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High street shake-out

Woolworths has gone, many other famous stores will disappear, but a new age of shopping will emerge

Traditionally it is the days and weeks after Christmas that are the most terrifying for retailers. The final quarter of the year arrives when rents have to be paid (this year, it is actually on 25 December), the invoices from suppliers pile up, a visit from the VAT man is imminent and the banks start to get antsy about the swelling overdrafts and feeble cash flow. Within days, the corporate undertakers come knocking.

This year the pattern has been different. Amid the carnage of the credit crunch, no one is taking any chances. Even if you are a company such as Woolworths - which takes in 80 per cent of its income in the six weeks leading up to Christmas - impatience sets in. The first thing to go is the credit insurance, the guarantee to suppliers that they will be paid, come hell or high water. When that happens, the sweet factory demands cash for each shipment of pick'n'mix and banks start becoming nervous. Before the directors have a chance to take emergency action, such as selling off a string of stores to rivals, the plug has been pulled.

The demise of Woolworths, a fixture on Britain's high streets for a century, is not that surprising. Its elder sister in the United States died some years ago and its falling share price has been signalling disaster for some time. But Woolworths is far from being alone. Among the reasons that Alistair Darling chose to make a 2.5 per cent cut in VAT the centrepiece of his pre-Budget report is that it has two important characteristics. Unlike an income or corporation tax, it can be administered swiftly - without the need for a complex finance bill. Second, it does help the consumer and the high street.

The sceptics have argued that a few pence or pounds off prices as a result of lowering VAT makes no difference in a year when Marks & Spencer is conducting guerrilla sales tactics ("20 per cent off" days, designed to catch the opposition on the hop) and other high-street chains are permanently holding sales.

Such observations are economically illiterate: by hook or by crook the cut in VAT will put £12bn into the economy over a relatively short period. Even if the price cut is not passed on, it will mean that smaller high-street boutiques may be able to hang on a little longer (by widening profit margins) allowing them to main tain a job or two that might have been shed in recession conditions.

What is different about the present crisis on the high street, which has seen the demise of Woolworths, MFI, MK One, as well as a slump in the shares of DSG (owner of Currys, PC World and the online Dixons site), is that it reflects changes in retailing and the way we shop.

It is no coincidence that the Woolworths on my local high street in south-west London had already closed by the time the administrators moved in and the premises were being refitted as a Tesco Extra.

The boundaries between shopping chains have changed. When Tesco reached saturation point in food sales, at the point where it became subject to regular competition and monopoly investigations, it headed in the direction of diversification. No longer is it just a grocer. It is a newsagent (watch out W H Smith), a clothing retailer (be careful Debenhams), an electronics outfit (no wonder Currys is hurting) and has moved into the video entertainment business (poor old Woolies). Tesco, the dominant force in British shopping, is not alone in this. There is no longer such a thing as a specialist retailer.

The big grocers - Tesco, Asda, Sainsbury's and, to a lesser extent, Morrisons - realised some time ago that while people came to their stores for their daily bread, the profit margins on food are relatively narrow. But if they could bulk-buy products - from fashionable clothes to flat-screen televisions made in China and the Far East - they could become vast department stores. Indeed, the profit margins on the clothes and electrical goods could be better than those on the 50,000 food items.

Even the venerable Marks & Spencer, still the nation's biggest clothing retailer with around 12 per cent of the market, is in the television and kettles business. Consumers who trust M&S with their lingerie needs are not going to doubt that an M&S kettle is as good as one bought from Currys. The need for the general store, of which Woolworths was the exemplar with its eclectic mix of everything from screwdrivers to chocolate bars, is no longer there.

Also undermining the high street is, of course, the internet. Personally, as much as I love browsing in bookshops, new and secondhand, it is a long time since I made a purchase from one. My book shopping is done online through Amazon or the fantastic used-book site AbeBooks. Online sales are rising exponentially, climbing by 54 per cent to £46.6bn in 2007. This is money that is being cannibalised from the high street. Does all of this mean that the high street as we know it is over? One doubts it. But the line-up of stores will change. Tescopoly has its natural limits. In much the same way as Woolworths has been replaced by its modern equivalent, Wilkinsons (which is seeking to buy Woolworths' premises), in some suburban centres, so Currys is going to find itself under pressure from the American import Best Buy, where the emphasis is on expertise and service.

Once it was out-of-town shopping that was the threat. But soon the developers realised that people actually like the social aspect of open-air, high-street shopping and have redeveloped the high street from Bristol to Leeds with open spaces and cafes. The high street is organic and over the coming year or so, as the slump bites, empty stores will proliferate. But don't despair - there will always be an entrepreneur ready to bet on recovery and find ever new ways to claim the shopping pound.

Alex Brummer is City editor of the Daily Mail

Retail carnage

Woolworths - the chain has collapsed with debts of £385m and many of its 815 branches (and 30,000 jobs) are expected to go.

