BRC SENSES CARBON TAX VICTORY – BUDGET REACTION

Reacting to the Budget today (Wednesday), British Retail Consortium Director General Stephen Robertson said: “One in four people tell us they run out of money before the end of the month because wages are not keeping pace with rising costs. Increasing personal allowances faster than previously planned will eventually give a boost to the spending power of hard-pressed households. But this isn’t going to help over the next 12 months when growth of the economy is expected to be slowest. The Chancellor’s business friendly tone is reassuring but two years into this Government it’s not enough. The prospect of scrapping Carbon Reduction Commitment bureaucracy is a welcome response to prolonged BRC campaigning but we need further meaningful action on red-tape that genuinely helps businesses grow. The Chancellor is right to keep deficit reduction as his primary objective. He’s right to recognise that ultimately the only sustainable way to achieve that is to grow the economy by making the UK more competitive. The acceleration of Corporation Tax reductions sends the right signal but it’s not the only tax affecting retailers.”

Carbon Reduction Commitment “Since the Chancellor effectively turned the scheme into nothing more than an environmental tax 18 months ago, we’ve been calling for the now-pointless league tables to be scrapped. It’s very good news that the Chancellor is taking action. He should not delay.”

Business Rates “It’s very disappointing that the Chancellor has done nothing to scale back the impending 5.6 per cent increase which will add £350 million to retailers’ costs. Inflation is already much lower and likely to fall further. The opportunity, previously announced, to postpone part of the bill will help some but retailers use a lot of property and imposing an increase on this the scale is hugely significant for the sector.”

Corporation Tax “Reducing Corporation Tax further and faster will make investment in the UK more attractive but it is not the only business tax that matters. An additional one per cent reduction in Corporation Tax does not make up for a 5.6 per cent increase in Business Rates.”

VAT “The Chancellor is right to retain VAT exemptions on children’s clothes, books and newspapers. As the Government considers the treatment of hot food we will be communicating the views of supermarkets and quick service restaurants to its review.”

Capital Allowances “Stimulating investment in equipment and technology is crucial to economic recovery. With the growth in online sales, many retailers are looking to invest in systems. Encouraging this fast growing export sector through tax breaks would have produced great returns. The very limited capital allowance concessions applying in some Enterprise Zones doesn’t offer help widely enough. The Chancellor should have made similar incentives available in all regions and to businesses of all sizes.”

Sunday Trading and Regulation “Some retailers support relaxation of the current rules on Sunday trading in England and Wales, others don’t. It must not be the only part of the Government’s deregulation plans. The Chancellor recognises the stranglehold regulation has on growth but the repeated red-tape-slashing promises of the last two years have yet to meet the reality. The Government has done some long-overdue clearing out of moribund rules but it must follow through on reform. One-in-one-out is a good principle but it must mean burdens being removed from retail for every new one added. Business is not a single life form. The relief must go to the same sector that is suffering new pain.”

Planning “To work for communities and the wider economy, the planning system should be speedy, predictable and pro-growth. Simplification of the planning process is what we want and what the economy needs.  It should encourage retail expansion and help revitalise England’s troubled high streets. When the National Planning Policy Framework is published next week it must keep the Town Centre First principle for office developments. Healthy town centres need people working in them.”

National Minimum Wage “The Government has made a thoroughly wise decision this week showing appropriate restraint at a time of falling inflation and rising unemployment. 1.8 per cent is within the limits the BRC’s evidence showed would allow retailers to create and maintain jobs. Any larger increase would have piled extra pressure on retailers at a time of weak customer demand. It’s deeply disappointing that the Chancellor hasn’t shown the same good sense when it comes to moderating the planned Business Rates increase in line with current conditions. A more predictable system that gives businesses much longer than the current six months notice of each year’s minimum wage increase is still needed.”

Fuel Duty “With fuel costs at record highs, eating into household budgets and adding to retailers’ distribution costs at a time when sales are weak, worried businesses and households need to know that the Fuel Duty Stabiliser will keep fuel prices down if world oil prices continue to rise. The Chancellor is imposing another drag on growth by not cancelling August’s duty increase.”

