Pound shops and possession orders: parables from the post-recession high street
One of our fanciest local shops — until it closed, it sold upmarket furnishings and children’s clothes — has its windows plastered with ‘Possession Order’ notices. Rumour says the space has been re-let to Oxfam, against which neighbouring retailers are getting up a petition because they regard charity shops as unfair competition in such a tough market.
That Yorkshire parable is the story of the national high street this summer, after a particularly dismal set of retail sales figures for May. Habitat and the fashion chain Jane Norman went into administration last week. Thorntons are closing 180 chocolate shops. Mothercare is one of several other famous names with closures looming. Struggling HMV says it can no longer make money selling recorded music, which most consumers now download from the internet. Book buyers are heading the same way or simply relying on Amazon, so we wait to see whether Waterstone’s can hold back the tide under new ownership and management. Only the glossiest luxury-brand boutiques are bucking the generally gloomy trend.
Meanwhile, on the outskirts of town, Tesco and Sainsbury’s sell more and more consumer goods as well as groceries, squeezing out specialist retailers. But grocery shoppers are migrating online too, and Ocado has finally moved into profit. Who does that leave to fill the empty space? The answer is downmarket chains like Poundstretcher and the weekly-payment store BrightHouse, pawnbrokers, fast-food outlets, charity shops and — a sector to watch, showing 5.6 per cent growth since 2008 — tattoo parlours.
What a panorama of Britain this presents. At one end of the spectrum, tattooed girls pause to buy scratchcards as they push their baby buggies from pawn-shop to pound store — and it’s really not their fault, they’re just the product of everything bad about modern economics and social policy. At the other end, bankers’ wives pause to place Ocado orders on their iPhones as they totter down Bond Street on Jimmy Choo slingbacks — and it’s not their fault either, though it may be partly their husbands’. So let’s not blame the consumer. But what’s to be done? Possession orders on shops no one wants any more are an inevitable element of the post-recession phase, reminiscent of the mid-1970s and early 1990s. This time, however, the desolation has been made more stark by the relentless advance of the internet and the supermarket giants, combined with commodity-driven inflation that has helped depress household disposable incomes by 2.7 per cent in the last year.
Ed Balls says that squeeze could be partially relieved by reversing the VAT increase imposed in January, and he’s right — but he knows full well the Chancellor can’t afford to do so yet. Others say councils should offer business-rate holidays for small retailers, or at least offer free town-centre parking to tempt shoppers back from out-of-town retail parks. But councils have their backs to the wall too, and measures aimed at defying long-term consumer trends would be a waste of money. In the end only a return to robust economic growth and rising real incomes can bring vitality back to retailing, and it may return in very different forms.
There will always be a place for the butcher, the baker, the florist or the shoe-repairer who offers quality and service. But the plain fact is that Britain now has more retail space than can possibly be filled by viable retailers. So a purge is inevitable, as is a change of use for many premises. Turn redundant shops into cheap-to-rent homes, new- business starter units and workshops teaching employable skills to tattooed girls and bankers’ wives alike, and you’ll have more people in the locality who need decent shops for their daily needs. What high streets need now are imagination and optimism, not bulldozers and tax tweaks.
Carriage and Wagon
Should the Thameslink trains contract have been awarded to Bombardier at Derby instead of Siemens of Germany, in the interest of sustaining the last vestige of British train-building capability? Transport minister Theresa Villiers stuck to the mantra of ‘value for money’ in defence of the government’s decision — but I wonder whether her officials’ analysis of the competing bids took account of the risk that, having shed 1,400 skilled staff who would have worked on the Thameslink contract, Bombardier may no longer be capable of bidding for Crossrail and other orders in the next few years. Indeed, the Canadian-owned company may no longer be in Derby at all, ending 140 years of train-making at what was originally the Midland Railway’s Carriage and Wagon Works. In an industry with huge investment plans, few global suppliers and a fine British heritage, long-term value for money might be better secured by making certain we still have at least one supplier of our own.
What’s your ideal job?
At a 21st birthday party full of well-scrubbed final-year students and new graduates, I go round asking them all whether they’ve found jobs, or if not what their ideal job would be. The ones in the first category are mostly going into the City, on graduate training schemes at firms such as Goldman Sachs and Lloyds — another indication (despite Lloyds’ recently announced plan to shed 15,000 staff) of returning normality after the crash. The no-jobbers all offer fluffy answers such as ‘food writer’, ‘film critic’ and ‘sports marketing’. ‘Aha,’ I respond, avuncular but stern. ‘That’s the problem with the youth of today — no one wants to be an engineer or an entrepreneur or a farmer. Who d’you think’s going to produce the essentials of economic life and growth for the next generation?’ They all look a bit embarrassed — but then I remember how I answered the ‘ideal job’ question myself in an interview to get into Oxford 38 years ago: what could have been fluffier than ‘I want to write for The Spectator’?