An exclusive look at the challenges and opportunities for retail businesses, as revealed in the Future of the High Street report the Federation of Small Businesses.
Supporting pop-ups for new businesses, creating mobile phone-based loyalty programmes and helping bricks and mortar businesses improve their online presence are some of the recommendations set out to revive the UK’s villages, towns and city centres, in a major new report by the Federation of Small Businesses (FSB).
The Future of the High Street report builds up a picture of small firms in and around the high street, including the retail sector, and sets out a vision to help transform high streets into places that meet future needs and support the next generation of entrepreneurs.
The report revealed that the biggest risks for local high streets, according to the retail businesses based on them, were falling consumer spending (74%), rising online shopping and delivery services (55%), plummeting footfall (53%) and crime or anti-social behaviour (48%).
Almost two thirds (63%) of local retail and wholesale small businesses say a diverse range of independent businesses is one of the most important factors for the future of their local high street.
Tina McKenzie
Tina McKenzie, policy chair at the FSB, notes that these businesses also need to be “well equipped” for the future.
“The retail and wholesale sector has been hard hit in recent years, with pressure from the cost-of-living crisis, as well as increasing energy and supply costs and the tightening of consumer purse strings,” she says.
“On top of this there’s been seismic changes on the retail scene in recent decades, with the growth of chain stores, the introduction of out-of-town retail and the arrival of the internet all making their mark. Our high streets continue to evolve and that’s why it’s so important that small businesses at their heart are well equipped for the future.”
The report, which features in depth analysis following a large-scale survey of small businesses, suggests a specialised fund to support mobile phone-based loyalty programmes for high street firms and launching community-specific online marketplaces to showcase local shops and services.
Loyalty schemes tailored to local retailers and communities can encourage repeat visits, higher spending, and a stronger sense of connection between shoppers and their high street. The research found that some sectors on the high street are more likely to offer and make use of these loyalty schemes such as food and beverage businesses (36%) and retail (22%).
The business group’s report is also calling for local authorities to finance support for pop-ups, markets, and temporary use initiatives for first-time businesses to encourage new ventures and help them set up on the high street. This could benefit business owners who are already utilising the benefits of social media to create businesses and interact with customers, but who want a physical presence on the high street.
(Photo: FSB)
Sheri-Ann Bhim started her online business during the Covid-19 pandemic, creating and selling greetings cards and gifts online. Currently selling online from her home in London allows her time to engage with her customer base across the country and develop her products.
The entrepreneur has considered expanding into a retail store that would provide her with storage space but is put off by the challenges that come alongside a physical shop, like “business rates and other overheads”.
“The high street seems so volatile in comparison to online. Yes, online sales can go up or down, but you don’t have as much investment or overheads in comparison to being on the high street,” Bhim says.
“It would be great to have more use of flexible space on the high street. I would love to have a pop-up shop from February to June, so from Valentine’s Day to Father’s Day and maybe two months ahead of Christmas as they’re busy periods for card sales. In the summer when my business isn’t so busy another small independent retailer could take over.”
The future of the high street “needs to be flexible” she adds. “It won’t be the same bricks and mortar businesses that have been there for 200 years, it will have a range of businesses that change with the season. We need to move away from long leases - flexibility is key.”
The integration of physical high street presence with online commerce is vital for the survival and growth of small businesses. With 39 per cent of local businesses selling to their customers via their own website it’s important that high streets remain competitive and appealing to consumers via their online presence.
Abdul Arain
Abdul Arain, owner of Al-Amin grocery store in Cambridge, emphasises the importance of small independent firms being helped to showcase their businesses online.
“Traditionally we have shops on the high street that are independent, then you have [stores like] Tesco Express and Sainsburys, which have a much stronger corporate identity and are more visible. If they want high streets to have a variety of businesses, something needs to be done to allow local businesses to be recognised for what they are offering. That would be powerful and could have large gains for small businesses,” he says.
FSB’s report suggests support could range from basic online marketing and advertising strategies, to utilising online platforms for retail only businesses. To help bridge the gap between more traditional retail and digital marketplaces, a fund could be introduced to support businesses develop their own websites and e-commerce operations.
“As well as core recommendations targeting fundamental issues for small firms on the high street, including business rates, transport and parking, this report also lays out innovative asks to ensure these businesses can survive into the future and ultimately help revive our town centres,” McKenzie says.
