Lord Howe of Aberavon – former minister in Margaret Thatcher’s cabinet – used a recent speech in the House of Lords to call for an end to the UK’s mixture of metric and imperial measures. He said the failure to remedy this in the year of the London Olympics was the most glaring omission from the Queen’s Speech. The UK was, he said, now split between “a metrically-literate elite and a bewildered majority, which increases costs, confuses shoppers…causes accidents and puts us all to shame”.  When the laughter died down someone reminded him of the rather more pressing issue of the Eurocrisis. Oh yes, and his 1979 abolition of the metrication board when Chancellor of the Exchequer. And his speech in 2000 when he pronounced “the UK must put itself into a single currency zone and enjoy the immense benefit of stability… in the European Union.”

One shouldn’t be too unkind – he did seem rather tired and confused and tried to exit the chamber via a cupboard.  There are rumours he was put up to this by Chancellor George Osborne who is keen to ensure drivers cannot work out that 143p/litre for fuel actually represents £6.50/gallon of which £4.10 goes straight back to HM Treasury in fuel duty and Vat.

But maybe Lord Howe is right – thinking in Imperial can be bad for your health. £6.50/gallon seems a lot more expensive then 143p/litre. But on the other hand 100 miles seems a lot less distance to drive than160 kilometres and 40 miles/gallon sounds a lot nicer than 8.8 miles/litre.  

Service charges: Value for money or just a presentational probelm?

It depends on Howe (sorry about the pun) you present the figures – a problem not uncommon to Market service charges. Most Open Markets charge an inclusive “all-in” rent i.e. your £25/day or whatever includes the cost of staffing and waste removal. But the high running costs of an indoor Market Hall means “exclusive” rents are the norm – Stallholders pay a service charge in addition to their rent. Historically, many Council landlords also shared the exemption from Vat which they enjoyed but pressure from HMRC has made this increasingly rare and often compounded by rating assessments on individual stalls. Add to this the expensive-to-run and overdue-for-replacement heating and refrigeration equipment seen in many Markets and there are plenty of reasons for high service charges.

Of course no-one likes paying bills but most do so, grudgingly, if they can see there has been an effort to reduce them. Most service charge complaints are caused by poor presentation – they fail to explain why the charges are so high and what efforts have been made to reduce them. This is a hangover from far too many outdated Market leases which don’t make provision for a detailed service charge statement at the end of each year as a matter of course. You wouldn’t get away with that in a Shopping Centres let to High Street multiples. But spare a kind thought for the many Market managers whose cost-cutting efforts are frustrated by lack of money to replace outdated equipment and charges of £110,000 a year from a City Engineer for a part-time cleaner and skip. From what I saw the cleaner wasn’t even very good at pushing a brush.

Localism Bill: An alternative to top-down delivery

Delivering discretionary local services like Markets without financial support from Whitehall is the purpose of the Localism Bill – not driven by political aspiration but by economic necessity. The Bill now has Royal assent and the chaos in Euroland is piling even more pressure on Westminster to reduce financial support. The presumption in favour of “top-down” delivery of services has been reversed in the Big Society agenda to relegate local government as an “enabler”, not necessarily a deliverer of discretionary services like Markets.

Eurocrisis: Piling on the pressure

The loss of control does not sit comfortably within most Councils and maybe a service charge dispute will trigger someone to lodge a “right to challenge” as embodied in the Act. But challenging the deliverer to relinquish control to you won’t work unless you can deliver an alternative source of development capital. That is, I’m afraid, commercial reality. In the meantime the local elections are out of the way so there’s one less reason for a Council not to “actively target their own businesses rate discounts in the best way for local businesses”. If you’ve been lumbered with an assessment for business rates now’s the time to look at Small Business Rates Relief. You’re more than likely to be eligible for a 100% or at least partial waiver.  

On a more cheerful note, Morrisons, the country’s fourth largest supermarket has sparked a minor petrol price war by cutting a couple of pence off a litre following a fall in crude oil prices. Their petrol director Mark Todd put a polished spin on it by announcing: “The continued bad news in financial markets is good news for motorists. After seeing continued reductions in the price of oil we are taking the opportunity to bring down prices at the petrol pump”. Nice one, Mark – but I still make it well over £6 / gallon. In response Tesco cut 5p off a litre “provided you spend £50 in store”.

