Retail experts and leading travel agents joined a panel to discuss the prospects for bricks and mortar at the latest Travel Weekly Business Breakfast. Chloe Berman reports
High street: Agency chief blames empty shops on high business rates
High street retailers need to work together to raise awareness of the impact of business rates, according to Andy Cresswell,deputy chief executive of The Midcounties Co-operative.
Retailers claim the burden of the tax on commercial property is behind the number of empty shops on the high street. Last week the government said it would defer plans for a 2015 revaluation of rates until 2017.
Cresswell told the Business Breakfast: “We all know there’s an issue with business rates and that needs to change.
“I’d like to see all industries join forces and get that message out there even harder. This is something we’ve got to continue campaigning on and I believe we’ll get there.”
Miles Morgan, owner of Miles Morgan Travel, said rates were behind the rising number of empty shops on the high streets.
He said: “If I had a magic wand for anything it would be to fill up all the empty shops.
“I’ve had locations I’ve looked at where the rent wasn’t the problem, but once you add the business rates you realise it’s not going to work.”
Dan Morgan, local government and taxation policy adviser at the British Retail Consortium, said the organisation had been campaigning for the reform of business rates.
“The government is doing things like reviews with Mary Portas but they’re not looking at how expensive it is to operate in town centres.
“But I’m confident that things are starting to turn and the media is on our side.”
Panellists agreed that high parking charges were also a challenge, but one that was unlikely to go away.
Cresswell said: “If customers have to pay for parking, we have to make sure the experience is worth that money.”
Online: Web ‘creates leads for shops’
The growth of online is creating new opportunities for high street businesses, delegates heard.
Andy Cresswell, who also looks after the food division of Midcounties Co-operative, said the growth of grocery shopping online meant consumers were visiting its convenience stores more often to stock up on fresh food.
“The growth of online runs parallel with convenience shopping,” he said.
“What online has done is created an opportunity in bricks and mortar – and I think that’s the same for every business.
“We’ve got to stop saying online is the competition. We have to think, how do they sit together?
“If we don’t do that, we have no right to survive because we’re not part of the modern world.”
Cresswell said Midcounties’ homeworkers were one of its biggest growth areas. “They’re doing a fantastic job – and most of their leads come from online. It’s a perfect example of how the digital age helps people sell.”
Miles Morgan said his chain of 12 shops receives leads from online but he preferred customers to book in-store and does not have a transactional website.
“We see online as opportunity to get leads,” he said. “We’ve got people walking into our branches but we’re also drawing in people we’d never dream would contact us as a result of e-commerce.”
Customers were tiring of the endless choices on the internet and were returning to the high street, said Morgan.
“As the internet becomes an even richer source of information, it becomes more like spaghetti, and managing to find a way through that becomes increasingly difficult for consumers.
“We’re seeing people starting to return to the high street because they’ve done it [booked online], they’re bored with it and they’d rather talk face to face with somebody and savour the moment.”
Consumer confidence is starting to recover in some parts of the country but that is not reflected in salaries.
Ben Perkins, head of consumer business research at Deloitte, said the high street had performed better than expected this year.
“The latest data shows a net loss of 200 stores this year so far,” he said. “Everyone has been surprised by how strong the retail market has been.”
However, Perkins said there were many regional differences, adding: “The consumer recovery is very uneven, with differences even within regions.
“The return in confidence isn’t based on income growth, it’s based around people feeling less negative than they did a year ago about their job prospects and their disposable income. It’s about them tapping into their savings – they’re saving less and borrowing more.”
Dan Morgan, local government and taxation policy adviser at the British Retail Consortium, said: “This recovery is based on a certain attitude and confidence, and rising house prices. It’s early days, we’re not out of the woods yet.”
Niche retailing: ‘Small specialists are the future’
The future of the high street will be in niche shops, Miles Morgan told the Business Breakfast.
He said: “In some of the places where I’ve got shops, I see all the shops on the high street are full. So many of them are small niche businesses and they attract a lot of local clients who like what they see and they draw business in from around.”
Morgan called on the government to support high street start-ups with a break from business rates.
“The only way to attract more businesses like that is to reduce the cost of entry.
“What we need is help in terms of business rates to get more entrepreneurial businesses and get more start-ups on the high street and invigorate it.
“That in turn will drive more people into town centres.”
“I can already see the signs that it’s changing – the high street is going to surge again
Discounting: ‘It’s a habit and it’s unnecessary’
Agents are giving clients discounts more out of habit than necessity, panellists said.
Midcounties’ Andy Cresswell said promotions were expected in the Co-operative’s food stores but were unnecessary in its travel division.
“The discounting in travel isn’t necessarily done because the customer needs it – it’s done because our colleagues have a habit of doing it,” he said.
“There are some areas where it’s pretty tough trading and the level of discounting is low because our colleagues are closing the sale at a certain level. It’s the history of how our colleagues work and I think it’s about training, making sure we understand the consumer and making sure our colleagues work the right way.”
Miles Morgan said his staff were trained to sell on service rather than price.
“We can have days of trading where we don’t put a single pound of discount through from our own commission,” he said.
“It depends how the staff are driven. Our staff are driven by profitability and bottom-line profit, not top-line sales.
“It also depends on marketing: if your marketing is about price, you’re going to attract that sort of customer.
“We’re losing that bottom-end customer, probably to online, and gaining the high-end customer that’s buying more on quality and service.”
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