1. The Mary Portas Review of high streets in England

2. The research evaluation of the Town Centres Regeneration Fund in Scotland (the Wheeler Report)

3. The Exhibition on the High Street developed by Architecture + Design Scotland, and running at The Lighthouse until 17th April 2012 (mentioned in this blog before).

The aim was to focus on “violent conversations” to shape a brief to inform the Regeneration Division of Scottish Government (and others in Government) and the development and work of the Scotland’s Towns Partnership.

These group conversations were stimulated by short 5 minute provocations produced by four so-called provocateurs:

a. Julian Dobson, Director of Urban Pollinators (the 21st Century Agora) – see his provocation and thoughts on his blog.

b. Doug Wheeler, Director of Doug Wheeler Associates (the Wheeler Report)

c. Diarmid Lawlor, Head of Urbanism at Architecture + Design Scotland

d. and as a random factor, me (my 5 minute diatribe on anachronistic irrelevancies, nostalgic romanticism, cascading withdrawals, antiquated mindsets, dysfunctional property systems, vestigial appendices and impressions of Canute can be found here (A Provocation)).

Short, sharp discussions in groups followed to begin to set a new agenda for thinking about town centers in Scotland. Amongst the soundbite highlights were:

• The need for an Association of Town Agitators and a “Collection of Wierdos” to pressure for change
• A swathe of Town Centre Truth and Reconciliation Committees to be established, as we know (indeed maybe are) the guilty men and women and they should be made to put it right
• The development of a “Framework for Mess” to get us back to what town centres should all be about
• A “Do No Harm” ordinance for national government policy to create space for local actions.

All nice ideas, but what was being requested (demanded?) really was a substantive change in the way government and other agencies think and operate. How do we create spaces for things to happen rather than thinking we can create change centrally? How do we get rid of self-defeating and limiting key performance indicators, when we are really trying to enrich lives and places? Can we turn the town centre and the high street into the School, rather than isolating and compartmentalising everything? Which high streets and town centers will shrink and how, and which will die and how do we allow/encourage this – and possibly build in the potential to re-emerge?

As ever with town centres, the issues are complex and interrelated, but we have spent the last 50 years failing to recognise that the world has changed. As a consequence we have to urgently change how we are organised, how we think and what we do, especially as we reach tipping points and long-term economic withdrawal from many activities. The future of the town centre is not a simple case of redressing market failure, but is about building on genuine desires to see something exciting emerge and prosper. Easy to say, hard to do.

In the next few days I hope to append a short newsletter which will summarise the session better than I can. The formal newsletter summery of the morning is now available (Reimagining Alternative High Street Futures AM).

If you have not seen the Lighthouse exhibition, then you really should go and make your “can contribution” to the debates.

Since the initial budget announcement there have been various statements about the nature and purpose of the levy and much heated discussion. My thoughts on the whole affair from last Autumn can be found on this blog. The levy was initially intended to raise £30 million in the first year rising to £40 million in subsequent years (£110million over three years) and was seen by many as a way to fill a budget hole.

When the budget was passed on the 8^th February 2012, the Government reacted to these various criticisms by reducing the take by £5m per annum (a supplemental rate of 9.3p was identified) and added a “sunset” clause to end the levy after three years. So we are now a little closer to knowing who might be affected and to what extent.

We are working on a wider project to think about this levy and its meaning and impact and to set such approaches (see also Northern Ireland) into a broader context. As part of that we have produced a very short briefing report which pulls together data on rateable values and store sizes to think about some of the potential impacts. This is a very limited and initial set of thoughts, but we thought it might be useful to share them. The report can be found in the download section of this blog or here (IRS Briefing Paper on Health Levy).

The levy is seen by some as “levelling the playing field” (between large and small retailers, if not between Scotland and England) and by others as a tax grab to fill a budget hole. It is clearly subject to variations and idiosyncrasies of operation and may make retailers in some places question how they can continue to trade profitability without passing on the tax to Scottish consumers or by seeking to restore profitability by reducing costs, which in retail inevitably means looking at the numbers of jobs and the hours of work.

Many applaud the Scottish Government’s consistent willingness to tackle alcohol and tobacco health issues in Scotland, but this levy seems an odd way to build consensus and take effective action, singling out as it does one part of one sector of the trade in these products and not relating the levy to the level of activity in that trade.

