Nearly 12% of shopping locations were empty in the first half of 2019, up 0.6% compared to the same period last year, according to research from Local Data Company’s (LDC) review of 3,000 retail centres. More than 25,700 outlets closed their doors, the highest level since LDC began tracking the market in 2010.
That was offset by 22,115 openings, the highest level since 2015.
The state of Britain’s high streets
Walk down any high street in Britain and you’re like to find varying states of health. Some are weathering the storm, some are thriving, others are struggling. Many blame the changing habits of consumers, others point the finger at reduced footfall in towns and cities.
At PDQ Funding, however, we think it’s a combination of factors – but some places, like Liverpool, are bucking the trend.
Politics and the high street
News broke that the current opposition is looking to reverse “retail apocalypse”. 29,000 abandoned retail units will be brought back to life, with the intention of reviving town and city centres. Would we see the empty spaces of Jamie’s Italian, for example, brought back to life? A joined up government initiative may just work, don’t you agree?
Digital is 24 hours
You know how difficult it is to compete 24 hours a day, therefore, when your physical business, for instance, operates for finite hours. Perhaps, you could supplement your high street presence with a website and social media strategy. You are uncertain though about how much that contributes to cash flow in your shop, restaurant, café. Small businesses need to be making people aware of their high street presence, but is it the best use of resources for small businesses?
Big business failures over 9 years
2010 saw several major fashion retailers collapse – Suits You, Racing Green, Faith Shoes and Ethel Austin.
Above all, 2011 was arguably even more challenging for the high street with big names like MFI, Barratt’s Shoes, Floors 2 Go, Comet, Focus all closing doors.
More recently, companies like Blacks, Game, Phones 4 U, Jessops, Debenhams and HMV have had to restructure, with closures of JJB Sports, BHS, Thomas Cook and others.
Poor old Thomas Cook, on the brink of liquidation, with a history and legacy stretching back hundreds of years. They are a familiar travel agency on the high street and online. But is the high street their downfall?
At PDQ Funding, we’ve written before about how cities like Liverpool have defied the high street decline. They’ve made the city centre a place for people to visit and not just shop.
Thomas Cook have a broad high street presence when there really is no need for this. Same with many service providers. Banks close. Estate agents shut up shop. Those independent stores can only survive with a digital and social presence.
HMV AND Jessops
These two companies have risen like Lazarus repeatedly. HMV are trapped selling a medium that few people want – compact discs and DVDs. Streaming has made their products look like museum pieces. HMV though has slimmed down from its near ubiquity on every high street and focused on a resurgent trend instead – vinyl.
You walk into a surviving HMV store and see for yourselves.
Its not all doom on the high street
Pop up stores and many town centres have shown that the high street may be ill, but not dead yet. There are very few closures of mobile phone network shops, cafés and restaurants and hairdressing salons. People cannot have their hair cut, nails done online. They may want to try clothes and shoes on first before heading to ASOS or the Schuh website.
Just Eat revolutionised takeaways, but the demand for good quality and affordable food seems to be fairly recession proof. Statistics show, for example, that consumers still eat out in economic downturns.
For your business to stand out, survive and thrive, it needs certain things:
Successful business models
A successful business like Tattu, a leading Manchester restaurant, needs to offer exceptional service and products with a brilliant online marketing and review strategy. The marketplace on the high street needs to be combined with innovative social media and digital marketing to make you stand out.
Your vaping shop is perfectly positioned to do both well.
It can survive and thrive on a high street, because vaping products, unlike CDs, are in demand.
High street success stories
It’s not just Liverpool that is seeing a high street resurgence – York and Ashford are two others, for instance. What Liverpool and other places have done so well is to reinvent their high streets. They’ve given visitors an incentive to go into city centres with food festivals, street entertainment and pop-up stores. These are some aspects you can buy into, in metropolitan areas across the U.K.
Five stores doing well
You may think we’re stating the obvious with the examples we give but it’s worth reminding you, perhaps, of success stories:
- Primark. This chain clothing store has expanded and been successful , as they’ve focused on price. They are the Lidl / Aldi of fashion. There’s more to their success, arguably, then value. Primark has invested heavily in social media and reports record sales and over 5 million Instagram followers.
- Domino’s. With many chain and independent restaurants and takeaways struggling, Domino’s is resurgent. Deliveroo and Just Eat are “feeding” this company and “Shall we get a Domino’s?” has apparently become a mainstream question!
- JD Sports. Positioned as a premium athleisure outlet, above all, JD Sports’ profit soared by 33% last year. “The middle- or mass-market is very difficult in the High Street and you have to look to the premium end and the discount end of the market for the good stories,” says independent retail analyst Nick Bubb.
- Disney. Pester pound has seen Disney’s reputation soar, along with profits. Firstly, there is canny marketing going on too. Secondly, we all know that the Disney film industry spawns Disney merchandise and the shops are very child-centred. No stern stares from staff to children for touching, hugging and messing up displays!
- Lush. You literally can smell these stores a mile off and their profits and growth have been similarly intoxicating. They sell unique products and are ardent promoters of their own principles and politics – made in the UK, environmental and animal friendly, as well as promoting gay rights and fairtrade as messages.”The core values of the company resonate with their consumers,” says Richard Lim, Retail Economics expert.. “They are authentic by staying true to those core values and offering a product not available elsewhere. That is the magic sauce. A lot of retailers talk about WACD, or “what Amazon can’t do”. Lush is WACD.”
