Grantham Journal Column – 14th September 2018
The growth of online shopping is undeniable, recent statistics that virtual sales are up by nearly 17% merely echo the changing way we all shop.
It’s tempting to blame the ongoing downturn on the high street solely on the evils of Amazon and their ilk. Amazon is experiencing record-smashing profits, while M&S will close an estimated 100 stores between now and 2022, and House of Fraser has gone into administration. The reality is that we, the consumer, are to blame. Our choices and habits are now met by a vast array of online shops and traditional physical stores are struggling to compete. The evidence is stark here in Grantham with the scourge of the empty shop front still blighting the town centre.
So what can be done? Chancellor Philip Hammond has one proposal, backed last week by Scottish Conservative leader Ruth Davidson: an “Amazon tax” on online giants, to “rebalance the playing field”. He argues that our shopping habits are changing and causing the high street to suffer. The response is to slap a tax on the booming business wrought by online retailers. In essence ‘tax success’ – a worrying mantra from someone at the heart of government. The most likely result of an Amazon tax would be higher prices for consumers online, but this wouldn’t drive consumers back to the high street. You can’t depress the benefits and convenience of online shopping (opening hours, reviews, range, etc) simply by taxing it. No matter the levels of taxation many types of shops are never likely to return to Grantham due to demographic and economic reasons.
What we need is a level playing field, rather than business rates and parking charges being a hindrance to the High Street, they must support the local economy not continue to be a cash cow to be milked for vanity projects and misadventure. Elsewhere in the UK we’ve seen town centres become the home of the independent retailer and a return to town centre living. I hope to see more free parking introduced here in Grantham along with longer and simpler on-street parking so that consumers have less barriers to spending their cash locally.
There is a massive opportunity to change as well. For example Morrisons after experiencing years of poor performance culminating in nearly £800m in losses in 2015, the company launched an ambitious turnaround program. This involved a multifaceted strategy: cutting prices, expanding its brand, and streamlining management roles. However, the key to the recovery was venturing into wholesale territory, cutting a deal with none other than Amazon. Morrisons began supplying Amazon with produce, that the online giant then sold through its Amazon Fresh and Amazon Pantry sites. As a result Morrisons is in its third consecutive year of growth and is the fastest growing of the big four supermarkets.
The stark reality is that the old traditional high street is dead and we are all to blame. However from its ashes a new vibrant but different town centre can arise providing we are brave enough to seize the moment.