Finance for smaller businesses “Small businesses are a vital part of the retail sector – 92 per cent of retail businesses have fewer than ten employees. Moves to help them find and afford the finance they need to expand are positive. The Chancellor’s innovative approach to credit easing should help some small and medium-sized firms with their credit costs. But for many small retailers, accessing capital comes before cost concerns so it’s important this scheme is straightforward and really does generate additional lending.”

CHANCELLOR MUST ‘PULL OUT ALL THE STOPS’ and deliver a Budget for business, says the British Chambers of Commerce (BCC) urging George Osborne to deliver a Budget for business which allows firms to drive growth, invest and create jobs. Just days ahead of its Annual Conference, the BCC believes the Chancellor should stick to Plan A, but use the wiggle room he has within the current spending envelope to bring forward substantive changes that will stave off stagnation and weak growth.

The BCC believes that there is sufficient latitude within the fiscal rules to implement three specific initiatives to support business growth, at a maximum cost to the Exchequer of £4.2bn.

Scrap the upcoming business rate rise which is anathema to growth In April 2012, the 5.6% up-rating of business rates will severely aggravate already uncertain business cashflow and impose hefty new costs without offering any real improvement in business conditions.  In addition, the BCC is calling for the restoration of the Empty Property Rate Relief (EPRR) to £18,000. The current threshold for EPRR creates perverse business incentives, deterring investment.  Cost:   £2.2bn

Introduce a time-limited £1bn capital allowance scheme for medium-sized companies A ‘when its gone, it’s gone’ capital allowance scheme would provide an incentive to firms who have put large investment projects on hold.  Providing a two-year window for medium-sized companies to make crucial investments would create a real incentive for businesses to take advantage of the opportunity.   Cost:   £1bn

Incentivise employers to take on young people The BCC is calling for the Chancellor to double the amount of money available for employer wage subsidies and funded placements under the new Youth Contract (from £1bn to £2bn), or consider changes to employer National Insurance Contributions for young people.  This would provide a cost-effective way to prevent the alienation of young people, and assist businesses with the development of the skills base required to drive future growth.   Cost:   £1bn

In addition, the BCC is recommending the following low-cost or no cost changes to the business environment to allow companies to grow, export and take on staff.

• Implement an effective credit easing programme, and consider the creation of a fully-fledged SME bank, which would be backed by the state at first and later returned to the private sector. This would go a long way to improving the follow of credit to viable businesses.
• A speeded-up National Infrastructure Plan and delivery of the mechanisms promised in the Autumn Statement to increase private investment in infrastructure projects.
• An aviation strategy that delivers both capacity for the South East and growth opportunities for Britain’s regional airports.
• Delivery of radical reforms to the planning system in the National Planning Policy Framework to help businesses expand, invest and grow.
• Help for SMEs trading internationally, through improved access to mentored outbound missions, smarter use of inbound missions and greater financial support for promotional activity and tradeshow attendance.
• Real de-regulation that makes a difference to businesses on the ground. This should include the reform of dismissal rules, such as relaxing the collective redundancy rules and introducing a new no-fault dismissal route.

Commenting on the upcoming Budget, John Longworth, Director General of the British Chambers of Commerce, said: “George Osborne faces one of the most challenging Budgets in recent years. He can either take bold steps to create growth in the economy by introducing measures to support business, or shy away and face the spectre of economic stagnation. He has to pull out all the stops to boost British business by providing them with a Budget for growth. Firms need an environment in which they can thrive, create jobs, and export our goods and services abroad.  Without a strong and prosperous private sector, we will be unable to provide the public services we all want or need. The Chancellor must stick to Plan A, but use the wiggle room he has to scrap the 5.6% business rate rise that will cripple many businesses. Firms must be incentivised to invest through a capital allowances scheme, and encouraged to take on young people. The government can do this by doubling the Youth Contract to £2bn, or by making changes to employer National Insurance contributions.  Business also wants to see reforms to employment law and the planning system significantly speeded up. Regulations must be slashed, and access to finance improved so as not to choke off recovery. Without concerted action in these areas, the potential for businesses to grow will be limited, and so will the economic recovery.”

