In recent months we have, in the UK, had a number of very prominent high street stores announce they will be closing shops and restructuring their business. In addition, several well-known retailers have either called in the receivers or have announced they are actively seeking a solution to their ongoing financial problems. Is this marking the death of retail stores as our high streets go into decline?
A look at recent newspaper headlines spells out the doom in no uncertain terms:
As a nation of shopkeepers, what is happening in our British High Streets, and what does this mean for the future of UK shopping.
Marks & Spencer, House of Fraser, Carpet Right and Mothercare have all recently announced that they will be closing a number of stores in the coming years with the corresponding redundancies and job losses expected to run into tens of thousands of jobs.
With the cost of renting suitable premises rising, and demand by consumers for traditional retail stores falling, 10% of shops in the UK are vacant, a report from British Retail Consortium and Springboard said.
In the North of England, Yorkshire, and Northern Ireland, figures are worse with over 15% of high street shops lying empty.
Retailers facing a crisis
In addition to the retailers above who have announced major restructuring of their businesses, the following well-known UK stores have gone out of business in the last few years:
- British Home Stores
- Toys ‘R’ Us
The latest retail giant trying to see off the receiver’s axe is the discount chain, Pound World.
The Centre for Retail Research’s latest report on UK company closures from 2010-2018 makes alarming reading.
A recent headline in The Telegraph read:
“Online shopping is king – high street stores must adapt or die”
another in The Guardian read:
“Up to 40% of high street shops ‘could close over next five years”
So what is happening to our high streets? Market towns up and down the land are seeing more and more retail closures and retail premises are remaining closed, leaving glaring holes in our beloved traditional retail experience.
My local newspaper recently ran with the headline “Are we becoming a ghost town?” as yet another retail chain in the town closed its doors to our local shoppers.
So why is this and what is behind our changing shopping habits?
There are many issues that affect traditional retailers. I myself used to own a music and dance-wear retail outlet in a small British market town but after 5 years of trading, we were forced to close our doors to the public and cease trading.
Some reasons for the decline in traditional retail include:
- Competition from online stores whose overhead and staff costs are less
- The high cost of business rates
- Falling foot-fall in town centres at shoppers emigrate to larger, super stores or out-of-town retail
- Changes to traditional family demographics and shopping habits
- Increasing parking charges in town centres
- Inertia in companies who are unable to change quickly enough to respond to changes in shopping habits
- Fall in sterling which pushed up inflation at the same time as a squeeze on wages
- Seasonal and weather factors such as the so-called “Beast from the East” which saw many parts of the UK under extreme snow conditions.
Footfall across shopfronts may be rising slightly but this is most likely due to seasonal factors and better weather.
Ultimately it is the lack of customers purchasing things in traditional shops that force our high street retailers out of business. People often lament the closure of their local stores but when asked when was the last time they bought anything in the shop, they often admit that they either haven’t been into the shop in months, or went in to check out a product and then went home and bought the same product online for less money.
The growth of convenience mini-markets
In my local area, it is not all doom and gloom however, and there are thriving success stories to be found. A local Tesco mini-market has seen growth since its inception a few years ago and more and more petrol stations are turning into mini-markets as our shopping habits change.
These stores (which can share their overhead costs with those of the petrol stations), are increasing. And the fact that they are open for longer hours (many of them are now 24hrs, or at least 6am – 11pm) means that we can pop in for something for dinner and the traditional ‘weekly-shop’ that my mother was used to doing, is now a thing of the past.
The growth of online shopping
Online shopping, in contrast to traditional stores, has seen a growth in recent years, which has affected not only the face of our high streets but also our delivery and postal services as well. The traditional British postal service, in the form of Royal Mail, has undergone a significant number of changes in recent years too – postal prices have gone up as we stopped sending letters and used quicker and more convenient forms of communication such as email, fax and texts.
By contrast, the parcel delivery side of the Royal Mail increased and a number of new parcel-delivery companies opened their doors for business.
We noticed a difference in our area when our local postman reported he was no longer allowed to use his bike for deliveries because everything was now “too bulky” to carry.
Is it a local or global issue?
The problem is not just confined to the UK. Countries across the world are seeing similar problems with their own local businesses.
A recent US website said:
The survey, now in its fifth year, polled more than 5,000 consumers who make at least two online purchases in a three-month period. According to results, shoppers now make 51% of their purchases online, compared to 48% in 2015 and 47% in 2014.
As online shopping accelerates, so does the use of smartphones to make purchases. The survey showed that 44% of smartphone users made buys through their devices, compared to 41% a year ago.”
It also suggested that more than half of US shoppers would shop online in the coming year.
Reports from Australia, Canada and the EU are all offering the same dim view of traditional retailing.
What does this mean for the future of British retail?