Scottish sales, especially in non-food in January, have gone off a cliff. They are substantially worse than the rest of the UK. Scottish Government claims of being supportive to retailing and doing everything they can to bolster consumers do not seem to be producing the results.

In January 2012

• All sales were down on a like for like basis by 2.6 % on 2011
• Non-food sales were down 6%, whilst food was up 1.1%
• Total sales were down 1.5% on last year
• UK figures showed  growth in total sales of 2.1% and a fall in like-for like sales of -0.3%
• The three month moving average saw sales fall in Scotland but rise in the UK (Total -0.2 vs 2.4 and Like for like -1.3 vs 0.3).

However you look at it, these figures are dreadful, but for me most worrying is the continued and sustained underperformance of the Scottish sales figures. This has been the developing story since the end of the English recession, but the gap seems to have widened in recent months.

We all suspected that there would be a hangover post Christmas, but this is now even more worrying than we thought for retailers and retail spaces across Scotland.

The only thing that gives me some pause for thought in looking at these figures is the question of internet and online sales. As far as I understand it, there is an issue over the extent to which internet sales by Scottish consumers are booked and recorded as being Scottish (or indeed should be). On the surface it looks as though UK internet sales would be in the UK data used here, but that Scottish internet sales are not.

Does this matter? Well if this is a measure of retail activity in Scotland then they should be included. Are click and collect sales to be recorded to the head office address for example as “sold” through the central website, or to the (Scottish) store? Does this vary by retailer? There may also be issues of comparability if internet sales, which might be delivered through Scottish shops (or done directly) are recorded in the UK figures. Likewise however, I wonder how Amazon at Dunfermline might be treated if it was to be included (and in passing how resellers would need to be captured), given that they “sell” to and deliver outside Scotland.

Yet another example of how the internet is changing how we think about and report and record retail sales and consumer activity – and that going nowhere near e-Bay yet.

Please forgive the slight digression into internet sales and stats, but these retail sales figures are scary enough on any day, let alone my birthday!

A few other things in their summary report also caught my eye. The claim that 50% of all leases are up for renewal before 2015 must give some pause for thought, given retailers already voiced claims to be examining their portfolios. The rising influence of the internet and the continued increase in sales must also raise questions of what shops are needed and what they are needed for.  The likely difficult future for consumer sales due to the recession and other issues adds to the headache. All point to the continued decline of the high street as the place to shop.

The picture in Scotland is slightly worse in absolute than for Great Britain as a whole, but the trends are the same.

One of the other things I caught up with after being away was the UK parliamentary debate on town centres (17th January), which can be found in Hansard. Quite a crowd was attracted, which says something about how politicians are beginning to feel about how they should feel about the high street. But some 6 hours of debate turned more into a Cook’s tour of English high streets than a dynamic issues driven discussion of what to do. Car parking seemed to be one issue that everyone raised but agreement about levelling the playing field polarised into discussion about the choice between adding costs to consumers in out of town locations or chopping an income stream for cash-strapped councils.

What seems to have been missed in the debate is the reality that there are structural changes underway and we need big and structural responses. Retail Week, last week, lead with Phil Wrigley, once of New Look  claiming Mary Portas was “right diagnosis, wrong prescription” and that the high street is “moribund and irrelevant” and “in a real, genuine and irreversible crisis”. His prescription was to stop muddling through and turn many high streets over to residential use. Is this a vote winner by 2015?

With 1 in 7 shops vacant, the future looking grim and consumers doing other things, we have to begin to think in these terms. Some of these 1 in 7 are long-standing vacancies that really do not justify being in retail use analysis. Of the 6 in 7 shops that are occupied, some may be occupied by some transient and other uses that border retailing. The effect is not always a strong, focused, dynamic, marketed high street or place. A £1million challenge fund is not going to have that much effect, and will we willing to do this for all 700+ town centres, and would it have any impact? The TCRF in Scotland with £60m barely scratched the surface of what needed to be done, before being closed.

If the high street really is dying, then maybe we need to move quickly to put some of them out of their misery? And if we can put people back at the heart of places, then maybe that will help those high streets that remain. Muddling through is not an option, even with the best of intentions.

