An Overview of Retail from Sandpiper - Part 2
The “Economic Affairs Scrutiny Panel” conducted a “Retail Policy Review”, and one of the witnesses was the CEO of Sandpiper.
There are some interesting nuggets which I have extracted and commented on after reading the review.
Sunday Trading
An interesting but realistic take on Sunday Trading. I wonder if the Chamber of Commerce or for that matter the States Statistical Unit has ever asked the question of shops up to 700 square metres: The law allows you to do it, why are you not trading?
I am somewhat agnostic on Sunday trading. I have to be because some of my shops do open and some do not so it would be slightly strange if I was to say anything else.
The reality is of course, as we all know, that any shop up to 700 square metres can open today. Walk round the town centre and count how many shops that are under 700 square metres that could trade are not trading. It seemed to me that in this process the first thing you would do would be to find out from all of those people: “The law allows you to do it, why are you not trading?”
But we have gone from giving the 700 square metres a few years ago to let us have open house for everybody. I do not know what the answer would be, and again it would be 2-faced for me to say anything other than I am agnostic. The only thing I would say is that I am trading the brands that have a demand. The brands that I have closed, which is most of my clothing brands, there is not the demand to justify 7 days. There is not the demand for me to ask staff to work extra hours at extra cost, when potentially the cake is only so big. I will keep away from the “Keep Sunday Special” issue, because that is a separate view.
Equally, I understand the argument that says government needs to get out the way and let the free economy take its place. That is why I come down on the view of being agnostic
I mean we open at the peak periods, so we are open now. There is probably an argument in the summer to open on selected Sundays but there are other Sundays in the depths of February where there are cobwebs rolling down the High Street.
Equally, the other consideration is that I would suspect that the real beneficiaries of Sunday trading will be the garden centres and D.I.Y. (Do It Yourself) shops. Therefore, this idea that we do Sunday trading, it will regenerate the town, you could argue that it might have a negative effect because it would drag people into alternate locations out of the town.
He also makes an interesting point on the main beneficiaries – the Garden centres, the DIY stores, the Farm Shops, and not the Town Centres. They are the nearest Jersey has to an attractions outside St Helier, and their product lines have often widened considerably from the basic core activity to supplying of refreshments and more general retail items, especially at Christmas.
It would be interesting, from a worker's perspective, to ask: does he ever work on a Sunday like his employees have to?
That's a question I always ask about Sunday trading: is there an element of hypocrisy if an employer wants the benefits of a day with his or her family, but is happy to let a worker forgo that. A day off in lieu in the week is not much good for the family if your children are at school.
Luxury Brand Market
My sense is that although there is a market for high end it is limited and therefore we have tended to stay away from it because I do not think the majority of the population are going to shop there and unfortunately in this day and age you cannot just afford to be a luxury treat.
It is interesting that both BHS and Woolworth have been taken over by much more high end suppliers, although the more expensive one, where BHS used to be, is looking to sell more general sportswear and have a cafe on premises.
Tourism for Retail
I remember “Time Jewellers” at the heyday of tourism in the 1960s and 1970s which did by and large survive on tourists (and never advertised), but even with specifically holiday geared tourism, such as tourism resorts, the market collapsed some time ago, along with Jersey Potteries, the Shire Horse Farm, the Fantastic Tropical Gardens etc. I think he very succinctly sums up the situation here.
To be honest the phrase I tend to use with tourism for retail is, it is cream on the cake. You cannot survive on tourists. The tourists will put a bit more cream on the cake if you like but you have to have an underlying bulk of business to drive your business on a day in day out basis and if you can attract some tourists as well then all well and good but you cannot build a business in retail just on tourism.
Costs of Doing Business and Changing the Townscape
There is an interesting distinction made here between locally owned properties, who have adjusted rents to keep business since the crash of 2008, and the institutionally owned properties, those bought primarily as an investment in land. It might be useful if there was an easily accessible way of determining which properties are owned by which kind of landlord, and if that could be easily determined, then it could go as a question on the property schedule. While property transactions are recorded in the Royal Court, we don't seem to have any central property registry which can easily be interrogated to produce statistical reports.
There is a certain parallel with the question of economic substance, because institutionally owned properties as described here, are buying to invest and resell as much as buying to rent or indeed redevelop for housing. You can usually tell the latter because they are either empty for a long period, or have a peppercorn charity rental, or have very low rental takeup (I’m thinking of Britannia place as an example)
I have to say in defence of local landlords we have been seeing over the past couple of years locally owned properties taking a far more pragmatic view of property prices. That is not the same when you have institutionally owned properties because institutionally owned properties are very loath to drop their rent because it means they have to lie down the carrying value of their asset which they are very loathe to do. So property prices remain high but I would say that there is certainly a more pragmatic solution being shown to that going forward which is indicative of the fact of supply and demand.