Argos - after reporting its biggest ever fall in sales in October, staff had their hours cut by 20 per cent.

John Lewis - reported a 13 per cent drop in sales, its tenth successive decline.

Debenhams - is carrying nearly £1bn in debts, and profits have dropped by 16 per cent.

MFI - the company went into administration last week; 1,000 jobs will be lost.

Character Group - shares in the firm, which supplies Britain's biggest toy retailers, including Tesco and Toys R Us, dropped 20 per cent last week. The company is now valued at little more than the value of its bank deposits.
JJB Sports - selling off assets to repay £20m loan; JD Sports is considering buying its rival.

Land of Leather - the furniture retailer reports sales down 47 per cent on last year.

Majestic Wine - its half-year profits are down 25 per cent.

Wrapit - the wedding gift-list firm went under in August, taking up to 2,000 couples' presents with it.
Rosebys - the textiles chain closed for good last month - 201 shops have shut.

Hardy Amies - the Savile Row tailor and one-time dressmaker to the Queen went into administration in October, forcing the closure of five of its six UK stores.
. . . and even Tesco has posted its worst performance since 1992, with just 1.9 per cent growth. Shares fell 40 per cent in the past year.

This article first appeared in the 08 December 2008 issue of the New Statesman, After the Terror

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No peace after progress

How the death of the industrial way of life gave us choice – and stoked resentment and fear.

Now that the making of useful and necessary things in Britain is only a shadow of what it once was, we can see more clearly the effects of the Manufacturing Age. The cost was high to the producers of prodigious wealth; a ten-year difference in life expectancy remains between people living in the richest areas and those in Glasgow. The (fleeting, it now seems) visitation of industrialism has made life more comfortable and its dismantling has liberated millions from choiceless occupations. The legacy is one of spectacular improvement, unequally shared.

Perhaps the most dramatic experience of the 20th century was the suddenness with which profligate plenty replaced a skinflint subsistence. Was it the speed of this that distracted us from wondering why, instead of the secure sustenance that generations of needy people had asked of an unyielding economic system, we were offered a promiscuous spillage of goods, promoted with quasi-religious zeal by the converts of a capitalism that had previously delivered to most of its captive workers a life of penury? Such a rapid reversal might have alerted us to changes beneath the surface that elided losses incurred.

The greatest of these was certainly not the extinction of the industrial way of life itself, release from which has been an unqualified blessing. But the transition from relentlessly work-driven lives (in the 1950s, two-thirds of Britain’s workers were still manual labourers) was marked by perfunctory obituaries for the disintegration of industrial communities, with no acknowledgement that, for a century and a half, they had represented the inescapable destiny of the people they sheltered.

Even less recognition was given to the fortitude with which they had borne a long, coercive labour. A way of life, buried without ceremony in the unmarked grave of progress, could not be mourned; and this has generated some social pathologies of our time: resentment over an arbitrary obliteration of industry, disengagement from a party of labour by those it called, like feudal lords, its “own people”, loss of memory of the economic migrants we also were, passing from the goad of industry into the pastures of consumption, and thence into the liberating servitude of technology.

Grief makes no judgement on the intrinsic value of what is lost. Absence of the known and familiar is the object of melancholy in its own right, even if replaced by something immeasurably better. Objectively, there was little to mourn in the vanished industrial way of life: insufficiency and humiliation, malice of overseer and manager, officiousness of poor-law administrator and means-test man. Male industrial workers exhausted in body and spirit, instead of protecting those for whom the power of their hands was the only shelter against destitution, visited similar punishment on their wives and children. There is nothing to be lamented in an end to the penitential life of women, scrubbing not only the red tiles of the kitchen floor, but even an arc of pavement outside the front door; their interception of men on payday before wages were wasted on beer and oblivion; the clenching against joyless invasion of their bodies in the boozy aftermath. But it was the only life they knew, and they adhered to it with grim stoicism and even pride.

There is much to be said for their resistance. The fragile lattice formed by women’s arms was often the only safety net against destitution. Trade unions and friendly and burial societies that shielded folk from economic violence foreshadowed the welfare state and the National Health Service.

The life of labouring people in Britain was strikingly homogeneous, despite diversity of occupation, dialect and local sensibility. There was the same collective experience: terraced house with parlour reserved for celebration or mourning; the three-piece suite, plaster figure on a stand behind the window, chenille curtain against the draught, engraving of The Stag at Bay on the wall; the deal table and Windsor chairs in the living room, the mantelpiece a domestic shrine with clock, candlesticks and pictures of soldiers smiling before they died; the music of cinders falling through the bars in the grate; cheerless bedrooms where husband and wife slept in high connubial state, more bier than bed, where sexual enjoyment was ritually sacrificed as flowers of frost formed on the inside of the window.