I remember my Dad pompously announcing he would give up motoring when the price reached £1 per gallon. It seemed sensible enough at the time but now seems about as realistic as Lord Howe.

The Chancellor's new friend - the charming Christine Lagarde

George Osborne is having a rough time steering the UK economy through the worst economic crisis for 60 years. But he finally managed a smile last week when the charming Christine Lagarde – newly-appointed head of the International Monetary Fund – put a friendly arm round his shoulders and told him how wonderful he was: “Formidable, Monsieur Le George”.

 His problems started with the Easter budget. First there was outrage at the new “Granny tax” and restrictions on charitable donations, then “Pastygate” and a threatened petrol tanker strike, no rain and a hosepipe ban. All good Daily Mail-type issues for backbenchers to moan about and an unwelcome diversion from his real dilemma – whether to contribute another £10 billion to boost the IMF and by implication support the Euro.

In the end he did the right thing and made Christine very very ‘appy by supporting the IMF and Britain’s largest trading partner, the Eurozone. But he did it on his terms: “We’re very clear our money comes with conditions – it’s a loan with interest and gets paid back” he said. “A Chancellor who takes his job seriously must engage with the issues and ensure Britain plays its part in sorting out problems that have a direct impact on the British economy”. A very grown-up attitude and stuff the backbenches – but one that placed him under more pressure than ever to grow the domestic economy and it’s tax base out of the problem. The extra lending will leave Britain with a total liability of nearly £40 billion to the IMF in addition to the billions already lent to Ireland and Greece.

Hot pasties - Enjoy them whilst you can

Plenty of OAP’s, charities and retailers would say the Easter budget was not a good start. Greggs Bakers protested about tax changes which will impose Vat on their sales “according to the temperature of baked products when sold”. They currently charge Vat on 20% of their sales – hot sandwiches, breakfast rolls, soup, coffee and cakes – but new Vat rules on hot food mean from October this will rise to 53%. Passing charges like that onto customers is bad for turnover and bad for profits.

So will this affect Markets? In a word, Yes. I’m told by my tame Vat inspector that Stallholders are already supposed to charge Vat on food sales whether hot or cold if they provide seating or customers chug it down at a communal seating area provided by management. But if they genuinely take hot food home then it seems from October it will now be Vattable. Rotisseries selling “hot chicken in a bag,” gammon chunks and ribs etc for takeaway will be affected as will the hot food counters in Supermarkets. 

This all seems pretty clear but any legislation is open to challenge. The issue of which foods sold on a Market are Vattable is already pretty unclear, so imposing new rules has the potential to create even more fun.

Australian GST tax - easier to administer, without exception

 HM Treasury have ignored the commonsense approach which suggests you can’t legislate for every possibility and tried to define hot food which attracts Vat as “above ambient air temperature”. If you run a rotisserie then be prepared for a Vat-inspector to wander in and stick a thermometer up your chickens’ backside. If he visits on a blazing hot summers day then you can argue you’re only obliged to charge Vat in the winter.

The fundamental problem is the UK Vat system is a mess. There are arbitrary exemptions all over the place. In recent years this led to absurd legal battles over whether Pringles are crisps (No, they’re a potato snack and therefore Vat-liable) and whether Jaffa Cakes are cakes (Yes they are, so Vat-exempt, unlike luxury biscuits). Such cases confirm that no-one apart from the courts can explain what is Vattable and what isn’t.

A recent report from the think-tank Reform showed how inefficient the UK’s zero Vat and reduced Vat rates are. It showed that our system is one of the most complicated in Europe and that exemptions of £30 billion per annum could be handed back to consumers in tax cuts to stimulate the economy. Countries like Australia and New Zealand have already taken that line and abolished exemptions whilst introducing a much simpler-to-administer Goods and Service Tax on everything BUT (and this is the clever bit) they linked it to a reduction in the percentage rate of GST and the rate of personal income tax. If this was done in the UK then all we need to do is harmonise our tax system with all other EU countries and make a lot of Vat inspectors redundant. Simples.

