The Retail Sector - Business, Innovation and Skills Committee Contents

1  Introduction

One thing is clear, that society has been interacting in social hubs around commerce since time began and human nature will continue to desire this in some form. [British Business Improvement District][1]

1. British Retail is a global success story. However, it is continually evolving, and the rate of change has increased dramatically over the past 40 years. The traditional High Street has seen the emergence of and competition from mail order, supermarkets, shopping centres, megastores, out of town retail parks, and, most recently, digital retail channels in the form of e-commerce and m-commerce. The retail sector has been affected, like other industries, by the economic downturn, but it will always survive in some form, as long as there are consumers wanting to purchase products. But does the High Street have a particular role, over and above the transaction of goods, in contributing to the physical fabric and the life of our town centres and villages? Do we need to ensure that the High Street is not swept away by the latest trends in consumer activity?

2. When discussing the retail sector, there is much talk of decline. However, there are many positive aspects of this constantly-changing sector. Indeed, Alex Gourlay, Chief Executive of the Health and Beauty Division of Boots, told us that communicating a negative image of retail can adversely influence the sector, and that it is important to change the perception:

    From 'the high street is dying' to the opportunities of a fantastic industry in the UK—it is probably the best retail industry in the world—and allowing people to celebrate that, while moving to develop an international strength to drive our great brands, products and services in international markets. It is a communication issue.[2]

3. David Owen, Chief Executive of GFirst Local Enterprise Partnership, also stressed the need to instil a sense of passion in the experience of shopping, by making it a pastime that is more than simply buying things:

    The challenge as we see it is more about the definition of what retail is. We see retail as a customer experience that goes beyond shopping and purchasing goods to going to cinemas, restaurants or cafes. It is about injecting passion into the high street and town centres, and injecting an experience.[3]

Despite the many challenges facing it, the retail sector is a growing sector. Fiona Wilson, from the Union of Shop, Distributive and Allied Workers (USDAW), told us that in the four-week period ending in May of 2013, "£27.1 billion was spent in the retail sector, so it is a growing and profitable sector".[4] She went on to say that the workforce is the greatest asset of the retail industry.[5] USDAW's written evidence stated: "We are the major union organising in the retail sector. Our retail membership currently stands at 343, 000, up by 20,000 over the last two years".[6] Given that the sector employs around three million people,[7] and has seen radical change with the multichannel developments, it is important to ensure that the right skills and training opportunities are provided. Mike Davidson, Head of Retail Operations at Land Securities spoke up for career opportunities in the retail sector: "If one of the things that comes out of this is that retail is put on the map as a career choice with future potential, that would be hugely advantageous in the process".[8]

4. Britain leads the world in the retail sector, and we hope that it will continue to thrive. If the recommendations in this Report are accepted, we are confident that the High Street retail sector, specifically, will also have a bright future. We launched our Inquiry into the Retail Sector in the Spring of 2013, in response to the Business, Innovation and Skills Retail Strategy, which was published in October 2012. It outlined the Department's support for the retail sector, at international, European, national and local levels. The Department then published a further Report, A Strategy for Future Retail in October 2013. Our inquiry asked for written comments on the initial Strategy. However, we received limited evidence concerning international and European retail issues; the bulk of our written and oral evidence concentrated on national issues. Furthermore, the majority of those who contributed to the inquiry wrote in detail about the burden of Business Rates. The Report, therefore, will concentrate primarily on the issue of Business Rates, in the context of the retail sector. It does not say that the High Street is being destroyed by the growth of digital and multichannel retailing; they are all part of a buoyant retail sector, which is finding a new balance. But the High Street landscape is evolving and is likely to involve a more diverse mix of use, with housing, leisure, office, retail, and community space.[9] In this new evolving landscape, leisure facilities, restaurants, and coffee bars will also play an important part. However, for shops to be a part of that future, there must be an urgent review of Business Rates for retail premises. The Communities and Local Government (CLG) Committee has explored issues around the Portas Review and the High Street. That evidence informed our consideration of many issues relating to retail. We hope that issues raised in this Report will be of interest to the work of the CLG Committee.

5. We started the inquiry with a breakfast meeting hosted by Google, with a wide range of retail representatives. The Committee received 40 pieces of written evidence, and held five oral evidence sessions—four held in Westminster and one held at the Guildhall in Gloucester. We would like to thank all those who submitted written and oral evidence. We also visited Gloucester town centre, and Boxpark PopUp Mall in Shoreditch; and we participated in the PopUp Summit at County Hall, London. We would like to thank the organisers and participants of those events, which were invaluable in increasing our understanding of different aspects of the retail sector.

1   Ev w22 Back

2   Q207 Back

3   Q232 Back

4   Q104 Back

5   Q104 Back

6   Ev 193 Back

7   Ev 115 Back

8   Q325 Back

9   For example, Ev 140 (The Government); Ev w222 (BIDs) Back

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Prepared 4 March 2014