Whilst it is easy to be sucked into the doom and gloom around retailing in Scotland – and there is certainly enough of it to be sucked in to – there are also success stories. Whilst d2 may not be around for much more, Retail Week ran a story and feature about the huge success of the new  – and first – Primark in Edinburgh on Princes Street and what a successful launch it has been. Good retailers in great locations are always going to be in demand and there are successes, large and small, out there.

Secondly, it was sad to read of the ending of David Sands – not personally of course, but the eponymous firm. David Sands has been around for 200 years, this year, but has, subject to government approval, been taken over by the Co-operative Group. Fife will not seem the same without David Sands red fascia. It is symptomatic of the continuing demand for space in the convenience market. One does wonder however about the impact on the head office and distribution staff in due course.

And the third thing that caught my eye was the report launched by the Scottish Retail Consortium at its recent Parliamentary Reception – Retail: Serving Scotland’s Communities. This short report makes the case for retailing in the Scottish economy – again (politicians have short attention spans sometimes) – and is very welcome. As Primark and David Sands amongst many others show, in their different ways, the changing nature of retailing means that we need always to consider what is going on, attempt to measure and understand it, and continue to seek ways to recognise the contribution that all forms of retailing make to Scotland.

The conclusion of the report may bear repeating:

“Scottish retailing is at a crossroads. It is currently facing significant challenges, with increasingly cost-conscious consumers combined with rising input and operational costs. The rise of internet retailing could represent a major opportunity to access international markets with high-quality Scottish produce, serviced by highly skilled staff, if Scotland offers a low-cost easy operating environment. A burgeoning private sector, creating new jobs in Scottish businesses small and large would support renewed growth, particularly in the high-service food and nonfood markets.

On the other hand, increasing regulatory burdens, high government-driven operating costs and continued economic uncertainty could accelerate current trends of falling footfall, store occupancy and retail employment … public policy decisions will be crucial in determining which path is open to Scottish retail, the 240, ooo people it employs directly, and the many more it supports in Scotland’s other major economic sector”.

At a time when putting at least one question to the Scottish public seems to be in vogue, it might be pertinent to ask again, how might we best support the sorts of retailing we need and want in Scotland?

So from all the data and results and the commentaries, what did I feel emerged?

First, if you has things that consumers wanted then you were quids in. OK, it has always been thus, but this year the redefinition of value through the recessionary lens saw winners at both the top and the bottom end of the market. Luxury did well, but so did the discounters, But then so also did those in the mainstream that caught consumers’ eyes, whether Waitrose, M&S and Sainsbury in food or others in fashion. Some really good figures were seen.

Secondly, and in a parallel universe, if you had nothing that consumers cared about, then they walked away. So in the middle market despite the discounts and the loss-leaders, retailers struggled – Argos being amongst the obvious in this group. Price matters, but only if the product is wanted (fashion) or needed (food). Much of middle Britain’s retailing went into reverse, or in some cases (d2, Blacks, Past Times, Peacocks) simply failed. Some of the bad were truly dreadful.

Thirdly, overlaying this, and for me the most interesting thing, is that it seems to have been an online Christmas (whether computer or mobile). Even retailers trading badly (and Tesco is the poster child here but see Dixons) saw online do well, reinforcing the sense of a structural change in the market. The internet, in all its guises, is now mandatory. At the micro-level, with all the e-readers sold, problems seem likely to accelerate for Waterstones, HMV and the like. There’s being on the internet and there’s being killed by the internet, and the future is tough for those who are on the wrong side of the line.

So where does this leave us – and Scotland? It would be good to know the proportion of online sales across Scotland and in comparison with elsewhere. Middle Britain retail is not going to be around to lead the resurrection of retail in Scotland, killed by the internet and other cost pressures. Space plans will be reigned in and we may have seen a tipping point in thinking about retail space (at all sorts of levels) Maybe, just maybe, this gives local some chance?

Pre-Christmas the Guardian ran a lead story about the huge expansion plans for the major supermarket chains. At the time I commented that this was overblown and probably counter-productive for the retailers, if true. What price Tesco’s expansion of space now? Yes retailers all want good, new space and stores, but the emphasis for all retailers is now more on the good(think CVA, closures etc). And if retailers can’t get good, then they’ll take the internet.

