Mary Portas has recently published her report into the decline of some town centres as shopping centres.I attach to the bottom of this blog her 28 policy recommendations, which are now the subject of a consultation. I would like to hear readers’ views before putting in my own thoughts to the BIS Department. They are consutling on the Report and will in due course decide what if anything to do.
Last week-end I visited a couple of shopping centres, one in a southern market town and another in a larger city when I was away from Wokingham. They illustrated the problems and the opportunities.
In each case the rise of the internet, the growth of out of town shopping, and the fierce competition from a wide range of shopping centres and outlets was having a visible impact. There was an oversupply of space, with various units unoccupied, or let to temporary tenants probably on much cheaper terms than the established traders. Discount retailing seemed more successful than the higher priced shops. Most stores were having to cut prices substantially to generate traffic. Many were reporting anecdotally poor turnover figures and squeezed margins. Some areas of the centres were run down, with too much empty or poor quality frontage. There have been well publicised problems since 2008 for Woolworths, Senza, HMV, Comet and a number of other well known names.
No-one is seriously suggesting that the rise of internet shopping can or should be halted. It is likely the retail industry has to plan for an increasing amount of trade to take place on line. Indeed, many leading High Street retailers compete with themselves by having strong internet shops alongside their traditional stores.
Some argue that the rise and rise of the out of town large food retailer, increasingly seeking more space to sell chemist shop, textile and other ranges as well as food, should be halted by declining planning permissions for such stores. Mary Portas argues for some tilt in the planning system towards High Street locations, but falls short of wanting rationing or banning more out of town space which remains popular with many customers. Some wish to go further, and demand anti trust action against leading retailers. So far they have not produced evidence to convince the Competition Authorities that there is a case to answer. There seems to be plenty of competition between the major food retailers, and they remain very popular when judged by use.
The out of town food and general purpose retailer, and the specialist shed retailer, have three great advantages over many in town shops. They usually offer plenty of free parking right outside the door, making it much more convenient to shop there. They often have keen prices owing to the weight of their bulk buying. They can offer a wide range of choice owing to the large floorplates they trade from.
The in town retailer also has a variety of advantages, which explain why in town centre retailing is still the biggest single element of the retail market. Taken together the in town shops provide a very wide range of styles and ranges for most tastes and income levels. There is not the same single house view dominating the buying that you see in the main superstores. The general environment may be better for shoppers wishing to enjoy a morning or afternoon for the experience, with a wide range of cafes, restaurants and other facilites in the town near the shops. Town centres can have their own beauty or magic that may be missing on the trading estate. Some in town stores benefit from the same strong buying that out of town stores can deploy to offer keen prices.
The problems for the town centres to me boil down to four:
1. Overtaxation and regulation. Rates are often very high, and rules and controls can be stifling. Change of use may be difficult, and both Councils and landlords can be restrictive in what they will let shop managers do. This is the area where national and local government should concentrate its efforts, to ease burdens and cut costs.
2. Too much provision. As out of town and internet expands,we should expect some retreat of the High Street in some places. Landlords need to be able to convert fringe properties to different uses, and planners with town centre managers where they exist need to work with landlord groups at defining and sustaining a realistic amount of good shopping space within towns.
3. High rents. The market is likely eventually to resolve this problem by putting rents down. Rents are sticky downwards in the UK thanks to upwards only review clauses which are common. The market would clear more quickly and shops have more chance of trading profitably if the rent levels adjusted. This is not something governemnt can or should force. It is currently happening by forcing administration or bankruptcy on the weaker groups. The shops are then taken over at lower rents by new owners or operators.
4. Access and parking. Local government could do so much more to make free and cheap parking available for shoppers. Sensible time limits can stop this parking being used by long stay and all day users. Road networks should be reviewed so that junction capacity and safety is enhanced into and out of our main town centres. If you are going to shop and are expecting to make a number of larger purchases, you cannot take them home on the bus.
Summary of recommendations in the Mary Portas review:
Put in place a “Town Team”: a visionary, strategic and strong operational management team for high streets
Empower successful Business Improvement Districts to take on more responsibilities and powers and become “Super-BIDs”
Legislate to allow landlords to become high street investors by contributing to their Business Improvement District
Establish a new “National Market Day” where budding shopkeepers can try their hand at operating a low-cost retail business
Make it easier for people to become market traders by removing unnecessary regulations so that anyone can trade on the high street unless there is a valid reason why not
Government should consider whether business rates can better support small businesses and independent retailers
Local authorities should use their new discretionary powers to give business rate concessions to new local businesses
Make business rates work for business by reviewing the use of the RPI with a view to changing the calculation to CPI
Local areas should implement free controlled parking schemes that work for their town centres and we should have a new parking league table
Town Teams should focus on making high streets accessible, attractive and safe
Government should include high street deregulation as part of their ongoing work on freeing up red tape
Address the restrictive aspects of the ‘Use Class’ system to make it easier to change the uses of key properties on the high street
Put betting shops into a separate ‘Use Class’ of their own
14. Make explicit a presumption in favour of town centre development in the wording of the National Planning Policy Framework 15. Introduce Secretary of State “exceptional sign off” for all new out-of-town developments and require all large new developments to have an “affordable shops” quota 16. Large retailers should support and mentor local businesses and independent retailers 17. Retailers should report on their support of local high streets in their annual report 18. Encourage a contract of care between landlords and their commercial tenants by promoting the leasing code and supporting the use of lease structures other than upward only rent reviews, especially for small businesses 19. Explore further disincentives to prevent landlords from leaving units vacant 20. Banks who own empty property on the high street should either administer these assets well or be required to sell them 21. Local authorities should make more proactive use of Compulsory Purchase Order powers to encourage the redevelopment of key high street retail space 22. Empower local authorities to step in when landlords are negligent with new “Empty Shop Management Orders” 23. Introduce a public register of high street landlords 24. Run a high profile campaign to get people involved in Neighbourhood Plans 25. Promote the inclusion of the High Street in Neighbourhood Plans
Developers should make a financial contribution to ensure that the local community has a strong voice in the planning system
Support imaginative community use of empty properties through Community Right to Buy, Meanwhile Use and a new “Community Right to Try”
Run a number of High Street Pilots to test proof of concept