High Street shops in a battle against the internet

Money

Britain used to be a nation of shopkeepers, but for how much longer? Over the past few months, a number of high-profile names have collapsed, including Maplin and Toys R Us, while other big retailers such as Mothercare, Carpetright, New Look and House of Fraser are considering closing stores to secure their future.

But not every High Street is a ghost town. Rather, many have seen the usual butcher, grocer, shoe shop and ladies outfitter replaced by a different breed of business: a beauty salon, a hairdresser or coffee shop. 

Traditional businesses are being replaced by those operating in ‘the experiential economy’, to use industry jargon. The extent of this transformation is laid bare by recent figures from PwC, the consultancy firm.

Using data gathered from 500 British High Streets and shopping centres, it calculated that the UK’s High Streets suffered 5,855 store closures in 2017, more than in any year since 2010, and witnessed 4,083 openings — a net loss of 1,700 outlets.

Not every High Street is a ghost town. Rather, many have seen the usual butcher, grocer, shoe shop and ladies outfitter replaced by a different breed of business: a beauty salon, a hairdresser or coffee shop

Not every High Street is a ghost town. Rather, many have seen the usual butcher, grocer, shoe shop and ladies outfitter replaced by a different breed of business: a beauty salon, a hairdresser or coffee shop

Not every High Street is a ghost town. Rather, many have seen the usual butcher, grocer, shoe shop and ladies outfitter replaced by a different breed of business: a beauty salon, a hairdresser or coffee shop

The data offers a ‘state of retail snapshot’ because it focuses on net closures/openings of businesses with five or more outlets, rather than independents.

According to the British Independent Retailers Association, some 65 per cent of High Street shops are independent, and they have fared no better as soaring business rates, online competition and a harsh winter take their toll.

The casualties included pubs, fashion retailers, shoe shops, charity shops, travel agents and banks, while coffee shops, tea rooms, beauty product retailers, ice cream and funeral parlours all opened more outlets than they were closing.

The Mail talked to some of the winners and losers about the state of the British High Street . . . and whether it has a future.

RISERS

Beauty product shops – net rise nationwide of 30 outlets in 2017

Floral Street, King Street, Covent Garden, London

Michelle Feeney, 54, made a name for herself as the chief executive of tanning brand St Tropez. Now she has moved into perfume, opening Floral Street in November last year.

The location, near Chanel, Burberry and Apple stores, comes with ‘astronomical’ rent and business rates, Michelle admits. But she views it as an investment. ‘If you are going to make a beauty brand successful, you’d usually launch with a big advertising campaign. Instead, I’ve invested in a store.’

She is optimistic about the state of the High Street. ‘You have to make yourself a destination. Retail is alive and well if you make it exciting.’ What she offers is ‘edutainment’ — a place where customers can sign up for ‘scent tutorials’ as well as buying beauty.

Coffee Shops +25

Coaltown Espresso Bar, Ammanford, Wales

Ammanford is a small former mining town in Carmarthenshire. Scott James, 24, who founded Coaltown, a coffee roasting business, with his father Gordon in 2014 says he wanted ‘to bring some jobs back to the area’. Now he is doing well enough to supply Selfridges.

In February, they opened a cafe, too, and now employ 11 people in total, including roastery staff.

Rent for the cafe, a former burger bar that had been vacant for five months, is fortunately ‘quite low’, he says. ‘That’s thanks to the fact many businesses can’t survive on the High Street, so we’re able to take advantage of that.’

The coffee shop also doesn’t pay business rates as it’s too small to qualify. (Businesses with a rateable value of £12,000 or less are exempt.)

Scott is positive about the venture’s future. ‘Nowadays, you have to offer people something they can’t get online, something unique, something they can post on Instagram. Otherwise you don’t stand a chance. The High Street isn’t finished. It just needs to adapt, like it always has done.’

Ice cream shops +27

Romeo & Giulietta artisan gelateria, Stoke Newington, Hackney, London

When the sun comes out, a queue ten-deep snakes outside the door of this tiny shop. Opened last July, it has built up a loyal customer base for its ice cream, made on site by the twentysomething husband and wife team Ciprian Sumanaru, who used to be a plumber, and Iuliana, who used to work in Specsavers. The couple are Romanian but have lived in Italy and kitted out the shop (a former greengrocer’s) to resemble an Italian gelateria.

