Another day, another tragic tale of woe from Britain’s High Street.
Arcadia, HMV, BHS, Toys R Us, Maplin, the list goes on and on, almost as long as the list of failed Tory leadership contenders.
Store closures, job losses, and a new addition to the layman’s lexicon; the controversial Company Voluntary Arrangement (CVA) make it easy to paint an ugly and depressing picture. The media is happy to play along with this narrative of Britain’s High Streets in crisis, as the tsunami of headlines testifies.
Of course, there is some truth in it with five major reasons why so many businesses are buckling under pressure.
By far the biggest catalyst for change is undoubtedly the shift to online shopping. This has spawned the seemingly unstoppable Amazon juggernaut, but also nimble, specialist e-commerce players such as ASOS and Boohoo who are successfully disrupting the market and winning considerable market share.
This has left many traditional High Street chains, such as Marks & Spencer, Mothercare and Arcadia, with too many stores with sky-high rents at a time when many customers prefer shopping on their phone.
This has been compounded by things such as the National Living Wage, Apprenticeship Levy, Business Rates and weaker Sterling, creating the perfect storm of rising costs at a time of falling sales, squeezing profit margins.
Costly over-expansion in the boom years also weighs heavily on many High Street names as they now have too much debt. This has been most acute in the casual dining market where owners have splashed the cash to roll out what felt like a winning formula such as Gaucho and Jamie’s Italian. Much of this expansion came as consumers, spooked by Brexit uncertainty, started tightening their belts and eating out less. In other cases, the convenience of delivery services such as Deliveroo and JustEat encouraged the Netflix generation to stay home and order a takeaway.
This alludes to the fifth and final flaw handicapping so many businesses, the failure to react to changing consumer tastes and habits.
The demise of businesses such as Woolworths led to an outcry and outpouring of affection for a sepia-tinted past, but stores cannot survive on nostalgia and many of those mourning the passing of Woollies had not been customers for years.
But rather like many of those who pitched for No10, the headlines only reveal half the truth. There are still many vibrant and thriving retail businesses bucking the trend who, with careful crafting of their narrative and the right advocates, can get their story heard.
Some, like Waterstones, have reinvented themselves in the face of digital threats. Others like Pets at Home are creating the kind of in-store experiences, such as dog grooming, that can’t be replicated online. At the same time there are also new businesses emerging, like MADE.com, that are plugged in to what consumers want and how they like to shop.
Whilst the media focus is often on seismic events, such as a business failure or mass store closures, the reality is that these shops are often picked up and the people re-employed by businesses with successful strategies and popular products or experiences at the right price.
Rather like the Conservative Party, the High Street is going through a torturous transformation, but tales of its demise are likely to prove premature. The hope must be that both can reinvent themselves and emerge, refreshed, revitalised and relevant.