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tv   Review 2018  BBC News  December 26, 2018 2:30pm-3:00pm GMT

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hello, this is bbc news with simon mccoy. the headlines: japan confirms it will restart commercial whale hunting in july, defying an international ban. retail hopes for a boost as shoppers hit the traditional boxing day sales. it's estimated that bargin hunters will spend almost £4 billion. several people have been injured and buildings collapsed, after an earthquake close to the erupting mount etna in sicily. scientists in cambridge develop a virtual reality sd model of a tumour in a bid to find new cancer treatments. now on bbc news, there's no doubt britain's shopping habits are changing — and the impact on our high streets has been increasingly clear over the last 12 months. emma simpson presents review 2018: the retail year. it's been a turbulent year for the high street, as our shopping habits drive unprecedented change. the internet is killing the high street! retailers are grappling
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with a need to adapt. i think the uk in 2018 has probably seen the worst year that i can remember. more than a dozen store closures a day, and 80,000 fewerjobs. one month before it all happened, i was like, "i'm going to lose the house. i've literallyjust bought it." but technology is creating new winners in the world of retail. people are able to get exactly what they want, sent to them the same day. and who doesn't want that? and that's stirring up a debate. fashion is the second most harmful industry on the planet to the environment. it feels like retail‘s never been out of the headlines in 2018. big names have gone bust, others are fighting for survival. "is retail in crisis?", you might well be wondering. in this programme, i'll be looking back at the year, the key events, the causes, the impact on our town centres, and what the future holds for an industry that's the biggest employer in the private sector.
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welcome to a year in retail. it all started with toys r us. if you sell toys, you need to be cheap, convenient or fun. sadly, toys r us wasn't any of those things any more. they found themselves stuck in a retail no man's land. after yea rs of losses, in february, toys r us had finally run out of cash. at the time, it was easy to see what they were up against. this is the problem. there's so much space when these days, we're buying nearly 40% of our toys online. they hadn't invested online, where we continue to see growing
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demand for toys in particular. and i think if you look at the in—store experience at toys r us, it really should have been magical and fun and special. but the reality was a fairly soulless shed, especially if you compare the toys r us experience to its more nimble competitors, like the entertainer or smyth‘s, for example. 100 stores would go, and with it, 3000 jobs. bridget had been at this store in gloucester since it opened 28 years ago. it's sad, but realistic, yeah, it's the way things are going. things were going pretty badly for maplin, too, another name which disappeared from the high street this year — 219 stores and several thousand morejobs. what else have we got on? gemma richardson finally managed to find new work, but it's been traumatic.
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i go to bed dreaming about it, nightmares, bills. oh, it's just awful. it's a horrible, horrible situation to be in. once we got, you know, the e—mail and we left maplin, it was... it's like a race to get a job, and you're against people you know are really good at what they do. and for natasha, who also worked at maplin, the stakes were even higher. one month before it all happened, i was like, "i'm going to lose the house. i've literallyjust bought it. i'm turning 25 in a month's time. i'm not where i should be." maplin sold electronics, but the internet giant amazon did it better and cheaper. maplin was very much a victim of the amazon effect. and like toys r us, maplin was laden with debt. and when times got tough, when sales started to fall, it exposed their weaknesses, because both toys r us and maplin were fundamentally weak businesses to begin with. injune, poundworld collapsed — another 5000 jobs.
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others were also feeling the strain. by then, i'd spent months reporting on a host of household names. they didn't go bust, but they were forced to seek legal agreements with their landlords to shut stores, lots of them. i think the uk in 2018 has probably seen the worst year that i can remember. sir ian cheshire used to run b&q and is now the chairman of debenhams. we live and die by our shoppers. so when they change their habits, retail has to adapt. and i think what you're seeing there is a big shift in where consumers are prioritising where they're spending money. and increasingly, it's on experience and lifestyle and non—retail. so, retail‘s a much smaller percentage of the economy in terms of spending than it was 35 years ago. the second thing we're seeing is a massive shift, courtesy of technology. and if you'd asked a lot of the retailers who were laying down extra space in 2008 — did their business plan
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for that year refer to the iphone being launched? i bet the majority didn't. and the fact that the retailers didn't invent the iphone but the world has been upturned by the arrival of the smartphone, which has really allowed internet shopping to take off to a degree now where it's 20%. that has totally changed the game. here's what it boils down to. there are just too many shops, and in the wrong locations. this used to be one of essex‘s oldest department stores here in southend, until it shut last year. it's a really beautiful building, with all of the original fixtures and fittings. it's still a family—owned business, but they're now selling only online, on the top floor. sign of the times. nearly one in every £5 we spend is now online, meaning the economics of running this once proud store
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no longer made any sense. an example of this incredible shift in our shopping habits over the last decade. i think it's accelerating, and i think that's change that isn't going to reverse at any point. and that's because customers demand more, they want access to more different products, they want more speed. and therefore, that's making traditional retailers have to re—evaluate how they go to market. and in my view, the opportunity comes in for smaller businesses to come in and take advantage of that. they are more agile, they're more creative, they can do things faster, they can create unique products. and here's one of them. this young company's doing just great, with sales of £4 million a year. so these are actually quick drying beach towels... i met andy as he was gearing up for november's black friday shopping phenomenon. so we basicallyjust went online and started searching manufacturers over in china for ali baba, and basically just started to see who we could build a relationship with. so you'd never really open a shop?
