Page last updated at 13:23 GMT, Tuesday, 23 June 2009 14:23 UK

Lows ahead for the High Street

By Hamo Forsyth
BBC Money Programme

Charlie Mayfield, chairman, John Lewis
Retail employs more people than any other private sector business in the UK
Charlie Mayfield, chairman, John Lewis

For the past 10 years we have shopped till we dropped. Now the cash has run out and the party is over.

Up to 35,000 shops could be shut during the course of 2009, according to research obtained by the BBC's Money Programme.

Shops on the High Street could be closing at a rate of 100 per day, according to research firm Experian.

Every day, and tens of thousands are losing their jobs. The recession has caused havoc in High Streets up and down the country.

Major employer

The UK High Street is where we indulge our favourite pastime.

Sir Stuart Rose, chairman, Marks & Spencer

The High Street for me is a really important place and I think in Britain we'd be very much poorer without them

Sir Stuart Rose, chairman, Marks and Spencer

But it is also a pillar of the economy.

Retailing generates almost £900bn a year and one in six workers is employed in some part of the industry.

"Retail employs more people than any other private sector business in the UK," says Charlie Mayfield, chairman of John Lewis.

"It matters a lot for jobs and it is not just any jobs because actually retail offers jobs for people who want to be creative, people who want to work in distribution, someone who wants to work part time.

"You know, retail can offer a huge range of jobs. So it's actually vital to the economy."

Deadly recession

But, according to Marks and Spencer chairman Sir Stuart Rose, the High Street is of social importance too.

Sale signs
Competition is fierce on the High Street.

"It's about social interaction," he says. "It's about excitement, it's about sharing, it's about newness, it's about really expressing one's self.

"The High Street for me is a really important place and I think in Britain we'd be very much poorer without them."

Take the once-thriving market town of Dunstable in Bedfordshire, where one in five shops has shut.

Dunstable had suffered for some years from out-of-town shopping, traffic and competition from other towns.

But some locals believe recession has now almost killed it off.

"You could pay people to park here," shopkeeper Tim Smart says. "But why would they? There's nothing left."

Dunstable has suffered in particular from the closure of big names such as Woolworths, Adams and Burger King.

As these shops closed, fewer customers were attracted to visit the town.

And with fewer customers, smaller shops began to close too.

Get together

Tewkesbury in Gloucestershire is another town fighting to protect its High Street.

Justin King, chief executive, J. Sainsbury
It's not a race to the bottom
Justin King, chief executive, J. Sainsbury

It is by no means a ghost town, but on the brink of a dangerous downward spiral.

Having only just recovered from disastrous floods, recession is bringing down the shutters in shop after shop.

"Tewkesbury is at a crossroads," says the abbey's vicar, Canon Paul Williams.

"The heart of Tewkesbury will die unless we get our act together."

Adding value

These shopkeepers realise that it is up to them to help themselves by doing what they can to keep the town's tills ringing and make it as attractive to shoppers as it can be.

However small their outlets, there are fundamental lessons that Tewkesbury's shopkeepers can all learn from the UK's biggest retailers; this amounts to giving customers exactly what they want, based on value, service and experience when shopping.

Sainsbury boss Justin King explains how his supermarket chain has battled the downturn by cutting prices and adding value.

"It's not a race to the bottom, but it is about providing the right solutions for customers at the right time," he says.

And the strategy seems to have paid off, with Sainsbury's growth outstripping most of its rivals.

Cutting back

Meanwhile, John Lewis boss Mr Mayfield says his chain's famous service ethic has propped up profits.

And Oasis managing director Sharon O'Connor insists putting theatre and fun into shopping can loosen the purse strings of even the most recession-battered shoppers.

Measures such as these are crucial for retailers to keep their customers.

Research carried out by Gfk NOP reveals that 82% of the UK population have felt the impact of the credit crunch on their spending, with 66% of people cutting back on food luxuries, and 54% cutting back on buying new clothes.

Worse to come

But the shopkeepers of Tewkesbury, Dunstable - or just about anywhere else - should not hope that they might be saved by a reviving economy just yet.

In fact, leading accountants BDO Stoy Hayward say that the worst is still to come for the retailing industry.

They predict 4,300 retail businesses - large and small - will go bust in 2009.

And next year is set to be even worse, with more than 7,000 retail businesses will collapse, as customers lose their jobs and see pay packets shrink.

Mary Portas: Save Our Shops, broadcast 9pm 23 June 2009 on BBC 2.



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