Wednesday 14 December 2011

Mary Portas. Queen of Shops

The Queen of shops report into declining high streets and the death of town centres was all over the papers yesterday. I have only read the pre -report from September,{ just too busy. Its tough even getting near to last years snow destroyed sales figures. Not looking good George.... Not looking good. Modest improvement on 2010} but I have read the papers and the generally dismissive comments on the blogs. The Telegraph {Thanks Mr Drew and Raedwald} had this as the main point from the report.

"Planning laws should be changed radically to ensure that retail developments are built in town centres rather than on edge-of-town sites or in the countryside, Mary Portas has said."

Opinion is generally that this is a terrible idea. But that is probably because most readers haven't see it work. The picture above is of Two Rivers retail park in Staines. That is the high street. 1,000 yards behind those shops is a giant parking/retail park/leisure/cinema complex.

In front is the old shopping mall, built in 1980, that has had a much needed modernisation.

Staines high street used to be single, typical, long street sandwiched between the rivers Thames, Wraysbury and Colne. A Marks and Spencers. A Woolworths. A Debenhams. A WH Smiths.

It would be familiar to anyone who had been to a street any time in the last 50 years. It was a bit run down. A lot of traffic, and not a great variety. The mall was old, dark, and a bit too 1970's rather than 1980's. It was never up to much. I worked there in 1983 as a very young sales assistant.

But today, with very skillful planning and a good deal of cash spent, it is now a very decent shopping place.

This is the new part, built in 1996. A chain I worked for took one of the Shed units. A giant Waitrose is the anchor on this part. There is a second retail park further back that has PC World as place holder. 1000 car parking spaces is actually not enough, and a further 500 from a two storey stack would have been better, but that's expensive to do.

The walk from the high street to the retail park is about 1,000 yards through a parade of shops.

The old arcade and high street still have their car parks too, but usually people choose to park at Two Rivers. Its flat see, one level, women much prefer that. {ladies, don't write in..I've seen the reports. Women say they feel safer in the open. And are less likely to smash into a concrete pillar, although they don't say that last bit.}

Anyway, it worked very, very well. The high street has gained enormously from being pedestrianised, beautified, and having an additional 1,000 parking spaces. Not all of it. The two extreme ends of the high street have fallen away. But they were always like that. The rents are much cheaper, but the footfall is way less.
There hasn't been too much of an attempt , as councils are want to do, of creating a cafe culture. Here they had a restaurant/fast food area that links a second part of the leisure/multiplex to the high street, and they let the Nandos and Pizza Huts and Cafe Neros decide if outdoor seating is appropriate.

The pedestrian area is very wide and can be used for events, markets, street theatre or maybe even good theatre. Maybe even Ms Portas' idea of car boots that has also gone down so badly with the online commenting community. {Why is that a bad idea? Park on concrete and have access to shops, cafes, food and drink and seating and not have to stand in a muddy field all day? She's not saying become a car boot instead of a shop. She means as well as..on a low day, like a Tuesday? Raise revenue for the area...No? ..Ok we'll come back to it another time.}

I'm sure this is what Mary had in mind. A mix of old and new styles. The old bakery I used to eat at 30 years ago is still there, even with a mega Waitrose on the doorstep. Its a cafe/restaurant/bakery. A greengrocer isn't going to be able to open. Nor a butcher. Nor an independent sports clothing retailer as JJB/JD and Sportsworld etc are already there. But an independent clothing retailer could, if they were good. This is a major town. It has housed chain stores for decades, so a one off is not going to be easy. but it can be done. My old shop of 1983 was a jewellers. Its now an independent gift store.

Parking IS charged at Two Rivers, even though its an 'just' out of town park. 1 hour 90p
2-3 hours £2.20. Then a big jump to 4-5 hrs £6.80. They are pricing the space and most shopping centres do. 2-3 hours is the default.
Lots of commenters complained they would never pay for parking and only shop online with free delivery. Now in a village or very small town I would agree. Its crazy not have a free one/two hours allowance. That just stops people buying groceries, cards, drinks, newspapers...
but £2.20 for three hours as part of 'shopping experience' isn't much to ask. Brighton's Churchill square is £3.30 whilst the NCP down the road is £13.00 for 2-3 hours.

