The end of the High Street as we know it…

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Since the financial crisis of 2008 many firms have closed down or have turned into one of the many so called zombie companies occupying the high street. However, the high street as we know it has been changing since the start of Internet shopping and its popular growth over the last ten years. The rise of Amazon and eBay has radically changed the way we shop. However, the closure of brands such Woolworths and more recently HMV causes psychological damage to the high street adding to the feeling that the era of the high street is under threat.

The recent recession has damaged a lot of high street firms beyond repair, so what does this me for the shopping habits in towns in Northern Ireland? For one it means that a number of jobs will be on the chopping block and the money generated in local towns across Northern Ireland will be affected. Also, with less well known firms such as HMV on the high street, means people are less likely to go out shopping or it could be an opportunity for the rise of independents.

The recent closures of HMV and Blockbuster with the thousands of job losses and knock on effect of the supply chain, will have huge impact on our economy. Like the collapse of the manufacturing base before, the collapse of the high street firm could have huge implications for the economy. It creates new challenges and problems for businesses and policy makers. With the collapse of zombie companies who are not investing in their business and economy the hope is that new companies can spring up to fill this gap.

The recent flag protests and the rioting that sprung from it caused huge damage to the Belfast trading over Christmas. With traders in a recent meeting in the Europa were voicing their anger and frustration at. Set backs like this cost the high street further in its war with shoppers who are choosing Internet shopping over making the trip to their high street more and more now. Government policy also has a part to play in this, recent focus has been on the creation of out of town retail units this has has a huge impact on shopping habits. The way we shop is radically different to the way our parents and grandparents and no doubt our grandchildren will have a different pattern to us such is the progress of change.

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  • http://gravatar.com/joeharron Mister_Joe

    The pace of technological advances has been so great and continues, mainly for the good, that it is impossible to know what lies ahead in the coming decade even.

  • Red Lion

    People still like to ‘take a dander’ though, and often this is a dander into town. A demand for the high street will endure, but it will likely have to be an adapted, slimmed down high street/town centre.

    As the demand for high street reduces, but certainly does not die off, new thought is needed for how to use the newly avilable space in own centres.

    one possibility – convert some properties into housing(more likely in smaler town) and thus encourage more people into town centres by living there.

  • Neil

    Some industries are particularly susceptible. Jessops was one where the industry just changed. Cameras have changed completely and you can’t compete with tax free shopping from the Far East. Same with movies – the physical DVD rental is becoming unnecessary and the hassle of going out when you can pay a fiver for all the movies in the world for a month without leaving the house.

    Internet business is rent free and in some cases VAT free too and it’s hard to compete for small, honest traders. I’d say the outlook’s grim, particularly in cities where the council gouges the life out of people in rates. Golden goose thinking will come to it’s natural conclusion when the shops are all empty and they realise that charging too high rates can be counter productive.

    Bear in mind we are run by rank amateurs. They even waited til September to start mucking around with traffic.

  • NIISAFS

    The high street will evolve and survive as it has always done because some things are better done in person, a visit to the butchers or barbers for example. What killed a lot of high streets was a combination of high rates, high parking costs and all high streets being the same as an out of town shopping centre. Every high street in the UK has a Boots, Next, Waterstones, Laura Ashley etc etc. If there is nothing to distinguish your town from an out of town shopping centre then why visit your town? Until towns develop a USP ( that’s a unique selling point in the vernacular) then they will not compete. As someone above said we are run by rank amateurs and until we face some facts and ask why would people shop here instead of why are they not shopping here we will not get to grips with this issue.

  • Comrade Stalin

    Failure to pay tax on shipments from the Far East for consumers is illegal, and companies making false declarations of value on customs forms are also breaking the law. I would not be too surprised if HMRC stepped up enforcement in this area. Tax loopholes are being closed too. For example the Jersey/Guernsey tax loophole where items under £18 were VAT-free has been closed (which led directly to play.com announcing that it was ending retail trading recently).

    Also the road layout and traffic changes in Belfast are necessary. Disruption is inevitable and some of the people whining really need to grow up and bear in mind that cars are a luxury people in other big cities generally do not get to enjoy to the same extent that we do. Try doing shopping in your car in Dublin, and tell me about it.

    To the article itself .. yes the High Street as it is currently constituted is in trouble. Waterstone’s (bookseller/coffee shop owned by HMV), Thornton’s (chocolates) both have to be on anyone’s dead pool list, and I suspect it’s going to start looking tight for clothing retailers soon too.

    To be honest I’m not that upset about these big traders going down. Belfast is the worst example of the kind of effect they have; every major shop on Royal Avenue is a chain, these organizations pushed the rents up and squeezed out all the independent and smaller places. Belfast used to have several independent department stores, small booksellers, small record stores etc. If things work out the way they ideally should, a few of these losses will lead to a drop in the rents in the city centre and that might make it feasible for small businesses to set up there again.

