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Page last updated at 09:15 GMT, Monday, 29 August 2011 10:15 UK
Is the High Street doomed?

Evan Davis
By Evan Davis
Today programme

Colchester high street

With the economy turning away from its decade of shopping and borrowing and the march of technology continuing to drive sales on to the internet, the High Street is facing one of its biggest ever challenges.

Retailing has gone through many revolutions before: for example, the rise of the supermarket from the late 1940s which let customers pick things off the shelves themselves.

But, in an era of austerity in which online retailers - free from traditional property and staffing costs and often boasting a vast range of products - are presenting a whole new type of competition, are our High Street shops ready for disruption on that scale now?

HIGH STREET QUESTIONNAIRE
The Today programme asked its audience to tell them what made a High Street thrive.

Steven Roberston, director general of the British Retail Consortium, believes that shopkeepers big and small are facing some of the most difficult conditions they have seen in many years.

"Speaking to many chief executives running High Street retailers, they are telling me that they have no experience of trading being this tough, this demanding," he told me, "both in terms of how much money the customer has to spend and the difficulties of running your business as well."

Go out to the shops. Have a look around, look at the stores and ask yourself what works in retailing today?

The supermarkets, of course, with their low prices. And on the High Streets, Poundland is quite a phenomenon. But what else? What kinds of strategy will survive the difficult years our shops are going to face?

One interesting example is the "extreme niche" strategy exemplified by a business like Hotel Chocolat, whose 54 UK stores, online shop and even a hotel in the Caribbean idyll that is Saint Lucia are all dedicated to the confection.

The playful toy shop in Bristol

"This is a deep culture business," explains Hotel Chocolat's co-founder and chief executive Angus Thirlwell. "We're not in the business of flogging boxes of chocolates. We're a movement about chocolate.

"We like to make our customers happy. It's a very straightforward business. But we're about more than just chocolate, that's for sure."

Right at the other end of the scale there is John Lewis's flagship department store on Oxford Street in London, with its enormous vertigo-inducing atrium on four floors.

Charlie Mayfield, chairman of the John Lewis partnership, which also includes the upmarket Waitrose supermarket chain, says there is no substitute for high quality service, striving to give customers better value, better products and better convenience.

"So when you come to one of our shops you can get access to lots of different services which may be to do with advice to make your home look fabulous, maybe to help you if you've got a new baby - and that extends into Waitrose as well."

An Apple MacBook is seen on display as customers browse an Apple retail store in central London
US retailers are leading the way in imaginative store promotion

But is the kind of thinking and innovation outlined by Charlie Mayfield up to the scale of the challenge?

Retailers have been at the leading edge of innovation before - from the multi-storey car park to the loyalty card. But when I walk around now, I do see a lot of mediocrity on the High Street, with stores that are not cheap, nor theatrical either.

Some of the US stores, like the Apple Store, and Hollister, part of the Abercrombie & Fitch group, are excellent at drawing crowds of sightseers.

But maybe the British stores have had it too easy and are ill-equipped to deal with the difficulties now facing them. So, are we Brits any good at retailing any more?

I do believe that the UK is one of the best retailing nations in the world
Ken Murphy, Boots

Ken Murphy, chief operating officer of Boots, insists that we are.

"When I talk to people about what are the best standards of retailing in the world, many of the examples come from the UK," he told me. "So I do believe that the UK is one of the best retailing nations in the world."

And his company has widened its scope over the years into travel and health insurance as well as launching the Change One Thing public health campaign in 2006.

So, through some innovation, introducing a few extra services, keeping costs low and shelves full, maybe the plainest stores can see out the next few years.

But I suspect one other thing has to give: the property market. With lower expectations of sales per square metre, lower retail rents and less new space devoted to retailing, it's all up in the air, isn't it?

"We personally have seen our sales per square metre hold up pretty well over the last five years," Ken Murphy explains.

"But I think is because we have taken a much more conservative approach to new space.

"Certainly if you go to the European mainland they have a much lower sales density per square metre than we do in the UK. But then we are a much small country geographically, so you could argue that the current UK retail model is a much more efficient one.

"And I would be arguing for us trying to work that retail space harder, rather than continually adding new space."

Mannequin in the canteen at John Lewis Cribbs Causeway, Bristol
High street retailers have to be inventive to keep customers coming in

Boots thinks too much emphasis has been put on opening new retail space. I dare say that will change now anyway. And to cope with lower sales, the one thing all retailers agree on, they have to think about their business holistically.

Charlie Mayfield of John Lewis has no doubts that more trade is going to go online.

"So, on the face of it, if you measure your sales in the shop and you measure them separately from the sales online, you may find that, certainly in some places, the sales in the shop may go down.

"You have to look at it not as two channels. In the future, retailers are going to have to look at this as one business, and increasingly that's what we're doing.

"If you talk to some of our people here they will know what sales we take in the shop and they'll also know what sales we took in the catchment immediately around this shop over yesterday and last week.

"And we want them to know that because, if they give great service to the customer, it'll help us not just sell things here but also online."

After years of feast, our retailers face years of famine. It is an industry that will have to learn new tricks to enjoy a gentle fall, rather than suffer a mighty tumble.


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