UK Parliament / Open data

Retail Sector

Proceeding contribution from Greg Clark (Conservative) in the House of Commons on Wednesday, 6 June 2018. It occurred during Opposition day on Retail Sector.

My hon. Friend is exactly right about that. Of course many of our towns acquired shopping centres and shopping malls to make them more attractive at that time, which again was a big change. There is constant change in what the offer and draw of town centres is, and local authorities are very active in thinking about how they can make their places as attractive as they can.

According to the latest market data for the last five years, covering the period from 2013 to the end of 2017, 191 retailers in this country have gone into administration. That compares with the 202 that did so in the five years prior, so we have not had the sudden collapse that the hon. Member for Salford and Eccles was hinting at.

During the last five years, the number of stores affected by those failures was 7,429, compared with 19,639 in the previous five years. So it is very important that we do not paint a picture of British retail undergoing some sort experience that has never happened before; we need to make sure that its dynamism results in positive outcomes and not to regard this as completely out of the ordinary.

The hon. Lady cited examples of closures and, as I said, they are hugely hurtful and worrying for everyone caught up in them. However, she conspicuously failed to mention the other side of the equation. If she reads Retail Week in any given week, she will see example after example of stores that are opening and of companies that are expanding. She could have mentioned that just in January the Co-op committed that it will open 100 new stores during 2018, creating 1,600 jobs. Lidl is investing £1.45 billion in expanding its UK presence, and Aldi is now the fifth biggest retailer in the UK and it aims to have 1,000 stores by 2020. Lest anyone think that discount retail means discount wages, Aldi has pledged to become the UK’s highest-paying supermarket by 2020.

Our tastes and habits are changing. Home delivery from stores was once considered a relic of pre-war and immediately post-war times, but now it is increasingly standard for all the big supermarkets; Ocado has recently joined the FTSE 100 on the back of its growth. We have more and better choice through online retail than ever before, as colleagues have said. ASOS is now the UK’s largest clothing retailer by market valuation, and this week the British Retail Consortium showed that total retail sales increased substantially in May. The hon. Lady does the retail sector and the country a disservice by claiming that we are seeing an annihilation of the high street. We need to be much more practical and positive about the prospects.

However, our habits are changing. We are buying more and more each year— retail sales are buoyant—but we are choosing to buy more of that online, which of course provides a challenge. In 2007, 3% of total retail sales were bought online, yet in little more than a decade—by May this year—that had grown to 16.9%. That is a revolution in a short space of time. In the past 12 months alone, online sales rose by 11.9%, and clothing and footwear sales online rose by 24.1%. The consultants Oliver Wyman forecast that 40% of non-food retail sales will be online by 2030. That is how people are choosing to buy so, just as happened when supermarkets challenged individual shops, retail will look very different in the future. If we choose to buy 40% of goods online, not all the shops we have been used to will exist as they do today. As the British Retail Consortium says:

“We have too much retail space…there will be fewer shops and their role will be different”.

It says that they will be based on convenience fulfilment or, most likely, fulfilling a desire for experience and local community concentration. Those are the changes that the sector anticipates and wants to participate in.

Type
Proceeding contribution
Reference
642 cc328-9 
Session
2017-19
Chamber / Committee
House of Commons chamber
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