An exclusive look at the challenges and opportunities for retail businesses, as revealed in the Future of the High Street report the Federation of Small Businesses.
Supporting pop-ups for new businesses, creating mobile phone-based loyalty programmes and helping bricks and mortar businesses improve their online presence are some of the recommendations set out to revive the UK’s villages, towns and city centres, in a major new report by the Federation of Small Businesses (FSB).
The Future of the High Street report builds up a picture of small firms in and around the high street, including the retail sector, and sets out a vision to help transform high streets into places that meet future needs and support the next generation of entrepreneurs.
The report revealed that the biggest risks for local high streets, according to the retail businesses based on them, were falling consumer spending (74%), rising online shopping and delivery services (55%), plummeting footfall (53%) and crime or anti-social behaviour (48%).
Almost two thirds (63%) of local retail and wholesale small businesses say a diverse range of independent businesses is one of the most important factors for the future of their local high street.
Tina McKenzie
Tina McKenzie, policy chair at the FSB, notes that these businesses also need to be “well equipped” for the future.
“The retail and wholesale sector has been hard hit in recent years, with pressure from the cost-of-living crisis, as well as increasing energy and supply costs and the tightening of consumer purse strings,” she says.
“On top of this there’s been seismic changes on the retail scene in recent decades, with the growth of chain stores, the introduction of out-of-town retail and the arrival of the internet all making their mark. Our high streets continue to evolve and that’s why it’s so important that small businesses at their heart are well equipped for the future.”
The report, which features in depth analysis following a large-scale survey of small businesses, suggests a specialised fund to support mobile phone-based loyalty programmes for high street firms and launching community-specific online marketplaces to showcase local shops and services.
Loyalty schemes tailored to local retailers and communities can encourage repeat visits, higher spending, and a stronger sense of connection between shoppers and their high street. The research found that some sectors on the high street are more likely to offer and make use of these loyalty schemes such as food and beverage businesses (36%) and retail (22%).
The business group’s report is also calling for local authorities to finance support for pop-ups, markets, and temporary use initiatives for first-time businesses to encourage new ventures and help them set up on the high street. This could benefit business owners who are already utilising the benefits of social media to create businesses and interact with customers, but who want a physical presence on the high street.
(Photo: FSB)
Sheri-Ann Bhim started her online business during the Covid-19 pandemic, creating and selling greetings cards and gifts online. Currently selling online from her home in London allows her time to engage with her customer base across the country and develop her products.
The entrepreneur has considered expanding into a retail store that would provide her with storage space but is put off by the challenges that come alongside a physical shop, like “business rates and other overheads”.
“The high street seems so volatile in comparison to online. Yes, online sales can go up or down, but you don’t have as much investment or overheads in comparison to being on the high street,” Bhim says.
“It would be great to have more use of flexible space on the high street. I would love to have a pop-up shop from February to June, so from Valentine’s Day to Father’s Day and maybe two months ahead of Christmas as they’re busy periods for card sales. In the summer when my business isn’t so busy another small independent retailer could take over.”
The future of the high street “needs to be flexible” she adds. “It won’t be the same bricks and mortar businesses that have been there for 200 years, it will have a range of businesses that change with the season. We need to move away from long leases - flexibility is key.”
The integration of physical high street presence with online commerce is vital for the survival and growth of small businesses. With 39 per cent of local businesses selling to their customers via their own website it’s important that high streets remain competitive and appealing to consumers via their online presence.
Abdul Arain
Abdul Arain, owner of Al-Amin grocery store in Cambridge, emphasises the importance of small independent firms being helped to showcase their businesses online.
“Traditionally we have shops on the high street that are independent, then you have [stores like] Tesco Express and Sainsburys, which have a much stronger corporate identity and are more visible. If they want high streets to have a variety of businesses, something needs to be done to allow local businesses to be recognised for what they are offering. That would be powerful and could have large gains for small businesses,” he says.
FSB’s report suggests support could range from basic online marketing and advertising strategies, to utilising online platforms for retail only businesses. To help bridge the gap between more traditional retail and digital marketplaces, a fund could be introduced to support businesses develop their own websites and e-commerce operations.
“As well as core recommendations targeting fundamental issues for small firms on the high street, including business rates, transport and parking, this report also lays out innovative asks to ensure these businesses can survive into the future and ultimately help revive our town centres,” McKenzie says.
“High streets must be helped to evolve to changes in consumer behaviour as well as how small firms want to work. Introducing loyalty schemes should encourage local businesses to collaborate and incentivise consumers to shop, eat, and drink locally.
“We heard from many online small firms who want to take steps to open up in a bricks and mortar premises on the high street and this is exciting to hear. These businesses need support to make that change – and should be given the flexibility to access pop-up and temporary units.”
