COMMENT: Devolution risks schism in retail industry

So the UK Government has decided to give with its right hand and take away with its left, writes Neil Varnham, managing director at Pradera.

This summer UK chancellor of the exchequer George Osborne provided retailers with an early Christmas present by doing away with the country’s outdated Sunday trading laws. To facilitate the growth of high streets, councils will be given powers to zone areas where Sunday trading laws could be relaxed. However, these changes mean that councils could allow shops on designated high streets to operate under more relaxed hours while out-of-town shopping centres with fewer local ties could face restrictions.

There are towns up and down the country relying on and lobbying for out-of-town shopping centres. These are areas where high street offerings are basic or non-existent barring the odd coffee and book shop. In Cornwall hundreds of people have backed a petition calling for an out-of-town shopping centre to be built in St Austell, one of its largest towns. Do we grant them their wish but restrict when they can spend their money?

Under current laws, which date back more than 20 years, large stores can open for just six hours on Sunday, while smaller shops with floor space of less than 3,000 sq ft (278 m2) can open all day. Research shows that relaxing the rules across England and Wales could generate around £1.4 bn (€1.95 bn) for the economy, helping the bricks compete with the clicks of online shopping.

Devolution of power to local authorities has its merits but they risk alienating a large section of the retail industry by restricting out-of-town shopping hours. According to August’s Springboard footfall index for the second quarter 2015, out-of-town locations have continued to see increases in shopper numbers.

However, one of the key findings is that footfall growth is evident in the early evening across all retail location types reinforcing how retail locations need to adapt to changing consumer habits and lifestyles.
Retail parks and out-of-town shopping centres which offer early evening leisure have been able to take advantage of consumers wanting flexibility.

It seems only logical to level the playing field for both out-of-town shopping centres and high streets stores. The rise in footfall in retail parks shows that it is still possible to increase the volume of customers to bricks and mortar stores. However, why must we create divisions and put a section of the industry at a disadvantage?

More importantly, in our increasingly busy lives, we find ourselves purchasing household essentials such as DIY, furniture and electrical goods until far later into the evening than was the case previously, especially at weekends. Why then should restrictions on out-of-town shopping centres, which have the sufficient floor space for these services, prevent people from shopping as and when is most convenient to them. Surely councils would not only be punishing out-of-town shopping centres but hindering the everyday consumer?

Retail is the single biggest employer of people in the UK and a vital industry contributing billions of pounds a year to the economy. Longer trading hours across all retail location types will lead to more demand for staff, further reducing unemployment.

The case for out-of-town shopping centres is a simple one. Out-of-town locations offer larger stores which in turn boast a wider range of products benefiting from economies of scale. More importantly, retail is a ‘leisure occupation’ and out-of-town shopping centres offer restaurants, bars, bowling alleys and cinemas all under the same roof. They offer a whole experience which cannot be ignored.