There’s rarely been a greater need for a reminder that challenging economic circumstances can ultimately yield great innovation, reshape the economy for the better and force people to manage resources more sensibly.
Especially when the welter of gloomy economic news perpetuates the very shattered consumer and business confidence it reports.
It recently emerged that the average motorist is now paying an average of £1,720 a year in fuel, 23% more than 12 months ago. A 30% surge in insurance premiums has compounded this, bringing the total annual cost of motoring to more than £3,000 – a 21% rise year-on-year. Fuelling inflation in an economy where wages are stagnating and both state and citizen are paying down debt, soaring oil prices – reaching a record $125 a barrel this year – could potentially derail the still-fragile recovery.
But recent retail data suggests petrol prices, could be delivering an unforeseen, timely boost to the traditional British shopping parade. The otherwise-thriving John Lewis recently revealed a first-quarter 9% drop in sales at its Bluewater shopping centre outlet in Kent and an 11% fall at its Cribbs Causeway store in Bristol. This is consistent with a wider decline at out-of-town shopping centres, which welcomed 12% fewer shoppers in March, against a 7% decline across all shops, according to retail research group Synovate.
If car ownership saw newly mobile Brits overlooking their local shops, where prices were higher and choice limited, and spurning traffic-choked city centres, might the inexorable rise in petrol prices herald a reversal of that trend?
"Structural shift"
Some analysts have conflated the sharp sales fall with soaring petrol prices. Tim Denison, director of retail intelligence at Synovate Retail Performance, told the Guardian that "if petrol prices remain high, there is likely to be some kind of structural shift, with people going to out-of-town centres less frequently and spending more time there when they do.”
And petrol prices surely will remain high. While oil spikes are inflated by market speculation, prices are seemingly on a long-term upward trajectory thanks to the ineluctable truths of growing demand and dwindling supplies.
According to a study by another retail research group, CACI, the average drive to shopping centres on the outskirts of major conurbations like Meadowhall in Sheffield or the Metro Centre in Gateshead is 32 miles and costs about £12 more in petrol than an equivalent trip to the local high street. Research from Sainsbury’s Finance suggests that around 1.3 million people have given up driving in the past year, while 45% who continue to drive profess to use their car more sparingly.
But Sarah Cordey, a spokesperson for the British Retail Consortium, suggests that “major retail parks offer a different shopping experience to town centres, and some people may find it more economical to make a single journey to a place where they can do all their shopping in one go.”
It’s arguably the biggest threat faced by the out-of-town giants since Brent Cross, the UK’s first standalone shopping centre, opened its doors in 1976. Shoppers flocked to the shopping centres, which shielded them from the elements and were spacious yet densely packed with retailers and eateries, in growing numbers throughout the 80s and 90s as car ownership rose. While only 58% of households owned a car in 1980, by 2001 that figure was 73%, with many families owning two cars.
If car ownership saw newly mobile Brits overlooking their local shops, where prices were higher and choice limited, and spurning traffic-choked city centres, might the inexorable rise in petrol prices herald a reversal of that trend? Well chronic congestion and soaring rail fares undermine the town centre’s credibility as a cost-effective alternative to the out-of-town retail park.
But a story told by former M&S chairman Sir Stuart Rose suggests many shoppers are increasingly shunning the drive to regional shopping centres in favour of their local parade. Suggesting to a local shopkeeper that it must be tough running an independent village retailer in such a challenging economic climate, Rose was told that, on the contrary – business had never been better. And that was in 2008; petrol prices have risen even more precipitously since then.
Reclaim trade
“Reports do suggest that shoppers are using their cars less as it is easier and cheaper to walk down to their local butchers, newsagent and bakers than pay the high costs to drive 20 miles to a big supermarket,” said a spokesperson for the Federation for Small Businesses (FSB). “So there is potential for small, independent shops to reclaim some trade.”
There are, however, compelling factors militating against any renaissance. Not least, suggests the FSB spokesperson, the fact that rising oil prices ultimately push costs up for all businesses, including small retailers – the latest fuel hike will cost small businesses “up to £2,000 over the next six months”.
Then there’s the supermarket factor. The ubiquity of Tesco Metros in particular means a revival on the suburban high street won’t necessarily mean a triumph for plurality, diversity and independent retail. And big businesses, enjoying bulk-buying advantages, are better placed to meet cash-strapped consumers’ greater desire for value.
But if walking to the local shops is easier and cheaper than driving several miles to a retail park, then shopping online is a veritable doddle, giving shoppers greater value and choice than the largest of out-of-town shopping centres. But internet shopping, whose rapid growth was barely checked by the recent slump, can support as well as threaten small retailers. Particularly for niche retailers, online sales can substantially augment offline sales.
For an insight into the impact on shopping habits of a reduction in car usage, you could do worse than examine the capital. Car ownership and usage is much lower in London owing to onerous parking and congestion charges and comparatively frequent, comprehensive public transport.
While shopping parades elsewhere in Britain have decayed, many suburban streets in the capital abound with independent convenience stores, delicatessens, cafes, hardware stores and so on. However, it’s one thing for an artisan bakery to thrive in affluent Muswell Hill, quite another in Rochdale, where budget chains like Greggs are more likely to flourish.
The private car is hardly in terminal decline. Car sharing and switching to smaller, more efficient vehicles will help motorists absorb rising petrol costs, while in the long term, who knows – electric or hydrogen-fuelled vehicles might yet become affordable and practical option for the majority. For the foreseeable future, though, the humble British shopping parade has an opportunity to reclaim some of the trade it’s surrendered in recent decades.
