When you buy from a big business...

Let's consider this message. Its sentiment is lovely, it speaks of the effort the small business makes to succeed, of the hours of struggle, the nights wading through paperwork, the early mornings racing to collect stock and still get back to open the shop. We've all got a great regard for the shopkeeper, their work (as Napoleon knew) is deep in the English psyche.

But the words on the board are still wrong. Not because there isn't some distant chief executive wanting a second yacht but because when you shop in a big store you're helping to pay the wages of the woman on the checkout, the lad stacking shelves, the folk in the back doing the banking, the warehouse staff, the drivers, the trolley boys and the smiling ladies in the cafe. And those people have daughters who want dance lessons and sons who want a football shirt. These employees of the big shop have school uniforms to pay for, mortgages, gas bills, bus fares and loan repayments.

The portion of your shopping bill that goes to pay the chief executive is tiny - in the case of big bad Tesco it's less than 0.001% of the company's turnover. And the proportion of each pound of sales going in profits is also pretty small - less than 5% even in good years. Most of the mark up goes on paying the wages of ordinary employees who have exactly the same struggles paying their way as do the owners of those lovely local shops.

Don't stop shopping in those indie stores but do so for the right reasons - great service, interesting products, high quality and good value. Don't shop there because you think you're sticking one to some bloated plutocrat because you're not.

....

Hurrah! The High Street is saved! The man from Savills says so!

The man at Savill's who sells retail property thinks the high street is fine:

There is now a clear consensus that the rise of online retail is not killing the UK high street. In fact, in some cases, the internet is helping to promote the need for retail space as the boundaries between online and bricks and mortar become increasingly blurred.

Now the blog in question is pretty dreadful. It presents some half-baked statistics, carefully selected to suggest that all is just hunky-dory on the High Street. Stuff about the growth in click-and-collect (think about this - why should I go five miles to the high street to collect when there's a convenient shop on the corner) and something called 'O2O' - 'online-to-offline'.

This is, at best, wishful thinking and at worst actively misleading. I don't know which because Sean Gillies, the man from Savills in question, doesn't provide us with any evidence. I mean real evidence about rents, voids and vacancies not vague statements like:

It has also been reported that some retailers have found that opening a new store has resulted in an increase in online sales

Reported where? By whom? And on the basis of what evidence? Not this evidence I guess:

Without doubt this is due to both the challenge of the internet and the convenience of out-of-town locations for click-and-collect as they offer plentiful, accessible parking that is free of charge. Despite this, it is good news that the vacancy rate has increased only slightly, to 10.4 per cent; although the number of retail leases that are due to expire over this year suggests that this could rise further over the coming months - particularly as consumers are now demanding discounts, which squeeze margins and adversely impact profitability and long term business sustainability.

Now it's true that retail space in the better high streets now appeals to the growing market for the shop as a brand marketing tool but this does little or nothing for less appealing locations lacking in the right demographic.

I know Savills have shops to rent but when their head of retail pushes a retail recovery on such flimsy evidence we really should question the credence given to its opinion.

....

Can we now stop saying town centres are for shopping?

****

‘She kept an antique shop – or it kept her.
Among Apostle spoons and Bristol glass,
The faded silks, the heavy furniture…’

I've felt like something of a lone voice in all this - bashing away at the shiny regeneration on the one hand while pointing out to locovoracious folk that their dream of twee high streets filled with organic independent shops (probably workers co-ops or some other form of trendy model) is just as daft.

Indeed these people - epitomised by Julian Dobson - still bash away at the idea that there's some magical system of common ownership that will change the high street:

What’s broken isn’t just the retail model of HMV or Jessops, or the business rates system, or city centre parking, or any of the individual bugbears blamed for the demise of the high street. What’s broken is our own ability as citizens to share in the ownership, management and use of the spaces we occupy. It’s about the whole place, not just the shops.

 

I agree that it's about the whole place. I agree that it isn't just the shops. But this idea of us "sharing" the ownership is just so much wiffle. I'm not interested in some sort of 'commons' system where I sort of own it but not really and where we get endless rows and scraps about who should be allowed to do what on that common land. Up here in Cullingworth, the council stopped fifty years of moto-cross and scrambling on the Flappit because it wasn't the right sort of use for that particular 'urban common'.

If you want things to work, they have to be owned. And right now the only bits of the town centre that are 'owned' are the shops, which is why we're still talking about retail rather than about town centres as the stage on which we perform. In the Portas Review we read how the high street needs to be run more like a business - more like the out-of-town malls in fact:

 

“High streets should be run more like businesses. And businesses are run on the basis of strategic vision. However, unlike the sophisticated shopping malls or large retailers, high streets aren’t overseen by a single landlord or professional management body.”

 

The retail establishment - the shiny regenerationist - view is that we carry on more-or-less as before - rather as we see in Bradford where the council uses its own funds and Regional Growth Fund to subsidise the business rates of new or relocating businesses. A straightforward bung to businesses will do the trick. Except they don't appear to be flocking to the city.

