THE bad news has just kept on coming for the high street. First, there was the proliferation of the big out-of-town shopping centres with lots of free parking. Then the internet made it easier, and often cheaper, to shop at home. With the economic crash of 2008 turning the screw even more, suddenly the way we have shopped for generations changed and the high street struggled to keep up. Some businesses adapted. Others declined. Many disappeared.
Sadly, the latest litmus test on the state of the high street appears to show there has been no improvement, particularly in Scotland where more shops closed in 2016 than any other part of the UK. The figures show that last year 254 stores opened across Scotland but that 366 closed, which amounts to a drop of 3.44 per cent – double the British average of 1.32 per cent.
A number of factors appear to be combining to make matters difficult for the Scottish sector. For a start, the Brexit effect on inflation is tightening household budgets. The state of the banking industry and the growth of online banking has also meant the closure of many branches which were once the heart of the high street.
However, an added issue in Scotland is the state of our economy, which is lagging behind the UK’s, so much so that there is now a real risk of recession. What this means in practical terms is that people have less money to spend. All those “to-let” signs and shuttered store-fronts on the high street are a real-life reflection of the parlous state of the wider economy.
Business rates in Scotland are also contributing to the problem. As highlighted by The Herald’s series on the issue, the recently announced rises have real potential to further damage the high street. The burden is also greater on Scottish businesses than it is in the rest of the UK due to the large business rates supplement. A total of 21,578 businesses across Scotland have to pay the supplement, which is set at 2.6p in the pound – double the 1.3p rate in England in Wales. The Scottish Government must seek to reduce this burden, and fix the anomalies in the system, before it is too late.
There are other ideas for regenerating the high street that should be considered. The principles of planning are still far too strict, for example, and relaxing them could encourage people to live in the centre of towns. More should also be done to keep the costs low for new businesses and to encourage more openings, which remain healthy in Scotland.
Some of the trends that are causing the problems are inevitable and reflect profound social and cultural changes that cannot be reversed. But in many areas, the high street remains a linchpin of the community and must be protected and nurtured – not least because high street stores remain a vital employer in Scotland.
To a large extent, the improvement in the state of the high street will have to be about keeping business costs as low as possible. But the high street also needs a healthy economy, decent pay growth and a regulatory system that has the high street sector as the top priority. With structural, economic and regulatory change of that kind, the good news is that there is still hope for the high street.
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