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9 October 2012

Ed might want to revise his position on “Tesco-isation of the high street“

Big stores go bust, smaller ones follow.

By New Statesman

Shortly after he was elected labour leader Ed Milliband criticised the “Tesco-isation” of British high streets, calling for specific policy changes. Asked on the Daily Politics show if if Labour would prevent more supermarkets on the high street, he said: “I think that is an issue, yes and it is something that we’re looking at … It’s about local people. It is about planning.”

Back then, he was adding his voice to a generally held view, that big chains stifle competition on the high street and kill off independent stores. But figures to be released next week by the Local Data company suggest a rather different picture. It’s the big stores themselves that are in trouble, and they’re taking the small ones down with them. According to the FT today:

The scale of closures among the big chains is having a knock on effect on independent retailers, many of whom rely on chains to anchor high streets, and act as a magnet to shoppers.

There was a net decrease in large chain stores by 1.4 per cent in the first half of the year, down from a net decrease of 0.25 per cent last year, as more big stores closed than opened. This is a sharp change even from 2009, where despite the banking crisis the number of big stores on the high street was still growing by 1.2 per cent.

The independent stores are following suit: while still on the rise, there has been a significant slowdown from last year. A net increase of 2.4 per cent has become a net increase of 0.8 per cent. And according to Matthew Hopkinson, director of the Local Data Company, it is town centres that are bearing the brunt.

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It will be interesting to see if Miliband revises his position in view of this news.