March 11 2014 Latest news:
Ben Woods, Business writer
Tuesday, December 24, 2013
In a year when towns and cities have been left beleaguered and blighted by empty shops – and the popularity of online shopping has continued to soar – few would expect any positive news to come out of the high street.
Julia Pink, 30, owner of Goldfinches, a vintage shop, St Gregory’s Alley.
“The recession was a really hard and scary time. We had to be proactive and concentrate on what was bang on trend.
“Christmas is the most important time for independent shops. If you put 100pc into your shop you will reap the rewards, my sister and I work seven days a week and there is only two of us.
“This Christmas is a lot better, things have really picked up.
“The outlook for 2014 depends on the weather, many people want to stay inside and shop online.”
Phillip Browne, owner of men’s clothing shop Phillip Browne on Guildhall Hill.
He said: “We have seen a buoyant eight weeks of trading. We are up on last year.
“I feel very optimistic for 2014.”
Paul Dodd, 46, co-owner of menswear clothing store Elements on Lower Goat Lane.
“We are doing the same as last year, we are parallel.
“Our internet business is 40pc up and I see it as the future of the shop. We are taking in orders all the time, we also deal with Amazon and have done for a couple of years.”
But in Norwich, evidence suggests that its retail offering is going from strength-to-strength after recording some of its lowest shop vacancy rates since the start of the recession.
According to Norwich City Council’s latest Shopping Floorspace Monitor, the vacancy rate as a proportion of available floorspace in the city centre stood at 5.3pc this year. This compares to 9.3pc when the last study was made in January 2011, 12.4pc in July 2010, and close to the pre-recession level of 5.2pc seen in July 2007.
Meanwhile, the study reveals that other areas of the city are also improving. Secondary area vacancy rates, which include the Norwich Lanes and St Benedicts Street, have fallen to 3.3pc this year, compared to the peak vacancy rate of 6.6pc in 2010, and 4.1pc in 2007.
And these positive signs even stretch as far as Magdalen Street and Anglia Square, where vacancy rates have more than halved to 7.1pc from 18.1pc in 2011.
Great Yarmouth town centre currently has a 13pc vacancy rate, with 58 of 425 units empty. Town centre manager Jonathan Newman said footfall has been “improving” in the run-up to Christmas, with the week commencing December 9 up 2pc on the same week last year.
And the future is looking more positive in some of north Norfolk’s market towns, according to chamber of trade chiefs in Cromer and North Walsham.
Tracey Khalil, president of Cromer and District Chamber of Trade, struggled to think of an empty shop in the town which did not have a prospective new tenant lined up.
“Some of them are taken up by charitable organisations but it’s really quite good at the moment – definitely below a handful,” she said.
In North Walsham, chamber chairman Nicholas Lee said: “We have suffered a few closures over the year but there has also been quite a bit of interest and new businesses opening, particularly in the latter half of the year. There are very few empty shops in the town centre.”
In Harleston, Clive Attwood, chairman of the business forum, said the town’s retail offerings were going from strength to strength. “There is a turnover of businesses but nevertheless they do seem to be filled quite quickly,” he said. “I guess there are three or four that are completely empty but they’ve all been let and there’s movement.
“I think we’ve got a lot going for us... We’ve got properties going back to the 14th century and the fact we’ve got free parking is great for our little town. It’s gradually moulding into a niche with individual shops and it’s got atmosphere and a little vigour.”
In King’s Lynn it has been shaping up to be a strong year.
Abbie Panks, Vancouver Quarter manager, said: “At the moment it is looking very positive. The vacancy rate in the town centre is around 9.5pc while the national rate is 14pc so we are better than most of the country.”
Dereham town council clerk Tony Needham said there had been some good success stories in the town over the past year, highlighting the expansion of Knitwits and Fabric Store into much larger premises on the High Street.
But there were still some empty shops which needed to be filled.
However the positives for the town remain the free parking. The town’s deputy mayor Tim Birt said he felt the town was “holding up well”.
Norfolk county councillors will be holding a business rates summit at County Hall on January 14.
But why is Norwich managing to improve its retail offering while other cities remain stuck in a rut?
Looking at the picture nationwide, vacancy rates have remained stubbornly high this year, with Britain showing an average vacancy rate of 14.1pc in its top 650 centres, according to the Local Data Company.