These dichotomies – good space and the internet and the polarised performance of the retail market (don’t be stuck in the middle) – are the new reality for Scottish and British retailing.

But maybe there’s another reality to come. We’ve had the sales figures, but I wonder about the achieved margin for some retailers, given the discounting to entice consumers in and to buy. There’s more pain to be revealed I am sure, and the problems won’t all go away by cutting costs and lessening consumer satisfaction.

A Bumpy New Year to all.

The Lighthouse is one of the only centres in the world that is equally dedicated to architecture and design. Its definition of design includes graphic, product and industrial, interior, fashion, textiles, jewellery and digital design with architecture relating to the built environment, from buildings and planning to landscape design.It was opened in July 1999, by HM Queen Elizabeth, after a £13 million ($20 million) conversion, which transformed Charles Rennie Mackintosh’s derelict 1895 Glasgow Herald newspaper office into Scotland’s first, dedicated, national centre for architecture and design.

And on now, until the 17th April 2012 is an exhibition on Scotland’s High Streets.

Obviously highly topical given the Portas Review and the worries about vacancies and the scale or not of Christmas shopping, the exhibition asks:

“Do we really value our High Streets or are they simply past their sell by date? With vacancies up and shopper numbers down is it time to re-think? In Scotland the High Street began as a market place, a hub of social activity – busy, raucous and messy. This exhibition shows their evolution, our changing shops and shopping habits and the impact this has had today. Specially commissioned films gather people’s stories of the High Street, from butchers and bakers to professors and planners. It looks to the future with remedies that make our High Streets good value, vital in creating unique and thriving places.”

Now you will have to put up with a few seconds (mercifully brief – honest) of me in one of the films, but if you can get past that, then various people discuss what high streets mean for them and what we can do to re-energise and re-imagine them. There is also a look back, and a look at, Scottish high streets in numbers and films and various artefacts to stimulate discussion.

What’s more, the exhibition is free – though there is a nice shop on the ground floor, a cafe on the fifth floor and a panoramic view of Glasgow from the top of the building. Blow away those Christmas cobwebs and help us think about high streets at the same time.

The Lighthouse
11 Mitchell Lane
Glasgow G1 3NU

I spent part of last week reading the full version of the Mary Portas Review, rather than simply the 28 recommendations and press coverage. In my quick comment I wondered if there was much “meat” in the main report, and now I have read it, I am unconvinced that there is. That is not to say that there aren’t good things, but rather that the response of the Government and then local agencies etc will be fundamental.

So what came across in the main report?

1. The style of the report is really interesting. It is a good read, though does tend to overdue the “I” word and is a refreshing alternative to the dull official and (yes, guilty as charged) academic reports we so often see. Other than some jarring references  – why did she have to refer to Westfield (I am sure you can work it out) – it is quite smooth and won’t take you long.

2. But in that style there lies a problem. And that is that there are no solutions here. It comes over as high level and with some ideas, but the practicality of the implementation of all these is left to others. There is almost no recognition of the complexity of what is being asked and the alignment of willpower that is needed to cut through things.

3. There is though welcome recognition that one size does not fit all and that local areas have to get their own acts together. She is not in the blame game – to some extent – but the ideas she puts forward do implicitly point the finger at the way in which we think of high streets and town management. But what powers will “town teams” really have – for example to veto shop uses in high streets – and how will all this funding and operational lines fit together? Not beyond the wit of man – or woman – but not as easy as a two line recommendation.

4. There is also for me a disconnect in some of the lines of thought. We need to bring people and uses back to high streets. Fine, so why focus on only the retail decentralisation that has happened? There is mention of offices briefly, but if we are serious about returning uses then this has to include not only offices and shops, but also cinemas, restaurants, hotels, government agencies and even bingo halls! And in terms of people why is there only one mention of people living in town centers and the potential (long recognised and discussed but rarely actioned) for re-thinking the uses of upper floors in town centres? What financial incentives or reductions in costs can work here?

So this is all interesting and the strength lies perhaps in the force of personality of the author and the inside track she has to some bits of the government. That sense of championing the high street and the publicity that celebrity enjoys for a while may keep high streets on the agenda. And that is no bad thing. But the detail has to be in the Government’s response and the actions that have to follow from that.

