Warnings for the future health of our high streets

Business leaders and residents have expressed their dismay at a series of firms including HMV filing for administration, having come under increasing competition from companies trading exclusively on the internet.

Finding the solution to what some observers have portrayed as the decline of the traditional high street is one of the business community’s most pressing issues.

Not only does the retail sector provide a significant proportion of jobs across Worthing, Shoreham and Littlehampton, the health of such core companies remains a strong barometer for the wider economy.

But with troubling performances registered by some firms in the run-up to Christmas which saw companies engage in high-risk discounting, it was clear hard-pressed shoppers were feeling far from frivolous.

With other factors including wage stagnation and instability in the jobs market factored in, customers’ spending power has been clearly reduced, which has impacted considerably on regional economic outlooks.

Another key issue has been poor weather – plenty of rain and more recently snow – which had a marked effect on short-term sales confidence. Consequently, area footfall figures were down compared to previous years.

However, Worthing’s Town Centre Initiative and chamber of commerce have attempted to support firms with measures including the creation of online directories, plus the staging seasonal events to draw in trade and the setting-up of an enterprise week.

But to a growing number of analysts, the cultural shift in how we shop, with a rapid rise in internet purchasing, is continuing to have a dramatic impact on our town-centre businesses.

It is a factor companies should clearly pay close heed to, with around 15 per cent of retail sales now being over the web.

There are clearly other factors at play too, with supermarket chains such as Tesco (which has nine branches in Worthing) and Asda, which has just opened at Ferring, also influencing shopping trends, through offering a ‘one-stop environment’.

Despite concerns, there has also been some cause for optimism, with the director of the Institute for Fiscal Studies, Paul Johnson, believing the employment picture could be even more severe than it is.

London-based expert Mr Johnson, who originally hails from Shoreham, said: “We are in a position with our economy where incomes are lower than they were five years ago, which is an extremely unusual place to be in.

“The cuts in benefits that are being made are affecting a lot of people and wages are rising well behind the rate of inflation.

“But the good news is that unemployment is way lower than you would expect given what the economy has gone through.

“Younger age groups under 35 have been hit the hardest, but we still could have expected things to be around 50 per cent worse than they are,” explained the senior economist, who said it was little surprise that chains such as HMV had experienced difficulties because of internet pricing competition.

As detailed earlier in the paper, one Worthing councillor, James Doyle, is proposing decisive action to address the situation.

Significantly, he felt the area had ‘been at the mercy’ of chain stores, resulting in only a couple of independent businesses now left in Montague Street.

He believed the county council needed to work closely with Worthing Borough Council to ensure the area pulls free of recession.

His four-point plan of action addresses some core issues including improving the shopping environment within Montague Street and creating a virtual high street with a Worthing app to draw traders together. He was hopeful this would have a genuinely positive impact in both the centre and West End of town.

Cllr Doyle said: “There should be support for independent traders in offering business training for those who make the town centre unique.

“There are a number of landlords in the area that are owned by bodies such as pension funds which look at them as an investment – they should realise that they may not be able to get £20,000 or £30,000 a year in rent. They should have people in their rather than having them stand empty.”

Worthing’s Town Centre Initiative manager, Sharon Clarke, revealed a mixed picture of trading in the area over the festive period.

She believed that despite ongoing economic challenges, there were a number of smaller firms offering distinctive products that were proving resilient.

And speaking to us about the troubles facing HMV, Tina Tilley, of Worthing and Adur Chamber of Commerce, added that both independent and smaller retailers required further backing to weather testing economic times.

She said this had been one of the key reasons the chamber had recently set up a programme of business mentoring and it had been closely involved in setting up Worthing’s Enterprise Week (see BM this week).