According to the report’s other findings, empty units are a major blight on shopping streets across the UK, with more than two thirds (69%) of local businesses reporting them on their nearby high street. FSB is asking for a band of on-site high street chiefs responsible for the growth and wellbeing of high streets across the country, creating promotion plans and monitoring vacant units within their area.
(Photo: FSB)
The research also highlights the need for well-maintained and accessible modern public toilets and family-friendly services like creche facilities, encouraging visitors to stay longer, upping footfall and supporting the local economy.
Business rates remain a huge burden on high street small businesses, with the current Small Business Rate Relief (SBRR) a key part of their survival. Half (50%) of local retail and wholesale small businesses say they would not survive without SBRR. With more than half (54%) of high street small businesses claiming they would invest in or grow their businesses if the SBRR threshold was increased from £12,000 of rateable value to £25,000, FSB believes doing so would be a crucial step in allowing small firms to further foster growth.
The report calls for a high street hop scheme providing free bus fares on key routes during peak shopping days to help increase footfall. Offering free parking on at least two Saturdays and two additional days a month, would bring in more visitors and support local businesses by making high streets more accessible, it adds.
A third (34%) of local retail and wholesale small firms say a reduced ability to accept cash payments in the future would pose one of the biggest risks to their local high street. The report calls for a Banking Hub Setup Fund, paid for by high street banks to cover the cost of setting up a hub on a high street, supporting local economies and ensuring essential financial services remain available to businesses and the community.
“Our small businesses are an integral part of the high street and will be central in leading the transformation of their local economies. By providing the infrastructure, flexibility and digital connectivity that modern businesses demand, high streets will then have the resources available to become resilient, dynamic hubs ready for the future,” McKenzie concludes.
SPAR UK has announced the appointment of Michael Fletcher as its new managing director.
Fletcher spent 22 years at Tesco plc, where he held numerous senior commercial roles in the UK, Ireland and Asia. He joined Co-op Retail in 2013 where he held the position of chief commercial officer before moving on to become CEO of Nisa Wholesale, a role he held until 2022.
Since leaving Nisa, Fletcher has taken on several non-executive director and board advisory roles. He is also the founder and chief executive of Sleet Brush Limited, where he focuses on designing and implementing innovative solutions to complex retail and wholesale challenges.
“Michael has outstanding credentials in commercial, retail and FMCG sectors, with experience across various trading environments,” Nick Bunker, non-executive chair, SPAR Food Distributors Ltd, said.
“His professional capabilities and high standards consistently drive excellent business performance and operational resilience. We are delighted with his appointment and look forward his lasting and positive contribution to the SPAR business.”
Fletcher added: “SPAR is a globally recognised and respected brand, and I am thrilled to join the team. I look forward to supporting the ongoing strengthening and development of the SPAR proposition in the UK.”
October saw shop prices fall marginally further into deflation for the third consecutive month with food inflation eased, particularly for meat, fish and tea along with chocolate and sweets as retailers treated customers to spooky season deals, shows industry data released today (29).
According to British Retail Consortium (BRC), shop price deflation was at 0.8 per cent in October, down from deflation of 0.6 per cent in the previous month. This is below the 3-month average rate of -0.6 per cent. Shop price annual growth was at its lowest rate since August 2021.
Food inflation slowed to 1.9 per cent in October, down from 2.3% in September. This is above the 3-month average rate of 2.1 per cent . The annual rate continues to ease in this category and inflation remained at its lowest rate since November 2021.
Fresh Food inflation decelerated in October, to 1.0 per cent , down from 1.5 per cent in September. This is below the 3-month average rate of 1.2 per cent . Inflation was its lowest since October 2021.
Ambient Food inflation decelerated to 3.1 per cent in October, down from 3.3 per cent in September. This is below the 3-month average rate of 3.3 per cent and remained at its lowest since March 2022.
Helen Dickinson OBE, Chief Executive of the BRC, said, “October saw shop prices fall marginally further into deflation for the third consecutive month. Food inflation eased, particularly for meat, fish and tea as well as chocolate and sweets as retailers treated customers to spooky season deals. In non-food, discounting meant prices fell for electricals such as mobile phones, and DIY as retailers capitalised on the recent pick-up in the housing market.
“With fashion sales finally turning a corner this Autumn, prices edged up slightly for the first time since January as retailers started to unwind the heavy discounting seen over the past year.”
“Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed Government regulation. Retail is already paying more than its fair share of taxes compared to other industries.
