Retailing woe – what can be done?

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It might not have been as bad had it not been the case that many of those rolling down the shutters are big name, household brands – the lynch-pin chain stores that serve also to attract other shops in to town centres.

According to reports in the media, even the big players are finding thing’s that tough that they are downsizing, shutting the less profitable outlets and cutting costs.

That tells you all you need to know about the parlous state of retailing. And there’s absolutely no doubt that retailers have had a torrid time of it recently.

But where did it all go wrong? Retailers will say the rot began with the rise of the Internet, and there’s probably plenty in that. You only have to now look at the big players like Amazon and E-bay to see how big the net has become and the market penetration they have.

And then there are the thousands and thousands of small traders who ply their wares on the world wide web too. It’s been a huge hit for traditional retailers to take.

The high street has also been forced to change over the years thanks to the influence of supermarket diversification. Where once most high streets would boast the proverbial butcher, baker, candle stick maker – or more latterly the green grocer, and various off-licences for example – but not anymore.  The one-stop-shop on the corner, the Tesco Express, the Sainsbury’s Local, now mop up that kind of trade.

It doesn’t help that supermarkets have moved in to other lines too such as clothing, electrical, and even travel. Tesco even operate a catalogue buy and collect business a la Argos variety.

Then of course the recessions have seen the rise of the discount store. Every high street has one, maybe two. They rely heavily on loss leader tactics, and the power of bulk buying. Combined it means smaller independent shops just can’t compete on prices.

These are the eroding factors the Government can do nothing about. But there are actions they could take, and some they have already acted on.  For instance, the Government this year acted to stamp out Low Value Consignment Relief from the Channel Islands, which allowed certain items to be shipped VAT free to the UK. Big companies could afford to do this, small ones could not. But did the Chancellor act here to help high streets, or merely to boost Treasury coffers?

What else could he do? Business rates should be frozen, we think, and councils should not be looking to charge shoppers to park in town centres anymore. These two alone could help small retailers massively.

But what are the chances of either happening this year?