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High Street Woes Could Become a National Opportunity

This review shows a few headline statistics to help see what is happening to the UK high-street along with providing a few pointers towards what needs doing to offset the change. Its’s argued here that with the right strategy and planning, the current problems could potentially be turned to great advantage for both the business community as well as for local and national Government.

Let’s start by getting the negatives out of the way. Sixteen stores close across UK high streets every day and, according to PriceWaterhouseCoopers, new UK high-street stores are opening at their slowest rate for 7 years. In terms of regional performance, Scotland has more vacant high street shops than anywhere else in UK.

A quick summary of some high street losses so far in 2018 include:

While there are always new shops opening to partially offset these changes, these new openings are much fewer and tend to be for charity shops, barbers, ice-cream parlours and beauty salons. One way to look at the new openings is that they are all selling things that cannot be easily sold online. The closing of other high street service businesses is simply a reflection of lower high street footfall.

One of the reasons for the historical success of the high street is that, within easy walking distance, there’s a critical mass of outlets that provide access to all the things you want to purchase. The scale of closures means that the critical mass may not be achieved and a tipping point is reached. Consequently, high street losses are likely to continue and possibly even accelerate.

The high street provides a major source of income not only for those who rent retail property but also for local councils where business rates are a major contributor to local Government coffers. All together this paints a poor picture for both retail and for the local economy.

There are invariably two sides to every change in business. The key is to first recognise the change and then create a clear plan to adapt and take advantage of the changing situation. While the pundits have claimed that the demise of the high-street has been caused by rate rises, rent hikes, brexit, the weather and austerity, the more sober statistics suggest that it is almost exclusively because of ecommerce.

There are a growing number of people who simply don’t use high-street shops anymore. Prices, quality of service and range of goods increasingly favour those who shop online. Parts of the UK that are home to a high density of ecommerce providers (e.g. London or Manchester) have done well from the shift to ecommerce while those regions with a relatively low density of ecommerce suppliers, e.g. Scotland, have seen a progressively negative GDP and balance of e-trade with the rest of the UK.

With customers moving online, we need to factor in that the UK dominates European ecommerce and is the number three ecommerce country in the world after China and the US. According to the UK ONS, ecommerce in the UK is already worth £511 Billion. With the UK as an ecommerce powerhouse success the rather obvious strategy is to do everything possible to get many more Scottish and UK businesses selling their products and services through ecommerce rather than through traditional channels. Doing that will not only even out the current e-trade imbalance within the UK but will also meet the needs of both the UK and Scottish Governments in improving our export capability. If the Governments were serious about putting some national muscle behind such an initiative then creating a national project to further increase ecommerce capabilities would be a good place to start.

Components for such a project should include:

  1. Collecting statistics (jobs, imports, exports, turnover) and data for regional ecommerce performance.
  2. Creating a library of local case studies aimed at helping inspire other businesses to follow.
  3. Providing workshops and courses led by hands-on practitioners.
  4. Providing a network of small self-help groups to share experience, tips, tricks and information.
  5. Provide a regular stream of ecommerce stories into the traditional media channels.
  6. Get regional colleges and Universities to help offer certified qualifications in ecommerce.
  7. Hold major ecommerce events in every region of the UK to help galvanise and focus objectives for each local economy.