Barbers and bookies fill gaps on high streets as independent shops shut - The Guardian

Britain's high streets are in the midst of a revolution as traditional independent shops are rapidly being replaced by service providers such as barbers, bookmakers, coffee shops and nailbars.

Independent clothing stores, shoe shops and newsagents are shutting at a record rate with nearly 200 closing down in the first half of this year, about the same number as in the whole of 2012, according to a report.

But despite predictions of the death of the high street, the total number of independent outlets has crept up by 424 – or 0.4% – as entrepreneurs opened new cafes, beauty salons, bookies, pawnbrokers and mobile phone outlets, said the British Independent Retailers Association and research firm The Local Data Company (LDC).

"This is fundamental structural change. No longer will shopping be the primary reason to visit a town centre. We are seeing the death of traditional shops and the rise of services which offer the personal touch, the things you can't buy at the supermarket or online," said Matthew Hopkinson, director of LDC.

He said 8% of independent stores had either opened or closed in the last six months, a dramatic increase in the rate of "churn" from just 1% in the first half of last year.

The evidence of rapid change comes in a week when the future of the high street will be hotly debated. Mary Portas, the "queen of shops", will appear before a parliamentary committee on Monday to discuss progress since her review of the high street nearly two years ago, and on Wednesday the veteran retailer Bill Grimsey will outline a battery of tactics to help revive town centres.

Grimsey, the former boss of Wickes and Iceland, has said nearly half the country's 44,000 retail businesses are "zombie companies" in the commercial equivalent of negative equity, with £2.3bn of liabilities, and a quarter of those under threat can be expected to fail in the next three years.

Amid evidence that about 14% of shops in Britain stand empty, Grimsey will call on the government to give a 50% discount on business rates to retailers opening in premises that have been vacant for a year. He also wants the immediate introduction of a business rates revaluation due for 2015 and a freeze on rates from next year. He will suggest councils use their capital reserves to help fund small businesses.

Michael Weedon, deputy chief executive of the British Independent Retailers Association, said independent stores were leading change in town centres as big chain stores pulled out. "They are the best hope that our high streets have. But the margin between openings and closings, between vibrant health and sickness in the town centre environment, is just 0.4% in the first half of this year, far too fine a margin for comfort," said Weedon.

Just a 1% decline in the number of independent stores would result in nearly 30,000 empty high street premises, doubling the current number.

The report shows that independent stores are suffering more in some parts of the country than others. Surprisingly, given its resilience during the economic downturn, London and the south-east saw the greatest loss of independent stores while Wales saw the greatest rise, up 3.3% after a 3.3% drop in 2012.

Weedon said: "The Westminster government should take a look at the thoughtful work that the Welsh government has put into considering using business rate income for some good by supporting retailers opening in units that have been empty for over a year, while reining back on the massive rate discounts that have made the charity shop sector a leader in high street growth."

He criticised plans for another rise in business rates next year which he said would add £200m or more to independent stores' costs after a £175m lift this April.

The government is likely to come in for criticism this week as the high street continues to struggle amid worries that few of Portas' 28 recommendations have been put into action.

When she appears before the communities and local government select committee, she will discuss the progress of the 27 "Portas pilots" schemes which each received £100,000 to fund new ideas to regenerate the high street. Another 326 town teams received £10,000 each.

While some projects have clearly brought results, others have been criticised for being slow to spend the cash and for wasting it on questionable initiatives, such as the £1,600 Peppa Pig costume hired by Dartford council to appeal to families. In February, the first wave of 12 Portas pilot towns were revealed to have spent only 12% of the money handed to them and only two had managed to cut the number of empty shopping outlets.

Amid concerns that the pilot towns were not getting enough support, the government set up the Future High Streets Forum, a group of retailers, academics and trade bodies, to help speed up the pace of response to the high street's problems.

On Sunday Eric Pickles, the communities and local government minister announced teams of local experts would this month start training the leaders of the 326 Portas "town teams" in how to used planning powers to reshape the high street to adapt to changing consumer behaviour.

The government has also mooted changes to planning law to allow councils to convert empty shops into housing and cut business rates for some small businesses. Recently Pickles called on local councils to cut parking charges which he said "undermine the viability of town centres".