Economic & Labour Market Review | Vol 1 | No 4 | April 2007 Office for National Statistics 47

Comparing ONS’s retail sales index with the BRC’s retail sales monitor

This article compares two key indicators of retail sales growth, the Office for National Statistics’ (ONS)retail sales index (RSI)and the retail sales monitor produced by the British Retail Consortium (BRC) in conjunction with KPMG. It is also an update of the joint ONS-BRC articles published by the BRC in spring 2003 and November 2006. The two series are regularly quoted by the media and are used widely by retailers and retail analysts. Also, they both feature in the Bank of England’s Inflation Report in its assessment of domestic demand and in the discussions of the Bank’s Monetary Policy Committee.

There are some important differences between the two indicators in relation to coverage and the method of compilation, and these can sometimes lead to apparent discrepancies in the published figures. This article summarises those differences and compares the headline BRC series with an estimated RSI series based on the panel of contributors used by the BRC.

SUMMARY

Nicholas Palmer: Office for National Statistics and Joscelyne Hynard: British Retail Consortium

The retail sales index (RSI) measures movements in the average weekly sales of retailers in Great Britain. The monthly survey of 5,000 retailers collects the total retail turnover from each business selected. Responses are mandatory in accordance with government legislation. The retail turnover requested is the total value of sales of goods to the general public for personal or household use. It includes sales via the internet and other forms of mail order. For the first two months in each calendar quarter, the reporting period for which data are collected is four whole weeks and for the third month it is five weeks.

The Office for National Statistics’ (ONS) monthly retail sales first release concentrates on seasonally adjusted volumes of retail sales, that is, after the estimated effects of price changes and regular seasonal variations have been removed. The volume estimates are derived by applying weighted combinations of retail price indices for various types of retail goods to the returned sales data. These indices are the same as those published in

ONS’s consumer price indices first release. The seasonal adjustment takes account of both calendar effects and within-year seasonal variation. Calendar effects cover,for example, how the different timings of Easter impact on the average weekly sales in March and April from one year to the next. Adjustments for within-year seasonality relate to the usual seasonal effects on the sales in each month. For example, the average weekly sales in December are usually much higher than in other months of the year and this needs to be accounted for in the seasonally adjusted series. An RSI for the value of retail sales, not seasonally adjusted, is also included in the first release. In addition, a monthly compendium called SDM28 is published which contains detailed series by type and size of retailer.

The retail sales monitor (RSM) is produced from around 70 participants from across the UK retail industry who are members of the British Retail Consortium (BRC). Sales values across a range of 12 product categories are provided weekly to KPMG who then aggregate them into annual growth rates for each month on a total and like-for-like basis. The like-for-like figure strips out the effect of expansions and store openings and closures and is presented as a measure of retail industry performance. The total figure reflects retail industry growth. The headline growth rates in the RSM are published in the second week after the month reported on. In addition, all participants in the survey receive analysis of sales split into the product categories as a tool for gauging their own performance in relation to their sector as a whole. Comparing the RSI with the RSM From the retail sales first release, the most appropriate measure to compare with the RSM total sales series is the RSI for the value of sales, not seasonally adjusted. Although the longer-term trends in each series are similar, there are sometimes differences in the direction of the movements from one month to the next. These are due to a range of differences that exist between the RSM and the RSI and which can be broadly described as relating to either coverage or methods.

Differences in Coverage The main coverage differences suggest that the RSI for large retailers, which is published monthly in the retail sales business monitor SDM28, may provide a more appropriate comparison with the RSM’s total sales series than the RSI for all retailers.  While the RSI for large retailers appears to be slightly closer to the BRC’s series than the RSI for all retailers, there are clearly more differences affecting the comparison than just the size of retailers covered. For a start, the RSI for large retailers represents around 900 businesses that have 100 or more employees.

Differences in methods In an attempt to measure the overall effect of the differences in methods, an RSI has been calculated just for the businesses surveyed by the BRC.  A small number of these businesses are actually excluded from the RSI as they are not classified as retailers under the system used by ONS. However they are surveyed in ONS’s monthly survey of the services sector and so their data were added into the analysis.

