As HMV announces the closure of dozens of branches, and other big-name retailers continue to struggle, is the future for our town centres all Poundlands and betting shops?

Two and a bit years ago, it was the demise of Woolworths; this week, the predicament of the British high street has been reflected in the increasingly uncertain fate of HMV. Yesterday it emerged that British retail sales across the board had suffered their worst December since 1998. And in the wake of profit warnings and a plunging share price, HMV’s suppliers have been cutting back credit, debt advisers have been called in to look at the business’s finances, and 60 shops are now set for closure – including 20 branches of Waterstone’s, the once-thriving high street name that was folded into HMV in 1998, and may now be sold off. This week, a number of record companies announced that they would support the chain by leaving their trading terms unaltered, but the latter half of 2011 could be yet grimmer, because without the additional goodwill of the people who make DVDs, computer games and the rest, it will be almost impossible to build up stock before Christmas.

In response, as with Woolies, scores of voices have been dredging up their HMV memories. You will doubtless have your own: mine go back to the mid-1980s, and endless trips to the two branches on Manchester’s Market Street, where I would habitually buy 12in singles by the Style Council, and wonder whether to spend what money remained on the Redskins, Easterhouse or the Faith Brothers (don’t ask). Of late, as the music industry tumbles towards doom, I have been thrown by HMV’s decision to push music further and further towards the back of their shops in favour of more profitable lines, but have still been gripped by a regular urge to go inside in search of some unexpected musical discovery. Certainly, the idea of London’s Oxford Street without their two signature stores seems very strange.

Yet that may be where we are headed. In countless towns, and parts of our cities, the basic story is simple enough: first, the big chain stores saw off independent shops, but now they themselves are either ailing, or off somewhere else. The result, to use a phrase invented by the New Economics Foundation (Nef), is a passage “from clone town to ghost town”, driven by three factors, much more deep-seated than economic ups and downs, which point to the likely shape of the retail future. First, the rise and rise of the internet – 39% of CDs and 34% of DVDs are bought online, yet only a miserable 10% of HMV’s business happens there. Looking ahead, music, films and games – and, yes, books – will increasingly be downloaded rather than physically owned, and we’ll also see to even more of our personal finances and house buying online (according to the Ordnance Survey, between 2008 and 2011, the high street presence of building societies came down by 29%).

Second comes the ever-growing tyranny of the supermarkets, and third, the retail trade’s ongoing shift from the cramped environs of urban streets to places where the big names can stretch out and keep their customers captive. Increasingly, when you think of Boots or Next, you will not picture a standard-issue, high street shop, but a much bigger construction, either placed within a town centre “retail destination”, or plonked on a ring road in an American-style strip mall built around a vast car park. By comparison, the idea of walking down the street while doing your shopping looks quaint and inconvenient, and the likes of HMV find themselves laid lower and lower.

In February last year, Nef published figures for shop closures in the 12 months up to April 2009. The death of Woolworths accounted for 807 stores. The Stylo group, which owns the shoe chains Barratts and Priceless, had shut 220; 214 Celebrations card shops had gone, and another 125 shops had become empty thanks to the death of the misfiring entertainment chain Zavvi.

There was also bad news from chains such as JJB Sports (55 closed shops), the Officers Club (32), and good old Passion for Perfume (45), and since then, the great emptying-out of the high street has continued. Philip Green’s Arcadia group is set to close up to 300 shops, mostly less-than-sexy brands, such as Burton and Dorothy Perkins. The once-ubiquitous chain Game has announced that 90 of its branches are going.

Every six months, people from a research firm called the Local Data Company walk the streets of around 800 towns and cities and chronicle their fate. “There is a fundamental change happening,” says their business development director, Matthew Hopkinson. “I can’t prove it yet, but that’s my gut feeling.” He mentions plenty of ailing businesses, but also what’s happening to thriving chains. “The big retailers – the Nexts and the Topshops – are cutting their number of stores, and they’re going for big-box formats,” he says. “It’s cheaper to do business that way, and they don’t have to contend with councils. These are controlled environments.

“It’s best to have total control over what the consumer sees, smells and everything else. Because once you’ve got them under your roof, you can manipulate them until the cows come home. And on the high street, it’s very difficult to do that. That’s what the supermarkets have taught us.”