Supermarket petrol - facing an OFT inquiry?

Meanwhile another enormous revenue-producer for HM Treasury may be scrutinised by the Office of Fair Trading. There are renewed calls from independent garages through the Retail Motor Industry Federation for a formal investigation into the retail fuel market. Evidence from members suggests some supermarkets are in cahoots with suppliers and indulging in unfair and predatory pricing policies. This is set against the background of filling station numbers falling from 40,000 in 1966 to 8,480 today with some 300 independents closing each year. In the meantime the market share of fuel sold by Supermarkets has risen to 46%.  Maybe the OFT will mount an inquiry but petrol tanker drivers union reps. were quick to see the pay leverage they have now that so few filling stations exist.

What with no rain, no pasties and no petrol this looks like really bad news for the traditional English summer. I blame the French.

Relaxed Sunday trading rules - creeping deregulation?

The relaxation will apply nationwide but mainly benefit West End retailers and HM Treasury who estimate 100,000 Olympic visitors can be persuaded to support our retail economy. In contrast a poll amongst retailers and stallholders at Mudford-on-Sea – 200 miles from the Olympic stadium – confirmed they are less than enthusiastic about the new Mudford Tesco being granted a concession to open all hours whilst they still need to take a day off to go buying. Government sources claim cross-party support for the proposal with a LibDem spokesperson putting a spin on it by announcing: “This will stimulate growth as part of a Robin Hood budget” without identifying who was Robin, Marian or the Sheriff of Nottingham.
Taking on the Church for the sake of Oxford Street is bold stuff – even Maggie Thatcher shied-away from unrestricted Sunday trading after Conservative MPs described the threat to family life and Labour MPs their concern about workers’ welfare. But that was 25 years ago and Sunday is now the second most remunerative day of the week for HM Treasury. In response to the proposal the Church of England weighed-in with: “We believe that for family stability and community life as many people as possible should have the possibility of a common day off every week. The detrimental impact on the health of employees and on small retailers outweighs any potential benefits of further deregulation”. But Whitehall responded with:“The emergency legislation will be very clear this is only a temporary measure and should not be taken as a signal for future reform”.
Hmmmm….., many see this as a precursor to revoking all Sunday restrictions, forever. John Ashcroft, spokesman for the Keep Sunday Special Campaign, said: “Such moves are unnecessary and a cover for creeping deregulation. David Cameron came into government promising to make this country the most family-friendly in Europe, but more than one million families have at least one parent working on both weekend days so have little time to spend with children who are not at school. No changes to Sunday trading legislation are needed to enable all Olympic visitors to have a great day out with family and friends.”

Quite so – everyone needs a day off with their family, occasionally.

Meanwhile Morrisons Supermarkets announced proposals to increase their 12% UK market share by opening some 70 High Street convenience stores over the next two years. They also confirmed online sales are planned for non-food items because (unlike their “big four” competitors) they do not yet sell over the internet. The Company posted reasonable year end results with sales up by 7%, so expanding into online sales and High Street convenience stores is a logical step for them. They still have a long way to go though to catch up with the competition – Tesco have 1345 and Sainsbury have 435 local shops.
The Morrisons board has a reputation for caution and allowing others to trial new ideas before adopting them. Having digested Safeway with less-than-expected trouble it would now suit Morrisons (and Tesco/Sainsbury/Asda) if both the Use Classes Order and Sunday Trading restrictions were ditched. The High Street seems set to become a new battleground for multiples striving to increase market share. If, as the Portas Review suggested, retailers are prepared to embrace the technology there are still plenty of opportunities.
If all this technology scares you then you’d better stay away from Seoul, South Korea where the days of “bricks-and-mortar shopping” (as they call it) may be numbered. Soon you may not need to stand on a cold, draughty Market stall but could sit 24/7 in a nice warm van, dropping things off to Customers homes and earning a fortune in the process.