What these success stories show
These five examples of large business success may resonate with you. Domino’s pizza have sorted out branding and a product that epitomises great taste and value. Primark has tapped into cash and fashion-conscious buyers, harnessing social media. Firstly, JD Sports, Disney and Lush have clear consumer messages and are “high end.” Secondly, Greggs is another high flying company that has developed a cult following, for instance, with low prices and innovative marketing.
Only pay when you sell
The problem that many small to medium enterprises face is one of cash flow. However, short term loans or a business loan, that are correctly authorised and regulated, may appeal but you may want to only pay when revenue is being generated. Makes sense really. You may only want to repay an agreed percentage, where interest rates are fixed at an agreed percentage to aid cash flow.
The UK high street
Britain’s high streets, shopping centres and retail parks have been left with the highest number of empty outlets in five years as chains have taken a battering from rising costs and low consumer confidence.
Nearly 12% of shopping locations were empty in the first half of 2019, up 0.6% compared to the same period last year, according to research from Local Data Company’s (LDC) review of 3,000 retail centres.
You can read the full news story here.
Is the high street terminally ill?
We don’t simply say this out of some partisan promotion of business, but from facts and figures outlined in the same piece.
Long established companies may be struggling or have gone bust. The likes of Toys R Us, Maplin and Poundworld, with chain restaurants collapsing for example too. Carluccio’s, Jamie’s Italian, Loch Fyne and Ed’s Easy Diner.
In the month of October 2019, the high street suffered on of its worst months for business failures with Supercuts, Regis UK, Links of London and Bonmarche all failing.
The independent stores are proving more resilient, though with smaller overheads and a more loyal customer base.
Who are the high street success stories?
It’s easy to focus on failures on the high street – after all, we can see shops that are permanently closed. Retail parks are no different. They have business casualties too, but there are clear successes. pop up restaurants are starting to “pop-up” across the UK, it is a way for new businesses to get established and ensure landlords have a business in their premises.
The selfie culture
It’s clear to many people that social media and the selfie culture has led to many high street successes – witness, for example, the proliferation of nail bars, tattoo parlours and hairdressers. Because you can’t beautify yourself for an Instagram selfie online easily (apart from digital filters) there is huge growing demand in this industry.
Craft beers and gins
Craft beers are another success – we’ve written extensively before about how Brewdog’s expansion is a model to all in great social media marketing.
Teetotalism is rising too across society. This is not apocryphal. Figures show this. Demand for zero and low alcohol products are rising and we will exemplify this in a future blog post.
Trend spotting online and on the high street
Trends are by their very definition ephemeral and passing. A trend is just that. But some trends have a longer shelf life than others and your business needs to be canny in spotting these and being resilient enough to change strategy when the trend passes. Vegan food is not a trend, a fad, but a growing movement. It’s one area your business could focus upon. The trend for selfies, and reduced alcohol consumption, are others, as is vaping.
What is business resilience?
You know people at work, friends, family who you’d class as “resilient”. Without getting too political, recent leaders have shown resilience, whether you think that resilience was misplaced or not. Business resilience is being able to take knocks, to endure the odd punch, to use boxing, but bounce back from the floor and win.
People can develop resilience, as can businesses.
Making your business strong
You can do five things in your planning to ensure survival in these straitened economic times:
- Manage crises. Natural disasters, technology failure, supply chain failure can all lead to business crisis. Instead of waiting for emergencies, your business needs to plan a strategy for dealing with them.
- Manage market trends. Resilience is all about spotting niches and capitalising on them. This may be in what you sell, the food and drink you provide or the services you offer, for instance.
- Monitoring of risks. If you are monitoring and evaluating risks to your business, you have a higher chance of minimising their impact. Cashflow is often a business hurdle to new companies and established ones (Thomas Cook had £4.1 billion of debt).
- Manage location. We can see all around us that business shifts on high streets and city centres. It always has done. Your location may be affecting your chances of success and relocation could be a winning plan, for instance.
- Make your business stand out and be outstanding. To foster resilience, for example, you may decide on heavy investment in digital marketing or employing people with a track record of success in similar businesses. Your customers have got to trust, like and love you.
Don’t just survive, thrive on the high street and elsewhere.
Firstly, any business will inevitably have peaks and troughs. Your job as business owner is to reduce low periods and maintain some sort of equilibrium, where profits grow.
Secondly, you need to grow your business sensibly. This doesn’t mean, however, that you need Costa or Starbucks levels of ubiquity. It means sensible growth, in our opinion. For example, you may decide to franchise your brand to enable further success.
Thirdly, business is like life. There’s birth, growth, maturity and decline. Your job is to change decline into renewal so that the four stages become circular or circadian (nice word, we know). HMV, in decline, has forged its future on the resurgence in vinyl. Aldi and Lidl are building small stores to capitalise on their success and the trend for smaller daily shops.
Above all, thriving may mean looking for additional sources of funding.
How PDQ Funding can help your business thrive
What we can do, in short, is help you grow with a business cash advance.
- All you need to have to qualify is 6 months of trading experience.
- No security or business plans are required.
- We offer approval within 24 hours, with a 90% approval rate.
- You can apply for a merchant cash advance in minutes.
- Repayments are flexible because they are based on your card sales.
Contact us today
Finally, if you need a business cash advance from a leading reputable lender, contact us today.