Is the high street about to become a thing of the past?

It seems that nowadays you can’t open a newspaper without reading about yet another major retail name foundering, with Homebase back on that undignified list last week.

It all started with the closure of Woolworths stores towards the end of 2008, with the most recent victims Toys R Us and Poundworld plunging under in more recent months.

This has to be partly down to the shift in how consumers are choosing to shop, with online purchasing ever on the rise.

Last week saw Homebase announce plans to close 42 stores, endangering up to 1,500 jobs.

It’s evidently not great news for Scotland as some of the stores earmarked for closure include two Aberdeen outlets, Dundee, East Kilbride, Greenock, Hawick, Pollokshaws and Stirling.

The company was bought earlier this year for £1 by restructuring specialist Hilco which has now described the purchase as a “disappointing investment”.

I wonder how Australian retail giant Wesfarmers felt about that assessment seeing as they purchased Homebase for £340 million back in 2016, spent millions on rebranding, then walked off with a quid?

However, it’s not all bad news for retailers in the firing line.

Department store giant House of Fraser was recently bought over by Sports Direct just hours after it went into administration.

This was definitely a strategic business decision from billionaire tycoon Mike Ashley. By delaying until the company went into a pre-packed administration deal, it means that the business can still operate as usual, hopefully leading to more jobs being retained.

If any stores are forced to close immediately, it would without a doubt have been damaging to the brand’s image.

Ashley has reversed the previous owner’s plans to close 31 stores, and hopes to only close 12 as he goes into rent agreements.

House of Fraser was founded in Glasgow in 1849, and was once hailed the “jewel of the high street”. Let’s see if self-made millionaire Ashley can make the stores sparkle again.

You might wonder what I would have done to prevent any closures. There’s no simple answer to this. The economy is changing, buying behaviour has been evolving for years and online retailers are definitely squeezing the high street on innovation and price.

Some online retailers, including ASOS, have introduced a ‘try before you buy’ option. Customers have to download the app and can order items for delivery and then return what they don’t want to keep, free of charge.

It’s a great idea, but I would personally be concerned that this would lead to an influx of party-goers jumping on the trend of wearing an outfit once and returning it.

My approach to saving a sinking retailer from disaster would consist of changing the business model to reflect the changing world. We’re now firmly in adapt-or-die territory – retailers’ digital offerings have to match up to their physical stores and vice versa, or else.

It’s all about injecting new technology, market trends, and positive growth into the business model.

I reject the old hackneyed saying ‘if it ain’t broke, don’t fix it’. Just because certain business practices are working now, doesn’t mean they will continue to work for years to come.

Modern entrepreneurs and business owners should be at the forefront of innovation. Being able to adapt to changing markets and consumers has helped me achieve my success.

You can never sit still in modern business - that much is clear.

 

SIDE

It may be raining right now with the dark clouds taking over the skies but new figures show that Scottish shoppers planning heatwave barbeques and picnics last month helped to boost food sales to their highest level in five years.

I don’t know about you, but I‘ve been enjoying every single ray of sunshine this summer and made every excuse to get the family together for a get together and I’m sure others have done likewise.

Total food sales in July rose 5.6 per cent compared to July 2017, when they had increased by 4.2 per cent, according to a report from SRC-KPMG Scottish Retail Sales Monitor.

This represents the highest growth since July 2013 and is above both the three-month average of 4.9 per cent and the 12-month average of 4.3 per cent.

As Scotland continued to enjoy the super summer weather, items such as gin, ice, and electric fans all sold well and on a three-month basis, food sales were also stronger in Scotland than in the UK overall.

Despite the various recent high street closures, overall high street spending increased by a more modest 1.1 per cent, although it was also up on last year.

With our cities busy with tourists attending the Edinburgh Fringe Festival and the European Championships in Glasgow, we may well see another spike this month.

 

WEEP

With a rise in inflation comes a predictable rise in costs and ScotRail is the most recent organisation to announce a ticket hike.

 

Peak fares will increase by 3.2 per cent next year, mirroring the retail price index (RPI) rate of inflation, which tracks the change in a sample basket of goods and services.

 

The average hike in season tickets and peak fares follows a 3.6 per cent increase at the start of the year. That makes this the biggest jump since 2013.

 

It should be pointed out that the rise in off-peak fares north of the border will be held at 2.2 per cent, as the government has pledged to cap them at one per cent below inflation.

 

I’ll be honest though – that won’t feel like a massive consolation to train users.

 

LAUGH

Not so much a laugh this week - more of a big, happy smile as Scotland’s baby box celebrates its first birthday.

 

It was great to see The Scottish Government report that an average of 1,000 baby boxes per week were delivered to parents of newborns in the past year.

Not only that, The Museum of Childhood in Edinburgh has announced that it will exhibit one of the boxes from next year, thus cementing its place in our culture.

The boxes contain items such as clothing, play mat, books, a towel and a sling carrier - and the structure itself can be used as a sleeping space.

It’s a real testament to our country’s ability to think inside the box.