Uncle Audley says “We’ve Never Had It So Good” – but is he right?

Uncle Audley snorted from behind the Sunday paper.  It was the business section and I guess that he had been reading about the latest developments related to the credit crunch and the recession.  “What’s up?” I enquired setting Uncle Audley up for his take on the situation. 

 

“If I had based my judgement on this reportage then I would think that it was the end of civilisation as we know it.  I was going to say Armageddon, but I read somewhere else there is a reluctance to use this particular word.  Now I am not saying that there is not a lot of suffering already from the recession.  Innocent, blameless people are losing their jobs and I am afraid there will be more job losses in the coming months.  I know then that there is a knock on effect of having to sell one’s home at the bottom end of the market, if one cannot get another job.  We should try not to be too pessimistic and keep things in context.  The economy may shrink a little after years of growth.  We will have to tighten our belts and cut down on things.  You younger ones should realise, though, how much our standard of living has gone up, even in the last ten years but certainly significantly since the recession of the early nineties.  If I go back to the earlier recessions of the early seventies and early eighties, then there is simply no comparison.  Even after the belt tightening, the generality of us have a much higher standard of living now than ever we did then. 

 

For those of us who are that little bit older and have longer memories, we can go back to the privation suffered by British families in the Second World War and the decade or so afterwards.  What we consume in a day now would have to last us at least a week then.  Rationing did not stop until the mid 1950’s.  Houses were colder, clothing was of poorer quality.  Cars would break down.  We had some seriously severe winters to contend with such as in 1947.  I remember the evocative pictures of people having to queue to get some coal, which was also rationed, in order to try and heat their homes. 

 

I could go on.  That was austerity.  But, even today, if you are prone to bemoan your lot, do have a look round the world and put things in perspective.”

 

He might have a point; but what’s your take on the situation? If you wish to comment please use the box below.

Nick Forsyth considers local prospects for 2009 following retail failures

It was a strange Christmas morning. “What did you get?” “Voucher!” “Where for? – right get down and spend that quick as they’re rumoured to be struggling!” Twice we had that but it would be rude to mention the stores concerned in this article but take it from me those vouchers were spent on Saturday!

 

I read on Saturday that four Essex Woolworth’s branches were to close on that day and Braintree was to be one of them. A sad day indeed for the town as Woolworths is one of the largest stores in the town centre and will be really difficult to fill. Braintree also has a Zavvi and today’s casualty Adams so it is likely that there will be some difficult holes to fill in our town centre. Local retail economies have taken a real pasting over recent years and the loss of these traditional names will do little encourage more people to shop in market towns. Braintree has always suffered at the hands of near neighbours Chelmsford and Colchester but they in turn are being hit by Lakeside and Bluewater. Apparently 6 out of 10 shoppers living in Mid and South Essex now travel to these venues for their shopping experience even when fuel prices were rapidly increasing.

 

Most retailers are under pressure. Shopping trends appear to be changing on a permanent basis and the purchasing power of the larger retailers has been dealing catastrophic blows to the smaller retailer for some time now. With the large players now hitting a brick wall and failing what does 2009 hold? Empty stores on the High Street will do nothing but help Internet shopping so stores need to put on an impressive show to bring in customers and make them spend.

 

The Government’s concern about deflation has them trying to encourage shoppers to spend by reducing interest rates to a 50 year low. But will it work? Certainly spending power is increased but concern over jobs and already burgeoning credit cards might discourage them in the short term. The next 6 weeks are traditionally quiet in industry and once the January sales draw to a close most retail businesses will be hoping for the support the Government has told the Banks to offer. Will it and can it be there – if businesses are losing money?

 

The Woolworth store in Braintree had been in Bank Street since 1929. Previously it had been the 8 bedroom house of Dr Harrison the one time coroner for East Essex. The house and garden stretched back all the way to what was Sandpit Lane and the corner of Quadrant stores opposite Stanley Tee’s office in Rayne Road. A massive site to develop and clearly an important national name when it first opened in the town. Over the years the business has had its ups and downs. No doubt pressure from Argos and Toys R Us placed the final nails in the coffin for this once great institution. As teenagers we surveyed the records on a regular basis as the options were Elvic in Fairfield Road (a musical instrument shop – now a Chinese Restaurant), Hannays in Bank Street and a shop opposite the fountain that sold record players too – now also a fast food takeaway. Then the arrival of Kellys and Parrot Records meant the need for Woolies departed and no visits for many years!

 

In many ways a bit like the ITunes store effect on stores like Zavvi; how can you compete with the 79p track and particularly in an era where the concept of the album is lost on many people. The days of reading lyrics inside a gatefold cover and listening to the whole album are of the past. As I say to my daughter, “the artist has spent many hours deciding which songs to include, which order to put them into, the concept of the cover art etc so please give it all a chance and not just the song the radio station is instructed to play.” It always meets with deaf ears of course and had we approached music in such a way would some of the great bands have had their longevity?

