COLUMN: It's the High Street in need of retail therapy now

However, as 2018 unfolds it is increasingly obvious that retail itself is in need of therapy, let alone a fix.

Last week The Press undertook a survey of vacant retail outlets in York and came up with some interesting findings. In the city centre alone 49 shops and restaurants (8.1 per cent) stand empty, many in prime locations. Although it represents a shop vacancy rate below the national average of 11.1 per cent, this matters deeply for a tourist town like York, because a range of attractive shops draws visitors – a key factor in our local economy.

In fact, the high street as we know it is taking a battering nationally. Big names have gone bust or are facing severe pressures: Poundworld, Maplin and Toys ‘R’ Us have all collapsed into administration, while New Look and the department store group House of Fraser are seeking to shore up their finances. In addition, restaurant chains like Jamie’s Italian and Prezzo have announced closures.

The reasons are complex. One huge factor is a fall in the real value of people’s earnings, linked to a 15 per cent fall in the value of the pound since the Brexit referendum, pushing up inflation. As a result imported goods are more expensive, with shoppers inevitably cutting back.

Retailers are also complaining of rising overheads, not least a hike in business rates set by the government and the implementation of a National Living Wage. To my mind, that last complaint is contradictory. A big reason people are spending less is that they earn less. If businesses can’t afford to pay their staff wages sufficient for a basic existence (and the Minimum Wage is scarcely a fortune), then they are not legally viable business models.

Another key issue is the shift to online shopping undermining traditional retail habits. Internet giants like Amazon, who pay shockingly little tax in the UK, have had a huge impact on the high street as more people see online shopping as a cheaper and easier way of getting goods and services. What’s more, online sales continue to shoot up even when overall retail spending is in decline.

Finally, debt is endemic in austerity Britain. We have witnessed unprecedented levels of government borrowing, but many businesses have also overextended their financial liabilities. Just before its collapse, for example, Toys R Us UK faced a looming VAT debt payment deadline of £15m.

Perhaps more worrying is the level of personal debt – an inevitable result of our low wage economy. According to the Office for Responsibility, an average UK household has credit debt worth £7,629 and the figure is steadily rising. Broken down per person, this means each UK citizen has an average credit debt of £4,009. As for mortgage debt, even a slight rise in interest rates could sink many families.

What is to be done? One obvious step is to encourage small, local firms through lower business rates. If corporations and wealthy individuals paid moderately higher taxes we could fund such a measure. But at the heart of the problem is the fact that the UK has drifted into a low skill, low pay, low productivity economy through decades of the wrong kinds of investment and short-term government thinking.

Every crisis is simultaneously an opportunity. Problems with the UK’s current culture of shopping are actually a chance to re-evaluate whether mass, planet-wrecking consumerism is really the way to be happy. After all, consumerism is based on the notion that, at some fundamental level, you are what you own. We all know money can’t buy love. Maybe we should be spending more time and resources on hobbies, relationships, on-going education or community activities like sport or volunteering. Perhaps then, with a more rounded approach to life, we wouldn’t need doses of retail therapy and its fleeting satisfactions in response to unhappiness.