“High streets must be helped to evolve to changes in consumer behaviour as well as how small firms want to work. Introducing loyalty schemes should encourage local businesses to collaborate and incentivise consumers to shop, eat, and drink locally.
“We heard from many online small firms who want to take steps to open up in a bricks and mortar premises on the high street and this is exciting to hear. These businesses need support to make that change – and should be given the flexibility to access pop-up and temporary units.”
According to the report’s other findings, empty units are a major blight on shopping streets across the UK, with more than two thirds (69%) of local businesses reporting them on their nearby high street. FSB is asking for a band of on-site high street chiefs responsible for the growth and wellbeing of high streets across the country, creating promotion plans and monitoring vacant units within their area.
(Photo: FSB)
The research also highlights the need for well-maintained and accessible modern public toilets and family-friendly services like creche facilities, encouraging visitors to stay longer, upping footfall and supporting the local economy.
Business rates remain a huge burden on high street small businesses, with the current Small Business Rate Relief (SBRR) a key part of their survival. Half (50%) of local retail and wholesale small businesses say they would not survive without SBRR. With more than half (54%) of high street small businesses claiming they would invest in or grow their businesses if the SBRR threshold was increased from £12,000 of rateable value to £25,000, FSB believes doing so would be a crucial step in allowing small firms to further foster growth.
The report calls for a high street hop scheme providing free bus fares on key routes during peak shopping days to help increase footfall. Offering free parking on at least two Saturdays and two additional days a month, would bring in more visitors and support local businesses by making high streets more accessible, it adds.
A third (34%) of local retail and wholesale small firms say a reduced ability to accept cash payments in the future would pose one of the biggest risks to their local high street. The report calls for a Banking Hub Setup Fund, paid for by high street banks to cover the cost of setting up a hub on a high street, supporting local economies and ensuring essential financial services remain available to businesses and the community.
“Our small businesses are an integral part of the high street and will be central in leading the transformation of their local economies. By providing the infrastructure, flexibility and digital connectivity that modern businesses demand, high streets will then have the resources available to become resilient, dynamic hubs ready for the future,” McKenzie concludes.
To support and champion independent wholesalers, a brand new buying group title The Wholesale Group has been created and will officially launch on Jan 1 2025.
Described as "the buying group for the future" and "home of the independent wholesalers" The Wholesale Group will be led by joint managing directors Tom Gittins and Jess Douglas with Martin Williams and Coral Rose as co-chairs. The Wholesale Group will bring together the members of Confex and Fairway Foodservice to create the new group.
The Wholesale Group represents more than 12 per cent of UK wholesale and has £4.47bn annual turnover. The group will boast of 253 depots across the UK, serving more than 349,000 customers.
“Put simply, this is the buying group that the sector needs,” said Gittins.
“The Wholesale Group will be the only UK buying group to offer an extensive retail and foodservice range and expertise, alongside logistics efficiency via central distribution. It has an award-winning foodservice own brand supported by bespoke, coordinated member marketing and retail member support. And there are no membership fees and every member receives a share of the profits. We are delighted to launch The Wholesale Group as we know it is the solution for the independent wholesaler.”
Douglas adds, “The sector has changed dramatically and it is crucial that we do things differently to accommodate these changes for both our members and suppliers, and The Wholesale Group will lead the way. Driven by data and technology and with a crystal-clear focus on service, it will be the largest delivered buying group, the largest foodservice buying group and the second largest retail buying group in the UK.”
Rose states, "For our supplier partners, The Wholesale Group provides an efficient and powerful route to market through enhanced scale and capability.
“For our members, it is clear that Confex and Fairway have long held similar cultures and ethos, focused on celebrating and championing family businesses with members at the heart of everything we do. By coming together, we retain this member-centric approach but are even stronger, while building for the future.”
“While the foundations of The Wholesale Group are built upon years of expertise and specialist knowledge of the sector, this is a buying group created for the future,” said Williams.
“This is the solution for the independent wholesaler. It will provide something no other group can, and this will enable us to become the genuine home of independent wholesalers. We look forward to an incredibly exciting future.”
Things have had a shake-up at SPAR Milnthorpe with the launch of an Ann Forshaw’s Milk Shed, the new vending machine offering up fresh whole milk and flavoured milkshakes.
