Local shops emerged in Victorian times and burgeoned from Edwardian times onwards. The shop keeper rented or owned his shop, stock was kept at the back and the family lived upstairs. We refer to “the butcher, the baker, the candlestick maker” to epitomise this era of shops. Local residents shopped daily for food and milk (because there was no refrigeration) and would turn to a local shop to have clothes, shoes or household items repaired.
This image survived, more or less intact, until the war but since then the retail landscape has been changing and that change has become ever more rapid as time has gone on.
CHANGES THROUGH TIME
Numbers of shops: We have too many shops. Economists noticed the decline of the High Street back in the 1990s (e.g. NEF:”Ghost Town Britain II” 1993). We do not have the need for repair shops and supermarkets have removed the need for separate grocers, greengrocers, butchers etc.
Competition: Today there are too many alternatives to local shopping besides supermarkets – the internet, television, mail order and vast new retail shopping areas such as Westfields and even bigger – the out of town ones like Lakeside and Bluewater.
In a report by Experian, Barnes is shown to be the internet “hotspot” of Britain, with residents spending an average of £150 per year, per head on goods. This amount is predicted by the Verdict Research group to rise to over £1000 on average by 2011.
Retail giants: Some small independents grew into retailing empires (Charles Harrod opened in Knightsbridge in 1849 in a one roomed shop with just two assistants and a messenger boy). These are our department stores, chains and franchises, all of which can offer discounts and promotions, pay higher wages, advertise and carry out market research and marketing before opening new branches. Today’s small independents are at a huge disadvantage here, unable to access data for research and finding their purchase prices are undercut.
Keeping up: The independents are also at a disadvantage when trying to keep up with change. Often they cannot afford to attend courses or belong to trading associations nor can they cannot afford the time to attend.
Classification of retailers: Not all retailers (especially in a local shopping area) are optimisers looking for maximum profit. Some are satisficers, attempting to meet criteria for adequacy. They are less likely to wish to fight all these adversities.
CHANGES IN THE MARKET
Confusing opening times: Before the war women did not tend to work. They visited the shops daily for perishables, met their friends and kept up with local issues. Shops closed on Wednesday afternoons. Today, local shops are in confusion. Whole families are away from the home all week – at nurseries, school, and at work. Consequently the footfall in the High Street is pitifully low during the week (retirees and Mums of small children mainly), whilst it rises in the early morning, early evening and on weekends. Shops are now opening at different hours to catch the market, leaving the consumer totally confused as to what the opening hours actually are and leaving some frustrated at having made a wasted journey.
Also local retailers work very long hours, often without an assistant so they might close at random times for lunch, or to go to market or because it is raining and near the end of the day. Understandable as this is, it only further frustrates the local shopper.
Parking: Before the war the housewife had time on her hands. Today time is precious so people want to use the car to shop locally. Conflicts between shoppers, businesses and commuters (and councils seeing an opportunity to raise money) have led to draconian parking regulations which either frighten off the consumer or cause them to give up and drive on.
Low footfall: The consequence of parking regulations, irregular hours of opening, lack of time, inability to organise spectacular promotions or events, all lead to the footfall being so low as to verge on the dangerous.
CHANGES IN THE ECONOMY
Spending in a recession: Throughout most of the post war period, the standard of living has constantly increased (even after Harold Macmillan so famously said “You’ve never had it so good” in 1957) which has sustained an excess of shops. We have had more disposable income to spend on consumer items, extras and luxuries. Now we are in recession, the consequences are obvious.
Holidays and bad weather: We also have longer holidays with the result that many areas are drained entirely of shoppers in July and August, and over Easter, when our local consumer is shopping in elsewhere in the UK or on the continent. Bad weather also frightens off the local shopper who is not sheltered under the protective roof of a precinct. Many shops closed through much of January 2010 because of snow and a rainy Saturday can be seen to have a dire effect on local shoppers.
High prices: The recession has had the obvious consequences of reducing spending. In a recent residents’ questionnaire reference was frequently made to the fact that some local shops out-price themselves, assuming the wealthy local market will pay up.
Not enough tenants for shops: The recession has also made potential shop keepers wary. This is a “no risk” environment and agents complain of numerous deals being broken at the last minute because the potential tenant gets cold feet. There are just not enough people willing to risk investing their money in retailing, as there are shops at the moment. Logically market forces should lead to a massive reduction in rents but that does not always happen.. (see below)
LANDLORDS AND TENANTS
High rents: In Barnes some rents are deemed to be too high. The residents are assumed to be wealthy because of the high price of property but in actual fact many have relatively little disposable income because they have high mortgages, choose to privately educate their children or are retired. Moreover footfall is low compared to other similar local shopping areas. Since rates are linked to rents, they are too high also.
Company landlords: Shops are usually rented. The owner is often a property company, a pension find or similar which will own swathes of shops and other commercial properties. The properties make up a portfolio which is set at a certain amount based on the ability to let. The portfolio can be used as collateral or used in City trading. Any reduction in the rent of one shop devalues the whole portfolio. So grand landlords such as these prefer to keep shops empty (and pay council tax) rather than fill them at market prices.
No change: The William Pears group owns a number of Barnes shops and their web site states: “The group’s commercial properties are considered a core holding and are rarely traded” so the situation is unlikely to change.
Domino effect: Also other tenants will hear about rent reductions and at the next review demand rent reductions too. As far as the landlord is concerned lowering a rent opens up a Pandora’s box!
Gentrification: Barnes has three or four Company landlords who are therefore unlikely to have a special interest in revitalising the local area. In the case of Marylebone High Street there was one landlord (Howard de Walden estates) who took responsibility and it worked. Northcote Road gentrified due to a progressive business community and a very supportive council.
On-going leases: Some shops have leases still running so the landlord will not be aggressively trying to let the premises because he is obtaining rent anyway.
Complex ownership: Sometimes land ownership has become excessively complex over the years. One Barnes’ tenant occupies land and property owned by 20 different agents!
Dodgy deals: Tesco offers us an illustration of the principle of “landbanking” – holding ransom strips to prevent rivals from getting a foothold” and ‘trampling’ over planning law (Observer 14 Jan 2007). Until the weakly regulated market is tightened, other companies can do this legally, although there is no evidence that this is affecting Barnes at the moment.
Secrecy: There are differences in the market between shops and houses in. One of these is the need for secrecy. For example, if a business is struggling, the landlord cannot look for another tenant because if word gets out, the business will spiral into decline. This is why it is always difficult to find out what is happening in the High Street.
Short term lets: There have been one or two “pop up” shops (very short lets) in Barnes – a temporary gallery, a Christmas tree shop and so on, which have been successful. But from the point of view of longer lets (say 18 month leases only) the tenant’s initial costs (shop refurbishment and furnishing) would probably outweigh the return. The landlord, meanwhile may lose a more permanent tenant.