 

These national closures will have large repercussions upon town centres up and down the Country. In trying to retain a modern feel many towns have already changed their layouts leaving some businesses high and dry whilst putting others into a stronger position. Woolworths is a prime example of this. All of their stores would have been in a primary position at the time of opening but over years this may have changed. Braintree is such an  example. Primary positions were the High Street and Bank Street which moved towards the Market Place in the 1970’s with the building of the town centre Tesco store and then towards George Yard in the late 1980’s when the new precinct was developed. Those stores previously situated near to the traditional primary positions may have seen their locations lose foot fall with these changes and in the most recent the Post Office has relocated moving foot fall away from Rayne Road towards New Street.

 

Where Woolworths retain a primary position and the size of the store deems it empty for some time will this cause confusion in towns of similar size to Braintree having repercussions on local independent retailers? I fear it will but sincerely hope that I am wrong. Relocation is not a suitable option for many small businesses but if the geography of the town you trade in changes what are your choices. Will the Government help cover such eventualities to allow businesses to continue?

 

Over 20 years I have seen a number of small retailers lose their business due to changes in trading practices. The sale of newspapers in supermarkets and garages was an unforgivable act that put paid too many a family’s fortunes where a significant investment had been made to buy the business.  In all of this the supermarkets appear relatively unscathed unless they have invested too heavily into land on which they have debt. In fact if you look at the growth of these stores, having accounted for the majority of local fruit and vegetable businesses in the 1980’s, it has been into white goods, clothing, music, toys and other household items. Familiar items in terms of the names mentioned above that have entered administration. Might we see some Supermarkets increase their chains into some of the Woolworth stores?

 

What can be done? Well first I’m not sure I am right. I have a hunch, but your thoughts might provide a very different viewpoint. If I am correct Government needs to decide whether it thinks small independent retailers hold a place in the future. If they think it so, then some form of thought process is required to understand what this role should be and how far the supermarket chains should be allowed to develop in the future.

 

Let me conclude by saying the survival of the fittest is always important and no business has a divine right to survive. At the end of the day the owners or directors of every business have a responsibility to make sure that they have done everything in their power to give the business every chance of survival and success. If they have done this and customers do not materialise then if the business fails there can be no regrets. In the past some businesses have not been able to say they did absolutely everything. I think in 2009 without exception every board up and down the Country will need this as a motto for it promises to be a very difficult period indeed.  Not just for retail but for us all.       

Has Government considered the business cost of its actions?

With all the concerns over the economy and keeping people in work was now the right time fro the Government to cost business an estimated £300 million to be able to reduce the rate of Value Added Tax by 2.5% on 1^st December 2008? Having had some time to reflect on the Pre Budget Report Statement many retailers are thinking that the VAT reduction will not necessarily get passed onto shoppers at the till without negotiation and so is it all really worth the aggravation being caused?

 

This Government has been good at wasting resources. In its first term of office its obvious inexperience of being in Government led them to creating many costly talking shops whilst trying to reach the right answer on policy decisions. Laudable maybe in trying to discover the right answers but if Gordon Brown’s zig zagging method of being Chancellor has been mirrored across the board then a lot of right answers were not reached making the spend uneconomic.

 

Gordon’s last error; the 10p tax rate withdrawal (as if you didn’t know) has proved particularly costly to the Nation. By compensating all tax payers in the way they did the Chancellor issued another tax coding notice to every tax payer to every employed person with the new personal allowance on it. This cost the price of a stamp, an envelope, labour or machine costs to pack it and at least one sheet of A4 paper to produce it within HMRC.

 

Upon receipt there were the extra professional costs to check them to ensure accuracy. But how could they be wrong you ask as only 1 item changed; the personal allowance from one sum to another. Ah yes, but you have to consider that other tax codes had already been issued in many situations which had had things changed that were not correct. We had checked these and advised of the revisions. In many cases these had either not been processed or returned to the incorrect figures again meaning further amendments. Some clients we have had 7 or more tax coding notices this year!

 

And if this was not staggering enough we had to use our working together links to access a computer programmer to understand how the program worked so that we could telephone a Manchester tax office to explain how to use the software. I think this is called training and probably unaccredited training at that as we had never seen the software and so offered it in virtual way. “When a blind man cries” I think was the name of the Deep Purple song!

 

Trading in a difficult economy requires care and attention over the overheads to keep spending at a minimum. I think we need to see some appropriate care and attention from our Government to ensure that they do not cost their customers too much money and at the same time keep their own overheads to a minimum whilst offering an efficient and well trained service.

 

Now there’s a challenge for the New Year resolution!