As might be expected, the RSI based on BRC contributors is generally much closer to the RSM’s total sales series than the published RSIs for all retailers and large retailers. The relatively small discrepancies would appear to relate mainly to the methodological differences.  An additional factor may be the effect of changes to the profile of the participants in the BRC’s survey over time.

Note that the reporting periods used by ONS and the BRC are usually the same, that is, standard periods of four, four and five weeks in each quarter.

SALES REVIVAL REMAINS ILLUSORY

UK retail sales values were down 0.3% on a like-for-like basis from February 2011, when sales had fallen 0.4%. On a total basis, sales were up 2.3%, against a 1.1% increase in February 2011.

Food sales picked up, helped by stocking up in the very cold weather. Non-food weakened further, despite continued promotions and discounts. For clothing, footwear and homewares, February was worse than January and December, especially for larger purchases, hit by consumer caution.  Non-food non-store (internet, mail-order and phone) sales growth slowed further after picking up sharply in December. Sales were 9.9% up on a year ago, down from 11.3% in January and 18.5% in December and also below the 10.4% in February 2011.

Stephen Robertson, Director General, British Retail Consortium, said: “The reality of weak sales shows that a convincing revival remains illusory. Falling inflation has eased the squeeze on household finances and halted the slide in consumer confidence but that’s at risk from fuel price rises and Budget uncertainty. Unemployment is expected to rise further causing increased nervousness about job security, which is keeping confidence fragile. Any sense of improving optimism is not yet translating into more spending. Total sales growth is still below inflation, so overall customers are actually buying less than a year ago, while discounts are eating into margins. Food picked up but non-food sales deteriorated with goods affected by the slow housing market among those particularly struggling. In this climate of continued caution, the Chancellor must use the Budget to hold back business costs, which will support jobs, growth and the much-needed consumer turnaround.”

Helen Dickinson, Head of Retail, KPMG, said: “February’s results were similar to January’s but with very different dynamics. Food performed better than in the previous month but many non-food sectors struggled. The timing of half term caused plenty of variability during February and swings in performance by individual retailers makes business planning all the more challenging. Consumers remain reluctant to spend unless encouraged by promotional activity. Thus, while the market is still growing slightly in headline sales terms, profitability continues to be eroded through loss of margins. Many retailers feel they’re fighting very hard just to stand still at best and don’t see any light at the end of the tunnel. However, there are retailers out there who deliver what the customer wants and needs – in terms of product, brand and price – which proves that if the proposition is spot on it is still possible to outperform the market and the competition.”

SHOPPER NUMBERS DOWN AFTER FESTIVE BOOST

Footfall in the three months November to January was 1.8% up on a year ago, better than the 2.3% fall in the previous three months.

Footfall improved in all types of locations, particularly out-of-town with a 3.1% increase, compared with high streets up 1.4% and shopping centres up 0.8%. Averaging over the last 12 months shows high streets have fared worst, with a 4.8% decline. The hardest-hit locations in the past three months were Scotland (-8.5%) and the South West (-7.5%). Scotland was also one of the worst in the previous three months. Wales (11.4%), Northern Ireland (7.2%) and the South East (7.1%) held up the best. The national town centre vacancy rate in the UK was 11.1% in January 2012 (high streets and shopping centres), unchanged from October 2011. Northern Ireland (14.1%), the North and Yorkshire (12.9%) and East Midlands (12.4%) recorded the highest vacancy rates.

Stephen Robertson, British Retail Consortium Director General, said: “The lift in shopper numbers for the quarter is almost entirely down to a strong Christmas. And December looks deceptively good because it’s being compared with the heavy snowfall which affected the end of 2010 and kept many people at home then. At the start of 2012 footfall numbers dipped again, showing underlying caution hasn’t changed. Worries about personal finances and job security are putting people off shopping. Although inflation has started to ease, costs are still rising faster than wages. Any significant change in consumer sentiment is going to take time.  The rate of town centre vacancies has stayed constant across the UK as a whole but the condition of too many high streets is still bleak. The 5.6 per cent rise in business rates due in April would be another major blow. The Chancellor has the opportunity to recognise how much town centres matter to local jobs, economies and communities by sharply reducing the scale of that rise.”