Not everywhere can do a Two Rivers. But there was a lot of vision in the design from developers and council. I think it works. I also think this is the sort of thing Mary was looking at. She has seen a lot more than most shoppers. {My old firm sold the lease + healthy profit after only three years to another retailer desperate to get in.}

Mary Portas has 28 points to raise. We may look at the others another time. This was just one.

It's not so bad, is it?


Lord Blagger said...

1. Put in place a “Town Team”: a visionary, strategic and strong
operational management team for high streets

In other words - local government has failed.

2. Empower successful Business Improvement Districts to take on
more responsibilities and powers and become “Super-BIDs”

More quangos

3. Legislate to allow landlords to become high street investors by
contributing to their Business Improvement District

So by buying property and letting it, you aren't helping?

4. Establish a new “National Market Day” where budding shopkeepers
can try their hand at operating a low-cost retail business

Puffery and spin

5. Make it easier for people to become market traders by removing
unnecessary regulations so that anyone can trade on the high street
unless there is a valid reason why not

Yep. Government regulation is hampering lots of things.

6. Government should consider whether business rates can better
support small businesses and independent retailers

Yep - taxation isn't fair. People take all the risks, and do all
the work, and government takes 50% of the profits, none of the losses.
Not equitable is it.

7. Local authorities should use their new discretionary powers to give
business rate concessions to new local businesses

How about just reducing business rates across the board. Otherwise, the
tax angle is shut down the company, sell to a new one, and for the cost
of a new sign, you have a lower rate bill

8. Make business rates work for business by reviewing the use of the
RPI with a view to changing the calculation to CPI

See, RPI when it suits the government. CPI when it suits the government.
The reason is taxation just to pay the massive debts, not services

9. Local areas should implement free controlled parking schemes
that work for their town centres and we should have a new parking
league table

Parking is the major reason many high streets are screwed. Why go there
and risk huge fines or even pay for parking, when you can go elsewhere?

10. Town Teams should focus on making high streets accessible,
attractive and safe

So they haven't been doing it? Yep, all that money for nothing.

Lord Blagger said...

11. Government should include high street deregulation as part of
their ongoing work on freeing up red tape

Regulation - less jobs - more on the dole. Lower profits - less tax - more debt.

12. Address the restrictive aspects of the ‘Use Class’ system to make it
easier to change the uses of key properties on the high street

Yep - regulation again.

13. Put betting shops into a separate ‘Use Class’ of their own

Why? Aren't they part of the highstreet?

14. Make explicit a presumption in favour of town
centre development in the wording of the National
Planning Policy Framework

Why? Just get government out of it, and let people loose.

15. Introduce Secretary of State “exceptional sign off”
for all new out-of-town developments and require
all large new developments to have an “affordable
shops” quota

Lots more corner shops charging high prices. A call for more rent seeking.

16. Large retailers should support and mentor local
businesses and independent retailers

Pleeeezzeee. Another expense put onto firms, so prices go up.

17. Retailers should report on their support of local
high streets in their annual report

More regulation

18. Encourage a contract of care between landlords and
their commercial tenants by promoting the leasing
code and supporting the use of lease structures
other than upward only rent reviews, especially
for small businesses

More regulation

19. Explore further disincentives to prevent landlords
from leaving units vacant

Such as? Ah yes - subsidies.

20. Banks who own empty property on the high street
should either administer these assets well or be
required to sell them

To whom? How are the people buying them going to afford them?
All the money in banks is going to the government because of its
debts and the regulations mandating it.

Lord Blagger said...

21. Local authorities should make more proactive use
of Compulsory Purchase Order powers to encourage
the redevelopment of key high street retail space

Ah yes. The state will steal people's property.
Next on the list, all private and company pensions, for the
public good. Just like Argentina, Hungary, partially in France
and Ireland. Partially in the UK like Gordon Brown.

It's a kleptocracy.

