In August 2007, the subprime mortgage crisis heralded the Worldwide credit crunch which has been the albatross around all our necks ever since. We continue to pay the price as we seek, like the mole at the beginning of "The Wind in The Willows", to emerge from our dark world in to daylight.
Food prices in the UK have risen a staggering 40% since the beginning of the financial crisis. Inflation has continued unabated at 3.5% despite the government targeting a rate of just 2%. The 2% target will not be met for a very long time simply because food and fuel inflation is so exorbitantly high. As a society, we are all directly affected by these two parameters and seem set to remain so for a long time to come. Fuel poverty is said to apply to anyone who is spending more than 10% of their income on heating their home. This puts a lot of people in fuel poverty in the UK today.
It is therefore all the more baffling to witness the growth in out of town retail parks at a time when the fuel to get us there has never been more costly and the food to purchase so expensive. This begs the question: Why do we choose to shop in this way? Our net disposable incomes have never been lower and yet still we seek a little retail therapy to make ourselves feel what? A bit better? Over the past twenty years our high streets have become increasingly barren with major retailers choosing to relocate to lucrative out of town venues.
An interesting trend has started to emerge recently. The supermarket dominated retail sector has started to spot that not as many people are venturing out to their out of town retail palaces. Their response has been to seek premises on our high streets just in case they might be missing out on some of our income. Of course, the big problem is that like that that other scourge of modern society, the banks, they don't face any serious opposition. We all have a choice though. As our net disposable income is gradually squeezed, we naturally become a little more discerning in terms of where we chose to part with our money.
One thing is certain. Because of the rising price of petrol and diesel, shopping on our local high street has to be cheaper. It is up to the independent retailers to entice us. We have nothing new to learn about the supermarkets. We are all well versed in their marketing gimmicks. The supermarkets with loyalty schemes seem to have hit on something. Perhaps this is the way the local high street can fight back. If they join ranks and create a collective loyalty scheme, they stand a far better chance of getting their locals back. Recessions invariably serve one important purpose. They habitually get rid of the dead wood so that the retailers left standing are more efficient and focused.
Ultimately, both we the consumers and our local high street retailers have to compromise together to regain our once thriving retail sector. A retail sector dominated by four or five big players is not healthy. It needs to be spread out between more players and more local. If the supermarkets couldn't offer cheap booze, cheap petrol, loss leaders and loyalty cards, the playing field would be a lot more level. That won't change though so local retailers need to join forces and play them at their own game. We, the consumers, will ultimately choose whether we want a vibrant high street or not. Fuel poverty might just help us to make up our minds. The battle is between globalism and localism and it is up to us think carefully about which we want in the future.
No comments:
Post a Comment