After decades of ceaseless expansion, talking again about how Tesco et al have strangled the high street might seem like a cliche, but as the so-called big four extend their business into lines once undreamed of, it’s easy to miss the potentially momentous consequences. “They’re not really supermarkets any more,” says Hopkinson. “They’re almost becoming mini-villages. You get your milk, bread and all your food, but Tesco is launching places where you can get your hair cut. It’s: ‘Buy your school uniform, go to the doctor – and if you come to us, you get your loyalty points, and it’ll be cheaper than anywhere else.’”

Among other consequences, this means the retail equivalent of the “squeezed middle”, and the likely survival of only those businesses that sit either side of it. “The quality, niche guys – like Burberry – have done bloody well, and the Poundlands and 99p Stores have done bloody well,” Hopkinson adds. “But if you’re in the middle ground, you’re right where the supermarkets are.” For proof of this polarisation, look at recent headlines about some of the few high street businesses that seem to be on the rise. Bookmakers are doing well, increasing their share of the high street over the last two years by 5%. Meanwhile, the 99p Stores chain recently announced that it wants to increase its shops from 138 to 600.

At the same time, an even more pernicious divide seems to be taking root. When I talk to Tim Danaher, editor of the trade magazine Retail Week, he makes a distinction between two kinds of place, and what tumult on the high street means for each of them. The essential divide, he explains, is between such urban centres as, say, Manchester, Bristol and Leeds, and much smaller places, which will feel the pinch: your Tauntons, Grimsbys, Barnsleys and Wrexhams.

“In our top towns, with a handful of exceptions, we’re getting to a stage where the focus of our high street is going to be on fashion,” he says. “But in the secondary towns, who knows? Value retail is growing, but it’ll only go so far. Beyond that, what’s there going to be?”

Empty shops, I suggest.

“Empty shops. That’s right.”

The first panic about increasingly gap-toothed high streets happened in early 2009. The recession was in full swing, and the average shop vacancy rate in towns and cities was forecast to rise to 15%. The independents that remained in urban centres were falling like flies, and the only businesses that were bravely announcing expansion were such titans as Asda, Subway and KFC. There was talk of empty shops being handed to artists, musicians and community groups: in April of that year, the government announced a £3m package to encourage precisely that – though its effects on most high streets seemed negligible.

Two years on, we’re supposedly out of recession, but the picture is still grim. The aforementioned 15% average vacancy rate will soon be passed, and in some places – such archetypal “secondary towns” as Rotherham and Margate are good examples – the figure is closer to a third. There are ongoing complaints about distant retail landlords, ever rising rents and the current business rates regime – although some people in the trade say there are glimmers of hope in the government’s localism bill, whereby councils will have powers to take a much more flexible approach to the last.

In the midst of all this change, one set of statistics has always chilled me to the bone. It comes from the work of a US academic named Kenneth Stone, who famously studied what happened when Wal-Mart moved into the state of Iowa. In the following decade, the state lost more than 555 grocery stores, 298 hardware stores, 293 building suppliers, 158 women’s clothing shops, 153 shoe outlets, 116 drug stores and 111 children’s clothing stores: in total, 7,326 businesses disappeared.

Is this where Britain is going? At Nef, Elizabeth Cox has been examining the fate of our high streets for eight years; looking ahead, she sounds a little more upbeat than I expected: “We’re not America, are we? That’s the worst-case scenario, and we have to heed that warning. But I think there is more opposition to that vision in the UK, and people are trying to do something different.” That said, she agrees that the current moment is fraught with danger: “It’s about whether people see this as an opportunity to build something different, or they say, ‘We’re doomed, and we’ll leave these places closed down’. That’s the fork in the road at which we’ve arrived.”

So what will the high street look like in, say, 2030?

“It’s going to be full of services, and social aspects,” says Hopkinson. “It’ll be full of hairdressers, tanning salons, cafes and restaurants. There might be doctors and dentists there. And it’ll become very leisure-focused. If there’s an area where people like the architecture, and they can socialise, and not just shop, that’s what will happen. You’ll get a place where people will go for community.”

That, I suggest, sounds rather optimistic. What of the more blighted areas of Britain, where there simply isn’t the money to sustain that kind of vision?

“That’s where you’ll get the analogy of Shitsville, Tennessee,” he says. “If you haven’t got nice buildings, or any events, or any reason to go there unless you live or work there, you’ve got a problem.”

Welcome, then, to one very depressing vision of the future. Lattes, book festivals, and high-end casualwear if you’re lucky; pound shops, Ladbrokes and boarded-up businesses if you’re not. If 21st-century Britain often feels like two countries, we may not have seen the half of it.

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Taken from The Guardian, 22/01, John Harris

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