Tuesday 24 June 2014

Amazon might still save the high street. Here's how

Rolling Acres shopping mall in Akron, Ohio
Have you noticed how the discussion about whether or not our high streets can survive has disappeared from our collective media radar?

So 2013, wasn’t it...

My article inthe Guardian yesterday suggests that there is a reason for this – the cheerleaders for out of town shopping are finding that the sums just don’t add up for them any more.

To the surprise of many of us, last September’s figures showed that out of town shopping centres were losing shoppers faster than high streets.  Even the Great King Clone of the retail world, Tesco, is on the slide.

I don’t think we realised back in the days of the Clone Town Britain campaign how the market would change – these days you either have to be cheap and convenient or local and authentic.  The economic writing is on the wall for anything in between.

In other words, the high streets appear to be on the winning side, for a change.

What I didn't say in the article – because I only had the regulation 700 words – is that the survival of high street shopping is certainly not assured either.  Three other conditions have to be met before they come anything close to thriving again...

First, they need an economic raison d'etre.  The preferred high street solution depends on there being space for culture, fun and eating out – what James Rouse used to call the 'festival marketplace' – but there is a problem here. For a secure future, high streets and town centres have to provide an economic underpinning. It can't just be pop-up art installations in the empty shops. Despite Mary Portas, who is right I have to say, we are not there yet.

Second, they need to escape the clutches of our pensions.  If the big property companies think they can still rake off the kind of rental profits that they wee used to in the days of upward only rent reviews, then the whole delicate edifice really can't survive

But the last one is the most important.  The tax anomalies that give such an advantage for the online providers have to be sorted out – the government simply must cannot turn a blind eye to the way Amazon routes its sales through Luxembourg in a way that John Lewis can't.  It is unfair, destructive and it is anti-business.

So when Hamish McRae in the Evening Standard last night asked why the government's tax take is going down even as the economy rises, it might be worth looking at the growth of online shopping as one potential explanation.

If we are heading for the imminent demise of what we might call Bluewater Mind (the tendency to spend a couple of hours sweating on a motorway sliproad just for the chance to consume), then we are paying for it by giving tyrannical power over us to the internet behemoths.

The current control that Amazon has over the economy is unsustainable and potentially tyrannical – and the failure of the coalition to act on their tax avoidance is one of its most important failures.

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