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Industry calls on government to help the high street

Retailers have reiterated calls for government intervention to help the high street amid concerns regional towns will be left reeling from a wave of store closures.

A cross-party parliamentary inquiry from the Housing, Communities and Local Government Committee is due to examine the economic and technological challenges facing town centres, but retailers and industry experts stressed the need for fast, decisive action to stem the tide of company voluntary arrangements (CVAs) and administrations sweeping the UK high street.

It comes as the BRC-KPMG Retail Sales Monitor reported fashion sales in the UK across stores and online fell 2.4% on a like-for-like basis year on year in the three months to 28 April – the biggest decrease since March 2009. In-store sales of non-food items fell by 3.8% in the same three months – a record low since the index began in January 2013.

“We need to be tougher on the government,” said former Tesco CEO Sir Terry Leahy. “The business rates system is medieval in its current form. We need help to keep this great sector going. We want help with skills that can help retailers manage digital changes. We need to sit down and repurpose the high street.”

Retail veteran Bill Grimsey, who launched his second review into Britain’s high streets earlier this year, agreed: “We need to do something about the huge pressure on retailers. This is a complex issue. It isn’t just about CVAs, it’s about recognising that the retail landscape has been materially changed and that we need local economies that work.

“We’re aiming the second Grimsey report at local authorities because it isn’t just about shops, it isn’t just about restaurants, it is about creating broader community hubs that encompass a range of experiences. [The CVA plan at] HoF is just the tip of the iceberg – there is a massive amount of the retail and restaurant industry that is struggling.”

Rohan Moore, managing director of contemporary lifestyle brand Olive, argued the government should focus on lowering rents, not business rates, to revitalise the high street: “The biggest barrier to a reinvigorated high street is surely landlords of commercial property, who profit by refusing to adjust rents to market value. Lobbying for stronger disincentives against this practice seems a more effective way of driving change than relentless lobbying for less onerous business rates.”

A department store source added that the government has to prioritise the high street to help it weather the challenges ahead: “The government needs to intervene and put some real thought into the town centres of the future. Since January the retail landscape has shifted and something has to give.”

House of Fraser is expected to shutter up to 20 stores after it announced plans to launch a CVA in June. The move comes just weeks after creditors gave the green light to beleaguered retailer New Look’s CVA proposal, resulting in 60 store closures and close to 1,000 job losses. 

Smaller towns in the north of England, Wales and Scotland are expected to bear the brunt of the closures. Although House of Fraser has yet to confirm which stores will be shuttered, industry analysts have suggested shops in Altrincham, Hull, Sutton Coldfield, Darlington and Grimsby could be in line for closure. New Look will also close its Hull store, as well as branches in Aberdeen, Brynmawr, Cardiff, Craigleith, Dundee and Glasgow.

Parts of northern England, Scotland and Wales also dominate the 10 worst-performing towns on commercial retail estate company Cushman & Wakefield’s Retail Resilience Index, which tracks the performance of the retail property market around the UK. Released last month, the list included Scottish towns Falkirk, Dumfries, Hamilton and Greenock, Newport and Llandudno in Wales, and Rotherham.

“Areas that are particularly vulnerable are small towns that lack dominance in their catchment area. Consumers are very mobile these days and are willing to travel to seek new experiences,” said one property source.

Another property expert agreed: “Stores in the north-east and the north-west are at risk – places like Doncaster and Hull. There are also a lot of legacy stores out there that don’t work very well as a retail space, even in better-performing towns.”

 

Readers' comments (1)

  • darren hoggett

    There is little any government can do. The 'High Street' will regenerate like it always has done, whether that is different types of shops or residential.

    Retailers need to look at themselves as what they should be doing to continue their viability and the answer is actually relatively simple - if the High Street isn't working for you, then move to somewhere else where it does.

    Unsuitable or offensive? Report this comment

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