‘People seem to like the fact that the ice cream is homemade and say it makes them feel like they’re on holiday,’ says Iuliana.

The shop benefits from not having to pay any business rates yet due to its relatively small turnover, and rental is cheap thanks to its location just off the main thoroughfare. ‘Businesses that ensure the very best customer experience have a future,’ insists Iuliana.

Funeral parlours +12

Claridge Funeral Service, Marlborough, Wiltshire

At the age of 18, Daniel Claridge became Britain’s youngest qualified funeral director and, now 27, he launched his own business last October. He expected to arrange 20 to 30 funerals in his first year but has clocked up nearly 50 so far. His parents, both former paramedics, help out in the business.

The recent boom in funeral parlours in the UK is not because of a spike in the country’s death rate, he believes, but rather an increase in small independent firms. ‘In the 1990s, there were a lot of big firms which bought out the smaller operators, and that led to the service becoming less personal. People are going back to independents, which has led to new businesses being set up.’

He, too, is grateful for not having to pay business rates yet.

Book shops +20

Imagined Things, Harrogate, North Yorkshire

‘Yes, there are a lot of threats to bookshops — online, supermarkets, deep discounting,’ say Georgia Duffy, the owner. ‘But there is still something special about a bookshop and a bookseller that still cares about authors.’ Her aim is ‘to put readers in touch with authors,’ and she invites writers to give talks at the shop, which are proving hugely popular.

The 28-year-old, a qualified radiographer who put her job at Harrogate Hospital on hold to open her shop last summer, says conditions are tough and the costs of operating on the High Street are ‘weighted against us’, compared with internet retailers operating out of warehouses paying lower rents and business rates.

Tea rooms +30

Mrs C’s Vintage Tea Room, Hucknall, Nottinghamshire

Step inside this new tea room and you’re back in the Forties. Glenn Miller is on the gramophone, teapots come with knitted warmers and the owner, Karen Clubley, 46, is dressed in a floral swing dress. She took over the venue in January to meet a demand for ‘nostalgia’. ‘When you walk in here, you are in your grandma’s parlour. And you’re greeted by people with passion. The public’s so fed up with the Costas and Starbucks — there’s nothing original about them.’

Located just off the main High Street, her rent is a bit lower than if she was in a more prominent location, she says. ‘And our rates are non-existent because we’re a small business. I think if you try to ensure customers have a great time, then they’ll come back.’

Barbers +4

House of Gentleman, Elvet Bridge, Durham,

Sam Gadd, 30, set up his barber shop last year and also offers ‘male beauty and waxing’.

He pays £15,000 a year in business rates and £55,000 a year in rent. The costs are ‘astronomical’, but he says he wanted a large site.

He charges £18.95 for a basic cut, which he admits is expensive. ‘Across the road you can get a cut for £8, but we explain that you get a high-quality service here — a full consultation and a free drink. We offer a personalised experience.’

The resurgence in barber shops is, Sam says, down to ‘male vanity — men do want to look better now. They’re waking up to taking care about their appearance and a barber is the first port of call.’

He says that he’s been profitable every month since opening, ‘but it’s quite tough’.

FALLERS

Fashion stores Net fall of 314 in 2017

Chi Chi Boutique, High Road, Loughton, Essex

In a good year, Chi Chi had a turnover of £250,000 to £300,000. By the end, Jo Mason, 43, says she was ‘lucky if it was £70,000 to £80,000’. When she opened her shop in 2001, there were at least 20 other fashion outlets on the long High Road, she says. ‘There’s now just half a dozen.’

Throwaway fashion, the rise of Primark and the internet have hit her business. ‘Shops become surplus to requirements — unless it’s to get your nails done or have a shave.’

Her boutique closed two years ago and the site, after remaining empty for some time, recently reopened as a waxing salon.

Shoe shops -86

Marshall Shoes, High Street, Bridlington

David Marshall’s grandfather opened the shop in 1895 to sell boots and shoes to the local Yorkshire farming community. Today, this part of Bridlington is in decline, says David.

The business, which has two other shops in the town, also sells shoes online, accounting for about 65 per cent of its turnover.

‘We can now sell more in a month online than that store could turn over in 12 months,’ he says, which is why he could no longer justify three outlets. With a ‘heavy heart’, he closed the original Victorian shop last month to turn it into office space and warehousing for the online business.

