More bad news for the High Street...

A recent report from Retail Research warns of more High Street closures in the forthcoming months.

In Luton and Bedford this has meant empty shops where once stood :

• Blockbuster
• Jessops
• HMV

In better news Dixons has recently reported increased profits. Factors for their success appear to include

• Sale of tablets
• Collapse of rivals such as Comet and Jessops

Both these stories widely reported in the press recently. For more information consult databases FAME ( for financial data ) and Newsbank ( for commentary )

Recession on the High Street - Portas Towns

It is now a year since Mary Portas launched the government pilot scheme to revive the UK High Street.

12 towns were given an equal share of £1.2 to create more prosperous and diverse high streets.

Unfortunately in ten towns from this list more shops have closed than opened.

In total research shows that 700 units closed, and fewer than 600 opened in their place

Only two towns of the Portas 12 , Bedminster and Margate, added any shops. Research on this project was carried out by the Local Data Company, and has been widely reported in the UK Press this week. For more information try our Newsbank database.

Recession on the High Street...a new government strategy

12 UK towns have recently been awarded £100k to help revive their ailing town centres.

These so called Portas Pilots include Wolverhampton as well as smaller towns such as Lizkeard (Cornwall) and Market Rasen (Lincolnshire)

Luton ( pictured left ) , Dunstable and Bedford have not made the list.
It will be interesting to see what initiatives are suggested and whether these towns can overcome the threats of :

• internet shopping
• penniless customers 
• successful out of town centres 

Radio 4 recently featured the plight of Dunstable's Quadrant Shopping Centre. The Council are anxious to buy the site but cannot afford the price demanded by the owners ( Southend Property Holdings ) who feel that they are sitting on a goldmine.

Eastex & Alexon

Despite my upbeat posts about 'Made in England' brands such as Eastex and Alexon both firms are now in severe financial straits. Eastex has been bought out and Alexon is facing 'severe funding problems'

In Luton the situation can't have been helped by the closure of Guildford Street whilst the new busway is being constructed. This has restricted access to both firms retail outlets in the town at this difficult time.

Game Over in Luton

Another closure in the Luton Mall. GAME the computer games retailer has closed with the company in grave danger

Suppliers of new games were so worried about the company's prospects that they were unwilling to deal with the company.

Most gamers today seem to buy products and services online.

Bad news for the Luton staff. The Mall branch is one of 280 to close. A further 333 stores remain in the UK.

Another Mall Store Closes

Another familiar brand has disappeared from the Luton Mall recently with the closure of Millets.

As a seller of outdoor wear, particularly waterproofs for camping and walking, it would be perhaps possible to blame the recent good weather !

Millets fortunes however have been in decline for a while. Blacks Leisure who own the company has faced a 9% decline in sales. A takeover by JD Sports has not worked out and maybe Luton just doesn't have enough campers and walkers.

Nearest stores are now Hitchin ( 7.5 miles away ) Hemel ( 9 miles ) and St Albans (9.5 )

Success on the High Street - it's a piece of cake

When I moved to Luton in 1990 the shopping centre ( then called the Arndale ) had two branches of Our Price, as well as an HMV. The Luton Mall still has an HMV but two GREGGS.

Greggs recently announced their final year figures. Profits are up by 15 % and there are 84 new outlets in the UK. This strong performance is based on cheap sausage rolls and coffee. Many shops have installed their own coffee machines.

The Wetherspoons Pub chain has also realised that the British love their coffee but are not always prepared to pay Starbucks (or Costa) prices.

The State of the Economy

Facing a long train journey on Monday I bought a couple of newspapers ( I can usually manage the Daily Express Crossword, and complete about three clues from the Telegraph )

Look at the difference in the stories on the economy though ( both based on the same sets of government figures )The Express talks of modest growth ( falling inflation, rising house prices ) and the Daily Telegraph repeats a comment made when Labour left power that there was no money left.

The next Budget is on March 21st. Should be interesting to see how that gets reported in the UK Press.

Thornton's Chocolates .... more details

Still no clue in the Luton Mall about the fate of the Thorntons shop there. Apparently details are to be announced when staff have been informed, within the next fortnight.

Thorntons operate 337 UK stores and are closing at least 120 of them. Where stores close they are hoping to open franchises nearby ( maybe in Debenhams or similar I imagine ?)

Strategy for the future ?

More products for less than £5, and in-store tasting sessions !

Christmas, Valentines Day & Easter are seasonal peaks for chocolate sales, but Thorntons additionally stressed that hot weather in May affected business.

I wonder if headlines like the one above didn't help. Maybe we are eating too much fruit these days ?

High Street Meltdown

Lots of stories in the papers this weekend about the crisis affecting the UK High Street. This one seems a particularly good summary of the situation....

Walsh,K & Shah, O (2011) High noon on the High Street, Sunday Times, 3rd July Focus Section p.5

It has been a disastrous few days for the following companies :

T.J Hughes - discount department chain, has gone out of business. 57 stores and 4,000 staff face a bleak future.

Jane Norman, the youth fashion chain went under on Monday night. 200 shops and 1,600 staff lost.

HMV finally gave up with the CD market and will now concentrate on live music and gadgets. Sales sank by 11% this year, and the company only survived, many think, by selling off Waterstones.

Thorntons, the chocolatier, is closing many high street shops. We are not sure whether the Luton and Bedford branches have survived the chop.

What are the reasons for these poor results ?

1. Internet shopping
2. The financial crisis means that consumers are changing from a 'want' culture to a 'need' culture
3. Giant supermarkets are now selling everything, including Thorntons chocolates and CD's.
4. Lack of consumer confidence ( consumers may have the cash to spend but they are worried about their future )
5. Conspicuous consumption is no longer fashionable. People feel guilty about spending ( despite this some luxury brands are still manageing to prosper )
6. Customer service is no longer valued as much as it was formerly. This may be partly because people have so much information about the products they are buying available online.
7. Discount retailers such as Aldi and Lidl are doing well.

Aldi Effect

The term "Aldi Effect" has been used to convey the idea that during recessionary times shoppers will dessert Tesco and Asda is order to save money.

Instead they will visit Aldi and Lidl, cut-price supermarkets which have recently prospered.

Although the arguement is a tempting one it does not explain the recent success of the more upmarket chain, Waitrose.

Figures to support these theories can be found on the Newsbank database.

Look at shops which have disappeared in Luton or your local town lately.

Luton Waterstones to close....

The Luton branch of Waterstones is to close shortly. The only bookshops left in the town will be the discount store 'The Works' and the more general W.H Smith. Very sad for the University Community and especially embarrassing as Luton attempts to obtain city status.

The company blames shop closures on the severe weather recently, and a 'weak entertainment market ' Shares worth £1 last January are now valued at 6 pence.

Surely Amazon and the effects of the recession are the real reason for the shops decline.

Retailing in a recession...

According to an article in Harvard Business Review concentrating on loyal customers may not be the best strategy during a recession ( Favaro, 2009 ). If your loyal customers spend 25 % less in your store you will struggle. An alternative approach is to concentrate on "switchers". These are the people who divide their spending between your store and elsewhere.

Hence in Luton a new store like Family Bargains may hope to take custom from existing shops in the same market ( ie other cheap stores such as the Poundshop, and Wilko's )