In recent years the high street has come under increasing pressure and most towns across the UK do have a large number of empty retail units.
The Forum of Private Business feels that the margins being made by many small businesses have reduced in recent years, driven by the living wage, currency fluctuations, pension provision, late payment, larger businesses driving down margins, less financial support in terms of short-term small loans particularly from the banks and tough competition.
This means that many small businesses no longer have a big enough cash shock absorber to deal with business issues that cause cash flow problems, this, in turn, can lead to business failure.
We see landlords still expecting high rents and estate agents fuel this expectation as they know a high valuation will secure a rented business premise and landlords are becoming a big part of the problem and they are often driven by short-term greed rather than long-term objectives.
We are seeing those retailers who can, florists and food manufacturers and retailers moving their production units out of town while taking a smaller space on the high street to sell to customers in order to make dramatic savings on their rent.
In terms of new retail concepts, how does an entrepreneur with a great new retail idea get a foothold on the high street, the prices are often too high and length of lease too long. So it’s difficult for them to set up in a small way, learn their trade and develop a customer base, let’s not forget that many of Britain’s bigger businesses started in a far smaller way.
- Fortnum and Masons – William Fortnum was a footman in the household of Queen Anne. The royal family’s insistence on having new candles every night resulted in large amounts of half-used wax, which Fortnum promptly resold for a tidy profit. The enterprising Fortnum also had a sideline business as a grocer. He convinced his landlord, Hugh Mason, to be his associate, and they founded the first Fortnum & Mason store in Mason’s small shop in St James’s Market in 1707.
- Marks and Spencer – Michael Marks had a Penny Bazaar market stall in Kirkgate Market in Leeds. A fellow trader, Jowitt Dewhirst, lent him £5 to establish the Bazaar and taught him basic English. Dewhirst’s bookkeeper was Thomas Spencer and Marks invited Spencer to become his partner.
- Tesco – Jack Cohen founded Tesco in 1919 when he began to sell war-surplus groceries from a stall at Well Street Market, Hackney, in the East End of London. The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of tea from Thomas Edward Stockwell. He made new labels using the initials of the supplier’s name (TES), and the first two letters of his surname (CO), forming the word TESCO. After experimenting with his first permanent indoor market stall at Tooting in November 1930, Jack Cohen opened the first Tesco shop in September 1931 at 54 Watling Street, Burnt Oak, Edgware, Middlesex.
- Dunelm – Dunelm was founded in 1979 by Bill Adderley and Jeany Adderley, trading in home textiles from a market stall in Leicester. The first Dunelm store opened in Churchgate Leicester in 1984 with the first superstore opening in Rotherham in 1991.
- The apprentice star Lord Alan Sugar – He began selling radio aerials for cars and other electrical goods out of a van which he had bought for £50 and insured for £8. To afford this, he withdrew all of his postal savings which totalled just £100. This would later become his largest business venture, consumer electronics company Amstrad. In 2007, he sold his remaining interest in the company in a deal to BSkyB for £125m.
While there has been help given to business start-ups through business hubs like those at Chester or Manchester Metropolitan University, small tech or engineering businesses can get short-term leases and cheap small business units. However, established retailers don’t have access to these benefits.
Areas like Cargo at Wapping Wharf in Bristol, show us the way forward, the ability for the retailers of the future to take short-term fairly priced units where they can learn their retailing skills and develop a customer base before moving to larger hopefully high street premises.
We feel government and landlords should be encouraged to support more of these retail development areas to develop the retailers of the future, some of whom will be able to scale up and develop into national or potentially international brands.
Many towns have areas that could be developed for these purposes, we also have many underdeveloped or underutilised market halls and areas that could be redeveloped to fit this purpose. You only have to look at the success of Altrincham Market and its surrounding area to see what could be achieved. Interest-free loans from the council have also helped.
For this project to work we need to look at business rates, this inefficient tax system needs to be overhauled as soon as possible, but business rates should be suspended on these development areas for a period of 3 years while the business is growing and developing, letting the business reinvest money in its growth and creating a firm foundation for its future success.
The Forum intends to put its time and resources into the process of building these retail development areas, we will work with entrepreneurs, landlords, councils, local and national government to make this project a reality.
We also feel that the Governments industrial strategy needs to include “Restore the high Street” as retail is the UKs largest employer.