The problem is not just an issue for those in the retail industry, but the consequences will filter down into every echelon of society within the next 10-20 years. We are in the middle of the next ‘revolution’ which historians will look back on and label as they see fit.
And the problem is not a new one.
In the late middle ages, as our societies changed from feudalism to mercantilism, and there was a burgeoning of certain industries such as the woolen industry and a decline in serfdom.
In the 1700s the birth of the canal system gave rise to the growth of the transport industry and canals and canal-building became major employers for the population.
The early 19th century saw the canals in decline being replaced by the faster and more efficient rail industries which in turn lead to the industrial revolution where traditional jobs such as farming the land and cottage industries like spinning and weaving, were lost in favour of factory work and city living.
We are currently in the middle of the next great revolution – the technological revolution, the information age, the digital age and apparently we are now moving into the ‘conceptual’ age. Experts have been warning of the decline of traditional jobs for many years now. The steel and coal industries in the UK and other countries have seen massive changes, redundancies and restructuring in recent years and this is only set to continue.
We should be preparing ourselves for these changes as traditional industries and jobs are replaced with computers, online systems and increasingly, by artificial intelligence systems. The decline in our high street shops is only one symptom of this economic and societal revolution taking place around us.
And the pace of change is only going to get faster, not slower.
This will affect:
- Education – are we preparing our young people properly for the 21st century or are we stuck in outmoded education systems that will disenfranchise many of our young people?
- Entertainment and leisure industries
- Society as a whole.
There is hope though.
The video and music industries have been going through a fundamental change for many years as consumers found the ease of downloading files, and the availability of music and videos across multiple devices, preferable to hands-on physical products.
Where companies were able to adapt and change, such as Spotify, iTunes and Amazon; they have seen an increase in business. Where companies were stuck in the past and unable to adapt, such as Blockbuster Video; they have fallen by the wayside.
Riding the tide of change and coming out on top
To piggy-back onto a key catch phrase from “Game of Thrones”:
- Change is coming
- Change is here, and
- Change is definitely NOT going away.
Not now, or ever. It is in our make-up, our DNA – change is what drives evolution forward and it is inevitable.
The only question is – how will we respond to the change?
Will we be left behind, clinging on to the shirt tails of the trail blazers or will we be at the forefront of change, helping to determine the path ahead?
The ATC21S Project is an international project designed to research the skills needed for the 21st century workforce in the information/digital age. Five countries are taking part in the research including the UK, Australia, Portugal, Singapore and Finland. They will deploy pilot schemes across educational establishments in the coming years and analyse the results.
Initially, they have identified the following essential competencies which a student in the “Information Age” would need:
- Ways of thinking. Creativity, critical thinking, problem-solving, decision-making and learning
- Ways of working. Communication and collaboration
- Tools for working. Information and communications technology (ICT) and information literacy
- Skills for living in the world. Citizenship, life and career, and personal and social responsibility
The quote on their website sums it up for me, and as a teacher, I will be watching the results with interest. In the UK, there has been an alarming, government-led move away from more creative, collaborative subjects in recent years that seems to move completely against what is actually needed in the 21st century:
Things to do to stay ahead of the game
If only we had a crystal ball, all would be well. However, in the absence of that, what we do have is research and expert analysis to help us move through these changing times and these are telling us that we need to embrace the change, be more flexible and adapt if we want to survive.
A recent report of the state of British High Streets recommended “embracing online” and said that High Streets needed to understand the behaviour of their customers more and be adaptive to their needs. (Read more on the University of Southampton report at: The Great British High Street.)
It even suggested that some online shopping could drive people back to the High Street with the growth of “Click & Collect” sales.
- In addition, adapting to the evolving 21st century society will require:
- Keep up to date with technological changes
- Investment in education systems that promote creative thinking and the ability to solve problems and adapt quickly
- Being prepared for the change in retail shopping and the growth of online businesses such as affiliate marketing, information marketing and online retailing
- Being prepared for the advent of artificial intelligence systems that will throw us an even greater curve-ball than the current decline in our high street stores.
This means that if you currently run a traditional retail business, or work in one, you need to make sure you are setting things in place for when the changes come. This could mean:
- Developing an online version of your existing business
- Starting new online businesses that don’t rely on
- Learning the creative, IT, marketing and collaborative-working skills that will be needed in the new age
- Expanding your skill set to be compatible with growth industries (e.g. social media marketing, internet marketing etc.)
Whatever business you are in, changes are coming – the question for you is – are you ready for them, and how will you survive if you are not?
If you are interested in starting or developing an online business, then I recommend you take a look at Wealthy Affiliate. I created this website and various other online business through the training I learned there and there are many other successful online entrepreneurs who have successfully managed to adapt to our changing world there too.
See my full review here, or click on the banner below to sign up for a free training account.
The only thing you have to lose is being stuck in the past.