Seoul is a breeding ground for new technology. It has an excellent underground system where every busy commuter has a Smartphone glued to the side of his or her head – ready to do a spot of virtual shopping whilst waiting for their train. Tesco’s Korean arm, Home Plus recently transformed Hangangjin Station into a “virtual supermarket” by pasting posters of stocked shelves onto the platform walls. Each item had a QR (Quick Response) code posted next to it so shoppers could photograph the QR and confirm the quantity by Smartphone. The delivery was then made to their home once they get back from an exhausting day designing better mousetraps or whatever. The trial allegedly boosted online sales for Home Plus by 130% and online membership by 76%.

London Underground has expressed interest but whether UK consumers are ready to embrace the technology is unknown. Maybe the day will come when a High Street is no longer needed – Shoppers will be able to buy everything they need by Smartphone off posters and QR codes. All that a Stallholder needs to do is set up a delivery service, post piccies of their stock and QR codes on a stall and then wait for the orders to flood in. Customers won’t need to go shopping as often so Sunday trading will be banned to keep the Bishops happy. But if you’re a Stallholder the bad news is you’ll be so busy delivering orders that you still won’t have a day off.

THE new-look indoor market is taking shape with some businesses already settled into their units as work continues towards the summer launch.

As the project nears completion letting agent Quarterbridge is pleased with the progress made so far.

With a host of long-standing market retailers and opportunities for start up businesses, it is hoped the renovations will prove popular with shoppers.

Work on both the inside and outside of the new Market Quarter is still ongoing but curious customers can wonder round the building and investigate the shops already open for business.

The £3m refurbishment will see the market transformed into a clean, modern attraction with a diverse collection of shops.

As well as the traditional butchers and fishmongers, a mobile phone shop and restaurant are set to move in over the coming months.

Eager to encourage new retailers, Quarterbridge also set up units for short term lease designed for budding entrepreneurs to try out their ideas.

Operational director Andy Morris said: “We have created a block of units for start up businesses.

“If you are a trader or retailer or hobbyist and have an idea and want to go on your own on the high street it’s very difficult.

“But in this you have a short term lease of six months, so you can try your product or try your service and see how it goes.

“We want people with new ideas who don’t want to let a high street unit for four or five years with massive overheads.”

These 100sq ft units are priced at less than £14 a day.

Click here to to read the full story

We’re supporting the DCLG “Town Team” competition with an offer of free support for bidders who use a Market to promote their bid. DCLG is offering up to £100K of funding for each of the 12 winners but the clock is ticking – entries have to be in by 30th March.

A Street Market or Market Hall is an obvious element for a successful bid – a highly-visible footfall-generator to test new ideas and the Portas recommendations. We offer no-nonsense, practical guidance for Market operators who wish to realise their full potential – particularly historic Market Halls with underused upper floors. We have unrivalled experience in developing them as Business Nurseries for service-based or Arts & Crafts use.

If you’d like a confidential chat about how we could support your bid contact Jonathan Owen at our Buckingham Office – 01296 712233 or email: jonathan.owen@quarterbridge.co.uk

Following December’s publication of Mary Portas’ “Review into the future of our High Streets” the Government was remarkably quick off the mark implementing one of her key recommendations – establishing pilot “Town Team” schemes. A formal response to all 28 recommendations is due soon but in the meantime Grant Shapps, Minister for Housing and Local Government at the DCLG unexpectedly stumped up enough cash for a competition to select 12 pilot towns, with each being given some £100,000 of funding to test the “proof of concept”.

On 4^th February he announced the competition on YouTube (no less) from Hatfield Town Centre.“Our High streets have faced stiff competition from Internet shopping and out-of-town shopping” he declared, in front of a very unexciting High Street. “We are leaving them underused, unloved and under-valued. The internet is not going to go away and so for our High Streets to survive they need to offer something new and exciting”.

Was there a note of nervousness in his voice? Maybe, as he might have been warned about redheads by his mother. In any event Ms Portas was in like Flynn with her response: “I hope my Review has inspired people with another vision of tomorrow where our High Streets are re-imagined as destinations for socializing, culture, well being and learning as well as shopping. I want the first twelve Town Teams to challenge the old ways of working, experiment, take risks and reaffirm their place at the heart of a community. A place we all want to be and can be proud of.”