And everywhere photographs: wraithlike children with ringlets or in sailor suits, fated never to grow up; weddings in the back garden, a bouquet of lilies and a grandmother in boots and astrakhan hat; the smudged features of a kinsman no one can now identify. Identical memories, too: the shotgun wedding in the dingy finery of a Co-op hall; the funeral tableau around the grave, amid ominous inscriptions of “Sleeping where no shadows fall”; queues outside the ocean-going Savoy or Tivoli to watch Gone With the Wind; the pub where “Vilia” or “The Last Rose of Summer” was hammered out on a discordant piano.

The opening up of such sombre lives might have been expected to call forth cries of gratitude. Instead, a synthetic joy has emanated largely from the same sources that, until recently, offered people grudging survival only, the change of tune outsourced to producers of manufactured delight, purveyors of contrived euphoria to the people – a different order of industrial artefact from the shoes, utensils and textiles of another era.

***

A more authentic popular res­ponse exists beneath the official psalmody, a persistent murmur of discontent and powerlessness. Anger and aggression swirl around like dust and waste paper in the streets of our affluent, unequal society. As long-term recipients of the contempt of our betters, we know how to despise the vulnerable – people incapable of work, the poor, the timid and the fearful, those addicted to drugs and alcohol. Sullen resentment tarnishes the wealth of the world, a conviction that somebody else is getting the advantages that ought to be “ours” by right and by merit.

Rancour appears among those “left behind” in neighbourhoods besieged by unknown tongues and foreign accents: people who never voted for unchosen change, as all political options are locked up in a consensus of elites. “Give us back our country!”
they cry; even though that country is not in the custody of those from whom they would reclaim it. There was no space for the working class to grieve over its own dissolution. If, as E P Thompson said, that class was present at its own making, it was certainly not complicit in its own undoing.

Grief denied in individuals leads to damaging psychological disorders. There is no reason to believe that this differs for those bereaved of a known way of living. The working class has been colonised, as was the peasantry in the early industrial era. When the values, beliefs and myths of indigenous peoples are laid waste, these lose meaning, and people go to grieve in city slums and die from alcohol, drugs and other forms of self-inflicted violence. Though the dominant culture’s erasure of the manufacturing way of life in Britain was less intense than the colonial ruin of ancient societies, this subculture was equally unceremoniously broken. It is a question of degree. The ravages of drugs and alcohol and self-harm in silent former pit villages and derelict factory towns show convergence with other ruined cultures elsewhere in the world.

Depression is a symptom of repressed grief: here is the connection between unfinished mourning and popular resentment at having been cheated out of our fair share, our due, our place in the world. If we are unable to discern our own possible fate in suffering people now, this is perhaps a result of estrangement from unresolved wrongs in our own past. Nothing was ever explained. Globalisation occurred under a kind of social laissez-faire: no political education made the world more comprehensible to the disaffected and disregarded, people of small account to those who take decisions on their behalf and in their name.

Anyone who protested against our passage into this changed world was criminalised, called “wrecker” and “extremist”. The miners’ strike of 1984 was the symbol of this: their doomed fight to preserve a dignity achieved in pain and violence was presented by the merchants of deliverance not only as retrograde, but also as an act of outlawry. Resistance to compulsory change was derided as a response of nostalgics protecting the indefensible, when the whole world was on the brink of a new life. Early in her tenure of Downing Street, Margaret Thatcher, that sybil and prophet who knew about these things, warned that Britain would become “a less cosy, more abrasive” place: a vision confirmed by the Battle of Orgreave – redolent of civil war – and the anguish of Hillsborough.

It is too late to grieve now. Scar tissue has healed over the untreated wound. Though no one expects the ruling classes to understand the distress of perpetual “modernisation”, the leaders of labour might have been able to recognise capitalism’s realm of freedom and a gaudy consumerism that concealed hardening competitiveness and the growth of a crueller, more bitter society.

The ills of this best of all worlds, its excessive wealth and extreme inequality, are on show in hushed thoroughfares of London, shuttered sites of “inward investment”, where the only sound is the faint melody of assets appreciating; while elsewhere, people wait for charitable tins of denutrified substances to feed their family, or sit under a grubby duvet, a Styrofoam cup beseeching the pence of passers-by.

Unresolved feelings about industrialism, enforced with great harshness and abolished with equal contempt for those who served it, are certainly related to the stylish savagery of contemporary life. The alibi that present-day evils are an expression of “human nature” is a poor apology for what is clearly the nature – restless and opportunistic – of a social and economic system that has, so far at least, outwitted its opponents at every turn.

Jeremy Seabrook’s book “The Song of the Shirt” (C Hurst & Co) won the Bread and Roses Award for Radical Publishing 2016

This article first appeared in the 23 June 2016 issue of the New Statesman, Divided Britain