Retail Strategy

Bill Esterson Excerpts

Wednesday 10th July 2019 Westminster Hall

[Bill Esterson (Sefton Central) (Lab)]

It is always a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing this debate and on an excellent speech. I also congratulate my right hon. Friend the Member for Delyn (David Hanson) and my hon. Friends the Members for Batley and Spen (Tracy Brabin) and for Ellesmere and Neston (Justin Madders), who all advocated for their constituencies and spoke strongly on this issue. They touched on the importance of a retail sector agreement and referred to the USDAW proposals for an industrial strategy for retail; as a member of USDAW, I declare an interest in that matter.

My wife and I decided to buy a dishwasher, and searched online for a local retailer. We found that Smiths TV, in Formby in my constituency, sold dishwashers. Its website was well designed, and when we went to the store, the layout was attractive and the staff were friendly and helpful, so we bought from them. It is a local independent retailer that is clearly doing well, with four stores in Sefton and west Lancashire. Meanwhile, Aintree retail park and Aintree Racecourse retail park, which are next to each other, are both thriving, packed shopping centres where footfall is strong.

In my constituency and across the country, there are success stories in retail, including independent retailers that combine a strong online presence with excellent in-store customer service, and shopping centres where the management and stores combine to present an attractive offer that ensures that customers come and visit. To return to a point made by my right hon. Friend the Member for Delyn, what can high streets learn from successful out-of-town shopping centres? I have mentioned the success stories in my constituency, and it is important that we all do so, because there are plenty more.

However, as is the case with everyone else who has spoken in the debate, the trend across my constituency is far from positive. There have been high-profile closures such as Maplin, Comet and the other names that have been mentioned. In the high streets of my constituency—in Formby, Maghull and Crosby—we have the tattoo parlours, betting shops and tanning salons that others have mentioned, where once we had household names or good local retailers. Many retailers in my constituency, like everywhere else, find trading tough. That is why it is disappointing that the Business, Energy and Industrial Strategy Committee had to report that

“the Industrial Strategy promised to work with low productivity sectors, such as retail and hospitality, with the potential for even small productivity gains across people-heavy sectors having a significant beneficial impact on the UK’s overall productivity. Yet we found that so far neither the retail nor hospitality sector has been able to make significant progress on securing a sector deal of their own”.

The retail industry is a key part of our economy; it employs 3 million people and, according to USDAW, contributes 11% of UK economic output. Many people have their first experience of work in retail. In smaller towns and villages, shops are often the heart of the community, and retail is a fundamental part of how we all go about our day-to-day life. However, 74,000 jobs were lost in 2018 alone, with many more job losses predicted. There is a long-term decline in retail, which is a cause of great concern in many high streets and has a profound impact on communities, workers and the whole country.

However, as I have shown through the local examples I have given, there is much in the industry and high streets and town centres that tells us that this crisis can be addressed. Businesses can still thrive, and good, higher skilled, better paid jobs can be available if we improve skills and use technology to drive productivity, with a strong strategy and the proper partnership between national and local government, businesses and the wider community.

A successful retail strategy should put in place support for businesses to harness the power of the internet and to benefit from a combination of online and offline shopping. Smiths TV in Formby shows how that can work, but such good practice needs far greater promotion and support. Labour’s plans for business support will maximise the benefits of technology to help business, deliver the well-paid jobs of the future and help communities as well. As was said earlier, high pay means there is more for businesses too, as well-paid workers are able to buy more goods and services from them. The good use of technology, allied to equipping staff with the technical and interpersonal skills that I experienced at Smiths, offers a vision of a successful retail future.

The challenges in retail, especially in our high streets, have been analysed by a number of organisations. The Government must listen to the British Retail Consortium, to Bill Grimsey and Mary Portas, to USDAW, and to others who have written excellent reports. All have produced reviews with evidence-informed recommendations to address the high costs of business rates; the lack of footfall and public transport; bank and post office closures; the need in town centres for work space and housing, as well as for good-quality leisure facilities such as bars, cafes and restaurants; and the opportunity to re-establish public services with lots of staff near where shopkeepers can benefit from their spending power—services such as doctors and dentists, whose patients are also potential retail customers.

Retail is an industry of national importance. We are a nation of shopkeepers, but we are in danger of becoming a nation of shuttered shops. That is why Labour’s plan—a bold and comprehensive offer that would bring customers and workers to town centres, reform the crippling system of business rates and preserve the essential heart of communities—is so necessary. In it, we have addressed the need to have decent bus services—services that are free for under-25s and that have free wi-fi; to keep banks open; to address the digital exclusion of the too many who cannot go online to bank, those who need to use cash to buy and those businesses that rely on cash; to retain cash machines for the same reason, for consumers and businesses alike; to have a register of landlords to address the challenge of empty shops; and to overhaul business rates and consider the alternatives, such as an online sales tax. All those ideas are designed to help address requests made by businesses and shoppers. How about electric vehicle charging points to attract shoppers, while at the same time nudging behaviour on climate action?

A retail council that meets three times a year and whose recommendations go nowhere is a talking shop, and is no substitute for a retail industry strategy; £150,000 for a study of a limited number of high streets is no strategy either. When the majority of high streets have been excluded from the high street fund, it starts to look like window dressing, rather than the basis of a strategy that could transform the prospects of retail and communities. A lack of a detailed plan simply will not save retail jobs, or reinvigorate high streets or communities. There are deep-seated problems in areas of deprivation, which will take much greater intervention than in more prosperous areas.

