Slipped discs

Record shops in the Eighties were vibrant, exciting places staffed by teenagers with a passion for music and overrun by kids hanging out, being cool. You could find all sorts of people there, united by their love of music: little girls buying CD singles of their favourite boy band; teenage girls buying chart CDs; teenage boys buying 12" singles; young men replacing all the LPs bought in their youth with the new exciting CD format; young women buying Now That's What I Call Music; middle aged women buying record tokens as birthday presents; and dads buying cassettes for the car. For each, their record shop provided an important cultural experience.

Since those golden days, the independent outlets have seen their fortunes rapidly fade, brought on by rising internet sales, piracy and supermarket price wars. So swift has been the decline that more than 400 shops have closed in the UK in only the past five years. And the process hasn't finished yet.

Record shops are no longer the realm of teenagers. Now, they are mainly frequented by the over-30s. The staff are older and the music quieter as shops strive to cultivate more mature customers. There is more space as fewer people shop there. The stock range has changed. Gone are the majority of singles CDs, chart CDs and 12" singles. The cassette format is dead. They have been replaced by a far greater range with expanded folk, country, world, jazz, reggae and world music sections. Prices have undergone a radical change, too. You would have paid around £12 for a CD in 1988; now they are usually cheaper than that.

During the past decade, the UK record industry has seen an increase in the number of units sold, alongside an overall decrease in revenue. In other words, more CDs have been sold at lower prices, as retailer's margins have constantly been reduced.

In 1988, a record shop would have had a chart wall to display the top 30 albums. Nowadays, the chart CDs have been lost to the supermarkets, with most record shops keeping only a token stock, because they can't offer competitive prices. Moreover, the majority of independent stores no longer stock singles.

By contrast, independent shops in 1988 would display their top 30 CD singles on a chart wall. Nowadays it's just not possible to do that, because many songs in the charts are only available via download. The hardcopy single, which used to form a significant portion of a shop's business, has been in decline since the Eighties due to an inadequate pricing structure, expensive dealer price, low margin as well as the withdrawal of a "sale or return" deal for shops. This once profitable system is no longer a viable practice; the hard copies probably won't last much longer. People just won't pay £3.99 for a CD single when they can pay £9.99 for an entire album or download a single track for 79p.

The record companies' policy of ignoring CD single buyers has resulted in music fans abandoning the format in droves. People who only want a single track now download it via the internet, often illegally.

One decade ago, the majority of music fans would be able to name the number one single. Now, who knows? More poignantly, who cares? The 12" single has vanished, along with cassettes and the national record token scheme. The great thing about these tokens was that someone in Inverness could buy a record token for somebody living in Plymouth, knowing that they could spend it locally. The record industry shot itself in the foot the day the national record token scheme was scrapped.

The tokens were an ideal gift from a grandparent or Auntie who couldn't think of what to buy you for Christmas. As well as providing a source of income for independent outlets, they encouraged the general public to visit record stores. Most children's first experience of buying a CD was redeeming a record token at their local record shop. The original scheme, administered by EMI, was a huge success. But when WH Smith produced their own record token in 1995, others soon followed and the original scheme was doomed, costing independent record shops millions of pounds in lost sales.

Throughout the Eighties and Nineties, most shops' three biggest selling CDs of the year would be the three volumes of Now That's What I Call Music.

These albums are the biggest selling compilation series ever. Independent record shops were initially offered a good discount on their early orders, which encouraged sales. Most stores took between 50 and 200 on initial order. Sadly, EMI withdrew the discount for the independents while at the same time offering substantial discounts to the supermarkets. What was once a real money-spinner that brought people into independent record stores three times a year became a source of embarrassment. The discounts offered to the supermarkets were so great it enabled them to sell the series to the public at a lower price than record shops could buy them from EMI. The majority of independents became embittered and stopped carrying the series in protest.

Having lost the market for record tokens, CD singles, chart CDs, 12" records, and Now That's What I Call Music – how are the few remaining independent shops surviving? The biggest problem for them nowadays is that they have become significantly less important to music collectors. Anybody who wants an obscure or rare CD can find it at the click of a mouse. This has forced the independent record shops to keep their prices as low as possible while aiming at a market of people who still get excited by discovering new and different music. Knowing they can't hope to compete with the purchasing power of the big supermarkets, independent shops now concentrate on stocking music not found in Woolworths or Tesco. They are also diversifying into related areas, such as in selling musical instruments, music-related books, music memorabilia and various other merchandise. They sell tickets, provide coffee and smoothies, and innovate to make visiting a record shop a more enjoyable experience.

One exciting development has been the widespread introduction of personal, small-scale gigs and appearances in independent record shops, with no attendance charge. Action Records in Preston hosted Muse in their early days, while Rough Trade East in London's Shoreditch organises at least one gig a week. Earlier in the year, Radiohead were due to play there, and although due to its size the gig was moved across the road to the live music venue 93 Feet East, it still created a good publicity for the record store.

Other record shop owners have gone to more unusual lengths. Dave Minns of Brighton-based Borderline Records persuaded world famous cartoonist Robert Crumb to design their carrier bags. Crumb, who designed the sleeve for Janis Joplin's Cheap Thrills album and once turned down the offer of doing an album sleeve for the Rolling Stones as he thought their music was "rubbish", was delighted to help.

Rod Emms, of Scarborough-based Record Revivals, converted half his shop to a café so his customers could listen to CDs while they ate. Rod laid the foundations for his business using "Beatle bricks". Through a contact in the insurance industry, he bought the rubble from the legendary Cavern Club in Liverpool, the venue where The Beatles played many of their early gigs. He supplements his income by selling the bricks, each one of them individually numbered.

Call into the Drift Record Shop in Totnes, and not only can you rent a DVD from their cult film library, but you can book a session of holistic therapy.

All of this illustrates how independent shops have adapted as they lost ground in the battle against greater purchasing power. They are forced to compete in the only area where they have the edge, by offering a more personal shopping experience than their big business rivals ever could. Drawing in customers with gimmicks or diversifying away from purely selling records might seem like selling out to anyone who relishes the glory days of the Eighties, but it's either that or shut up shop for good.

'Last Shop Standing' by Graham Jones is due to be published in 2009

The tale of how a Midlands-based chain of record shops obtained their stock of Coldplay's Viva La Vida – one of the biggest CD releases of 2008 – is a bizarre one.

In better days they would have ordered about 1,200 copies of such a major release. But now business is not so good, so it limited its initial order to just 50 copies.

EMI's dealer price for the album was £8.95. When the CD was released it generated much excitement. The chain put it out at £10.99 – a fair price. But regular customers soon flocked into the shops telling them that Morrisons was selling the CD for £6.99. The owner didn't want to upset his customers, so he decided to reduce the price to £9.99, making him £1.04 per CD.

Despite being £3 more expensive than the supermarkets, the shops still sold out. So what was the owner to do now for further supplies of the CD? Should he order from EMI at £8.95 or should he pop down to Morrisons and buy them for £6.99?

No contest – so off he popped to the supermarkets. Unfortunately, he was limited to five copies per visit and after two trips, it was made clear to him that he was an unwelcome customer.

There was only one thing for it – all the staff took it in turns to pop out to the supermarkets during their lunch hour to buy five copies each.

It became an exercise in espionage – in order not to arouse suspicion they staked out each supermarket and learned when the staff changed shift. Now they could each buy up to 15 copies a day each – five from each shift. The chain has now obtained more than 250 copies of the album from Morrisons and Asda who also decided to sell the CD at £6.99.

'Last Shop Standing' by Graham Jones is due to be published in 2009.