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the cash you need to do that isjust... it's very daunting. i think there's a lot better places to focus our cash than a store. by may, another big name on the high street was thinking that way, too, a dramatic move to try to futureproof its business. these aren't any store closures. they are m&s store closures — 100 over the next four years. this is a tremendously difficult set of decisions. but what we've got to reflect is the fact that a third of our business will be online within the next five years. we've alreadyjust hit over 20% in the last six months. and i'm afraid that trend is not reversible. another trend was also emerging — the impact on jobs. we said there could be up to 900,000 fewerjobs in retail, and that the nature of the jobs that remained would be different. and what we're seeing now is some of that begin to play out. there are 80,000 fewer people working in retailjust over
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the course of this summer alone. john brailsford was one of those affected by all this upheaval. i've worked in retail forjust over 42 years. i've been made redundant five times, most recently this year with carpetright. very first thought, "uh—oh. here we go again." it came completely out of the blue. and i just learned to take a step back. i couldn't affect it. find myself anotherjob and dust myself down and carry on. watch that rug. i'm still working in retail, because somebody once likened me to a stick of blackpool rock. they said if they cut my arm off, it'd just say "retail" all the way through. 0ur changing shopping habits are also creating new and different jobs. all those internet orders need delivering, for a start. this easter, dhl told us about its £150 million expansion of this site, to try to keep up with the demand. the pace of change is incredible.
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so a few years ago, we wouldn't have seen any e—commerce or online shipping parcels come through this organisation. now, we're seeing 60% of the uk volume is all e—commerce. what does that tell you? it tells us, that's the way forward. that's where the future is. next door, a vast new distribution site, the east midlands gateway, was taking shape, where we revealed the boom in warehouse space. we've commissioned research which shows that over the last decade, 235 million square feet of warehouse space has been leased or bought. that's double compared with the previous decade, and more than half of it has been built from scratch — like this. and the proportion going to retail has doubled too, with 2018 set to be a record year. for online retailers, these vast sheds have another
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thing going for them — lower business rates than the high street, a tax that's been a thorny issue in retail this year. business rates are a property based tax. so, retailers that have shops pay high business rates. so, any retail business that has more shops pays more business rates than those that have less. business rates are the factor that any retail executive always talks about when they are talking about store closures. it is often the thing that tips the decision whether to open a new store or to close an existing store. debenhams has 165 stores and is struggling. its rates bill was nearly three times as much as its annual profits this year. we've got two stores — one on oxford street and one in westfield — that pay more rates than the whole of amazon.
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so the tax burden for us, as a business, is simply extraordinarily different. what the problem is is that you can't find, if you like, a sort of quick competitive way of getting around that. so, you can't adjust and say, "right, i'll move all my business online and i'll be there." are business rates killing the high street? i think business rates are contributing to killing the high street. i wouldn't say that's the only game in town. but it's a very important part of that, along with issues like town centre regeneration, and parking fees and a number of other local issues. but if you look in the big picture, i think rates are helping kill high streets. for traditional retailers, it's simply hitting harder to make all the sums add up, as sales move away from physical stores to online. the real killer blow for retailers has been their inability to change the cost structure in their business model. so what all of us are trying to do is reinvent ourselves
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towards a much more online future, but we are faced with leases, in particular, that are very difficult to change or alter once they're signed. and they last for 20 years. and right now, property is debenhams‘s biggest headache. debenhams has identified a format for the future, where we can see 90 stores where can invest in those. but there are 70 or 80 stores where, fundamentally, they're not in the mid— to long—term going to be truly viable, and what we want to do is try and find a way to work with landlords to change the leases or, frankly, close a big chunk of them, because you wouldn't start them if you were inventing a business now. injune, the most shocking and visible sign of the distress playing out on our high streets, with news that house of fraser was to close more than half its stores. birmingham's oldest and biggest shop was on the hit list. so, too, was wolverhampton.
