Puzzling aspects of the high street

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Raphael
Posts: 52
Joined: 7 Aug 2012 06:12
Location: Sydenham

Puzzling aspects of the high street

Post by Raphael »

Am I the only one to be puzzled by shops and eateries along Sydenham Road that suddenly open up, only to close down a few months later? One example in Lower Sydenham was a west African restaurant that always looked empty. Now it's an Indian restaurant (about the fifth between The Dolphin and Sainsbury's). The small grocery shop (again, there never seemed to be anyone in it) near Kente's coffee shop has closed and looks as it's being decked out as a hair salon/shop. Since I moved to Sydenham three years ago, several internet cafes sprang up, but most have disappeared. Then there was the large shop opposite LA Fitness selling art. That only lasted a few months. Also, there's something called itself an academy, also near Kente's. It looks quite odd and not the kind of place you would look to for education.

I ask this question because it must cost a few bob to open up a business, what with the lease, business rates, utility bills, insurance, fittings, staff etc etc. It's not something you would do on a whim, not if you wanted to make a living. Yet some business seem to have failure written all over them from day one, either because of what they're offering or the location. I wonder how long the cafe that's set to open in the former plumber's shop at the bottom of Kirkdale will last. That definitely seems the wrong location, given the number of people who walk along that stretch of the road each day and also it's proximity to Blue Mountain and Sugarhill.

Anyway, I would be interested to hear what everyone else thinks.
Tim Lund
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Location: Silverdale

Re: Puzzling aspects of the high street

Post by Tim Lund »

I have had similar thoughts. I think the first problem is unrealistic would-be shop keepers. I can't find the link now, but a year or so I found something in the Economist along these lines; it's a characteristic dream of us Brits. Many people finding themselves with a bit of money, and not really knowing what to do with it, think "Ah - how about that dream I had all these years about starting a shop, cafe, etc.?" The two Sydenham examples I think of which had failure written all over them from day 1 were the bicycle shop near Sugar Mountain and the cafe which tried to start opposite Hexagon Housing, in the former Man of Kent pub. I think this is a particular problem with people wanting to start out as pub landlords, which is one of the reasons I don't like the system of tied pubs, since it exploits this weakness, and leads to too many poorly run pubs. I do also, but less often, wonder if some businesses are fronts for recylcing cash, but I suspect there are easier ways - not something I claim to know much about.

Second order problems arise from the ownership of commercial premises; where the landlord just sees the shop as part of a portfolio of assets, without enough commitment to the area to spend any effort thinking about what might be a better long run approach to managing his/her investment, they will probaly be happy to take the money of such naive new shop keepers. If there was a way commercial landlords could be brought together, and encouraged to cooperate for the longer run, we'd not have such problems.

There is also the planning system and the lack of housing (sorry Lee :( ). This is more relevant the further away from the station, but if there is even only a modest chance of converting former retail premises to housing, or on a larger scale, redeveloping to include a decent amount of housing above and behind, then it also makes sense just to take this sort of naive money if it is offered.
_HB

Re: Puzzling aspects of the high street

Post by _HB »

Of course it doesn't help that the High St is such a horrid environment, dominated as it is by speeding and polluting private motor through-traffic. Small businesses might have a better chance of taking root if you could encourage people to make more trips to the High St more often and enable them to do so by active means.
leenewham
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Re: Puzzling aspects of the high street

Post by leenewham »

Hmm, I tip toe into this conversation.

Sorry Tim, housing hasn't much to do with it, you could build a billion houses next to a high street, but if there is nothing there that entices people to visit and part with their money for something they will go to the places that do, even if it's far away.

How busy is Westfield? Ikea? Crystal Palace? East Dulwich? Oxford Street? Feast? Greenwich?

Like it or not, these places are pretty busy, and they are doing something right. It's not about copying them, but learning from them. And it's more than just banning traffic, go to most pedestrianised high streets and they are deserted at night. most of these places are nice places to be. But more than that, they offer choice. People like choice, it's why there are so many different types of pasta sauce, pizzas, cars, phones, coca cola etc.

The most important thing in any high street are the shops. What they offer, how they look and how they make the place feel. And variety. I wouldn't go to a shop that didn't offer what I wanted, no matter how good it looked or how nice the staff were. The most important word there is WANT. Not need.

Grouping like minded or complimentary businesses together is key. People like choice.

This takes us back to the OP. Why do these business open and close down quickly? There are a few reasons.