Charity shops -69,

The Children’s Society, Cavendish Street, Keighley, Yorkshire

Many retailers grumble that charity shops, which tend to enjoy discounted business rates, have an unfair advantage. But even they have started to feel the pinch.

The Children’s Society, which runs 104 shops, has suffered a dramatic decline in customers over the past few years, according to Lynne McMahon, director of retail and trading. ‘The number of customers fell by about 50 per cent. We can’t run a shop at a loss.’

This branch closed, after 20 years, at the end of March.

‘We’re not a destination shop — we’re very reliant on footfall, on people walking past. Small things — like a bus stop moving or a bank closing — can make a tremendous difference.’

Parking restrictions introduced on the other side of the road had significantly affected the number of donations, she added.

Convenience stores -59

My Local, Church Street, Liverpool

Over the past decade there has been a boom in supermarkets opening convenience stores — but that appears to be over. In 2016, the 130-strong chain of My Local stores went into administration.

The prominent site of this My Local, on the corner of the Clayton Square shopping centre in the centre of Liverpool, has recently been taken over by McDonald’s, even though it has three existing outlets within 300 yards.

Pubs -66

The George, Eden Grove, Holloway, North London

Peter Mara, 50, has been landlord of this Victorian pub for 27 years. He will pull his last pint on May 29 when the pub closes.

‘It will be a terrible loss to the community,’ he says. ‘We’ve had weddings, christenings, funerals, birthdays, Christmases in here.’

It is not yet known what will happen to the site, owned by the Wellington Pub Company, but many pubs in this area, near Arsenal’s Emirates Stadium, have been turned into flats.

‘I made a profit every one of the 27 years I’ve been here, but turnover has been steadily going down, and the cost of everything has just gone up,’ Peter says, pointing out that a case of house wine from the cash and carry has gone up recently from £25 to £32.

His lease is up for renewal next month and given that it was due to increase substantially, he concluded that ‘the maths just didn’t stack up’. Competition from two nearby Wetherspoons and supermarkets offering cheap beer has hit custom — and changes in behaviour.

‘When I started, people would come in for a pint at lunch and then go back to work. That’s no longer acceptable.’

Estate Agents -102

Hunters, Ber Street, Norwich

Hunters operates 213 estate agents nationwide. But the great majority are run by a variety of franchisees. This branch in Norwich was one of eight in the East Anglia region to close in February this year. Kudos Residential, who ran this particular franchise, went into liquidation with a loss of 21 jobs and owing £545,833 to creditors.

A spokesman for Hunters insists this was not reflective of the company’s overall robust financial health: ‘The closure in Norfolk was due to other factors and is not representative of trends we are seeing.’

In the past five years, however, a plethora of online estate agents have taken off, leading many traditional High Street branches to feel the pain.

Countrywide, the UK’s biggest estate agency company, which owns Hamptons and Bridgfords, posted an annual loss of £212 million for 2017.

Travel Agents -326

Co-operative Travel, Mansfield, Notts

The internet and low-cost airlines have dealt a double blow to High Street travel agents, leading to significant consolidation among the big chains.

This former Co-operative Travel closed during 2017, one of a large number of Co-ops to be closed by Thomas Cook, which had been running them as a joint venture since 2011.

At its peak in 2012, Thomas Cook operated 1,237 branches across the UK. By the end of this month there will be just 601.

A company spokesman points out there is a Thomas Cook branch less than 100 yards away in Mansfield.

Lynne Jordan Dicks, who owns the Blooming Wonderful florist next to the former Co-operative Travel, says it’s tough for all retailers in Mansfield. ‘We used to have queues of people outside our shop on market day, but everybody buys everything online nowadays.’

Banks -201

NatWest, North Street, Wareham, Dorset

North Street in Wareham is a handsome shopping thoroughfare, with a hardware shop, Post Office, butchers and bakers. But one of its key outlets, a NatWest bank, is closing at the end of May, part of a long wave of bank closure programmes instigated by its parent company, Royal Bank of Scotland (still 71 per cent owned by the taxpayer after the financial crash of 2008).

Recently, RBS announced 300 branch closures to reduce its total to 750, in response to ‘the different ways that people are banking with us’, according to a spokesman, who added: ‘Since 2012 transactions in the NatWest Wareham branch have reduced by 26 per cent, with now only 93 customers visiting the branch on a weekly basis.’

NatWest is by no means the only bank to be shutting branches. HSBC, which had 1,286 in 2011, now has 625.

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