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News - 15 January 2006
Unsustainable business plan?

What now for retail in Brighton & Hove?

Christmas was not the bloodbath that many retailers expected but the raft of profit warnings and failures in the sector (see earlier story Rise in business failures hits retail hardest – 7th November 2005) is evidence enough that it wasn’t a picnic either. What does 2006 hold for Brighton & Hove’s shops?

The Bank of England seemed to discount early retail results in its deliberations over interest rates, which it decided to leave unchanged at 4.5% on January 12th. This is probably because retail remains in a considerable state of flux and difficult to read but it seems unlikely that the marginally improved performance in the Christmas period will carry through into the rest of the year.

Quite simply the conditions in the south east that made retailing so buoyant from about 1995 onwards are no longer present in the economy. The housing market boom is over which means that fewer people are boosting high street sales by purchasing household items. Personal borrowing has reached alarming levels (see earlier story UK Debt – over one trillion and rising – 7th January 2006) with personal borrowing now equivalent to 150% of household income (it was 110% five years ago) and the nation is becoming increasingly preoccupied with their pensions or the lack of them.

Retailers face increasing competition from the internet, which boomed at Christmas robbing traditional bricks and mortar outlets of a large chunk of their market share.

Traditional retail must respond by improving the quality of the service and the shopping experience itself. Invariably independents are more vulnerable that the big high street names. Business Improvement Districts (BIDs) offer the opportunity to make shopping areas vibrant, clean and exciting ‘must visit’ destinations and the Business Forum and Economic Partnership will be promoting BIDs over the spring with a view to establishing the first city centre BID at the end of May.

Click on the BIDs icon at the top right hand corner of this page for more information.

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