However, for Adrian Fennell, partner responsible for retail and leisure at Norwich-based Roche chartered surveyors, the city’s success comes down to its location.
While some business leaders will curse Norfolk for being cut off from other major business hubs due to poor infrastructure. When it comes to retail, Norwich’s remoteness means it has less competition, which, in turn, makes it a more attractive proposition for major high street brands.
“Norwich is the predominant retail city in Norfolk, which spills into north Suffolk and north eastern Cambridgeshire,” Mr Fennell said.
“And because it has such a large catchment area, national retailers need to be there – it is all about representation.
“After all, people will travel along way to go to the likes of an Apple store, while there is also a strong mix of independent retailers on the next level down from the big national chains, which are all feeding off each other when it comes to sales.
“And because Norwich is a large city and the rents are competitive, it means retailers still have the ability to make money there.”
Evidence of increased confidence in Norwich is a welcome sign for retailers that depend on the city’s vibrant shopping mix to drive footfall and sales. But should businesses be expecting this growing optimism to translate into increased consumer spending?
On the national front, there are signs that some retailers are seeing sales picking up. John Lewis raised hopes of a bumper end to the Christmas shopping period when it notched up £164.4m in takings in the week ending on Saturday December 14 – a 4.2pc increase on last year.
But these numbers may prove an anomaly compared to other popular high street brands who have hedged their bets on driving up revenues through flash sales on the run up to Christmas.
Large promotions have included a 30pc discount across clothing lines at Marks & Spencer, as well as price cuts at Debenhams, Gap, Argos and BHS.
These cut-price promotions have led some retails analysts, including Mr Fennel, to question whether an increase in footfall this winter would actually lead to more money going into the tills.
He believes the sight of people in Norwich with lots of shopping bags may provide a skewed perspective of how well the city has actually done over the Christmas period.
“Retailers have approached the December trading with caution because it is still really tough out there,” he said. “That is why we are seeing flash sales from the likes of Marks and Spencers and Debenhams, coupled with recent sales initiatives like Cyber Monday and Black Friday.
“While we maybe seeing a lot of people in the high street in Norwich with lots of shopping bags, it doesn’t necessarily mean they are spending as they had done in previous years. They have more bags because the retailers are heavily discounting products way before the January sales, and people are buying more discounted items.
“Meanwhile, the mild winter we have had means people are not spending as much money on winter clothes, which will also have an impact on the high street as well.
“However, when it comes to the vacancy rates in the city, Norwich is going through a positive period in its life compared to the last five years.”
It is likely to be a number of weeks before it becomes clear just how well Norwich has fared over the Christmas period.
And regardless of whether it proves to be a bumper year or not, hopes will remain high that vacancy rates will stay low, and Norwich’s retail economy will continue to grow.
But while there is optimism, there is also a degree of frustration in equal measure. Retailers are becoming increasingly concerned by the cost of business rates in Norwich, which continue to be disproportionately high compared to the level of rent on commercial properties.
Some business leaders believe the rates are choking the ambition of businesses who are discouraged from expanding their premises and taking on new staff because of their high overheads.
And with the rates set to increase by 2pc in line with inflation this April, a number of retailers in Norwich are also facing the prosect of having to pay an extra £440 per year.
Concerns over the tax have led Norfolk county councillors to appeal to traders to share their anxieties as part of a business rates summit scheduled at County Hall in January.
But Brandon Lewis, the high streets minister and MP for Great Yarmouth, has dismissed the idea that a rates rise would deal a blow to Norwich. He said retailers need to look closely at the whole business rates package on offer.
“Every business wants to see lower taxes, I totally understand that,” he said.
“There have been no business rates increases since 2010, and on top of that the government showed that it is trying to help small businesses through the measures announced in the Autumn Statement. These include a cap on business rate rises at 2pc; a £1,000 business rates discount to retail premises with a rateable value of up to £50,000; and a new reoccupation relief, which will halve the rates for new occupants if the premises have been empty for a year or more.
“One of the reasons Norwich has the ability thrive is because it has a diverse offering, from modern areas like Chapelfield, to its independent shops and cobbled streets. It also has a good mixture of retail and hospitality, while being pretty accessible to the rest of the region.
“However, the real challenge lies with the towns outside of the city, and making sure they have a diverse offering that encourages shoppers as well.”
• Norfolk county councillors will be holding a business rates summit at County Hall in Norwich on Tuesday January 14 at 10am.
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