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we're just devastated. it's a lovely, wonderful shop. edinburgh didn't escape. i can see partly why it's going to close here. it'sjust old now. and cirencester was also earmarked to go. it's like the high street isjust dying. it's very, very sad. house of fraser was attempting a formal restructuring with its landlords, to save the business. it was no surprise to me or other industry watchers. the problems had been building for years. for many, many years, it hasn't had a sufficiently differentiated product. it hasn't stood out. it hasn't been clear about exactly who it's been targeting. there hasn't been enough investment in the business. there've been too many stores. and the market has become far less forgiving. two months later, the restructuring was overtaken by the collapse of the entire business, swiftly followed by a dramatic rescue.
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the struggling department store chain house of fraser is bought by sportsdirect. it agreed to pay £90 million for the business just hours after it went into administration. sportsdirect‘s billionaire owner, mike ashley, says he wants to turn the chain into the harrods of the high street. sportsdirectjust seems quite a jump from house of fraser. it doesn't really, in my mind, really fit together very well. mike ashley has been a big player in retail this year. he snapped up evans cycles out of administration and has stakes in a host of other chains too. a lot of people are wondering what mike ashley is really up to. he's made a series of investments in major high street retailers, and also, he's invested in department stores, which — as we all know — are struggling at the moment. they are facing a number of challenges. and, you know, the big question on everyone‘s lips is, "can he turn them around?
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will he turn house of fraser into, in his words, ‘the harrods of the high street‘?" it was a bold move. and by december, mps wanted to know his plans for the stores, his employees and the future of the high street. it's not my fault the high street's dying, is it? it's not house of fraser's fault, it's not marks & spencer's fault, it's not debenhams' fault the high street is dying. it's very, very simple why the high street is dying, and you all know the answer. but we have to say it. it's the internet. the internet is killing the high street. the high street won't make 2030. it's not going to be there. unless you do something really radical and grab the bulls by the horns, it won't be there. our high streets are already taking a battering, from vacant shops to pubs and restaurants.
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the gaps are getting harder to fill. in the first six months of this year, another 11,402 of them were lying empty. are high street stores becoming a thing of the past? i'm off to meet two women influencing the way a whole new generation shop now. melissa and jasmine both run their own fashion blogs, and use social media to connect with younger shoppers. they tell me some retailers are doing well, but the biggest growth is in fast fashion online. asos, boohoo, quiz, pretty little thing... i think also, it's brands that have also grown via instagram, if i'm honest. they've got big names endorsing them. i think they're able to turn around things that they see on the internet very fast, and i think people want to replicate
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the same things they see on their favourite celebrities. for example, kylie jenner, when she had her birthday, she had about three different outfits that she wore. and the very next day, an online retailer was able to replicate those designs and have them sold the next day, and people were... they completely sold out. people are able to get exactly what they want, sent to them the same day. and who doesn't want that? that's one reason why the likes of boohoo are growing at breakneck speed. but this was the year that the throwaway culture of fast fashion began to spark a debate. injanuary, one of the industry's most famous designers spoke to the bbc. fashion is the second—most harmful industry on the planet to the environment, and we need to now be encouraged to be mindful of that, and to pay attention, and to consume in a more responsible way. stella's comments made waves this year, helped by growing concern about our use of plastics. fast fashion even prompted scrutiny in parliament in november. i don't think people are doing
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enough research, so therefore, their priorities may not lie with wanting to buy and source sustainable things. i can understand why. because a lot of people, you know, especially younger generations, don't have... yeah, the disposable income to, you know, invest in pieces that are more sustainable, because we all know they're a little bit more expensive, for good reason. but for them, you know, if they can have the option to do it, they might just, you know, shut one eye and just go with it. because it's easier for them. and cheaper. exactly. it seems fashion is fast becoming more polarised. either people are keen to kind of follow fast trend fashion and, you know, wear the next big thing or they're keen to really invest in key pieces. i don't feel that there is a middle ground any more. people can no longer afford shelling out £70 on a dress, because they don't really care to wear the dress more than once. they kind just want to get that picture in and then done with it. what do stores have to do if they are going to survive?
