Structural change not shopping is killing the High Street
THIS is an interesting little piece of news from Marks and Spencer:
Marks & Spencer is to stop opening new general stores in the UK amid a shift to internet shopping.
The company will build four new large outlets over the next three years, but then call a halt to 129 years of bricks and mortar expansion.
Bosses believe that the popularity of ‘click and collect’ means people will be buying more online and either collecting from its existing stores or getting home deliveries.
Economists desperately try to point out that there’s two very different processes that go on in any country or economy. There’s that bit that we normally think of as economics, boom or bust, inflation, unemployment and so on. And then there’s the bit that economists think is much more important and no one else does: structural change.
Times right now are hard, we all know that. Incomes are stretched, no one’s got much money to splash. So there’s empty shops all over the place. So all we’ve got to do is get a bit of a boom going, kill unemployment, and the high streets will be thriving again, right?
Well, no. Almost certainly not: for there’s that structural change going on. We’re all doing a lot more of our chopping on hte internet. Thus we simply need less shops space around. Some of what we built as shops before the internet is simply never going to be used as shops again. Even M&S, as we can see, thinks this.
It’s true that some 12% of Britain’s high street shops are empty. It’s also true that some 12% of retail sales are now taking place on the internet. There is a connection between those two facts.
Posted: 24th, May 2013 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink