A nation of shopkeepers: Britain's small business undergo transition in tough economic times

LONDON – The small shopkeepers in Greenwich are running out of time.

In the London borough that gave its name to Greenwich Mean Time, businesses like Lorraine Turton’s are endangered by online shopping, cut-price competition from giant supermarkets, changing tastes and, increasingly, the protracted recession. Her Internet cafe on Trafalgar Road is a rare hive of activity on a “high street” — the British name for a town’s main business district.

These days, those streets are increasingly dotted with empty storefronts.

Napoleon once derided England as a “nation of shopkeepers,” but its small retailers are vanishing at an alarming rate. If the trend continues, the character of the country’s cities and towns, whose high streets have attracted retailers for hundreds of years, could change profoundly.

“The shopping high street is an important local place of community,” Turton said. “Our entire country has been founded on the principle of market towns. If we lose our high streets, we lose an intrinsic part of our culture.”

Retailers are being forced out of business as Britain struggles to recover from an economic slowdown that has been longer and deeper than any since the 1930s.

What makes this downturn different is that consumers have been reluctant to start spending again on small purchases — just the sort of thing people buy at the neighbourhood store. Three and half years after the start of the downturn, so-called nondurable purchases remained more than 5 per cent below pre-recession levels. After the recessions of the 1980s and 1990s, they had already rebounded within three years.

A study released last week by the accounting firm PwC and the Local Data Company found that retailers were closing an average of 20 stores a day, a number it predicted would rise to 28 per day in the first three months of this year.

Greeting card shops, travel agents and jewelry outlets are being shut down. Charity shops selling donated second-hand goods, pawnshops, and payday lenders increasingly take their place.

Those closures worry British Prime Minister David Cameron, who two years ago hired the nation’s undisputed shopping czarina, Mary Portas — a retail expert dubbed by the tabloids “Mary, Queen of Shops” — to offer advice on luring people back to the high street and make it the heart of every community.

Despite the fanfare, Portas and the government have struggled to show results. Retail sales remain poor, putting more pressure on shops trying to attract what Portas called “today’s increasingly sophisticated, time-poor yet experience-rich, consumer.”

Like merchants in many downtowns in the United States, British shopkeepers have suffered as others feel the hard times. Revenue-strapped local governments raise parking fees, which discourage shoppers; banks are reluctant to lend; suppliers have killed businesses by cutting off credit; landlords seek tenants who will pay the highest rent, not those who make the high streets attractive shopping destinations.

Even the 2012 London Olympics didn’t change much for Greenwich’s Trafalgar Road, situated between two venues in east London.

What should have been a bonanza nearly killed Turton’s business, she said. Road construction before the games disrupted traffic and prompted suppliers to refuse to make deliveries. During the Olympics, marshals hustled fans away from the venues and toward the train station — rather than let spectators kill time by having a meal, a beer, or in Turton’s case, stopping by her Internet cafe.

“That was just an opportunity lost,” she said, staring out of her store, the Greenwich Communication Centre, an oasis of humming Macs and PCs.

What’s tough about losing such opportunities is that they come along so rarely, says Peter Vlachos, a business professor at the University of Greenwich.

Striding down Trafalgar Road, Vlachos shakes his head, pointing to empty storefronts and tacky signs in garish greens and fading reds. The gas station seems to be the only place doing a steady business. While there are pockets of brightness — a Pilates studio, a cozy wine store — the overall impression is of a road that hasn’t bustled since Margaret Thatcher’s governments of the 1980s. Or maybe longer.

Vlachos has tried to offer expertise to local merchants. When he walks into Turton’s shop the two fall into animated discussion about tactics for growth: Could Vlachos persuade students to gather marketing data that might help her reach out to new customers? Does he want to attend a workshop with other small business owners? The problems are complex and the opportunities for help are few.

“Our local businesses are just very much squeezed,” he said. “There just isn’t anywhere to turn.”

For all the pain, many see the shifting landscape as inevitable — a reflection of Britain’s changing economy, shopping patterns and globalization. Many of these shops are holdovers from chains that don’t need as many outlets any more. Independents have an opportunity to step in, said Dan Thompson, founder of the Empty Shops Network, which gives advice to local retailers and has persuaded landlords to let their properties be used as art galleries and the like, rather than sit vacant.

“It feels brutal to see this going on. But it’s the death of something that didn’t work,” he said. “What we’re seeing is change.”

Reviving the high street also depends on people having disposable income, something that has decreased during the economic downturn. Inflation has exceeded wage increases for the past three years, and in terms of buying power average U.K. earnings are now at 2003 levels, according to the Office for National Statistics.

“On a practical level wages aren’t rising, but inflation is. That is having its effect on the consumer,” said Isabel Cavill a retail analyst at Planet Retail. “Discretionary spending has really gone down.”

But Thompson insisted that that all is not lost — though he says it will take time to make adjustments. Take Covent Garden, the outdoor market immortalized by Audrey Hepburn’s flower seller in “My Fair Lady.” In the 1970s, planners suggested it should be demolished, but it has since been revitalized into specialty shops, restaurants and theatres.

He suggested taking the long view, arguing that high streets have existed since “14-something,” and they will continue to evolve.

“It’s a bit messy and it’s painful, but as people we’re tough,” Thompson said. “We’ll get through it.”