COMMENT Consumers may be reluctant to do so, but I’ll return to the high street again this week.
This week Mothercare joined the chain gang of retailers restructuring their store portfolios through a CVA. This latest proposal would see 50 stores – or 430,000 sq ft of retail space – relinquished. According to Radius Data Exchange data, it would take the total space surrendered by retailers in 2018 to 7.1m sq ft.
It’s a colossal figure, though at the risk of adding to landlords’ pain, it’s worth noting that that 7.1m sq ft would fit into Amazon’s Seattle HQ comfortably. Indeed, with 1m sq ft to spare, the online giant could add to its roster of 24 in-house cafes. And yes, that aggregate vacancy would also fit into the similarly sized HQ2 the online giant is currently proposing siting in one of 20 US cities. A decision on that, we’re told, is imminent.
See also: Amazon’s HQ2 shortlist: the cities going the extra mile
But back to the high street on this side of the Atlantic. That 7.1m sq ft is a figure that will undoubtedly rise over the summer. Fast fashion, (fairly) fast food and more will add to it. But, if predictions prove right, don’t bet against bookies causing it to soar.
There were many sound reasons for this week’s decision by government to cut the maximum stake on fixed-odds betting terminals from £100 to £2. The potential impact on the high street was not one of them. (Neither should it have been, many would argue.)
But be certain that it will have significant consequences.
Within hours of what was an unexpectedly interventionist announcement, William Hill warned that around 900 of its shops – more than one in three – could become loss-making.
“A proportion of these would be at risk of being closed within a relatively short time of the proposed staking change being implemented and, for the remainder of the estate, we will monitor the actual impact on the estate and performance over the medium and long term,” the company said.
And with 33,611 fixed-odds terminals across the country, the Association of British Bookmakers warned that more than 4,000 shops will close as a result of the intervention. As the average size of a betting shop is around 1,000 sq ft, the government’s decision would cause the aggregate vacancy driven by store closures this year to rise by more than 50%.
The locations likely to be worst affected are those already hit hardest by store closures – after all, it is the rise in other retail administrations that has allowed bookies to move from side streets to high streets. More often than not, these deprived areas are also home to populations more vulnerable to gambling-related harm.
From the archive: Bookies gamble on new formats
Bookies are already in retreat; in the 1970s and 80s there were more than 16,000 betting shops. Today there are around 9,000 shops nationwide, accounting for about 4% of Britain’s retail units. Over the past 18 months alone, more than 400 have closed, with the ABB blaming increased taxes and lower profitability.
The government’s decision will satisfy campaigners and others who believe that the terminals fuel problem gambling. Make no mistake: that makes it the right thing to do.
But rare is the government intervention that doesn’t solve one problem and create another. This one has made the job of fixing the high street significantly harder.
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