Bb VIEW BY GREEN BRAIN ON BEHALF OF BRITISH BIDS 6 JUNE 2014
GOVERNMENT FUNDS £2m FOR APPS TO HELP HIGH STREET
- With a promise of a further £6m for successful trials A future trip to the high street could start with pre-booking your parking spot by mobile app and sending out an alert to local shops to tell them what you are heading into town to buy. Once there, you might find yourself searching for a new T-shirt from inside the changing room if you find the one you took to try on doesn't suit. These are among the 21 technology projects the government has funded to the tune of £2m in the hope they can help high street retailers. The schemes, selected from 181 applicants by the UK's innovation agency, the Technology Strategy Board, under its Reinventing the High Street scheme, aim to help independent retailers and town centres that are struggling to cope with a dramatic shift towards online shopping. Each of the 21 selected will get a chance to do feasibility studies for six months before a handful of the best are selected to share a further £6m of cash for larger-scale trials. Projects include an attempt to build a virtual version of Leeds's Kirkgate Market, where shoppers can buy online and then pick up their purchases later at the ornate building where Marks & Spencer was founded. Another service allows shoppers to view special offers in shop windows via a virtual reality tool. Also among the winners is the Bristol Pound, which is getting a £100,000 grant to take the digital version of its successful local currency to other towns and cities, starting with Totnes in Devon. David Willetts, the minister for science, admits that high streets face a number of problems, including a lack of car parking and high business rates. But he says: "For most of the challenges facing the country, innovative technology is part of the answer and I don't see why it should not be part of the answer for the high street. Using mobile phones or other ways of personalising digital technology to help high streets recover is worth a go." Reinventing the High Street is the latest effort to revive town centres that are struggling to cope with shoppers' love affair with the internet. Over the past four years, online spending has grown by around 75%, while sales from bricks-and-mortar shops have been flat, according to Verdict Retail.
As an increasing amount of shopping is ordered from the comfort of the sofa, local shops are also battling to cope with belt-tightening by consumers hit by rising inflation and low pay rises, while landlords have been unwilling to cut rents and business rates continue to rise. The purpose of the high street is being changed: more services are appearing such as cafes, betting shops and nail bars, while some local authorities are seeking to convert redundant stores into housing, doctors' surgeries or crèches. Mary Portas has said technology to create links between independent stores and the internet was an important part of creating thriving high streets, but had to be part of an overall package of measures developed by local communities. "It doesn't matter what digital set-up you have if people can't park or open new businesses because of high business rates. None of this works in isolation." http://www.theguardian.com/business/2014/jun/01/local-high-street-smartphone-apps
PRICE CUTS FAILING – NOW THE KNIVES ARE OUT Tesco appears to have lost more than 1 million customer visits a week, worth £25m in sales, with its market share showing the biggest decline for at least 20 years. In the 12 weeks to 25 May, Tesco's sales fell 3.1% from a year earlier according to figures compiled by Kantar Worldpanel. Kantar said the grocery market was at its weakest for at least 11 years. Tesco's market share dropped to 29% from 30.5%, while Morrisons' share fell to 10.9% from 11.6%. The drop in Tesco's share is the highest since Kantar's records began in 1994. Analyst David McCarthy at HSBC said the figures were shocking. He said: "The market is in danger of getting desensitised to bad figures from Tesco, Morrison and Sainsbury, but this would be a mistake. These figures from Kantar are shocking, in our view, and show that Tesco's and Morrison's total sales are going backwards, despite huge investment. Tesco looks like it is experiencing more than 1 million fewer customer visits per week on a like-for-like basis (assuming average expenditure of £25 per lost visit)."
One commentator has questioned the wisdom of blaming lower income on their policy to reduce use of promotional vouchers, wondering if it makes sense to use a self inflicted change of policy intended to improve results as the reason for a poor result. Another has suggested that in starting a price cut war with the already comfortably positioned Aldi and Lidl “Tesco may not only face a long series of losing battles and still lose the war� The performance of Tesco and Morrisons contrasts with the rise of Aldi and Lidl, the German budget grocers, whose sales surged by 35.9% and 22.7% respectively. In April, Tesco reported a second year of falling sales and profits in its core UK business. Chief executive Philip Clarke has scaled back Tesco's international operations to concentrate on its ailing UK operations, but investors are yet to see returns from his spending on store revamps and limited price cuts. Britain's big supermarkets have suffered as hard-up consumers have reined in spending and turned to the German value chains for their basic shopping. http://www.theguardian.com/business/2014/jun/03/tesco-morrisons-sales-fall-further-aldi-lidl
STAY AT HOME WORKERS AT HIGHEST LEVELS There were 4.2 million UK home workers in the first three months of 2014, amounting to 13.9% of the workforce. The ONS said that was the highest proportion since measurements started in 1998. The figures include those who work at home, and those who use their home as a base, but work in different places. About 1.5 million actually work in their home, or in studios or workshops in the grounds. Nearly double that number 2.7 million - say they work from home, but travel on a frequent basis to meet customers elsewhere. It was in the 1990s that many big companies - such as BT - began encouraging staff to work from home. But the TUC believes many companies have failed to embrace home-working on a large enough scale. "Too many bosses still don't trust staff to work from home and instead force them to trudge into the office so they can keep an eye on them," said Frances O'Grady, the TUC's general secretary. "Employers' attitudes to new working practices must change to make a much better use of modern technology in all workplaces," she said. But according to the ONS analysis, the majority of people working from home are self-employed. In all, 63% regarded
themselves as self-employed, compared to 34% who were employed by a company or organisation. Home workers are also likely to be well-paid and highly skilled. Just under 15% of home workers are managers or senior officials, while 35% are professionals. Median wages are £13.23 an hour, compared with £10.50 an hour for other workers. http://www.bbc.co.uk/news/business-27694938
PORTAS PUTS HER DESIGNER BOOTS IN Retail guru Mary Portas has criticised the government for being slow to provide funding and guidance for suffering UK high streets in an essay which takes on her critics by highlighting successes of towns that followed her guidance. Two years after the coalition responded to Portas's 2011 review of the high street, she writes: "Progress from central government has been far slower than I'd hoped." blaming "bumpy starts" at the 27 Portas Pilot Towns on "vague supporting processes" and "insufficient guidance from government". The Pilot Towns have faced criticism over their use of £1.9m in government funding, while some towns have been very slow to spend money at all. Portas says teams are now getting better support but questions the government's commitment to the "town centre first" planning policy, pointing out that at the end of last year 31 of 43 retail developments permitted since new planning laws were out of town. "Town centre first is a policy convincingly bandied around, but the approval of out-of-town development still happens at a depressing rate" Portas writes. In the essay, entitled Why Our High Streets Still Matter, Portas is generally upbeat, arguing: "High streets will thrive if we re-imagine them." And that those who criticise the Portas Pilot Towns fail to recognise their progress and that they were just one part of her plan. "400 town teams got no money from the government but are following my recommendations and having great success," pointing out the success of several towns, including Rotherham, which has been able to draw in more shoppers and reduce the number of empty shops with a mix of training for shop owners, the launch of a local market, pop-up shops and a creative hub for local artists and crafts people. She also highlights the popularity of her suggestion for a national market day – which has led to the Love Your Local Market campaign and National Markets Fortnight. At this year's event in May, 915 markets signed up. "Every initiative has come off the back of two years of pushing the government for change," says Portas. Read the full thought piece here: http://www.portasagency.com/wpcontent/uploads/2014/05/WhyOurHighStreetsStillMatter_MaryPortas.pdf View Editor: ian@thegreenbrain.co.uk