  • Zig70

    Parking costs, high price of casual public transport, unreasonable returns policies, high prices, rip-off selling on warranties, sales assistants with big hair, nails and vacant stares. Lots of reasons why the high street choked itself. Evolution isn’t always good. Get it wrong and we’ll get a dead city centre, increase in crime and a drop in tourists.

  • http://gravatar.com/joeharron Mister_Joe

    The same thing happened to many towns in Canada in the last decade. Some towns have been very successful in rejuvinating their centres often by encouraging restaurants to open, many with “ethic” food from around the world. Don’t despair.

  • http://gravatar.com/joeharron Mister_Joe

    ethnic, of course.

  • USA

    Neil,
    “Internet business is rent free”

    This is not the case Neil. Online companies that deliver digital content have an advantage in terms of the need for space. However they also need technical staff to generate complling content. Regardless, this is a small sector of the online market.

    The point is, every e-commerce company that sells a product needs someone in the distribution channel to physically store the products, complete order fulfillment, process credit cards, address customer service, returns etc. So unless they want to sub-contract out all that work, the e-commerce entrepreneur will have to complete all those business tasks themselves as they are critical to the successful completion of each transaction. To think e-commerce companies don’t have to pay rent or other expenses is simply incorrect. For example, search engine advertising budgets are not something paid by High Street companies.

    It can also be easily argued that companies with a bricks and mortar high street presence who can successfully integrate e-commerce into their current business practices will be very well placed to be successful in the years to come. Business is Darwinian :-)

    Now back to my Google, Facebook and Bing online marketing campaigns :-) And on a Sunday too…god will not be pleased, will she!!!!

  • aquifer

    Rack rents with upward only reviews. Letting car parking crowd out housing. Non-food in supermarkets. The rich getting richer and shopping while they holiday elsewhere. Restrictive alcohol and entertainment licensing. Sites that are too small for modern stores. Competition from warm enclosed shopping centres with free parking in a rainy cold country. Competition from shopping centres that actually plan the mixture of shops. Two earners working to many hours to shop. Better choice of home entertainment.

    It is a wonder city centres work for retailing at all. With better buses and taxis they can work for entertainment though.

  • USA

    Should read….”compelling content”

  • urbanrepairista

    The fightback has started – in Frome, Somerset

  • The Raven

    Aquifer, I’d take a street of small independent shops over those Land of the Dead outlet places any day. And happily walk to them too.

    Neil, the rates are an easy hit. Less than half goes locally; over half goes to an even bigger white elephant. Less binmen and landfill and infrastructure? Throw less stuff away. Less environmental health? Trust your local cafes to do the right thing, believe that no one will dump illegally, and happily accept that nuisance neighbours don’t exist. No dog warden? etc etc No leisure facilities – the second biggest drain after waste disposal? Sure, let the private sector provide it in each area. Which I’m sure they’ll do.

    We’ll not talk about rent to rate ratios being up to 6 to 1 in some areas where they should closer to 2:1. We’ll certainly not talk about the overpriced rents being charged in some of the provincial towns. I dunno what Belfast is like, but some of the rents being charged in market towns are scandalous.

    Rates are a culprit, but they’re not the main villain of the piece by a long shot.

  • http://footballcliches.wordpress.com/ footballcliches

    The demise of the High Street was IMHO somewhat masked due to the amount of cheap money sloshing around from 2002 onwards and is now being brought about in a more devastating manner thanks to the protracted GFC we have been facing with little or no end in sight.

    As many above have noted, capitalism is quite Darwinian and tbh, I feel no real nostalgia for the demise of stores such as Woolworths or HMV; the former was pretty crap and relied on the sale of pick’n’mix, cd singles and annuals while the latter tried to become a stack it high, sell them cheap operation with some rather costly (overpriced) special interest sections (foreign dvds and specialist cds) with properties in areas notorious for high rents and rates and they failed too.

    I was reading Wayne Hemmingway’s article over on the Guardian and thought that it raised many interesting points, especially in relation to high streets being boring clones of one another and how the demise of the high street may act as a catalyst for independent ventures to give it a go now (http://www.guardian.co.uk/commentisfree/2012/mar/22/british-high-street-dead-lets-celebrate?INTCMP=SRCH), which I hope is the case, yet I have my own reservations especialy as funding is very tight and in most instance non-existent tbh.

    Finally, this demise could perhaps herald in a better balance of properties in our cities, even in places such as Belfast where we have a better mix of commercial property and residential accommodation allowing for people to live in affordable housing in the city centre without the need to travel great distances in cars or otherwise to do their shopping? I was in Adelaide over the holidays and whilst not a mega city it is noticeable how many people are able to live in decent accommodation at affordable prices in the CBD (central business district) and make the city their home. This appears to be the norm there yet it is about to be put under some strain thanks to the local govt approving for highrise development to get underway. It is a far cry from the many ‘developments’ I see springing up in Belfast, Dublin, London or anywhere else which is very top down in planning and which are fairly soulless and lacking in anything like community spirit. They’re just units, they’re not homes.