We must recognise the realities of shopping habits, including online shopping, and not give up on our shops and their staff. Working in a warehouse fulfilling orders cannot be the limit of our aspiration for millions of workers, an nor will online shopping be the answer in all cases. Creating an attractive experience that balances online and physical shopping will provide an opportunity for businesses, consumers and workers, as long as we have the right strategy. Human interaction is important in life; that is as true in retail as anywhere else, and online cannot replicate that experience.

Smiths TV in Formby shows what is possible. If it can succeed as an independent retailer, so can many more. However, retailers cannot do it alone, which is why it is now time for the Government to take action. We must have a proper retail strategy, working with the industry to preserve jobs and reinvigorate communities.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

It is a pleasure to serve under your chairmanship, Sir David, and I congratulate the hon. Member for Blaydon (Liz Twist) on securing today’s important debate. Like her, I have a family history in retail and shopkeeping: my great-grandmother ran a corner grocery store, my great-grandfather was a bootmaker and my father used to run a DIY shop.It is interesting that we are having this debate, because he closed that DIY shop after the retail sector changed. The likes of B&Q finished off some of our small, independent DIY shops. I hope I have been able to bring some direct understanding to my role as a Minister in this area.

As the hon. Lady and other Members have pointed out, the retail sector employs more than 3 million people and contributed £94 billion of gross value added to the UK economy in 2018. The retail sector is at the heart of our communities and our country. I reassure Members that I am extremely passionate and determined about the retail sector and that I care vehemently about it, much as everyone who sits in the House of Commons—not just those in the Government—cares very much about it and values it, the jobs it creates and the value it delivers to our communities.

Retail has always evolved to meet changing consumer demands, and it will continue to do so. Indeed, it is already thriving in many areas. For example, we have the most developed e-commerce market in Europe, with 48% of the estimated total of €198 billion in 2018. We recognise the high-profile pressures in the sector, but there are also businesses that are expanding and developing, as outlined by the hon. Member for Sefton Central (Bill Esterson) with his great plug for his local retailer Smiths TV. Amazon, Lidl, Aldi, Ocado and JD Sports are all companies investing in UK retail, which is a good sign for the future. Primark, which recently opened the world’s largest fashion retail store in Birmingham, is proving that a high street business can still be successful without a significant online presence. We have seen sales increase by 4% and increased profits. Organisations such as Pets at Home are taking on the challenge of changing consumer demand. In its stores, it is bringing in veterinary services and grooming services and investing in the workforce and apprenticeships. Many retailers are grasping the challenge of a changing retail sector and ensuring they are able to deliver services on the ground that consumers want.

We have heard examples from Members about local growth. It has been great to hear examples of local authorities working proactively with their high street forums and the opportunities available to them to try to grow and really focus on meeting the needs of the local community through the local retail offer. However, to continue to evolve, we need to innovate. I was therefore excited to see the UK Digital Retail Innovation Centre open in Gloucester in May this year, following a funding award of £400,000 from Gloucestershire’s local enterprise partnership. It will be a national centre for testing and developing disruptive digital innovations and will help shape and inform the future of cities with a special focus on retail.

Alongside those successes, we have seen some high-profile names struggle, including Woolworths, Toys R Us and, more recently, Debenhams and House of Fraser. We have been used to seeing those iconic names on our high streets, but in some cases they are no longer there. I do not underestimate the impact of those changes, which can be hugely difficult for the individuals and families involved and for communities. Indeed, I know the hon. Member for Blaydon met Toys R Us staff from the metro retail park when the store closed down. Some of them had been working there for 20 years, and I commend her for the support she showed to her constituents.

There is no doubt the sector is facing significant pressures, whether from uncertainty in the business environment or from changes in consumer expectations and preferences towards online shopping. Those challenges are reflected in retail across the world, not just in the UK. Our retail sector is still one of the best in the world, and we are well placed to deal with the challenges. Retail has a long history of responding successfully to change, of turning challenges into opportunities and of turning pressure into innovation. The Government are, and I personally am, absolutely committed to supporting the sector as it responds to change and strives to continue to serve the public so well, as it has in the past, and as it will in the future.

I am pleased, as part of my portfolio, to serve as the co-chair of the industry-led Retail Sector Council, alongside Richard Pennycook, the chairman of the British Retail Consortium. There has been confusion over the idea that the council does not meet very often and is just focused on the troubles of the past, rather than looking to the future, but I assure Members that we not only have Retail Sector Council meetings, but a number of sub-groups heading up the workstreams and meeting regularly. A lot of work goes on outside those meetings to reach targets. The workstreams are focused on future challenges and how we can drive the retail sector forward. It is not just a talking shop; if it were, I can assure Members I would want no part in it. I spent many a year before becoming an MP in talking shops, and I do not particularly want to do that as an elected Member of Parliament and especially not as a Minister.

[Bill Esterson]

I am glad the Minister has mentioned the Retail Sector Council. I am curious as to what it has achieved. Perhaps she can tell us, because if it is not a talking shop, it will have made a difference, and there will be some outcomes, deliverables and differences made.

[Kelly Tolhurst]

The hon. Gentleman is quite right. As he will know, when the Retail Sector Council was set up last year, we set its priorities. The six workstreams and the priority workstreams have been agreed. We are working for outcomes. The beauty of the Retail Sector Council is that it is the retail sector coming together with Government to find solutions to the future challenges. It includes not only the bricks-and-mortar retailers, but the online retailers and the small independent retailers. In the council, the sector is working with Government to move forward and bring forward plans and proposals that will benefit and aid the sector.