The machine has been placed adjacent to the SPAR store and Shell forecourt on the A6. It is dispensing gently pasteurised and non-homogenised milk fresh from the dairy in 500ml or one litre servings, competitively priced at £1 and £1.60 respectively.
Milkshakes are available too at £1.80 for a 500ml size or £2.80 for a one litre serving, and are in five mouthwatering classic flavours of Chocolate, Strawberry, Banana, Vanilla, and Salted Caramel. A sixth Limited Edition milkshake flavour will always be on rotation to complement the core range. At launch this week it is Mint, and this will be replaced by White Chocolate flavour on Friday 15th November.
All the milkshakes use natural flavourings and colourings where possible and do not contain the ‘Southampton Six’ food colours which have been found to have an adverse effect on activity and attention in children. Customers will also have the option to purchase Milk Shed branded reusable glass bottles at £1.80 for a 500ml or £2.20 for a one litre size, enabling repeat, plastic free purchases.
Recyclable cardboard cups and paper straws offer a free and an environmentally friendly alternative. SPAR Milnthorpe’s Milk Shed will be operational 24-hours a day, and it becomes the third Ann Forshaw’s Milk Shed to launch.
The original Milk Shed concept was launched at Ann Forshaw’s Alston Dairy at Longridge, near Preston, in February of this year. After an incredibly successful launch, SPAR Padiham Road in Burnley became the first SPAR North of England store to receive one in September.
Fiona Drummond, Company Stores Director at James Hall & Co. Ltd, owner of SPAR Milnthorpe, said: “This is the first Milk Shed to launch at one of our forecourt sites, and we are thrilled to bring our Milk Shed offer to Milnthorpe which we believe will be a real asset for the community.
“It is such a simple but effective concept. Our high-quality fresh milk is very competitively priced, and the milkshakes are delicious treat and suitable for all ages with the conscious decision to utilise natural flavourings.”
Ann Forshaw’s and its associated Alston Dairy was acquired by the James Hall Group of Companies in December 2022. James Hall & Co. Ltd is a fifth-generation family business which serves a network of independent SPAR retailers and company-owned SPAR stores across Northern England six days a week from its base at Bowland View in Preston.
In a significant escalation in backlash to plans announced by Chancellor Rachel Reeves, farmers are threatening to target ports and disrupt supermarket supply chains to protest against Labour tax rises, states a recent report, claiming that there are plans to withhold produce and livestock in a bid to trigger food shortages,
The Chancellor placed a 20 per cent inheritance tax on farmers’ assets worth more than £1 million in her first Budget. Previously, tax breaks designed to allow family farms to pass down the generations were exempt from the divisive 40 per cent duty.
According to The Telegraph, some farmers are now openly discussing plans to take a more radical course of action. The discussions are understood to be taking place among farmers who have previously organised tractor “go-slows” on roads as well as protests in February which saw 5,000 farmers gather at the Senedd to voice dissent over environmental targets.
“They will block every port in the UK if they have to,” the report quoted an insider. “[This] could be a possibility to slow down the supply in the supermarket. The Government and supermarkets need to realise the control we have as farmers. The good thing with that is you have farmers everywhere so you can cover all the ports.”
Tom Bradshaw, president of the National Farmers Union (NFU), said that his members felt “betrayed” by Labour government.
“I had a meeting with farmers this week and they are absolutely irate,” he said. “If they hadn’t said they weren’t going to do it, there would still be dismay but not the sense of betrayal. Anyone living longer than five years is thinking, will a future government do something different? The leader of the opposition has said they will overturn it.”
The NFU has organised a lobbying event later this month in Parliament where members will hold meetings with their MPs – but the union declined to back a mass demonstration in the capital on the same day, telling its members that unless they have registered for the parliamentary event they should stay away.
There are also reports of plans for a co-ordinated “sewage strike” in a move that risks causing chaos for water-treatment companies and creating a mountain of waste.
Clive Bailye, the founder of the Farming Forum, the UK’s biggest agricultural online forum, said that some farmers were looking at other actions, “from not taking sewage sludge to not letting food leave the farm or sending livestock to market”.
“I can see produce being withheld.”
