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Naomi Kerbel Headshot

How Important Is the High Street?

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Back in 2011, David Cameron gave the self-styled 'Queen of Shops' Mary Portas a mission - take a good look at the UK high street and tell us what's wrong.

As I walk down my local high street today I have to say, not much appears to be wrong. Although the butcher is a bicycle rather than a walk away, there's a Tesco Express handy for mid-week shop top-ups, a bank, a few local restaurants, a post office and an independent book shop. But go out of the privileged confines of the M25 and the picture is dramatically different. The north-west has the highest proportion of shop vacancies, at 17.3%. The national average is 12.2%.

Portas, herself a shop girl turned successful businesswoman knew what she was taking on. In the Portas Review into UK high streets she didn't pull her punches. She said the high street was at "crisis point". And was unsentimental in her evaluation: "How we shop as a nation has quite simply changed beyond recognition. Forever."

And so, the Portas pilot was launched - £1.2m of funding to revamp the UK's most well-trodden pavements. But more than two years on, as Sky News' Frazer Maude outlines in his video report, key recommendations such as free parking and a reduction in business rates, arguably those that could have the most impact have been ignored.

Critics have argued that the scheme should not have been piloted without agreements first on parking and rates. Surprisingly, David Wood the chief executive of Brand Mary, the company set up to look after Portas' various interests including the High Street Review agrees and sounds like he has some beef with the government.

"We think there's some justified criticism of the way government originally implemented the programme and the lack of infrastructure to support the town teams.

"There's also justified criticism of the way the majority of the recommendations were accepted but nothing was done."

But there is something far far deeper at the centre of all of this. Something that has become a part of our every day lives like the dawn of the high street itself in the late 19th Century. And that is the internet. The rise of online shopping has revolutionised the way we live and the big retailers are adjusting accordingly.

Tesco, Asda, Sainsburys and Waitrose through Ocado have been onto this for a long time, Morrisons is only just catching on. These behemoths of UK retailing are shifting focus to local convenience stores, abandoning plans for new mega out-of-town stores and instead opening massive warehouses or "dark stores" dedicated to internet distribution.

But these big names are facing problems themselves. The rise of the discount retailer is causing many a chief executive to wake in the night with the sweats. No more so than Tesco's Philip Clarke who's been the latest victim of the supermarket war.

Tesco's share of the grocery market fell from 30.3% last year to 28.9% up until the end of July. Meanwhile, Aldi's share rose from 3.7% to 4.8% and Lidl has expanded from 3.1% to 3.6%. Tesco announced last month that Clarke would be replaced in October.

It seems that vast variety isn't as enticing as it once was. Think of the number of times, you've stood staring at rows and rows of washing powder, an odd trance-like state sweeping over you as you try to remember what it was you were after in the first place.

All that choice is overwhelming and unnecessary. Who needs 42 different varieties of dishwasher tablet when one cheaper but arguably just as good, will do?

So, like a 10-tonne lorry takes longer to do a three-point turn than a Ford Fiesta, the high street can act far quicker to respond to customer demand than the bigger retail giants.

The success of a shop will not be because the government pumped money into it but because they spotted a gap in their local market, filled it and consistently reviewed whether they're filling it with the right stuff.

No one can be complacent. Despite the latest growth figures showing that the UK economy is back to its pre-crisis peak, in terms of wages we're still £1,500 worse off a year.
Personal debt is on the rise. The number of people registered as formally insolvent totalled 27,209 in the second quarter of 2014 which is an 8.3% increase compared to the first quarter of the year.
And we may all be bored with the rhetoric on house prices but here's a quick reminder:
Rents are up by 6.3% on a year ago and
and house prices are 6.4% higher, with London up 16.4%.

This is not to scaremonger but to highlight that the recovery is fragile and local shops know this better than anyone. They can see whether takings are up and down day to day, not just week to week or month to month and it is taking action that is key to their success.

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