Often they are passed through the hands of different members or friends of a family.
Sometimes they aren't viable businesses.
Sometimes they are in the wrong place.
Sometimes businesses do a runner leaving debts.
Sometimes they are an island, there is nothing like them nearby, so people don't go there for what they offer. People like choice.
Sometimes they are just bad businesses or badly run.
Sometimes landlords find a better tenant.
Sometimes landlords raise the rent.

Many small businesses do no research before ether open.
Many small businesses copy other businesses and open nearby, which is why you see so many hair dressers or chicken shops. Franchises are pretty easy ways to open a business, everyone needs their hair cut at some point.
Unfortunately they all offer pretty much the same thing and no real choice so they end up taking trade from one another.

I'm sure many will think differently, but in general, this is how people think and behave. HIgh streets haven't learnt or don't compete with malls, supermarkets etc, partly because they are a collection of individual shops rather than a group of shops working together to promote the street they inhabit.
Pally
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Re: Puzzling aspects of the high street

Post by Pally »

That all makes absolute sense Lee. And In do think frontages are a key part of attracting people.... Too many in Sydenham are not thinking about that enough.
Nigel
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Re: Puzzling aspects of the high street

Post by Nigel »

Lee
Completely agree - the housing strategy is a red getting - it works of doesnt , on the basis of want not need .
I think there is an onus on us to be more consumer-power in our choices .
I buy books from Kirkdale Books , I never use Amazon for precisely those reasons .
The shops I use may not be the ultimate in design but they are either respectable and functional or really nice to look at .
I think we need to vote with our feet much more - If you make an effort I will spend in your shop etc .
A very good evening
Nigel
Raphael
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Joined: 7 Aug 2012 06:12
Location: Sydenham

Re: Puzzling aspects of the high street

Post by Raphael »

Interesting comments and they probably identify some of the main reasons why most of these business come and go so quickly. I have another theory about why some businesses do this, though no reason to think it applies to any of those I mentioned. But I'll keep these thoughts to myself, as I have no evidence to support my theory.

I actually like the high street as it is. I like its jumble of shops and the fact that it isn't dominated by chains, like some places. It has its own distinctive vibe. And we have some excellent business: Raffaele's Trattoria; Billings; The Cake Store; the DIY shop; Kirkdale Bookshop; Blue Mountain; the Turkish (?) shop near the post office; Fresh and Fruity; and three of those shops selling the kind of household items we all need to buy at some point. We also have some charity shops, where you can always find a bargain if you poke around, and branches of Lidl and Tesco (I'll nail my colours to the mast: I like supermarkets). And now we have a bistro, which I'm sure will do well once it sorts out the teething problems mentioned by some people on the forum.

So three cheers for our high street and its hard working traders!
Tim Lund
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Re: Puzzling aspects of the high street

Post by Tim Lund »

I'll join Lee in tip toeing round the relevance of the housing shortage ... I was just saying that unmet demand for housing prices out other uses, rather than that more housing would improve the High street of itself.

When Lee returns to the OP, mostly he just says what goes wrong rather than why, which I think Raphael was asking. We can agree that "Many small businesses do no research before they open", and his point about franchising being a dangerously easy way to open a business is similar to the point I made about people naively going into being a tied pub landlord. We also agree that there's a problem of commercial landlords not acting coherently.

I'd be interested to know where Sydenham Road lies on a spectrum of High Street success, taking into account where they are and the demographics. I suspect large commercial letting agents, who will be the main advisors for the sort of landlords who just see a shop as a financial asset, will have some model of average income in an area, proximity to train station and some other stats which can be obtained from the ONS or London data store, and a calculation which says what rent they should be asking for. If we could find other High streets with similar profiles on such mechanical views, and compare vacancy rates and tenant churn, then we could say whether Sydenham Road is doing well or not - at least on this measure.

Meanwhile Raphael and others can quite legitimately say they like it here anyway - there's no need to be mechanical - and I certainly go along with his list of favourite Sydenham Road locations. But he's missed off Whites Pet Centre - maybe he needs a cat?