He said that although they were “very worried about going to prison” he felt his position as founder of the Farming Forum put him in a strong position to help, adding: “We know we need to do something but we are not sure what it will look like yet. But I’ve got thousands of messages from farmers asking me how, when, where.”
A government spokesman said, “With public services crumbling, a £22 billion fiscal hole inherited from the previous government and 40 per cent of Agricultural Property Relief going to the 7 per cent of the wealthiest claimants, we made a difficult decision to ensure the relief is fiscally sustainable.
“Around 500 claims each year will be impacted and farm-owning couples can pass on up to £3 million without paying any inheritance tax – this is a fair and balanced approach.”
Post Offices handled £3.69 billion in cash deposits and withdrawals in October, reaching the highest monthly amount since July when a record £3.78 billion was handled over the counter, shows new figures released today (11).
Personal cash deposits totaled £1.52 billion which was up 2.2 per cent month-on-month (£1.49 billion, September 2024) and up almost 15 per cent year-on-year (£1.32 billion, October 2023). October 2024 was only the third time personal cash deposits have exceeded £1.5 billion in a single month (previously July and August 2024).
Business cash deposits totaled £1.21 billion which was up almost 4% month-on-month (£1.16 billion, September 2024) and up almost 8% year-on-year (£1.12 billion, October 2023). October 2024 was only the second time business cash deposits have exceeded £1.2 billion in a single month (previously July 2024).
Personal cash withdrawals totalled £928 million which was up 6.6% month-on-month (£871 million, September 2024) and up 13% year-on-year (£821 million, October 2023). The amount withdrawn over the counter was just below the record amount withdrawn in a single month set in December 2023 (£930 million).
Ross Borkett, Post Office Banking Director, said, “Our figures indicate that demand for cash is as strong as ever as people rely on cash to budget, particularly in the run-up to Christmas, and businesses rely on it to survive a volatile trading environment. Postmasters and their teams play a vital role in supporting small businesses to trade by providing a convenient and secure location to deposit their cash takings with many branches open long hours and some at weekends.”
Post Office Cash tracker data – October 2024
Cash deposits value (business & personal)
MOM%
YOY%
Cash withdrawals value (business & personal)
MOM%
YOY%
Total cash deposits & withdrawal value for October 2024
As at 16 October, 88 hubs have been opened in partnership between Cash Access UK and the Post Office. 168 Banking Hubs have now been announced by LINK with further openings planned for later this year.
Chancellor Rachel Reeves' budget is expected to prove to be “a big burden for the retail industry to carry”, Asda chair Stuart Rose has said, warning that the “consequences” of the budget will lead to some price increases.
Rose said the increase in employers’ NICs and changes to tax thresholds would have “consequences” and meant it could not rule out some price increases.
“If you get presented with a bill unexpectedly for around £100m, even if you’re a business as big as us, that takes some digestion. So we’re looking at the consequences of that, but you cannot rule out the fact there will be some inflation,” Lord Rose told the Guardian.
Rose added that the changes in last week’s budget were “a big burden for the retail industry to carry” and meant that Asda would “have to look hard at every piece of expenditure”, including the annual pay increase for staff, and may limit how many workers it hires.
“We’ve seen an increase in national minimum wage,” he added. “We want to attract good staff, but we have to look very, very hard to affordability.”
It comes a day after Asda released its gloomy numbers the slide in total revenues, excluding fuel, by 2.5 per cent to £5.3bn in the three months to the end of September, while like-for-like sales were 4.8 per cent lower than the same quarter in 2023.
Asda’s warning about the cost of budget measures comes only days after it announced hundreds of head office job cuts and a restructuring in an attempt to turn around the business.
The retailer said it would slash 475 management roles in Leeds and Leicestershire to “remove duplication and simplify structures” amid a “challenging” market. The remaining staff have also been told they will be required to spend at least three days a week in the office from January.
“We are a business that relies on teams working together. It’s not always as efficient with those teams working together in terms of online, in terms of Zoom calls," Rose said.
Asda has been without a chief executive since the co-owner Mohsin Issa stepped back from executive duties in September, leaving the retail veteran Rose in the lead role.
Rose, who had previously called on Issa to step back, said he was “embarrassed” by Asda’s performance.
“I’d like to see the business flying again, so I stick by what I said,” Rose said. “We’re in here now with our heads together, we’ve got a good management team.”