consumers do like the mix of both local and independent shops (although according to some of the old crustaceans that sit on local Councils that have the authority to approve planning permission – you get the distinct thought that they are anti-competitive) with traditional high street brand names (so Electric Bakery can sit comfortably with Boots). Traditional fishmongers, greengrocers, butchers would have shop fronts almost next to each other and the consumer would shop from one to another to get their daily or weekly shop. Stores like Tesco and Sainsbury have always been around as well – and sat close to each other and almost complimented each other. There was nowhere to do your “dry grocery” (tinned soup etc..) shop so fresh was local and remaining was Supermarket. So as the supermarkets looked at what these old traditional retailers were doing and thought that they could buy in bulk and pass on some of the savings onto the consumer – and for convenience they could buy all their shopping in the same place. So the supermarkets dominated and found that as they expanded their ranges they could not accommodate the influx of new products that their existing retail space provided. So they moved out of their stores and built further out of town in normally old abandoned areas of towns, or old housing estates from the 50’s or 60’s that due to housing development had been left in a state of disrepair and back then the housing market had not kicked in (Margret Thatcher was only just around the corner) So the land was sold off to the supermarkets, with the local council and government glad that the wasteland that was a trouble spot or blight on the landscape had now been sold off to retail development – they were not concerned about traffic flow or traffic management or any kind of planning (I’ve yet to see any kind of traffic planning that actually makes sense !) they were glad to get rid of their eyesore! What happened to the land that was vacated – well either office space or multi-story car parks – you will find that in the late 70’s early 80’s as the big supermarkets moved out of the towns to grow their business, councils looked to increase their revenue by building car parks to have a steady cash flow throughout the year. {if you’ve followed me this far – well done – It is going on a bit...}
· So now we have the supermarkets moving further out of town and due to this people start to understand that American phrase “convenience shopping” – I can get all my shopping fresh and tinned all in one place – so they did in their millions – and the result was that the local retailer could not adapt – with rising rent and rates on their property with a lot of their produce being bought in bulk by the supermarkets – suddenly they were being squeezed out. (Now as much as I love traditional butchers, bakers etc... you have got look at it from the food producers view point – they can either sell some of their goods at a higher margin and make some money and have produce left over – or you can sell ALL of it for a smaller margin, but have a customer who will buy from you week in week out... even a traffic planning officer can work that one out (maybe) So this was the demise of these retailers. So now there is retail space left over and the town is now looking a little run down (the council decided not to spend any money on development since 1965) so decide to carry out some redevelopment of the high street to start to attract some of the new up and coming retailers that were beginning to come through – but how do they pay for this – another increase in rents and rates as well as the car parks – telling the retailers that it’s all for the good of the town and them... for some the increase is too much and some of the other traditional stores move out (there was no internet in that day for them to continue their trade and business) Again some of the worst decisions in road planning and town planning is executed by what can only be described as headless chickens... and another new concept starts arriving – how about knocking down all the empty retail outlets and creating one big outlet (the Americans called them Malls – we call then Shopping Centres) so suddenly the Shopping Centre was born into UK culture.
· So the Shopping Malls Centres started to get an influx of some of the well known high street brands – on offer some shiny new retail outlets, under cover and once again “convenience shopping” all your favourite stores under one big dry warm roof....again the local councils lapped up the extra income from the fact that here was rundown retail space that they were struggling to fill – and some developer wants to create a “Centre” where that will attract more retailers. They didn’t look outside to see that the stores that were moving in were just leaving more empty space elsewhere in the town and the last rent and rates rise just priced out some of the niche and local retailers. Brands like Next, River Island, Top Shop all started to descend into smaller towns in from the “Big Cities” because now they had a better business case for being in a seaside town as they were in good company and competition that would give the consumer greater choice. Councils decided that more car park spaces were needed so they built (or as what happened later is that as part of the developers deal they would need to build and supply car parking facilities as part of their development and that the council should get a share of this to ensure that the surroundings roads were well planned and managed) {cough} This was great and as some may recall – boom time in retail – as stores waited to get into the next shopping centre complex some of them took over some of the high street stores just to get their brand name in the town – this caused the council to increase the rents and rates again – as they saw their chance for increase revenue as their older high street retail units started to fill up again...
· Now what do you think happened next.... that’s right suddenly the town outgrew its parking availability and there was gridlock, congestion and nothing was done to fix it as the traffic planners were busy painting more and more double yellow lines (another revenue model) to catch the unsuspected shopper wanting to nip in and get a paper... The supermarkets watched on learning from the mistakes that the local councils and government had done in the boom of the 80’s and early 90’s and also looked within themselves and realised that they had reached a plateau and the only way to overcome this was “diversification” they could sell other items in their stores, that complemented their existing range of goods – and they had parking, and that wouldn’t it be convenient if they could get all their groceries plus.... toiletries and maybe even clothes.. So began the supermarkets vs “everyone” due to the same model that they used in the past (and let’s not split hairs here – it’s exactly the same way all business run - Levis will buy cotton in bulk to make their clothes and make bigger margins – so Tesco will buy Levis in bulk to get a better deal and pass this onto the consumer and make some margin) however the manufactures wanted their brands to be protected and the supermarkets were not “trained” in selling the jeans, the brand the experience... or that it showed just how much margin was being made!! Suddenly supermarkets needed to grow further and some started looking at massive hypermarkets – some even came from ailing distribution warehouses that had great road links and massive waste ground – and suddenly Hypermarkets were created that sold just about anything – and pretty soon other retailers knew that they could set up a massive destination store that was off the traditional shopping path – but now if they could travel and get everything that they needed (and also everything that they didn’t) with enough parking for a jumbo jet – then this really was convenience shopping on a massive scale...
So what happened next...and what has this to do with what David Cameron and the Conservatives and their out of town killing the traditional high street? Well I hope that you have got the build up so far this was such a massive blog piece that I decided to split it up into 2 parts...
Part 2 to follow.....