“The Chancellor using tomorrow’s Budget to introduce a Retail Rates Corrector, a 20 per cent downwards adjustment, to the business rates bills of all retail properties will allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said, “Inflation in the food supply chain continues to ease and this helped slow the upward pressure of shop price inflation in October, however other cost pressures remain.
“Consumers remain uncertain about when and where to spend and with Christmas promotions now kicking in, competition for discretionary spend will intensify in both food and non-food retailing.”
PayPoint has announced a new partnership with Leeds Credit Union (‘LCU’), a financial cooperative with 37,000 members, enabling them access to its CashOut service, effective immediately.
The partnership will mean that LCU customers can access their cash and savings across any of PayPoint’s UK network of 29,000 retailer partners. This represents an unprecedented growth in accessibility and the first partnership of its kind for LCU. Historically customers have needed to visit one of LCU’s four branches to withdraw money.
Leeds Credit Union provides straightforward, affordable financial services. As a mutual there are no shareholders, so it is owned by its members and always has the interests of the members at the heart of everything it does. The credit union prides itself on providing members with the most appropriate services based on their circumstances.
“Our partnership with Leeds Credit Union will enable its customers to access their funds more easily than ever before," said Jo Toolan, Managing Director of Payments at PayPoint. "We’re committed to pursuing these kinds of partnerships, which enable credit unions to offer a more competitive and technologically advanced service, while simultaneously making the lives of customers that little bit easier through enhanced access.”
Greg Potter, Head of Marketing & Member Experience at Leeds Credit Union, said: “Increasingly, we’re looking at ways that we can apply technological solutions and partnerships to add value to the experience of our members using Leeds Credit Union. This partnership is demonstrative of our determination to grow in their best interests and will make access to funds something that can be done at any of a number of PayPoint locations in the UK.”
Keep ReadingShow less
A Philip Morris logo is pictured on a factory in Serrieres near Neuchatel, Switzerland December 8, 2017. REUTERS/Denis Balibouse/File Photo
Marlboro-maker Philip Morris said Tuesday it planned to close down its two production sites in Germany, citing falling demand for cigarettes among Europeans.
"In recent years, demand for cigarettes in Europe has fallen significantly," the company said in a statement, adding that it saw the same trend for roll-your-own tobacco.
"This trend is expected to continue in the coming years," the company said.
Many smokers have been shifting to e-cigarettes, or vapes, and heated-tobacco devices.
Philip Morris employs 372 workers at its factories in Berlin and Dresden. Both sites are scheduled for closure next year.
The tobacco giant said it would begin discussions with labour representatives to find "fair and socially responsible solutions" for staff.
Nisa retailer Prem Uthayakumaran has made significant donations totalling £3,500 to two local community organisations through Nisa’s Making a Difference Locally (MADL) charity.
The funds will provide essential support to groups within the communities that his stores serve, helping them continue their invaluable work.
The first of these generous donations was a £1,000 contribution from Broxbourne Service Station in Hertfordshire, directed to the Lea Valley Karate Academy. The funds will enable the academy to purchase much-needed equipment, ensuring that young people and adults in the local area have access to high-quality resources as they develop their skills in martial arts.
Additionally, a £2,500 donation was made by Eastfield and Cross Road Service Stations to the Mansfield Town Ability Counts Football Club. The club, which provides opportunities for individuals with disabilities to participate in football, will use the funds to support their programs, enhancing the experience for current players and making it possible for even more participants to join.
In July 2024, Prem donated £1,000 to Voice of the Vale – a group of young performers at Nottingham Trent University. This followed further self-donations from Prem to Broxbourne Organisation for Disabled and to Mansfield Under 12s Football Club in 2023.
Prem Uthayakumaran said: “Supporting the communities around my stores has always been important to me, and through Nisa’s Making a Difference Locally charity, we’re able to make a real, tangible difference. The Lea Valley Karate Academy and Mansfield Town Ability Counts Football Club both play vital roles in their respective communities, and I’m thrilled to be able to contribute to their success.”
Nisa’s Making a Difference Locally charity enables retailers to donate to local good causes through the sale of Co-op own brand products in their stores. A percentage of sales from these products goes into a MADL fund, which retailers can then use to make donations to charities, schools, sports clubs, and other community groups.Kate Carroll, Head of Charity at Nisa, said, “We are delighted to see retailers like Prem using their MADL funds to support such worthwhile local causes. Both the Lea Valley Karate Academy and Mansfield Town Ability Counts Football Club provide vital services to their communities, and donations like these enable them to continue their important work. At Nisa, we are incredibly proud of our retailers’ commitment to making a difference locally.”
Nisa’s Making a Difference Locally charity has been helping retailers like Prem Uthayakumaran give back to their communities for over 15 years, and with each donation, they help foster stronger, more Connected local areas.