Houses of Parliament

Charity shops and the future of the high street

Due to our role in the charity retail sector we are often invited to participate in influential meetings with politicians and policy makers. As part of this work, I represented the Charity Retail Association at a discussion on the future of the high street in the Houses of Parliament on Wednesday 1 May.

This was organised by the All Party Parliamentary Group on Textiles and Fashion, chaired by the SNP MP Dr Lisa Cameron.

First to speak was Professor Will Jennings from the University of Southampton.  He helped to set up the Centre for Towns with Lisa Nandy MP. This is a non-party think tank looking at how the UK’s towns can be supported to survive and thrive. He stated that much successful work has been done to support cities in recent years but that often towns have been ignored even though many people closely identified with their local town. 

In 2001 in large, medium and small towns the core form of employment was manufacturing, but this has dropped dramatically and was not the main form of employment in any type of town by 2011. Largely this has been replaced by retail as the core form of employment, so the future of the high street and the jobs that it provides should be a major political priority.

He also identified key demographic differences, and huge divergence in social attitudes, between people who live in cities and towns. The demographics in towns are older and with less disposable income, which again presents a danger to the future of high streets in these towns.

Next up was Bev Malik the Fashion Retail Director at the charity Fashion Roundtable, who also provide the secretariat to the APPG. She has a long history in retail including as a buyer in some top end brands, she outlined how many people have identified a “Retail Armageddon” with the current Retail Health Index (RHI) scoring only just above the worst-ever score from the double-dip recession of around a decade ago. The health of bricks and mortar retail is even worse than the overall picture.

She identified three reasons for this: Brexit which has damaged “brand Britain”; staffing issues, and; changing consumer tastes which make fashion less of a priority. Online is not a panacea to this as it does not suit all businesses and favours those already established in the field. Worse, those that do continue to want so shop in bricks and mortar are not properly serviced and given the support they would expect when in store.

Her ideas for solutions included listening to the consumer and giving them full details on its production and making bricks and mortar stores akin to theatre which gives people an unforgettable experience.

Frances Card – a former board director at Harvey Nichols and Liberty – was far more positive about the current state of retail. She highlighted how online is now moving into bricks and mortar with even Amazon opening stores but overall believes that the opening up of the web which means the entire world can be a retailer’s market is a great and positive thing for the sector. 

She gave a detailed history of how selling online has transformed the sector over the last twenty years. Things they never anticipated at the start of this revolution included the access to customer data, trouble of buying stock and the extent of returns.

Next to speak was Anne Alexandre, the manager who runs the Retail Sales Monitor for KPMG and the British Retail Consortium. She began by highlighting the previous three years of sluggish real wage growth, and at times negative growth.  The result is that the sales trend in non-food items has been slowing down and declining.

At the same the trend of selling online has increased, with the proportion of non-food sold online now standing at 26 per cent. At current rates all items would be sold online within 50 years, though this is unlikely to happen in practice. Anne highlighted how so much has been shifted from psychical shops to online, this includes jobs and investment for companies. Though online does have its own issues and the growth of online is starting to slow slightly.

She conclude by demonstrating how government policy is having an impact on the high street with the relative cost of business rates and wages increasing.

Finally, Charlotte Taylor-Phillip, a senior policy adviser at the Federation of Small Business (FSB), a non partisan group represent 170,000 small businesses in the country. She began by outlining the rapid change we’ve seen in the last twenty years, with a new online competitor emerging in almost every single sector. By 2025 there will probably be 900,000 fewer jobs in retail with women bearing the brunt of this.

The FSB was neutral on the Brexit vote but has consistently argued against a no deal Brexit with no adjustment period for small businesses to adapt. This could damage trade, with one in ten small businesses stating that they would stop exporting altogether if the UK left on WTO terms only.

Small business must adapt to these changes and it’s not an exclusively negative picture. Click and collect has helped some stores to attract footfall, and, whilst some larger chains have closed in high profile cases there are many other independent retailers opening.

At the end of the presentations, Dr Lisa Cameron MP stated that all of the key points from the day would be brought together in a document to be sent to the government to inform their high street strategy, and she will continue to lobby them on this issue.

It was an extremely interested day and great to be involved.

Matt Kelcher
Head of Public Affairs and Research
Charity Retail Association