22. Empower local authorities to step in when
landlords are negligent with new “Empty Shop
Management Orders”

More regulation.

23. Introduce a public register of high street landlords

More regulation and cost.

24. Run a high proile campaign to get people involved
in Neighbourhood Plans

And what? Turn up to a planning meeting and its two fingers
because they have already decided to give permission to their mates.

25. Promote the inclusion of the High Street in
Neighbourhood Plans

More regulation

26. Developers should make a inancial contribution to
ensure that the local community has a strong voice
in the planning system

Ah yes. You have to bribe us first.

27. Support imaginative community use of empty
properties through Community Right to Buy,
Meanwhile Use and a new “Community Right
to Try”

Ah yes. The two year old's argument. If you have it, its mine.
If I want it, its mine. ...

28. Run a number of High Street Pilots to test proof
of concept

Window dressing.

It's all about cutting regulation. Getting government out
of the way. Not taking money from people so that it can be

Mark Wadsworth said...

I love a good out of town shopping mall, but of course you can have them in the middle of town or on/just off the high street as well. I can think of plenty of those. I think the big issue is parking, MP was right about that one.

But is it not simply the case that we have enough shops, and tarting up one area just means that another area falls by the way side?

For example, the new Olympics shopping centre is awesome, architecturally etc, and it's packed with people. But retailers in other high streets/shopping malls in East London (Ilford etc) have lost a lot of trade. So from here on in, we are robbing Peter to pay Paul, I'm not sure there's any point.

BrianSJ said...

The UK has a false market in office space because councils don't get the business rates. They go to Whitehall. What happens with shops? Do councils get the money or does it go to Whitehall?

Sebastian Weetabix said...

Very few problems are so bad that government involvement (especially local govt) won't make them worse. This is a good example. Leave the high streets alone and let them die. The only things that will make a difference are, in no particular order:
1. free parking
2. better shops
3. lower rents/rates so shops are actually viable.

In the case of 1 & 3 councils can do something - if they want to, which most of them don't.

Weekend Yachtsman said...

"pedestrianised, beautified, and having an additional 1,000 parking spaces"

That works.

It's the 1000 parking places that makes the difference, with charges thought about and set to encourage short-to-medium term shoppers and discourage day-long stays. And free in the evening, obviously, to encourage ordinary people to crowd out the neds then.

And the pedestrianisation is cool, as long as you can easily get quite near (ie to a handy car park) without any hassle.

Councils who ram up car parking costs AND install lots of anti-car measures for miles around, are just asking for people not to bother.

Charity shops could be controlled by allowing their enormous tax reliefs but only for very short lets: after a week or two, you're considered to be a normal shop, and full rates apply. Of course, the rates themselves need to be set at non-prohibitive levels as well.

CityUnslicker said...

Who would have thought it of Staines too - the place was a hellhole 30- years ago and now is quite gentrified by comparison.

Out of towns make sense in one way, the shops are far bigger - one big highstreet issue is that the old units are just not workable in scale for modern pile it high sell it cheap retail - this is the only way to compete against online.

Bill Quango MP said...

Lord Blagger: Thanks for your input. Agree with quite a few of those.
Mary Portas 'guru' ?

What kind of consultant comes back to a client with "I have 28 recommendations for you"?

No Ms P. Try,
"I have a wide ranging set of options. 5 you should consider carefully, and 3 you really should adopt."

MW: Yep, this happens all the time. Its a major problem not addressed specifically in the report. It should have been because it is is solvable, it just isn't planned for.
Rents/rates need to fall immediately a new development opens. This doesn't happen.

I have sen units who's taking have fallen 80% in a few years. Locked into long lease, chain stores. They become very neglected. if individual, they just go bust.
Over time {ten - fifteen years} rents fall to zip, councils offer rates free periods etc and small traders, markets, come back in. There is no reason to let all go to pieces and decay in the first place.

James Higham said...

We have a cartoon up about Mary Portaloo.

andrew said...

If business rates are reduced on empty premises, I have one simple answer - stop reducing them.

