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Drapers Investigates: the independent retail crisis

drapers indie indicator index image

Drapers’ survey shows independent businesses are currently battling to survive amid high street headwinds, with more than a quarter reporting they are not profitable. It found that the survival of the independent sector will require significant action from local councils and wider government.

Independent retailers play a vital role: nurturing new brands, setting the standard for service and serving their communities. But as high streets up and down the country are left with voids from the torrent of retail collapses, a punitive business rates regime, and political and economic uncertainty brought about by Brexit, the odds seem stacked against the UK’s smaller fashion businesses.

Against this backdrop of instability, Drapers conducted a survey of the independent sector to uncover the challenges businesses are facing and to find out what local and national support they need. The survey was open to fashion-based independents and received 133 responses from across the UK and Ireland.  

Worryingly, more than a quarter of respondents revealed that their businesses are not currently profitable, while only 35% have felt confident enough to expand by opening another store in the past three years. When asked to rank the main concerns in running an independent business, Brexit was top of respondents’ lists. This was closely followed by business rates and high rents. 

In December last year, the government launched the Future High Streets Fund to help revive town centres with a combined £1bn investment. A total of 100 towns have now been shortlisted and have received up to £150,000 each to develop project proposals for the final funding. 

However, Drapers’ survey found that more than two-thirds of respondents were sceptical that the fund will help independent retailers. 

One said: “[Prime minister] Boris Johnson is not to be trusted. Any local help and development spending promised by the Tories pre-election will simply be flung out post-election.”

Independents expressed exasperation at “retail giants [creating] a discounting culture that is hugely dangerous to retail”, and called for more government support to guard against increased overheads, and competition from retail parks and online shopping. 

High streets minister Jake Berry would not comment because of the pre-election purdah.

While the country remains in political and economic turmoil, the retail sector will struggle to get the attention of government. However, without its support, the future for independents is uncertain. 

Drapers’ survey of independent fashion retailers shows how this pioneering sector is battling competition and economic uncertainty. 

Independent fashion retail: the big picture

Are you profitable

How many fellow independent retailers have closed in your town or city in the past three years?

Do you think the government is doing enough to support independent fashion retailers?

Do you think local councils are doing enough to support independent fashion retailers?

 

Pressures and challenges

Independent retailers across the UK said they face many political and economic challenges. The main issues they cited included: Brexit uncertainty; high rents; high business rates; high parking charges and limited parking spaces; a decline in footfall; homeless people or begging on the streets; “constant” discounting from high street stores; online retail competition; “constant” requests for discounts; multiples launching CVAs/administrations [leading to closed shops on the high street], having to compete against the likes of JD Sports/Sports Direct [as people go to the larger retailers where they can access more exclusive product]; and a lack of good-quality and nice-looking shops. 

To what extent 1

Rank these health factors

How to fix the broken business rates system 

An overwhelming majority of respondents said they would like to see business reform. Suggestions included: the abolition of business rates altogether; reduction of the business rates multiplier; annual revaluations and performance-based business rates. 

Would you like to see business rates reform?

To what extent 2

What government support do independent retailers need? 

A main focus of the survey was to investigate the level of local and wider government support available for independent businesses. Respondents were pessimistic about help for independents from the £1bn Future High Streets Fund – a government initiative to reinvent town and city centres. Responses heavily indicated a lack of support from both local councils and national government. One independent warned: “If government doesn’t act soon, there will be a lot of business failures in spring 20.”

To what extent 3

Drapers investigates – independent retail survey 1

About the survey

  • Carried out online between 12 September and 18 October
  • 133 respondents across the UK and Ireland: 33% in the south-east of England (including London), 15% in the east, 13% in the south-west, 9% in the north-west, 9% in Scotland, 8% in the north-west, 8% in the West Midlands, 6% in the East Midlands, 6% in Yorkshire/Humber, 4% in Wales, 2% in Ireland, 2% in the north-east, and 1% in Northern Ireland
  • 42% run or work for a womenswear independent, 8% menswear, 5% childrenswear, 8% footwear. Others sold a mix of categories
  • 66% of respondents have one store, 16% have two stores, 9% have three, 2% have four, 2% have five and 5% have more than five 
  • The oldest independent retail business to take part opened in 1888, while the most recent opened in 2019

 

Related files

Readers' comments (4)

  • Retailers have been carrying an unfair burden of the tax take for many years- its about time this scandal was stopped. Councils have been sleepwalking into this disaster and just don't continue to do their part in driving customers away from traditional High Streets. Brexit has been hanging around like a bad smell- it is unlikely to go away quickly either, despite the election, as trade talks will drag on for years to come. Dear Boris only thinks of himself, unfortunately no time left over for Independent retailers (isn't he the man who said 'F... business')- 'Get Brexit done'- do me a favour!

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  • What really worries me when i read this is the slant of the questions so they are all external factors, brexit, rental, business rates etc. I recognise these are concerns but we also need to look internally in the mirror. Lack of product differentiation, slow moving fashion focus, unloved interiors all play such an important role. My concern is that it's so easy to view external factors and feel we cannot control them. We know there are high street retailers doing a great job, making money, exciting the customer...... they still have these factors.

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  • Thank you for your feedback. We focused on external factors as these are the things independents tell us they are struggling with, but agree that the internal challenges are equally important and could be the focus of a second survey, or feature.

  • Independent retailers all need to take a look in the mirror and focus on their very own USP, product, customer service, social media.....we can all look at the external factors surrounding us at this present time and we could al dwell on the negatives rather than the positives and we are all in the same boat. Passion, drive and determination have always served me well along with my commercial instinct.... I love retail through thick and thin!

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  • darren hoggett

    Retail keeps looking for excuses, but in many cases only have themselves to blame. For example, Business Rates does need looking at, but it is not the reason why retail is doing so badly.

    Every retailer knows what their expenses will be before the year ahead and should budget sensibly and not live beyond it means. I'm not seeing that. I see an industry that lacks discipline at the highest level, with a complete lack of personal responsibility when things go wrong.

    The blame is always external forces, rather than management.

    There are success stories out there and still plenty of money to be made, but the industry should stop wallowing in self pity and simply get on with it.

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