Is the High Street Still a Suitable Habitat for an Entrepreneur?
A look behind the headlines to see whether the high street still has potential for retail start-ups.
Woolworths, Blockbusters, Comet, HMV, Barratts, Jessops to name just a few: the list of recent High Street casualties is long and depressing. If you take the media headlines at face value, you’d certainly be forgiven for thinking that the High Street is now a ‘dead zone’ so far as entrepreneurship is concerned. There are some well-reported exceptions of course. For one thing, there’s the seemingly unstoppable rise of the ‘pound shop’ niche – with Poundland very recently achieving the quite remarkable feat of opening 11 stores in 11 days to bring its UK store total to over 450, according to an article on The Grocer.
Without wishing to speak disparagingly of the success of Poundland and its ilk, it’s pretty safe to say that the growth of this particular model is hardly a solid indicator of a vibrant high street.
What if your idea for a high street business start-up is worlds apart from Poundland? Why take the chance on a commercial lease when we can spend considerably less money building an all-singing, all-dancing website to sell to a global audience? Should we leave the high street as merely a place to eat drink and be merry? It’s worth taking a closer look at the current climate …
A Shifting Landscape
A little perspective is always useful. One way of looking at it is that the High Street has always been in a state of flux. It’s sometimes easy to forget that it definitely wasn’t the case that everything was rosy and secure in our town centres pre-recession and pre-Amazon. The rise of the out-of-town retail park has been an issue since the eighties. Many people in their sixties and older will remember the sheer novelty of an early supermarket – i.e. being able to help yourself to goods as opposed to giving your order over the counter.
The High Street used to be like this – according to the Two Ronnies. Do we really miss it?
No doubt people bemoaned the demise of milliners and haberdashers when the first department stores arrived … and so on. The ‘high street’ is definitely not a fixed entity.
Is Amazon The High Street’s Armageddon?
The feeling is that this time it’s different. Previously, the shops may have changed but by and large we still had to physically cross their threshold to get what we wanted! By the beginning of this year, internet sales were responsible for 9.7% of total retail sales – according to the Office of National Statistics (ONS). December is of course always the busiest time in retail, and last December saw the average value of weekly retail sales on the internet peaking at £844m. Increasingly, we’re no longer ‘heading into town’ (or even out of town for that matter) in the numbers we once were and there’s little to suggest that this trend is going to alter any time soon.
Existing high street names have obviously had to learn to adapt, and many of them now have an online presence which is equally – if not more – valuable financially than their physical stores.
So we get that big names are having to make changes to the way they operate (and sometimes very painful changes at that!). Does this automatically present a ‘Do Not Enter’ sign to entrepreneurs and business start-ups?
Well, not necessarily. True entrepreneurship is a skill (or rather, a set of skills) – and one of the vital components of it is being able to identify opportunity. Size is important too: a micro-business is a very different beast to a large, often incredibly unwieldy chain store. It may be able to flourish – even in what looks like an unpromising environment.
There are also a few rays of sunshine that any would-be high street entrepreneur may want to check out as part of any strategic review of an initial concept:
A Micro-business Friendly Environment?
Recent legislation in the UK is designed to foster high street entrepreneurship. The Localism Act allows councils a degree of flexibility when it comes to business tax. If a council is keen to attract businesses into a certain area it can grant discounts to the ratepayers.
What’s the attitude of the council in your area when it comes to fostering small business growth? In terms of balancing risk and opportunity, it’s definitely something to take into account.
The Resurgence of the Market Stall
The emergence of the farmers’ market certainly had a rehabilitative effect on the market image. Try and forget the idea of knocked-off clothing and ‘apples and pears’ – and instead imagine a boutique shop under canvas. You’ve got lower overheads and less risk than the bricks and mortar alternative.
Street market provision is definitely something you need to be looking at in your proposed location.
The Pop-up Shop
Essentially this is the type of situation where a commercial landlord lets space on a short term basis. The beauty of it is that you can test the market, test your product (and indeed decide whether the retail niche is really for you).
Check out popupbritain.com to find out more.
Help from Unexpected Quarters
There is, undoubtedly, a grass roots surge against big retail business – and not just because of corporate tax issues and the likes of Amazon. People really want to do business with smaller retailers, especially as they are more likely to be experts in their niche products.
The recent launch of Amex Shop Small, though it only benefits registered shops throughout the month of July 2013, shows that corporations are taking notice of smaller retail outlets. If the experiment is a success, it will not be an isolated incident!
Yes, the High Street’s risky. Yes, online retailers are going to continue to swallow up an increasingly larger proportion of the pie. Having said that, we’re still talking about a pretty big pie here. The UK retail industry’s annual worth is approximately £150 billion. This means there’s still plenty of scope for entrepreneurs looking to make inroads.
Success on the high street isn’t guaranteed – but the same can also be said about building your whole business strategy on being able to climb up the Google rankings!
Over To You:
What do you think? Is the High Street doomed? Are initiatives like pop-up shops and the Portas Towns too little, too late? Is the change just inevitable and retail entrepreneurship now consigned to the Internet?