Recession and the British high street

In the last decade high streets 1 in the UK have become increasingly homogenised.

In my old job I would end up travelling visiting most major towns and cities in the UK and it was depressing that they all looked the same – same brands, same items, same old same old.

This, of course, frustrates anyone in the coffee business when you see chains snap up great locations and fill them out with standardised and boring branded shops.  Starbucks have some amazing, interesting real estate in London but the moment you set foot inside all character is banished.

I can’t quite agree with all the doom mongering about the economy but it is clearly hurting the fat, bloated chains that had it too easy and got lazy/lost direction.  There is now some great real estate coming up in London and I hope that we see a small surge in independent businesses – not just in coffee but in all aspects of retail.  In the next few months in London there will be a handful of interesting places opening, which is wonderful, and I hope that trend continues.  Small business loans are still available from banks, and an intelligently planned new business run by someone with passion is probably a pretty safe bet for a bank these days!

Increasing demand in locality (not just in food), coupled with a potentially more discerning customer (I know I am thinking a little bit more carefully before spending my money) could be a great environment for new businesses.

This really is just me typing out my thoughts from tonight – I’d love to hear what people think?

  1. For those who don’t know what a high street is – in the UK the main shopping street in every town is refered to as a high street, and is often called High Street.  ↩︎

5 Comments

  1. I agree there is some potential for great opportunities. But I think the impact on the real economy is as yet unknown and could be exceptionally painful.

    I think if it was simply as binary as people deciding what coffee to buy, then perhaps I’d agree. But bear in mind all the other variables that determine the success of any shop. Suppliers need to keep going, rents need to be reasonable, people still need access to capital which is in short supply etc etc. I hope you’re right, my concern is that the network effects of the downturn are so severe lots of otherwise ‘safe’ businesses are going to be badly hurt.

  2. It would be good to see more places with a more individual feel and unique character. I do understand the role that’s played by large companies and their franchises, but every once in a while, I’d like to have a coffee experience that’s markedly different and interesting.

  3. There are definitely a few reasons to think the ‘downturn’ may help independent coffee:
    - retail space freed up by people going under
    - less competition for retail space, better ability to achieve sensible rent on good location
    - I find landlords now actually believe me when I say their potential corporate tenant is no safer a bet than me
    - councils more likely to sympathetic to ‘change of use’ applications when a street has a number of vacant shops, economy is struggling

  4. Rents are already becoming ever more reasonable, more and more spaces are popping up (I still have my inbox filled by all sorts of property e-mails) and as I get to chat to lots of different startups it seems that small business loans are still available from most banks. Granted – they are looking for more capital from the startup, and the maximum amount loaned has come down – but it isn’t impossible by any means.

    I agree that now is a very bad time to be ‘safe’, or merely acceptable. I also am glad I am not in the restaurant game where the stakes are very different. It will be interesting to see the effects of London’s food culture as well as its coffee culture.

  5. Yes rents will get more reasonable, sites more freely available and in every resession there are opportunities. At the same time there is less disposable income floating about – pretty much everyone I know has a story to tell about a colleague, friend etc being made reduntant, taking a pay cut, working shorter hours etc.

    The fundamentals of a successful new coffee business remain the same. Set your offer out to be different not just to copy, have enough money in the bank (after start up expences etc) to ride out some rough trading until you get established and manage your cash flow as well as your customer flow. And dont forget to treat your suppliers with repsect when it comes to credit – if they give you some now appreciate it and pay on time – they will be far more willing to support you if you hit a rough patch!

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