The Portas review is a good read and highlights the internet opportunities and challenges for retailers both large and small. It shows how online sales were creating High Street vacancies long before the recession bit. As Sir Philip Green of Arcadia Group said: “Why carry a High Street rent when it’s easier to increase sales online?” Portas demonstrates how the growth of internet sales is affecting multiple and independent retailers alike, hence the demise of Woolworths. The report recommends Town Teams of local businesses to manage their High Street like a business, just like the big boys do with their Shopping Centres.

Embracing a willingness to adopt technology recommended by the Portas report the DCLG competition is staged and run entirely online. It was only announced on 4^th February and entries must be submitted by 30^th March. That’s not much time to prepare an entry but as Scary Mary says, speed of response is vital to successful retailers. All entries need to be accompanied by a video posted on YouTube showing why this entry is down on the streets wiv the kids, innit?

Entries can be lodged by anyone interested in the future of their High Street, not just the local Council. Local partnerships of investors and landlords have as much chance as stallholders or retailers but strong leadership is expected. The entry forms are very simple and applicants are expected to describe their vision, the potential for improving their High Street and their priorities. £1,000,000 of prize money is a cheap way to market-test the reports recommendations and find new ideas to be rolled-out across the nation. If you’ve not yet read the report download it from

www.communities.gov.uk/publications/regeneration/portasreview

and the application form from

www.communities.gov.uk/publications/regeneration/portaspilotsprospectus.

The problem with reports like this is the devil hides in the detail. Some recommendations are very relevant to Markets e.g. a new “National Market Day” when anyone could try their hand at being a trader or removing regulations to allow anyone to trade on the High Street. It includes a recommendation small businesses (presumably including indoor stalls) are offered concessions on their business rates – but the devil is in the detail of implementation. There’s no mention of awkward issues like Market Charters and pedlars licenses and I’d be happier if the legality of individual stall assessments was challenged before giving concessions. But putting the detail to one side for a moment the real value of the report is the debate it stimulates and the reaction of government.

THE multi-million pound refurbishment of the Indoor Market is on target to be completed this summer. Builders are about to move onto the second phase of the £3m project, set to revitalise the iconic shopping area. And a host of “wonderful” new traders are looking to move in according to Quarterbridge, who are overseeing the upgrade.

It is already confirmed the new-look – and newly named – Market Quarter will have a fresh food area, which will be filled with retailers including butchers, greengrocers, a fishmonger, delicatessen, and a host of world foods.

Other businesses are also lining up to rent stalls and excitement over the new market is growing. Local entrepreneur Giles Gottig believes the improvements will be of great benefit to the town. Currently considering renting space in there he revealed the mood was positive among town traders and spaces were filling up.

He said: “I believe the refurbishment for the market is the right way to move ahead in the town.

“This was the only option in my eyes and what is positive is a number of people believe in it as space is filling already.”

Raymond Linch, managing director at Quarterbridge, said about two thirds of the refurbishment was complete, and phase two of the operation is about to start. This will see traders currently operating in the market moving over to the completed area, so builders can work on the remaining third.

Mr Linch said: “Things are going very well. We are delighted with how phase one is taking shape, which will be handed over in a few weeks. We are doing extremely well also in the lettings for the new traders.”

Read the complete article by clicking here…

Quarterbridge advised the Council throughout on the design, fit-out and lettings. Director Jonathan Owen said: “The Council took a bold decision to install display equipment for traders but it was crucial if the project was to be delivered on time. Open sightlines and quality displays are what shoppers expect nowadays but getting the right quality whilst meeting EU procurement rules was pretty demanding.”

The 60,000 sq ft Market now hosts some 120 stalls and a foodcourt, with direct links into the Blackburn shopping centre and 1200 space carpark. Follow-up surveys by consumer research company ROI Team have confirmed the food offer is the core attraction and a far younger shopper profile now use the market. Blackburn’s design has learnt from the competition and it’s paid off. Well done everyone – give yourselves a slap on the back!