With just the merest hint of irony, I was in a shopping centre for much of the day. But a shopping centre with fully integrated public transport links and a degree of wow factor as shopping centres go – Westfield in Stratford next to the Olympic Park. Some interesting shops and approaches from established retailers and it felt busy. But did it feel like a place? Could I tell it apart from any other modern shopping centre? Of course not.

And that’s rather the point about high streets – they are meant to be about somewhere. They are local, of a place and for people, as opposed to business. But along the way we’ve lost that, and that’s not just the fault of the big retailers.

So, cue Mary Portas.

Now, I have not read the full report, nor the supporting document on research into understanding high street performance – too much examination marking if you’re interested – but I intend to in the coming days. What I have read is the list of recommendations and some of the news coverage (in between buying Christmas presents on my smart phone – so much more convenient than actually trying to get to a shop or high street).

For me, the recommendations are really quite contrary. The bad guys are too easy to spot – local councils, landlords, banks, town centre managers and management . The good guys seem to be BIDS and market traders. Free up some of the red tape, consider some rates and rent stuff, give everyone free car parking, throw a national market day party and have some operational town teams and that’s the high street saved. Hardly.

Towns need people to want to go to them or want to live in them. It is not just retailing that’s been decentralised – look at cinemas, restaurants, football stadiums, offices, hotels, government offices and so on. We need to bring back lots of uses and excitement into town centres and high streets. Yes, we do need to free up space use, sort out some better rates and rental stuff to aid diversity and start-ups and make it easier and cheaper for consumers and organisations, businesses and shops to meet up in a place with meaning and have an exchange. The Portas Review is right on all this, but didn’t we know this before?

A lot of the recommendations are wishes not actions and don’t answer the “how” questions. Maybe there’s more meat in the full report, so I reserve full judgement, but as they stand these recommendations barely make it as sticking plasters. But it’s a start and we need high streets and town centres on the national agenda, and the report has done that.

A more considered view will follow, but I somehow doubt we’ve saved the high street today (and as she rightly says, however tough it may be, some are – and should be – beyond saving), with or without some Minister getting town centres to add to their portfolio.

But Mary knows David, and he needs the oxygen of some good news and a sense of things happening. Celebrity culture provides the clout and dynamism that all the previous reports (academics and others – guilty as charged) have failed to deliver. So we’ll get the Towns Minister and some high street pilots and/or high street enterprise zones (get the councils out of the way seems to be flavour of the month, but it is not as simple as that). But please let’s hope the parking league table never sees the light of day.

The Portas Review was about England, but that doesn’t mean that Scotland can be complacent about our high streets. We have many of the same problems and need to find our own Scottish solutions. The debate is as alive here as it is down south. We were ahead of the game with the Town Centre Regeneration Fund – let’s hope we’re not now falling behind.

Three decades of frustration and constant reiteration of the sophistication, reach, scale and significance of retailing may have made some dent in some people, but it is a long road.  Because people go shopping, and see shops everywhere (well, not so much now) they assume ubiquity equates to simplicity and irrelevance.

It does not.

It is therefore timely that the British Retail Consortium (BRC) has produced an appraisal of the retail sector in the UK.  Entitled ‘UK Retail: Leading Globally, Serving Locally’ it sets out the breadth of retail’s contribution to the country.

Amongst the many points it makes are:

• Retail sales are 20% of UK GDP and 5% of GVA.
• UK retailers are more productive than Euro zone equivalents.
• Three million people work in retailing, 10.5% of total employment.
• Retailers account for 12% of total training spend in the UK (50% per employee more than the financial sector and above manufacturing).
• UK retail pays 9% of total tax in the country (28% of business rates, 11% of corporation tax).
• 11% of global internet retail sales occur in the UK (#3 in the world)

This is an important document and should be compulsory reading for policy makers, journalists and academic economists, amongst others.  Too often retailing is taken for granted. Retailing is vitally important to the UK, and British retailers moving internationally, adds further value to the country and its brand.

The figures are a timely reminder of retail’s importance.  They follow hot on the heels of the DTZ report into retailing’s contribution to the Scottish economy, published in the spring.

It would be good if the BRC, through the Scottish Retail Consortium, produced Scottish data from this latest work and their other resources, to continue making the message – Retail Matters.