High Street Blues

There’s a distinct chance Britain’s high streets will look like ghost towns after the recession. New shopping centres in Britain – the equivalent of eight Bluewaters – will open over the next few months. They are certain to worsen the gathering storm.

Accountants PriceWaterHouseCooopers reckon another 3,600 retail outlets could fall vacant if just ten per cent of national retailers have difficulties over the next year, a scenario made worse by the continued growth and popularity of on-line shopping.

Thirty retailers have gone into liquidation this year – including DIY giants MFI, shoe chain Dolcis and furniture supplier Rosebys. Sometimes chains survive by slashing outlets – such as Jessops the photographic group which has closed over 80 stores.

Previously the once thriving service sector would have reduced the slack – especially coffee chains. But even coffee is looking costly. Demand has been falling – especially with a cut-back in City workers - and expansion plans put on ice.

Giant new shopping developments – where tenants who signed up months before the developments came on steam - have no choice but to put on a brave face. Such developments include the likes of the new Westfield centre at London’s White City – already dubbed White Elephant centre by some - and Bristol’s Cabot Circus.

Big retail chains – especially in fashion and clothing – expect a blood-bath at Christmas.

Jewellers could be in for a rough time. Recent reports suggest that the recession is now beginning to bite at the top end of the non-essential sector. Jewellery outlets in places like Canary Wharf could be hit. Thousands of city jobs are being scythed and the bonuses which bought the baubles are being scrapped – though not quickly enough for many.

There is a sense that in straitened times people don’t want to appear flash or showy in their spending. The celebrity culture now looks more vulgar than ever. As the recession deepens, and the dole queues lengthen, it’s smart to be modest, to make do and mend.

Retail margins across the board will be slashed to the bone and the competition in every sector – especially non-essentials – will be ferocious.

West End shops in London with colossal fixed overheads and wage bills are expecting developments such as that at White City to further siphon off their trade.

The cost of getting to London for out of town Christmas shoppers is beyond the reach of people faced with costly train journeys, high petrol costs and punitive parking.

Consumers have grown savvy and demanding. They are now less shy about bargaining and making offers. Prices will be slashed especially in fashion and electrical items.

Another worry for the multiples is the growing trend among consumers to save their money until the sales begin. There’ll be plenty of bargains this Christmas and there are certain to be more casualties among the familiar names which dominate the high street.