alt Hacker NewsIn the UK at least a big part of the problem for all high street retail is high fixed costs.
High rents for "prime" locations that, given the trend over the last 25 years, are no longer very prime, coupled with high business rates set by central government make it incredibly hard to make any money. And that's even before thinking about staff, where cover is no doubt needed at a higher concentration per square foot than warehouse based businesses.
Couple that with increases in minimum wage[0] and employer NI, and taking into account inflation and cost of living in recent years, and a lot of formerly workable retail businesses have simply been rendered non-viable.
[0] Which, by the way, I have no quarrel with.
Replies
Another problem with the UK retail scene is the charity shop, of all things.
It is hard to hate the charity shop as they are Mother Theresa and Bob Geldof in retail form, feeding the starving of Africa (name me one) and bringing us one step nearer to curing cancer (as if).
But, after a while, the charity tends to perpetuate the problems that it seeks to solve. So you have what amounts to a business that has volunteers rather than paid staff (forget about minimum wage), the electricity bill is at a special rate and even the products come for free, from house clearances and people just getting rid of their 'empty gifts of capitalism' (plastic trash).
The real hustle is with rent and business rates. Rent and rates gets paid but at a fraction of the cost. If the landlord kept the place empty then he would have to foot the rates bill, but get that charity shop in and the problem goes away. The landlord can then count on the value of his property going up because they don't make land any more and all capital ends up hoisting up property values, even if the crumbling 'property' was paid for aeons ago and is best demolished.
What you have with a toy shop is specialist retail, where customers have expectations of service. The staff should know the availability of every product, stock levels and much else. It is not 'pile it high' as per the Toys R Us model.
I worked in specialist retail and for a boss that despised charity shops. We were in a back alley, with a fraction of the footfall. Anyone visiting the town would see the usual row of useless charity shops but not our shop. We had bills to pay and they didn't. It was unfair.
Nowadays the High Street doesn't just have the charity shop scams going on. There is the joy of money laundering. Imagine you have a fine cannabis operation going on and you are bringing in tens of thousands a week. What do you do with that money? How do you convert it to property?
This is where the nail bar comes in to play. Or the 'barbers'. Or the 'vape shop'. Hire your immigrant labour to sell nothing all day, and you can put through all the money you want.
Then we have the Wetherspoons pub, where they don't really make money from beer, the idea is to build a property portfolio. Another hustle.
Then there are the naive hopefuls. Personally I would love to own a little shop that sold all my favourite toys that I was denied as a kid, so that would mean train sets. Or maybe I would love to own a little cafe that sells the healthiest food in town. With some lottery winnings or an inheritance, I could dive in, hire my best friends and have the grand opening.
Narcissism would mean that all the warning signs would be ignored. Pride would mean that I would be in it until the house was mortgaged three times over, with half the suppliers demanding payment up front. Every day would be praying for rain, as in sales. I would be complaining and blaming the usual suspects such as the jungle store.
There are many, many other hustles and it sometimes helps to explore a town with someone from 'the other side of the tracks'. Poor people get preyed on in ways you would not believe.
For instance, cigarettes. If you went into one of those convenience stores and wanted a packet of cigarettes, it would cost you a vast fortune, I don't know how much, but probably around £20 nowadays, at a guess. However, for our special friends, they get the counterfeit ones at a ridiculously low price.
If you were to ask for them then the owner would tell you where to go. However, if a special friend were to introduce you to the store owner, then you would be able to buy the £3 or £5 counterfeit items too. You can even pay by card, so long as you are in the club.
A certain poverty mindset keeps people from 'my special world' going back to these convenience stores to buy food and drink items that have no nutritional value apart from calories. It is very sad but you would be amazed at how much money can be made from the seedier side of the High Street.
The problem isn't with this strange underworld, it is with the people in charge. They don't have the 'speakeasy' code words needed to appreciate how it works and they haven't tried to give specialist retail a go. They are probably at a different level of criminality, with the rentier class that are the true parasites of Western society.
I also think the UK are very tight with money (not sure about other countries). There are lots of people, according to our local Clarks shoe shop, who get their feet measured and then just buy their shoes online to save a few pounds. People do the same with anything they can try on in the shop and then order the same thing somewhere online for a bit cheaper.
The things you said are definitely making things much worse and I suspect that even back in the day when everyone bought things from the local shop, most retailers were not making massive profits so anything cutting away at that will make it worse.
Sad really.