This will increase revenue to govt and depress rents.
It will force landlords to rent.
It will not affect existing businesses.
It will have a secondary effect of reducing property prices.

Bill Quango MP said...

The council collects the money for central government, who redistribute it back to the councils.

Sebastian Weetabix: Estates without shops of any kind are some of the worst. People in UK don't seem to like living amongst miles and miles of tract housing like they do in the US suburbs.

Of your 1/2/3 the problem with 2 is that at the moment people want pound shops and cheap bakeries like Greggs. That's what they are getting too. Nothing wrong with either, but are both low denominators. Hard to sell Versace at £100 a shirt when next door is selling Verserchi at £1.

Weekend Yachtsman: Yes, charity shops a re a problem. BQ industries sources our stock from the same Chinese factories as many of the charity shops. We have to pay rent/rates/wages. They don't really have to.
But better a charity than an empty.

You're right about rates. The example MW has of new developments killing old sites is made worse when councils charge rates as if the now declining area was still a prime retail zone.

JH: I shall have a look.

Andrew. I'm not sure I follow. At present many shops are rent free. The tenant pays the rates for the landlord. {which are usually the same price as the rents would be}.
Even then the retailer isn't making much money as the business just isn't there. Rates are far too high. They are just a tax, a before profit tax - of a what they can get away with figure.

Sebastian Weetabix said...

@BQ - I lived in the USA for a while... I got used to it.

If people actually wanted to use these shops, they can do so. But everyone who moans about the supermarkets/out of town centres and lauds the high street ignores the basic truth: why pay a sky-high figure for parking to go to a mediocre dump where a teenage assistant will tell you "if it isn't on the shelf we haven't got it", when you can park for free at some massive out of town place that's got everything? You can't buck the market. One of my sisters is always whinging about the big supermarkets and bewailing the loss of the high street... where does she shop? You guessed it. The out of town Sainsburys.

Mark Wadsworth said...

As per usual, you are all missing the point on Business Rates. The higher the better, especially if offset by lower taxes on actual businesses.

If they cut Business Rates then all that happens is that landlords put up rents to soak up the difference, this is easily observable in practice from what happened in various 'Enterprise Zones'.

Or best of all would be exempt the buildings element from BR entirely and increase the rate on the bare location value (i.e. LVT). And finally, there should be NO exemptions for vacant premises or even derelict sites, that way landlords won't be able to afford to leave sites derelict or buildings empty.

As real life evidence, Labour started phasing out empty buildings relief in 2008 or so, when the recession was well underway, and within six months, occupancy levels had increased.

It's proper economics, which is based on "real life" and "what has actually happened", the explanation is secondary. It is not "one-sided economics" where people posit a theory without looking at real life and then stick to it, despite there being no evidence to support the theory in real life.

Andrew hits nail on head. Facts. Logic. Maths. Real life. That's what this is about, not special interest bleating.

electro-kevin said...
This comment has been removed by the author.
electro-kevin said...

Of parking costs making a difference - well ask any cafe owner if 5p on a cuppa drives customers away. It certainly does - so a couple of quid parking (in Exeter you're talking a tenner for an afternoon) will most definitely put people off.

I say we go ahead with out-of-town supermarkets and convert vacant shops in towns to provide accommodation which is in short supply.

It's no good being sentimental about the High Street. It can only ever exist if it is able to provide a service which is needed.

The big problem I have is that the government policy of out-of-town development (quite sensible really) is not matched with driver friendly policies.

It's as though they are forcing us into cars whilst punishing us for using them.

Bill Quango MP said...

The Lakelander said...{over at EK's}

For some time now, we have simply had far too many shops. The number of shops we have reflect the so-called "boom years" fuelled by easy credit.

During those years, a Faustian pact developed between retailers, property developers, landlords and both local and national government.

Developers were allowed to develop pretty much whatever they wanted, provided they would sign up to enough Section 106 agreements to make the local council look good.

Landlords believed that "upwards only" rent reviews were the 11th Commandment, regardless of what state the economy was in or how many other developments were taking place in a town centre.

Local councils would then whack up parking charges at several times the rate of inflation and fine motorists who overstayed their tickets.

