Who can help businesses survive in town centre locations?

April 5, 2019

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Martin Newman

By Martin Newman

The Consumer Champion

Unsustainable commerce regions have become something of a vicious circle: central locations are too expensive, businesses move further out, taking advantage of cheaper out of town rents, only to see footfall drop off a cliff because people don’t want to commute too far to shop. Councils lose out because businesses move out of shopping districts, businesses lose out because profits drop, and customers lose out because they have to travel further to get what they need. But all is not lost. From parking provision to rent management, there’s plenty that local councils can do to help small businesses survive in central locations.

In any business, the customer should at the heart of any decision making process. What matters to them? What do they need from you to buy your product or use your service – and what would put them off? Sometimes, these things are out of your control, but if you have a proactive local council which is open to working with businesses and not against them, you’re onto a winner. Far too many councils work against businesses, and fail to see that it’s in their interest for shops and services in their districts to succeed. As such, they too fail to consider what customers need.

While the immediate return from pricey car park tickets might look very inviting – which can cost up to an eye-gouging £13 an hour – councils have to bear in mind that this will put people off, and visitor rates will plummet. Similarly, while using land far away from prime real estate might save you a pretty penny to build a car park, bear in mind that having a 20-minute walk to the high street would be enough to dissuade all but the most assiduous of shoppers.

Affordable rents are also an essential factor in ensuring that retailers aren’t pushed out of central locations. Private landlords have to understand that the consistently upwards trajectory has to reflect what is feasible for businesses. A coffee shop, for example, isn’t going to be able to inflate prices or sell more than a certain amount each day. There’s a real risk of boom and bust there; if landlords push too hard to inflate rents then they risk losing businesses altogether. A more flexible approach would enable them to attract pop ups, independent retailers and others looking for short term leases. They seem to think that empty shops are not a problem as their property will continue to accrue in value. That may have been the case a few years ago, but not now. Empty stores become a self-fulfilling prophecy and merely seek to dissuade consumers from visiting their local High Streets.

In 2018, Chancellor Philip Hammond announced a Treasury Committee inquiry into the impact of business rates, including the provision of a digital services tax. But this isn’t about levelling the playing field between bricks and mortar stores and online – it’s about helping businesses, both locally and nationally, to survive.

Written submissions to the inquiry include complaints from local nurseries, hairdressers, newspaper shops, pubs and bookshops to national retailers. All paint a grim picture of an unfair system of overcharging which has been damaging businesses of all sizes for decades. In its submission to the inquiry, the Retailer Rates Action Group – which represents stores including Iceland, Primark, River Island, Specsavers, Waterstones and WHSmith – said, “business rates liabilities are now, without doubt, one of the biggest contributors to the decline of the UK’s Retail Market”.

As a result, we are seeing household names like Boots and Debenhams radically cutting back on their locations, and even good old Marks and Spencer is closing stores and focusing on home delivery services.

If we want commerce districts to succeed, we have to work together in a meaningful way to ensure that all parties are aware of the concerns their partners, occupants and taxpayers are facing. We need Government, local councils, town centre planners, landlords, food & beverage establishments, retailers and the police to all work together to create a vision and roadmap for the sustainable future of our town centres.

All this is doable. We need open communication, a strong understanding of the chain within business and location concerns, and a focus on what really pays the bills: our customers. The high street isn’t dying, contrary to popular belief, but we all need to ensure we support a framework where our retailers and customer facing industries can survive.

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