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i think it's time for stores to create incentives, i think. people need to be lured in by something else. and as you said, having the personal shoppers in—store and almost having a free styling session, that's something that would lure people in. and discount codes and stuff like that, i think. but even, there are big retailers out there now like top shop, and accesorise where they have, like, a day a month where it's kind of like they've got a dj in and prosecco... it's a real experience again, where you can grab your mates and go down to the high street. how to make stores relevant. some retailers like zara are being more creative and making their stores more efficient. for instance, in may, it unveiled these automated collection points to pick up online orders. and here's a twist. some online companies, like this furniture business, have been opening a few physical stores. increasingly, a lot of these brands that started life online are actually recognising the value
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in having a physical presence. so we're also seeing this interesting clicks to bricks trend, where online retailers are looking to offset rising shipping costs, rising cost of customer acquisition and they're opening stores. and i think that in itself is validation that the physical store, the high street, bricks and mortar retail, isn't going anywhere. but how do you go about revitalising our high streets? they've done it here on this street in york. first of all, welcome to bishopthorpe road. we've seen a real transformation in the last ten years. bit wet today. it is a big wet today. i'm sorry about that. but, yeah. probably maybe ten years ago, we saw a few empty shops, more charity shops, but we've had... some real strong business moving into the street. looks pretty regular.
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but it's now thriving with all sorts of independent shops. and, crucially, plenty of options to eat and drink. i'm ready for a brew. julia and steve started this cafe ten years ago, which helped kick—start the revival. we've had our landlord actually really helping us. really supportive. generous. he took a chance on us. could've taken the safe bet with a big chain shop. what's been the recipe for success for the whole street? getting the community on board. street parties. crowdfunding the christmas lights. people take ownership over that. and there's a real sense of pride on the street. people shop local, they want to support local businesses. no business here could do it alone, make this street a success. it relies on all the businesses coming together to make it successful.
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so is the high street dead? no way. no, no way. i don't think so. this high street. this high street's 0k. is the high street dead in general? we just need to rethink them. i'm loving this sign. this place is absolutely rammed! young and old. let's go and talk to the locals. i used to come down here and shop a bit. but it was a bit flat. it wasn't very exciting. now, it's... vibrant is the only word i can think of it, really. there was no cafes on bishopthorpe road then, apart from an old greasy spoon, so it really has changed a lot. now, there's probably about five or six cafes on bishopthorpe road. they are all absolutely heaving. it's just got a really nice community as well. they reallyjoin together.
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there's, like, street parties and stuff as well. every town is different, of course, but so many places this year have been buffeted by an industry in the midst of a massive transformation. the high street‘s not dead. far from it. but many town centres will need reinventing, as retailers retreat from areas they used to dominate. theyjust don't need as many shops as they used to. it's a huge and painful transition, and this was the year where it finally gathered pace. and it'sjust beginning. the weather on boxing day is turning out to be fairly calm as expected.
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some of us have sunshine. out to be fairly calm as expected. for most of us it is cloudy. out to be fairly calm as expected. for all of us, relatively mild for this time in december and this mild weather is here to stay for the coming days. well into the new year we are expecting the mild weather to persist. that is the current thinking. a lot of cloud which we are stuck with, most of us. the winds coming out of the south—west pushing the mild air across the uk and some of that is reaching central parts of europe where so far it has been pretty chilly and they have had a white christmas but it looks as if a thaw will be setting in in central parts of europe. he is the weather for this afternoon, a or 9 degrees. a little bit of rain in western parts of scotland. tonight in some areas skies will clear. we have some sunshine
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in one or two back areas. that will lead to the clear skies and a frost overnight. towns and cities around two or three agrees but outside of town i would not be surprised if it dips below freezing. frost first thing in the morning on thursday, regularly in the south, not necessarily in the north. milder here to start thursday. in the afternoon not looking bad. sunshine for aberdeen and the north—east and the south. those temperatures in the south or north will be around 8—10 degrees. the end of the week, friday a weather front moving into scotland, in early in the day this will bring some rainfall but it quickly moves out of the way. this is the rain in the morning. it will have moved through belfast earlier. by the afternoon the wind has switched direction and the weather is looking fairly decent for glasgow and edinburgh and further south apart from a bit of cloud here and there. also, the weather will be fine.
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nine in london, 11 in belfast. into the weekend, it is looking more or less the same, a of cloud across the uk with temperatures hovering around 10 degrees. that's the latest. this is bbc news. i'm simon mccoy. the headlines at 15.00. japan is to restart commercial whale hunting in the summer — in defiance of a global ban. campaigners say they are concerned by the move. because ifjapan, if you like, gets away with this, other countries may want to try and do the same thing and then more and more populations will be exposed to whaling. despite queues this morning for the boxing day sales, figures show footfall on the high street today is down slightly on last year. dozens are said to be injured after a powerful earthquake hits sicily around europe's most active volcano mount etna. a new way to see cancer — scientists develop a virtual reality 3d model of the disease to help in the search for new treatments. and coming up, a special interview
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with australia's first female prime minister.
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