Charity begins on the British High Street
The decline of the British high street is not just about shops closing: there is a human price to pay as well
On Monday we wrote about the ‘Battle between Bricks and Clicks:’ the impact which online shopping is having – and will continue to have – on the UK’s high streets.
A year ago BHS (the old British Home Stores) went into administration. 164 stores closed and 11,000 jobs were lost. Many of you will have followed the saga of former owner Sir Philip Green and his eventual contribution to the BHS pension fund. But the problems of the failed group went much further than the pension fund and the shape of shopping across the UK: there are serious social implications as well.
12 months on more than 2/3rds of the former BHS stores are still empty and many of the staff are still out of work. That is an important point: if the face of retail changes dramatically it will impact on the working population, especially on women aged 26 to 45 who make up a significant proportion of the UK’s shop workers.
The British Retail Consortium (BRC) report that there are 1.5 million people working in low paid retail jobs – defined as those paying less than £8.05 per hour – in the UK. About 70% are female and 1 in 5 receive means-tested working age tax credits.
Inevitably, many companies have used the problems in the sector to try and save money by moving towards less secure employment models. Norman Pickavance, chairman of the Fabian Society task force on the future of the retail sector, said,
“There are more and more zero hours type contracts and more self-employment. A year on from the demise of BHS most retailers are continuing [towards] more flexibility.”
British unemployment may be down to its lowest level since 1975, but that masks the fate of thousands of former BHS staff – and retail staff in general – many of whom are either struggling to find work or are now on zero-hours contracts. In the final three months of 2016, there were 905,000 people working on this type of contract, an increase of 101,000 (equal to 13%) on 12 months previously.
As we wrote on Monday, the problems do not stop with BHS. Debenhams and Marks and Spencer have also announced store closures. In many towns stores like these are the mainstay of the British high street – but M&S has warned of plans to close 30 stores, and has given up on prominent locations in towns like Portsmouth, Slough, Warrington and Woking. We are not talking small, rural market towns here: Portsmouth has a population of 205,000.
The problem was compounded last month when another traditional clothing outlet, Jaeger, went into liquidation. Last week the administrators closed 20 stores, making more than 200 staff redundant. In itself, not a huge figure, but another gap to fill on which for many towns is an increasingly empty high street.
Could an old favourite ride to the rescue?
There are rumours that Woolworths could return to the British high street. The firm closed its last shop in January 2009, nearly 100 years after the first shop in the UK was opened in Liverpool. At its peak, Woolworths opened a store nearly every four days and by 1958 virtually every high street in the country had a ‘Woolies.’ But the chain was a victim of the 2008 financial crash and went bust with £400m of debt.
Around 27,000 jobs were lost when the shops closed, but now one of the former directors has approached Shop Direct, the owners of Littlewoods and Very, and the current holders of the Woolworth ‘brand.’
Tony Page has made an approach to Shop Direct, saying that the brand is not currently being used and he would like to revive it. The question retail analysts would ask is, ‘As what?’
Those of us that remember Woolworths remember a store that sold everything. Pic n’ Mix and clothes upstairs; plugs, pans and household goods downstairs.
Is it even remotely feasible that a new chain ‘selling everything’ could open and flourish on the British high street? Sadly, evidence from the US suggests it would be almost impossible.
The evidence from the USA
Meanwhile, in the US analysts are speaking of a ‘retail apocalypse’ as traditional main street stores like Macys and Sears compete with each other to announce ever more store closures. As American Apparel, Abercrombie & Fitch and JC Penney also close stores, hundreds of shopping malls are now under serious pressure, with 89,000 retail jobs estimated to have been lost over the last six months.
Global Data analyst Neil Saunders says that big stores increasingly
“fall into the trap of lacking differentiation and having an offer that is very middle of the road. This doesn’t work in today’s cutthroat market, where the consumer has so much online choice.”
Matthew Hopkinson – an analyst for Local Data Company – echoed these views, saying that the closures by M&S and Debenhams are simply “tinkering at the edges.” New brands, he added, could easily cover the UK with “30 prime stores and a website.”
UK retail staff turn to charity
Sadly many former BHS staff – and other retail staff in a similar position – are now having to turn to charity. In the wake of last year’s failure the Fashion and Textile Children’s Trust – founded in 1853 and once chaired by Charles Dickens – was inundated with requests for help. It came to the assistance of 460 families in the second half of 2016, with 274 of them being former BHS staff: this compares to 150 claims in the whole of 2015. The charity’s small grants of up to £250 are intended to help families with essential items like school uniforms or winter clothes.
A grim conclusion
As we wrote on Monday, retail may simply be a ‘20th-century distribution model failing to cope with 21st Century shopping habits.’ After all, why should I trail down to the high street between 9 and 5 when I can have a far greater choice and more competitive prices on my tablet whenever it is most convenient for me?
With the evidence from the USA backing up the disturbing trends, we see in British retail it may be that the social implications of the declining British high street will go far deeper than simply losing your local Debenhams or M&S. ‘Charity begins at home’ is the old saying. For far too many people, it may soon be a case of charity beginning on the high street.