Town centre stores get a welcome boost
Seven months ago the government asked retail guru Mary Portas to look into ways in which the decline of Britain's town centre shops could be halted. Her report was published yesterday and it lays most of the blame at the feet of our local councils.
Portas argues that they have discouraged shoppers from visiting Britain's high streets through high car parking charges, excessive regulation and encouraging the development of out-of-town shopping centres.
Shareholders in non-food retailers which are concentrated in Britain's town and city centres, even those with some food interests like Marks & Spencer, should welcome this report as if its recommendations are implemented it should boost their companies' future profitability.
High streets are under attack
It's no secret that local authorities love out-of-town shopping parks, which drain trade away from town centres. That's because they can twist the arms of the builders and the large companies which dominate these projects, such as ASDA, Sainsbury and Tesco, to get them pay for local infrastructure projects in return for granting planning permission.
If you've spent some time in Britain's town centres in the last few years, you can't have failed to notice the increasing number of empty shops, which is the most obvious symptom of the extreme pressure that retailers are coming under. Many have thrown in the towel as a result.
The high street has also been under attack from internet retailers for several years and this shows no sign of abating. The profits and share prices of companies such as Game Group and HMV , which are highly dependent upon goods which are easily sold online like computer games, CDs and DVDs, have collapsed as a result.
An example of how ruthless this competition can be was seen last week when the world's biggest internet retailer, Amazon , stirred up a hornets nest in America after suggesting that shoppers use its smartphone barcode scanning application to compare a shop's prices with its own; effectively treating other companies' stores as its own showrooms.
Big changes are recommended
Amongst the reports' many recommendations are that out-of-town shopping centre car parks need to be taxed, planning rules should be amended to favour town centre developments, all restrictions upon night-time deliveries should be removed and that parking charges for town centre council-owned car parks should be abolished.
The latter will especially annoy the local authorities, and some officials have been quick to complain, because many see parking fees and the enforcement of parking regulations as a way to supplement their budgets.
The report hasn't encouraged me to rush to buy non-food retailers' shares, though if I owned some, I'd be somewhat reassured. The big question is whether the proposals will actually be implemented or left on the shelf because vested interests choose to fight their own corner instead of considering the wider interest.