So rents are expensive, relatively expensive in the top 13.
But the town is getting emptier and that is when you are into this joined-up thinking that says we need to manage the decline. We need to manage re-zoning. We need to manage the creation of more green spaces. We need to shorten the process of planning permission so that people can turn commercial into residential at a much faster pace. We need to accept that the town centre is not the town centre that it was. You could almost argue that we almost need to give up on peripheral areas.
I read that Simon Crowcroft suggested a tax on empty shops. I agree with that partially. I agree with it in that I think it is absolutely right for the main streets. I think that is entirely appropriate. But not for the peripheral streets because you are trying to stop the tide of the internet, which is not going away.
What was in the town centre cannot possibly be the way going forward. The demand is not there to keep those businesses that were thriving 10, 15 years ago going. So do not penalise the people on top of having lost their business and having empty shops by taxing it. But absolutely, where you have institutional landlords in the main streets that are just frankly making the place look unattractive, they need to incentivise to move the thing along.
With the need for more residential housing in Jersey, the notion of incentivising a move from business rental to housing rental is an interesting one. A number of finance centre properties which were empty have been converted into flats, and the long time dead end furniture shop by Minden place is also on track to provide housing.
Luxury Brand Market
My sense is that although there is a market for high end it is limited and therefore we have tended to stay away from it because I do not think the majority of the population are going to shop there and unfortunately in this day and age you cannot just afford to be a luxury treat.
It is interesting that both BHS and Woolworth have been taken over by much more high end suppliers, although the more expensive one, where BHS used to be, is looking to sell more general sportswear and have a cafe on premises.
Tourism for Retail
I remember “Time Jewellers” at the heyday of tourism in the 1960s and 1970s which did by and large survive on tourists (and never advertised), but even with specifically holiday geared tourism, such as tourism resorts, the market collapsed some time ago, along with Jersey Potteries, the Shire Horse Farm, the Fantastic Tropical Gardens etc. I think he very succinctly sums up the situation here.
To be honest the phrase I tend to use with tourism for retail is, it is cream on the cake. You cannot survive on tourists. The tourists will put a bit more cream on the cake if you like but you have to have an underlying bulk of business to drive your business on a day in day out basis and if you can attract some tourists as well then all well and good but you cannot build a business in retail just on tourism.
Costs of Doing Business and Changing the Townscape
There is an interesting distinction made here between locally owned properties, who have adjusted rents to keep business since the crash of 2008, and the institutionally owned properties, those bought primarily as an investment in land. It might be useful if there was an easily accessible way of determining which properties are owned by which kind of landlord, and if that could be easily determined, then it could go as a question on the property schedule. While property transactions are recorded in the Royal Court, we don't seem to have any central property registry which can easily be interrogated to produce statistical reports.
There is a certain parallel with the question of economic substance, because institutionally owned properties as described here, are buying to invest and resell as much as buying to rent or indeed redevelop for housing. You can usually tell the latter because they are either empty for a long period, or have a peppercorn charity rental, or have very low rental takeup (I’m thinking of Britannia place as an example)
I have to say in defence of local landlords we have been seeing over the past couple of years locally owned properties taking a far more pragmatic view of property prices. That is not the same when you have institutionally owned properties because institutionally owned properties are very loath to drop their rent because it means they have to lie down the carrying value of their asset which they are very loathe to do. So property prices remain high but I would say that there is certainly a more pragmatic solution being shown to that going forward which is indicative of the fact of supply and demand.
So rents are expensive, relatively expensive in the top 13.
But the town is getting emptier and that is when you are into this joined-up thinking that says we need to manage the decline. We need to manage re-zoning. We need to manage the creation of more green spaces. We need to shorten the process of planning permission so that people can turn commercial into residential at a much faster pace. We need to accept that the town centre is not the town centre that it was. You could almost argue that we almost need to give up on peripheral areas.
I read that Simon Crowcroft suggested a tax on empty shops. I agree with that partially. I agree with it in that I think it is absolutely right for the main streets. I think that is entirely appropriate. But not for the peripheral streets because you are trying to stop the tide of the internet, which is not going away.
What was in the town centre cannot possibly be the way going forward. The demand is not there to keep those businesses that were thriving 10, 15 years ago going. So do not penalise the people on top of having lost their business and having empty shops by taxing it. But absolutely, where you have institutional landlords in the main streets that are just frankly making the place look unattractive, they need to incentivise to move the thing along.
With the need for more residential housing in Jersey, the notion of incentivising a move from business rental to housing rental is an interesting one. A number of finance centre properties which were empty have been converted into flats, and the long time dead end furniture shop by Minden place is also on track to provide housing.
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