Diane Wehrle, Research Director at Springboard, said: “Despite recent concerns over the health of high streets, footfall defied analyst expectations over the last quarter with an uplift of nearly 2 per cent. This is positive news considering some key players have recently gone into administration and there’s been a wave of profit loss announcements. For the first time in five years December saw footfall up on the previous year as savvy shoppers took advantage of heavy retailer discounting. Out-of-town shopping continues to show positive growth with a 3.1 per cent uplift as consumers seek to avoid car parking charges and take a more ‘functional’ approach, becoming increasingly targeted about what they’re buying. It’s also worth noting footfall on the UK’s high streets was stronger over the quarter than in purpose built shopping centres, with a particularly robust performance in the lead up to Christmas. This is testament to the success of town centres in attracting trade during cold weather when customers often gravitate towards a covered shopping environment.”

CUSTOMERS SIGNAL TOUGH YEAR AHEAD

UK retail sales values were down 0.3% on a like-for-like basis from January 2011, when sales had risen 2.3%, picking up after December 2010′s snow disruption. On a total basis, sales were up 2.1%, against a 4.2% increase in January 2011. On both measures it was the second-worst January, after January 2010, since the survey began in 1995.

Food sales slowed sharply after their Christmas boost. Non-food also weakened and any gains were largely driven by widespread heavy discounting in clearance sales. For clothing, footwear and homewares, January was worse than December, especially for larger purchases, hit by consumer caution. Non-food non-store (internet, mail-order and phone) sales growth slowed again after picking up sharply in December. Sales were 11.3% up on a year ago, less than December’s 18.5% gain but similar to the 12.3% in January 2011.

Stephen Robertson, Director General, British Retail Consortium, said: “As 2012 gets underway, it’s clear people don’t feel any better about the immediate future than they did 12 months ago. Customers parked their worries in December and spent, encouraged by discounts. Now, in the New Year, reality has bitten again as concerns about jobs, wages and household costs reassert themselves. Despite consumer confidence improving in January, actual spending shows households concentrating on paying off debt, saving and battening down for another tough year. Food sales grew faster than non-food but the gap was much narrower than in December as people cut back and searched out grocery offers and value lines. Big-ticket goods are still the weakest part of retailing, undermined further by the comparison with last year when beating the VAT rise and promotions linked to it helped sales.

In 2011 overall like-for-like growth averaged virtually zero and that was with a boost to top line figures from inflation, including the higher VAT rate, which won’t continue in 2012. Against that background, Government must hold down the costs it’s responsible for.”

Helen Dickinson, Head of Retail, KPMG, said: “After a stronger than expected December, these latest figures are rather sobering. The return to negative like-for-like sales reflects the trend seen throughout most of 2011 and is a stark reminder of the challenges facing retailers. Both food and non-food had a slow start to the month. In the first week of January customers were still using up stocks of food bought in for Christmas. Non-food didn’t benefit from the catch-up shopping effect we saw last year in the aftermath of December 2010′s snow disruption. Both categories improved as the month developed. But the underlying health of the sector remains a key concern, with margins and profits squeezed by the relentless need to discount to generate demand. Many retailers are rethinking their entire business models in a desperate attempt to adapt to this low growth environment and pricing remains more strategic than ever before.”

UK: MORE RETAILERS SET TO FALL INTO ADMINISTRATION

The total number of retailers in England and Wales falling into administration increased by 11% during 2011 to 183, with further troubles ahead, according to research from consultancy firm Deloitte. Findings from Deloitte’s recent Consumer Tracker, which monitors consumer confidence and spending habits, found that 36% of consumers are spending less on clothing and footwear in an attempt to reduce costs.

The company said today  that despite the last quarter including the lucrative Christmas period, administrations were up 27% on the previous quarter. A total of 42 retailers fell into administration during the fourth-quarter, compared with 33 in the third-quarter.

