Belfast Telegraph

Lisa Wilson: Time to think of importance of retail as Christmas looms

Economy Watch

The high street faces more challenges as Christmas approaches
The high street faces more challenges as Christmas approaches

By Dr Lisa Wilson, Neri

It's approaching that time of year again, when people start thinking about... Christmas. The mere thought brings smiles to most people's faces and elicits feelings of sweet anticipation and nostalgia.

And the period of time in the run-up towards Christmas is a time of year which our high street retailers really depend on. It is the time of year that our high streets have traditionally come alive with a surge in sales - the spike from which has been said to carry businesses through other quieter shopping periods of the year.

The last number of years, however, have seen us grow used to the closure of big-name retailers and a real sense that we're experiencing the end of the high street as more and more people do their shopping online.

High streets may be growing into more of a motley of charity shops, nail bars, coffee shops, bookmakers, vape shops and empty retail units - rather than somewhere we might actually want to go and splurge our hard-earned money.

So, are we experiencing the end of the high street? The media headlines of shop closures and the sense that we are experiencing the end of the high street is warranted, to some extent. Recent years have seen the closure of what were once landmark stores of our high street such as BHS or Woolworths. Thomas Cook stores have closed and standalone Argos stores are also to be shut.

It is hard not to conclude that the traditional high street retailer is struggling. And the data confirms that this is the case.

About 20% of retail spending is now online - a quadrupling on five years ago. Furthermore, research by the Resolution Foundation shows the number of store openings has been lower than, or equal to, the number of closures in each of the last five years.

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There has been a shift in spending habits between sub-sectors of the retail sector and we are less likely to spend money now on goods and more likely to spend on services and experiences. Or more precisely, when given an extra pound to spend, we are now less likely to spend it on 'things' than we once were and more likely to spend it on leisure activities.

It's a matter of debate whether or not policy makers need to be overly concerned about individual business failures on the high street or whether or not we chalk that up to market forces and conclude that it is people's choices and preferences which dictate what stores are present (or not).

And that debate needs to start with an honest public conversation about what we want our high streets and city centres to be. Policy makers do, however, need to be concerned with how the decline of the high street is impacting on people and workers. Because, of course, the inevitability of the shop closures has meant job losses for the many thousands of retail workers employed in these stores.

Given, however, that the labour market has been performing quite well in recent years policy makers might conclude that because there has been a net increase in the total number of jobs, policy interventions are not required. Like with any jobs disruption, policy makers need to ask themselves the following questions to minimise the impacts: what jobs are being lost? What jobs do we expect those who have lost their job to take up?

How do the skills requirements match up and how does each job compare to the other in terms of quality?

Indeed, as traditional retail declines and experiential retail or hospitality grows it might be tempting for policy makers to think that workers in retail can just seamlessly transition into hospitality. But research shows that this isn't likely to be the case.

More unsociable and uncertain hours, the prospect of less-enjoyable customer interactions and often lower pay means that it's not clear that retail workers will happily move into hospitality jobs, even if they are available.

@LisaWilsonNERI

Belfast Telegraph

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