Business rates would typically be equal to 40% of the rent paid on a shop. So - for a tiny 100 square feet shop in a centre that would cost £20k in rent, you would pay a further £8k in rates. That's £28k before you pay the staff or suppliers.

But when times were good, everyone was happy. Except for the customers, who were paying through the nose for over-priced merchandise on their credit cards.

It was bound to end in tears, wasn't it?

Excellent summary, only missing out that a strong pound and deliberately weak Yuan/Rupee let retailers source goods at an ever decreasing cost price, allowing rising fixed costs -rates/rents/ wages/ to be {partially} absorbed.

Lord Blagger said...

Portas can run shops. There is no doubt about it, and that's a real talent. I find her impressive. For example, look at two other programs, Master Chef, and the Apprentice. With Master Chef there is a real effort to explain the cooking with Roux doing example dishes first, and his sous chef doing prep work as a demo. Contrast that with the Apprentice. It's of the disaster documentary genre. Very little is put into what when right, and what best practices are so other people can learn. Portas is more Master Chef than the Apprentice, and we need more of that.

Now she is wrong, because she isn't allowed to be right. She is wrong in that she wants more government, when its more government that is the problem.

Here's an example. I live in London. What are the aspirational places to live, and why?

Dulwich, Nottinghill, Hampstead, Blackheath, ... The reason is that they haven't been screwed by developments by local councils. Compare that with Elephant and Castle. It's government. Likewise with parking. It's all about milking the motorist, because government is desperate for cash.

Now there is an alternative. Perversely it is Greece. 50% of the economy is now the black economy, and its growing. What happens when it hits 70, 80%? What's the government going to do? People have decided to cut the government out of their economic life, because the government hasn't behaved in a democratic way. I can see that happening in the UK.

Lord Blagger said...

Excellent summary, only missing out that a strong pound and deliberately weak Yuan/Rupee let retailers source goods at an ever decreasing cost price, allowing rising fixed costs -rates/rents/ wages/ to be {partially} absorbed.


And the internet.

Who buys retail now? You might window shop in the store, use something like Red Laser, [ ] and buy online cheaper.

The model is going to be more and more show room by the manufacturer with online purchase. Or buy and collect in store.

Similarly you might get the specialist stores having a bricks presence, and the rest online.

However, long term nowt will change because the government has its massive debts. If you are 14 times geared, you are screwed.

Andreas Paterson said...

Thought I'd just add, on a similar note to BQ's that a very similar thing has been done in Norwich, twice. One way back in the early 90's with a Mall built under Norwich Castle, another more recently on the site of what was an old Rowntree factory.

It's worked pretty well in terms of keeping the city centre quite vibrant.

BrianSJ said...

The analysis of office rates is that the money doesn't come back to the local government in any systematic form, so they don't approve enough plans for offices, keeping rents artificially high. The area per person for shopping is pretty large if I remember right, but does the council actually lose out having a high street full of charity shops, or do we?

Anonymous said...

The DWP should pay JSA/HB/IB in coupons not cash, only redeemable at selected stores in the town centre. That keeps the money in the ring with a guaranteed level of income for these premises.

Lord Blagger said...

Cue a second hand market in vouchers, available on Ebay and at your local pub for cash.

Yet another government scheme which requires lots of people to manage and control.

Hence no saving whatsoever.

The problem is government. Government's problem is its debt and fraudulent accounting.

Electro-Kevin said...

Lord Blagger - There is already a thriving black market here. Ask any tradesman or professional who barters or works for cash.

I am often asked to do jobs for 'twelve hours pay' when the actual work only takes eight (or less.)

There is no tax evasion going on here because everything I get has to go through paybills - but then I don't mind because I'm not putting the hours in anyway.

Then there is the other fiddle, "Do this extra work for us and you can start late tomorrow and work a shorter shift - the spare man can cover the first bit."

The latter method is becoming more prevalent in these tough times. I do an awful lot of unpaid favours too but that's because I fully appreciate how well treated I am and believe in give and take. Others don't though.