“2011 was a tough year for retailers and unfortunately this trend is set to continue well into 2012,” said Lee Manning, Deloitte restructuring services partner. ”Many retailers would have been banking on the busy Christmas period to give them a much needed sales uplift, but retailers were forced into discounting at levels last seen in the aftermath of the collapse of Lehman Brothers, putting severe pressure on margins. We are likely to see a further spike in retail administrations in Q1 2012 as retailers buckle under the pressure of VAT payments falling due, impending rent payments, the increased popularity of shopping online and the traditional decline in footfall as the attractive year end sale offers come to an end.”

Commenting on the study’s findings, British Retail Consortium director general Stephen Robertson said that the next few months are “bound to be quieter” as consumers rein in their spending after Christmas. ”Retailers are doing their bit by controlling their own costs and keeping prices down for customers despite steep increases in transport and utility bills. The UK’s governments need to support the sector’s efforts to survive, thrive and maintain jobs by holding back the costs for which they are responsible, including business rates, retail levies and the burden of regulation,” he said.

Robertson added that while retailers “don’t ask for handouts”, they do deserve help “overcoming some of the barriers to business success,” highlighting that retail is the private sector’s biggest employer and a major source of jobs for under 25s.

LOWEST SHOP PRICE INFLATION FOR A YEAR

Overall shop price inflation fell to 2.0% in November from 2.1% in October. Food inflation fell to 4.0% in November from 4.2% in October. Non-food inflation was unchanged at 0.8% in November.

Stephen Robertson, British Retail Consortium Director General, said: “At a time when petrol prices and utility bills are sky-high, fierce competition in the retail sector is helping hard-pressed families manage their budgets. Shop price inflation is now at its lowest for a year despite retailers having to cope with rising costs from suppliers and surging energy and distribution bills. For a second consecutive month the supermarket price war has helped reduce food inflation. As our recent research showed, a typical basket of goods purchased in the UK is around 5 per cent cheaper than the European average. Technology is making it easier than ever to compare prices. Accessing the internet on smartphones while out shopping is helping to make prices even more transparent. Inflationary pressures are easing. Cheaper commodities will help retailers keep prices down while the Chancellor’s decision to postpone January’s three pence increase in fuel duty will also benefit households. Retailers have protected consumers from the full impact of global commodity and currency shocks during 2011. In 2012 the Government should do more to reduce the costs it controls, chiefly business rates and the burden of regulation.”

Mike Watkins, Senior Manager, Retailer Services, Nielsen comments: “It’s been a slow start to Christmas trading and many retailers have reduced prices further in recent weeks to help boost footfall and spend in store. This is reflected in the headline shop price index. We also have the impact of some commodity price increases of last year now falling out of the comparatives. However, the benefits for shoppers are being offset by a continued fall in spending power as other household bills continue to rise. The outlook for inflation is however much more positive than this time last year and shop price inflation is expected to fall further in the first part of 2012.”

UK HIGH STREET REVIEW:  WHAT THE EXPERTS SAY

Retail expert Mary Portas has set out her vision for revitalisting the UK’s high streets. Here’s how the industry has responded to her recommendations.

Stephen Robertson, Director General, British Retail Consortium: “The report sets out some practical ways to address problems faced by the UK’s high streets many of which go back much further than the economic difficulties of the last few years. Prioritising action on Business Rates and parking is exactly right. These are the key concerns for customers and retailers. We agree, it would be ‘too easy’ to blame out-of-town retailing for the decline of our high streets. This plan should be about supporting a rich mix of retailing, not striking dividing lines between big names and independents or town centre and others. When he acts on this report, David Cameron should not restrict that choice by making life harder for any particular category of retailers. The three key words in the report are ‘make things happen’. Let’s see the best of these recommendations acted on quickly.”

