This is an important and MUST READ article from the Telegraph. Check it out!
via Half of high street retailers in danger of closing down – Telegraph.
In many respects retailing is an anachronism in need of major transformation.
Once again, it highlights that David Cameron’s government has no industry strategy and is reliant on financial services and austerity to stimulate the economy, along with Government guarantees for home loans.
Small businesses have been crippled by bureaucracy from the EU and hostile local authorities with aggressive rating strategies. Of course, the late Margaret Thatcher would have been able to empathize with the retailing challenge because of her corner shop background; this is in sharp contrast, with the privileged backgrounds of David Cameron, George Osborne and friends at the Conservative Party Central Office who seem to favor gays and minorities.
Since 2008, the banks have been excessively hard on lending to small businesses, and now with government guarantees backing home loan mortgages, banks are again neglecting the finance of small businesses. The banks are typically managed by vast bureaucracies, with relatively few who understand the retail sector anyway. In the past, local bank managers knew their local retail customers well and could vouch for their bona fides. These days it’s all about business plans.
Many large retailers have lost their way because of indifferent customer service, employing vast armies of poorly educated assistants who are pre-occupied with their iPhones and don’t like being distracted by customers. In supermarkets stacking shelves in prime time seems to get preference over helping customers locate goods.
Enormous opportunities for retailing have been missed by the UK Government. The armies of wealthy Chinese tourists prefer the US or the Eurozone because visas restrictions are more onerous entering the UK; also customer service in the UK seems to have been subordinated. London has some of the most famous shops in the World, like Harrods and Selfridges but wealthy Chinese seem to prefer London, Rome, New York and Los Angeles; does the UK Government know why? Do you remember when shop assistants were experts in the products that they were selling and could communicate with their customers? What about Government policy to encourage language training, especially Mandarin? To put it in perspective, when I was in Beijing, China, last year, Chinese shop-assistants were able to sell impressively in both English and Russian.
Retailing is in many respects a dead-duck industry, like the many sections of UK manufacturing; the internet has
Cover of Margaret Thatcher
radically changed the customer interface and reduced transaction costs enormously.
Of course, the austerity policies of George Osborne have not helped. If the Government cut VAT, retailing would get an enormous stimulus.
Ultimately, the failure of retailing is down to Government policy of David Cameron’s government, in my view.
Do you remember when the Conservative Party used to be regarded as the pro-business party? Quaint?
Any thoughts?
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Dr Alf makes very good points in this article and frankly it is no surprise to me that UK retailing is in such a mess.
The Government, with its present policies, has reduced disposable income for the average family of 4 to just £97 gbp and 80% of people who have bank accounts have less than £500 gbp in them at any one time.
This results in people buying goods on the internet using credit cards whilst the companies which lead in internet shopping like Amazon, pay just 3% Corporation Tax.
The same Government refuses to consolidate local authorities, constabularies, fire commands and the Civil Service thus creating a situation where the ordinary taxpayer is more heavily taxed than they need to be leaving people without money to spend. Local Authorities waste money on high salaries for their Chief Executives and “Portfolio Holders” and waste money on junketing, poor purchasing and nefarious practices with regard to planning permission which hold up legitimate development and further diminish the High Street. They also fail to do anything meaningful about reforming Adult Social Care which accounts for 50% of relevant council budgets. To pay for their profligacy and mismanagement they charge business rates which are too high, impose parking charges which drive people away from the High Street and deliberately provide too few car parking spaces whilst at the same time employing armies of car parking wardens to harrass the substance out of the public and extract as much money from them as possible.
Retailers, in many cases, are their own worst enemies as my former mother in law from America remarked when she experienced first hand what it was like to have food thrown at you in a supermarket before being asked to pay for it. The Basil Fawlty mentality whereby everything moves slowly except for the operation of the till is very much alive and well.
Similarly, go on holiday and after you have returned home, try to go into somewhere like PC World and buy a computer with Euros or some other currency and you will be told that they will only take pounds.
Standards of customer care in the UK are a disgrace and are made worse by the application of zero hours contracts and abysmally low pay which would make the most mild mannered person sullen and unpleasant simply because they hate their retailing jobs.
The Sunday trading laws are another anachronism which damages the High Street because it restricts hours of operation to suit the Lord’s Day Observance Society and the UDSAW Trades Union, rather than tourists with money and those members of the UK public with money and a willingness to spend it.
Mary Portas, “Mary Queen of Shops”, was tasked by the Government with developing strategies to revitalize the High Street. Personally, I think she is onto a hiding to nothing because many of the public have no interest in supporting it, as evidenced by the practice of entering a bookshop with an I Phone, scanning the product code and then ordering it online whilst in the bookshop coffee shop.
This practice extended to other areas of retailing will sound the death knell for the High Street but with the connivance of Government, local authorities and the police who do not do enough to ensure that shopping can be conducted without the risks of pickpockets, credit card scammers, muggers and bag snatchers making the experience unpleasant and in some cases dangerous.
Dr Alf asks if we can remember a time when a Conservative Government stood for the interests of business. That time did exist under Margaret Thatcher, but now the only business interests that are looked after are those of the City and large global multinationals who do most of their business elsewhere in the world.