Returning to the OP myself - and then going a bit beyond - sorry this is rambling - I was thinking about what economists would have to say about why small businesses do not do enough research before they open. It relates to the concerns of the Post Crash Economics Society I mentioned on another recent thread. These students are quite reasonably kicking against an approach to economics in which everyone is rational according to the definition of a particular school of economics (neo-classical), so flying in the face of the evidence, such as the persistent over optimism of people starting up small businesses referred to in the OP. But economists don't have to be like that; once upon a time they could write about people's animal spirits, and further back there is this
The over-weening conceit which the greater part of men have of their own abilities, is an ancient evil remarked by the philosophers and moralists of all ages. Their absurd presumption in their own good fortune has been less taken notice of. It is, however, if possible, still more universal. There is no man living, who, when in tolerable health and spirits, has not some share of it. The chance of gain is by every man more or less over-valued, and the chance of loss is by most men under-valued, and by scarce any man, who is in tolerable health and spirits, valued more than it is worth.
Source here

I'd never want to forget supply and demand, about which I think would-be shop keepers should think as much as about design, but it's no bad thing that we're now seeing more behavioural economists, who study what people actually do, rather than impose their own model of what they should do.
Last edited by Tim Lund on 12 Dec 2014 12:22, edited 1 time in total.
leenewham
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Re: Puzzling aspects of the high street

Post by leenewham »

People go to shopping malls, supermarkets and markets to buy stuff. The footfall they generate is nearly all for people who want to buy stuff, so in general is relates to the audience the mall generates though it's promotions, marketing and advertising which the mall owners charge a premium for.

Unfortunately high streets footfall is mixed. People walk down high streets to get to and from work, just passing through, going home, going to public transport on the way to a meeting, school, meet friends etc. Only a small proportion of the footfall in the high street are customers of the shops. They pass the shops, they don't go to the shops to spend money.

Yet this footfall is partly used to gauge how much rates are. Rents are calculated in such a bizarre fashion and rarely go down unless an area gets really bad and has lots of empty shops (which often leads to regeneration).

There are so many reasons why shops fail. Sometimes the businesses just aren't very good, sometimes the high street isn't right for that business, it was badly marketed, it's the wrong time, sometimes things like roadworks mean that people go elsewhere and when someones shopping behaviour changes it's difficult to change it back (this requires some nifty marketing to rectify), along the with other reasons I gave above. Tesco are finding this a problem at the moment.

There isn't one reason why shops and high streets do badly, it's a combination of lots of reasons.
Bunty
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Joined: 11 Jul 2013 17:49

Re: Puzzling aspects of the high street

Post by Bunty »

I use the high street but never seem to get any further than Kent House Road so don't really see or use the lower end of the street where many places come and go. Also, one of my gripes is the irregularity of opening hours. Cherry and Ice opens at different times, it's not always open when I go to work so buy my coffee elsewhere. I appreciate it's hard to run your own shop and need regular paid staff but if they continue to miss out on the busy morning footfall they will continue to lose potential customers and profits.
simon
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Re: Puzzling aspects of the high street

Post by simon »

I was hoping to open a retail offer last year and did a lot of research, projections etc and I found the largest obstacle was rents. I did find somewhere that would have been economically viable with a great location but the terms were frankly absurd and it led to me to believe that the agent didn't really want to let it and was more concerned about the income from the residential above.
The thing is; the numbers just did not stack up elsewhere but I suspect somebody with a different offer, with low barriers to entry like a hairdressers or restaurant, might have pressed ahead and then failed.
Sydenham retail rents are too high and they need to drop by around 30%, or there needs to be an equivalent subsidy from somewhere, otherwise any new businesses will struggle, particularly if they debt financed.
Chris Best
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Joined: 6 May 2005 11:37
Location: Sydenham

Re: Puzzling aspects of the high street

Post by Chris Best »

Just to note that we are at a point where there are relatively few vacant shops in the high street. The two units opposite LA Fitness are part of the block owned by Freshwater Properties who have more of an interest in the residential above. The long term vacant at 60 Sydenham Road has applied for change of use from A1 retail to A2 financial services for an estate agent. There is also the vacant unit where The Cheque Shop folded - again A2 use but hope it will be let for retail. Yes the level of the shop rents are based on comparisons of others in the high street and as the leases come up for review on a rolling basis so there is little chance of rents reducing. There is a Small Business Rate reduction scheme for reduced business rates with a rateable value under £12k - the smaller shops in the high street benefit from this but most do not.

What we can do as a community is shop local to ensure we keep a range of small businesses in the high street. Park free if you are driving in Girton Road car park and take a fresh look at the range of shops - support the market and join in the entertainment. Santa and his reindeer will be turning on the Christmas Tree at 4.45pm.
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