Business View: The British high street never got rich by whingeing

Weather is a favourite excuse. Too hot, and people don't want to shop; too cold, ditto
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The Independent Online

Paul McGowan, the UK boss of the distressed-debt specialists Hilco, predicts in these pages that a number of high-street names are facing imminent collapse. On top of that, there are negative trading updates coming from every corner of the sector: Next and Kingfisher last week, Woolworths this week.

This can hardly be a surprise to anyone who follows the sector. As far back as last autumn, expectations were growing that the crucial Christmas period would be dire for retailers, and by and large, they were spot on. We didn't buy enough stuff; January was awash with downbeat trading statements. The few retailers, such as Matalan, able to boast a reasonable Christmas were not gloating for long: the upswing in their sales failed to survive much beyond the New Year.

And so it is that we're now in the autumn again and even the strongest names on the high street, the ones we rely on to say the right things - Next, in other words - are bearers of bad news.

There is, of course, a myriad of excuses. Weather is a favourite: too hot, and people don't want to shop; too cold, ditto. Nor do excuses stop at the door of the Met office. All kinds of happenings have been blamed for a decline in footfall. The Live 8 concert was memorably cited by one company that measures retail traffic as being good news for global poverty but bad news for Oxford Street.

The fact is that these excuses are beginning to sound a little tired. London has, of course, suffered horrific terrorist attacks over the summer, and these have obviously affected business as people stayed nervously away from the capital.

But take that out of the equation and, frankly, a number of retailers are beginning to sound like whingers - and whingers with short memories, to boot. Only a short while back, and the Bank of England's main concern was how to cool down consumer spending. The high street has boomed in recent years, and the UK economy owes it a great debt for having carried it through the worst of the European recession.

But this is simple physics: what goes up, must come down. The boom could never have lasted for ever. For a start, consumers are shopped out - how many fridges/TVs/DVD players/cameras do you need exactly? And with personal debt levels still sky high, it's no bad thing if people start deciding they don't really need yet another pair of shoes.

It should also be remembered that not all of the sector is suffering. Associated British Foods' canny step into the cheap and chic fashion world, through Primark, continues to go from strength to strength. And we may be hearing from Woolworths this week, but we'll also be hearing from Tesco. No surprises there: profits are set to charge ahead as per usual.

Tesco and Primark are examples of companies that remain truly in touch with their customers, adapting products, prices and services in accordance. Simon Wolfson, chief executive of Next, can moan all he wants about how bad things are on the high street, but when you can buy rip-off Marc Jacobs designs at Primark or Topshop for just a few pounds, why would anyone make a detour to pick up a sensible, reasonably priced blouse at Next?

Of course, conditions are tough out there. People are spending less. Price deflation - something that has being going on, painfully, for a long time now - is compounding the woe. Margins are getting squeezed.

But retail has never been an easy sector. Instead, perhaps the high street should stop moaning about the here and now, push on through the bad times and start preparing for the next upswing.

a.townsend@independent.co.uk

Jason Nissé is away

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