More information on the market is available at www.blackburnmarket.com

Havelske Market: Handicrafts made on the stall

How was your Christmas trading? Good I hope – despite the long hours, discount competition and light fingers looking for a little something extra. Anecdotal evidence suggests Market sales held up pretty well in 2011 as shoppers looked for bargains. Mainstream retailers announced a mixed bag of results though. Like-for- like sales for multiples were up 2.2% but that was nothing to crow about in comparison to Christmas 2010 when sales fell 0.3% because of awful weather and the recession. Despite the continuing recession in 2011 the unseasonably good weather should have made Christmas 2010 easy to beat.

Debenhams, JD Sports and Next all reported flat sales with some retailers like Blacks Leisure never even making it through the festive period. Tesco issued a profits warning which wiped the odd billion or two off their share price, but Sainsbury announced “their best Christmas ever”. Ocado and online sales were the big winners – up 20% or so. You know online marketing makes sense. Mainstream fashion retailers were stuck with furry coats in an Indian summer which prompted pre-Christmas sales earlier than ever with 25-50% discounts the norm. Buying departments were left with faces redder than Santa because you just can’t rely on the weather anymore, can you? 

Amidst all this uncertainty December seemed like a good time for some research, courtesy of Wizzair. OK, the hotel was above a lap dancing club in Prague but what more can you expect from a cheap weekend package?

There are two good reasons for visiting the Czech Republic – it’s outside the Euro and everyone speaks English. Prague doesn’t have Budapest’s amazing market halls but since it became part of the EU in 2004 the Czechs have been quietly sorting out their economy whilst steering clear of the Euro. The City puts a lot of effort into the all-year general market on Havelske and the wonderful Christmas markets on Old Town Square and Wenceslas Square. One of the few good aspects of being behind the Iron Curtain was to preserve their historic buildings.

The quality and variety of goods was excellent with toys and decorations handmade on the stall with a healthy disregard for the excesses of Health & Safety. I’ve never seen a working blacksmith or glass blower on a market before.

But the Eurozone crisis reaches everywhere. Stallholders confirmed how visitor numbers had dropped off as German tourists and British Stag weekenders stayed at home. The markets were staying open in January hoping for a post- Christmas influx of Russians celebrating the Orthodox New Year. Despite lingering memories of the Prague Spring of 1968 they were more than willing to empty their wallets. Sadly, the same weekend the death was announced of the inspirational Czech president Vaclav Havel who led the so-called Velvet Revolution of 1989.

Tom Campbell - cultural advisor: A career-changing confession

Yes, life can be tough at Christmas – ask Celebrity Chef Anthony Worrall Thompson, cautioned for alleged shoplifting offences at Henley Tesco. This gave rise to a string of jokes such as “Why did the chicken cross the road? – Because it was under Anthony’s jacket” etc. but he was in good company with Peaches Geldof, Winona Ryder and Tom Campbell – former advisor to Boris Johnson. Tom came up with a wonderful, career-ending confession whilst cultural strategy advisor to the Mayor of London: “When I go into a chain place for lunch I have to steal so they don’t make a profit out of me” he announced. “I always steal the pudding or the soup or something. When you’re like, 40 they don’t grab you or anything – they just say “Sir, I think you’ve made a mistake…” and then let you go. If I could I’d ban Tesco Metro’s, burn Nando’s and all Pret a Mangers would be wiped out. It’s what’s strangling the creativity of this city.”

Well, Tom you do have a point but I wouldn’t try that at Mudford-on-Sea Market. Stallholders there have spotted the marketing potential of a “Celebrity Shoplifting” competition. The winner will be selected for the most imaginative excuse: “But I do a lot of work for charity / I’m always being picked-on for being ginger” etc. and the winner really will get out of there. Losers will have to work as shelf-stackers in the Mudford Tesco. Let the punishment fit the crime.

Jonathan Owen is a director of Quarterbridge Project Management – a specialist consultancy providing business advice and design services to Market owners and trade associations. He has a keen interest in the politics of retailing, growing vegetables and eating well.

Market Matters, published in Market Trade News magazine