 

As we see, the trendy place-maker view is all around 'commons' or, as Julian Dobson now seems to want, a public corporation approach. I don't think this will work - either we get the tradedy of the commons revisited or we get another pseudo-political corporation that can be captured by the very town centre interests Julian so dislikes.

 

My view is that we need to be far more radical:

A radical approach would be to transfer all that council owned land – the streets, the pavements, the market halls, the offices and the parks – into a for-profit company. Where, as in many places, the council owns freeholds of retail premises these can be added to the pot. And use that asset to create the excitement, the events and the environment – the “21^st Century urban entertainment centre” that Ms Portas describes. That would be a radical approach rather than the rewarmed versions of existing – and mostly unsuccessful – strategies presented by Ms Portas.

The ownership of the company could vary – maybe co-operative or mutual, perhaps the local council or possibly a combination of these approaches. But it is essential – if the town centre is to be run like a business – the company is for profit. For it is the search for profit that makes the shopping malls and supermarkets creative, innovative and focused on getting the experience right for the customer.

 

Most importantly this approach isn't founded in shopping - for there is no future in retail as the main determinant of the town centre environment.

....

Why are 'localists' economically illiterate?

****

A while ago I pointed out that the foundation of much 'localist' dogma is something call the regional multiplier and it's pretty dodgy economics:

The problem is that measures of the multiplier do not take account of the input source (i.e. where the money is earned) and that it is very difficult to define what we mean by “local” or “local economy”.

Despite this people continue with their belief that somehow we can get more value from money circulating more in a local economy. This is despite the indisputable fact that the the models proposed by the advocates of independent shops as the solution don't work because the extra value is entirely taken up in higher prices. There is precisely no evidence that shows that preventing more efficient retail systems results in a more successful economy.

Yet off they go - time and time again - with their guffle:

The dominant big brand retail-led town centre model extracts value from places rather than adding value to them.

No they don't - big retailers add value by being more efficient meaning that prices are lower. That allows people to buy things that - under the system beloved of the 'localists' - they would not be able to afford. And then there's all this discussion of 'production' as if that was the point - it's not, we produce stuff for one reason (even though we may absolutely love the production we've involved in). And that reason is because someone wants to consume that production.

Town centres are important - we need to think hard about how to make them work and what tomorrow's town centre will be like. But peddling economic nonsense, proposing an avalanche of new taxes or imposts and judging the choices and preferences of others isn't what's needed.

....

Why retail isn't the future of town centres...

****

For the past several years I've been banging on about what I call "leisure and pleasure" as the future of town centres rather than shops and offices. It is absolutely the case that retail does not represent either a solution or a future for town centres - this is nothing to do with the evil supermarket or insufficiently tough planning restrictions. It is about how our shopping habits are changing with the result being:

*£6bn – Online spending in the UK in 2004
*£23bn – Online spending in the UK 2010
*£1.3 bn – Level of m-commerce in the UK 2011
*£19bn – predicted level of m-commerce in 2019
*15,000 – reduction in town centre stores between 2000-2009
* 6.5% fall in number of town centre shops by 2014

We really do need to rethink town centres - to consider how they entertain us, how they provide space for formal and informal events, for celebration and for fun. Yet everywhere - and my city of Bradford is no different - local councils, planners and developers are attached limpet-like to big retail developments as some sort of salvation for struggling centres. When will it dawn on them that they're wrong?

....

Too few people using The People's Supermarket it seems!

****

There was a flurry of right-on, luvvie commentary about the People's Supermarket a while back:

Arthur Potts Dawson, the mastermind behind The People's Supermarket, is certainly full of what one might loosely define as organic missionary zeal. A tall, youthful and reasonably optimistic chap who set up the London eco-restaurant Acorn House, (and is vaguely related to Mick Jagger, inter alia), Potts Dawson hopes that once his baby takes off, the likes of Tesco and Asda will be as a bad dream. We will all put in our community service and revel in 1970s-style food bills, while the big boys founder.

This is because in return for washing walls at TPS, you will be eligible for a 10 per cent shopping discount, and the ability to buy about 20 special "People's" foodstuffs at artificially low prices. Ordinary shoppers will be able to use the store, but not access the cheaper prices. Only we cleaners qualify for that. 

Eighteen months later it doesn't seem to be working out for them:

Due to financial difficulties, The People's Supermarket has struggled to keep up with the payment of business rates to Camden Council. The People's Supermarket is a Co-operative and Community Benefit Society and operates for the benefit of its members and the community, not in pursuit of profit. For that reason, we ask that Camden Council continue to support us by allowing for the renegotiation of rate payments. In the absence of such support, The People's Supermarket will become insolvent by March 1st.

So when we're getting all excited about different business models, frothing about mutuals, co-ops, co-production and other such wonders, let's not forget the basic truth about the market! If you don't have enough custom, you don't make enough income and you can't pay your bills. With the result that the cap is waved under the council's nose saying "help us out - we're really good even though we're losing money!"

....