Rising rents and uncompromising landlords could be the downfall of our already beleaguered High Streets, says Fudge Kitchen MD, Sian Holt …
Well, today – after 101 days in the Covid wilderness – we re-open our retail stores and our 40+ unfurloughed fudge folk can’t wait to welcome back visitors, customers and guests, new and old, spreading fudge love and sweet treats as we’ve done for over 35 years.
But this next phase fills me with far more trepidation than the period of total shut down. Lockdown at least gave certainty of where we were in terms of cash flow; and there’s no doubt we would not be celebrating our return had it not been for the Government assistance in grants, rate holidays and furlough contributions. All topped up by a strong boost from our loyal customer base to our newly focused on-line offer, which we were only able to step up because our staff have been so marvellous.
With not inconsiderable investment in Covid equipment, signage and staff training, we return to a different world: new, but not so brave. We are facing vastly reduced footfall from nervous shoppers and a dearth of tourists, severe limitations on customer processing from social distancing measures in already small retail sites, all the operating costs of being open – fixed and variable – and absolutely no idea what we might expect to take. ‘Not very much’ is my best forecast.
And it’s not as if the High Streets were thriving before the pandemic. Labour and rent are the two biggest costs for retailers. The first we can control to a degree and the continued furlough scheme will help us to reduce redundancies while we hope trading returns to normal. Rents could well be our downfall, however.
Despite the Government’s June “Code of Practice for Commercial Property relationships during the Covid-19 pandemic”, my overall experience (with the odd exception) of trying to open positive discussions with both private and institutional landlords, to find short and medium-term arrangements to ensure our mutual survival, has been frustrating and hugely disappointing. The blinkered and short-sighted view to protect ‘yields’, pension funds and short-term returns will lead to the demise of many more traders over the next 6-9 months, littering our High Streets with yet more empty shops, making our towns less interesting as leisure shopping destinations … and thus the downward spiral will continue.
This is a perfect opportunity to re-shape the ‘them and us’, archaic landlord and tenant relationship, still underpinned by inflexible and now redundant commercial leases; with upward-only rent reviews, scant relevance to the commercial trading environment and no long-term sustainability for both sides.
Tenants want to pay rent. Landlords need to have a return on their investment. Together we need to take interest and have an understanding of each other’s businesses, in order to work to protect and build our local retail economies.
Small and independent retailers around the country are trying to get some positive action to find a solution but are being met by uncompromising brick walls and claims of the landlord’s own poverty from within those ivory towers. We’re not whining and whinging, looking for sympathy. We want to collaboratively carve sustainable frameworks for the future; whether this be through turnover arrangements or trade-offs with lease extensions and reduced current rentals.
We’re all sick of “unprecedented times” and the “new normal”, but one thing is for sure: things cannot continue as they are. Someone somewhere has to start listening. We love what we do, we’re great at doing it and are positively flinging our doors open in anticipation of great things to come. But we need help – please wave the banner to FSB’s, IODs, BIDs and any other acronyms that might be able to assist. Time is running out.