Barry Knight, Head of Retail, Grant Thornton: “I don’t see anything from this review, beyond looking at punitive car parking charges to park in out of town sites, that will encourage consumers to go to the high street. Mary Portas is basically suggesting that high street landlords have got to be more amenable to retail tenants and in effect reduce the cost of operating from these properties. The creation of Town Teams and the creation of Business Improvement Districts is all well and good, but the question is who is going to pay for them? Therefore, this is a bit of a pipe dream – firstly in that landlords will be put under huge pressure from their banks should they reduce rental levels, and as such this is not a commercially viable proposal. Secondly, it is hard to see local councils who are under pressure to cut local parking costs also willing to fund ‘quangos’. The increasing number of large supermarkets and their increased push in to non-food combined with internet shopping are major drivers in the decline of the high street. Mary Portas offers no discussion around how or if anything can be done about the impact of these trends. To ensure that high streets do not fall into terminal decline we need to ensure that no properties are empty, regardless of the financial cost and the need to change usage legislation.”

Richard Perks, Director of Research, Mintel: “Portas has 28 detailed proposals, but look behind that and the thrust of the report is very sensible. Granted there’s the dose of hyperbole that just seems unavoidable these days – the high street is certainly not in terminal decline, it may not even be in crisis. What’s happening at the moment is a contraction which is almost entirely due to the recession. And in tough times that’s what happens. The vacancy rates we hear so much about are mostly in secondary and tertiary sites because when high streets contract there is a general move to primary sites. But people still want to shop – that’s why major shopping centres are so successful. And what is a development like Westfield’s at Stratford but a brand new high street? So that is why Mary Portas is absolutely spot on when she says that high streets that want to survive must invest. Ideas such as more markets are excellent, because they add more excitement to the high street. No-one owes a retailer a living. No-one owes a high street a living. Consumers go to where they are best served – and that is as true of retailers as it is of high streets. A high street that gets no investment has no future.”

Maureen Hinton, Analyst, Verdict Research: “The major element behind the survival of the high street is how the consumer behaves and what consumers want. With retail growth halving every decade since the 1970s there was bound to be a fallout as the sector reached maturity. This, combined with the impact of online shopping has led to an oversupply of space. Though these factors are behind high street decline, the main reason is consumers shop differently now to the way we shopped even 10 years ago. We want the convenience of large out-of-town supermarkets with plentiful, free parking and a full range of products. We also want premium shopping centres with a complete range of stores and leisure activities. These locations would not survive if we did not shop at them and taxing them more heavily will be a further tax on shoppers rather than retailers and landlords. Already we are witnessing a return to local shopping. The expansion of click & collect, (in particular Collect + whereby we can collect parcels from local stores rather than wait in for a delivery or go to the Post Office), plus the high costs of driving, are encouraging shoppers to stay local. Furthermore the ageing population, with falling pensions and less mobility, will want local services and stores.”

Rupert Eastell, Head of Retail, Baker Tilly: “Retailers are being squeezed by increased rates and reduced traffic, and something needs to be done to help our high streets. The Portas report provides a call to action at a critical time. Regardless of whether you love her or hate her, Mary Portas’ report should stimulate debate about the future of the British high street and if it leads to just one high street making changes for the better, it will be a success. Portas makes sensible and deliverable recommendations in her report, but change is not down to her. If anything, it is clear that councils, community partnerships, local chambers of commerce and businesses must work together, take an honest look at their local high street, and make the tough decisions about the changes necessary for positive momentum. High streets have not adapted to out of town shopping centres quickly or efficiently enough and are suffering due to increased competition from large retailers who can beat them on price, if not on ambience and customer experience. A certain level of social entrepreneurship will be necessary to reinvigorate our high streets. For example, many communities have regeneration or community cohesion programmes in place. Surely, if economic regeneration can be incorporated into these programmes, the combined profit motive will create safe and pleasant town centres, where local residents will look forward to spending time and money.”

The Economist Intelligence Unit economist, Jon Copestake: “Most will agree that the traditional high street format has become outdated. A decade of dwindling occupancies as well as the rising tide of internet shopping and consolidation among retail chains point squarely to this trend. It is also difficult to see what can counteract the convenience and value that internet and supermarket shopping offer, especially in these frugal times. Although consumers may focus on initiatives like “National Market Day” and parking schemes, supermarket chains will be more concerned with proposed central regulation of out-of-town developments and suggestions that big retailers mentor and assist small businesses”.