Death of the High Street: who needs shops anyway?

Podcast Summary

• VHS and Austin Reed Close: 13,000 Job Losses and 20,000 Pensioners Affected: The high street continues to struggle with individual mismanagement leading to store closures and potential pension issues for thousands

  This week saw the closure of VHS, leaving 11,000 employees jobless and 20,000 pensioners potentially affected. The demise of VHS follows the failure of Austin Reed, resulting in 12,000 job losses and the risk of closing almost 300 stores. The high street is struggling, and individual mismanagement seems to be a common theme. Elsewhere, Brexit rhetoric reached new heights, with unworkable proposals leading to questionable forecasts from the OECD. During the podcast, the hosts discussed various pension personalities and the importance of understanding your saving habits. Steve Webb, former pension secretary and This is Money's Pensions Agony Uncle, answered listener queries about the government's online state pensions forecaster and the value of saving even small amounts. The hosts also shared memories of shopping at BHS, a store that has been around for 88 years but has unfortunately met its end.

• BHS's downfall caused by supermarket clothing lines: Supermarkets' affordable clothing lines drove customers away from BHS, contributing to its demise.

  The demise of BHS can be directly linked to the rise of clothing sales in supermarkets. The speaker argues that BHS was once a go-to store for homeware and casual clothing, but with the emergence of affordable clothing lines in supermarkets like George at Asda, Sainsbury's, and Florence and Fred at Tesco, shoppers began to make the switch. The speaker also mentions the issue of quality and customer service in BHS, which may have driven customers away. Overall, the speaker believes that the supermarkets, rather than online fashion retailers, pose the greatest threat to BHS.

• The Failure of BHS: Outdated Stores, Lack of Investment, and Questionable Business Decisions: The collapse of BHS highlights the importance of sound business decisions, ethical leadership, and investment in the future of businesses to ensure their long-term success. The public's anger towards the former owners and advisors raises moral and ethical concerns, while the shift towards online shopping leaves traditional retailers struggling to keep up.

  The failure of BHS, a once popular British retailer, can be attributed to a combination of factors including outdated stores, lack of investment, and questionable business decisions. The public is expressing anger towards the former owners, Philip Green, and the advisors who allowed the sale of the company despite its financial struggles. The British high street is facing seismic shifts towards online shopping, leaving traditional retailers like BHS struggling to keep up. The situation has raised moral and ethical concerns, with Frank Field, the chair of the Work and Pensions Committee, urging for a system where employers have a greater sense of decency and responsibility towards their workforce. The collapse of BHS has also fueled public distrust and anger, leaving many questioning the morality of UK PLC. The situation is a reminder of the importance of sound business decisions, ethical leadership, and investment in the future of businesses to ensure their long-term success.

• BHS goes bankrupt, leaving 11,000 jobless and 164 shops empty: BHS collapsed due to pension deficit and doubts about viability. High street retail faces challenges from changing shopping habits and online competition, leading to more insolvencies and empty shops.

  BHS, a well-known British retailer, is going out of business, leaving 11,000 people jobless and 164 shops empty on the high street. Despite interest from potential buyers like Mike Ashley, the administrators decided against selling the business due to the significant pension deficit and doubts about its viability. The high street retail sector is facing challenges, with shopping habits changing and online competition increasing. Even in affluent areas like London, shops remain empty. Analysts predict more insolvencies in the industry, particularly in the fashion sector. The merger between Ladbrokes and Coral could result in 400 unwanted shops, and Sainsbury's and Argos might leave another 200. It's a worrying time for the UK high street, with many shops struggling to compete and adapt to the changing retail landscape.

• High Street Struggles with Over 46,000 Empty Shops: Traditional retailers, particularly in fashion, face challenges from online shopping's convenience and affordability, leading to over 46,000 empty high street shops and pension fund deficits. Retailers must adapt and ensure ethical practices.

  The UK high street is facing a significant challenge with over 46,000 empty shops, many of which have been vacant for more than three years. Traditional retailers, particularly in the fashion industry, are struggling to compete with the convenience and affordability of online shopping. The trend is reminiscent of the challenges faced by supermarkets, where consumers can buy basic items at lower prices in large retail stores. The rise of online shopping is exacerbating the issue, as consumers can easily order items and return them for free if they're not satisfied, leading to increased delivery costs for retailers. The situation is particularly concerning for pension funds, as seen in the case of BHS, where questions of morality surround the sale of the company for a pound to a buyer who was unlikely to turn it around. The pension fund deficit for BHS is estimated to be around £571 million, and there are calls for Philip Green, the former owner, to contribute more to the fund. Overall, the high street's struggles highlight the need for retailers to adapt to changing consumer behavior and competition from online shopping, while also ensuring ethical business practices.

• Adapting to Change in the Retail Industry: Former retail executive Bill Grimsey proposes repurposing empty shops into homes to address the housing crisis and revitalize town centers. The retail industry faces challenges from constant change, including the closure of giants like BHS and Woolworths, the potential demise of the Eurozone and the Euro, and the ongoing Brexit debate.

  The retail industry, like many other sectors, undergoes constant change and some businesses may not be able to keep up with the times. This was discussed in relation to the closure of retail giants like BHS and Woolworths, as well as the potential demise of the Eurozone and the Euro. Bill Grimsey, a former retail executive, suggested repurposing empty shops into homes as a solution to the housing crisis and a way to revitalize town centers. Meanwhile, the Brexit debate continues, with claims of potential economic consequences on both sides. However, it was noted that getting accurate information about the issue is a challenge. In summary, change is inevitable, and finding creative solutions to adapt to new circumstances is essential.

• OECD Warns UK of Potential Low Growth Trap Post-Brexit: The OECD has issued a warning that leaving the EU could lead the UK into a self-reinforcing low growth situation, potentially damaging the economy and causing turmoil in global stock markets.

  The Organisation for Economic Cooperation and Development (OECD) has warned that leaving the European Union (EU) could lead the UK into a low growth trap, potentially causing substantial damage to the UK economy and sending global stock markets into turmoil. According to the OECD, this low growth situation is self-reinforcing, with businesses reluctant to invest due to weak aggregate demand and low consumption, leading to further decreases in demand and trade. The OECD's chief economist, Catherine Mann, spoke about this on Share Radio, stating that the UK's economic growth forecast for 2016 is only 3%, compared to the long-term historical average of around 4%. The OECD's dire warnings join those of the Bank of England and the International Monetary Fund, with many experts and organizations warning that leaving the EU could lead to job losses and decreased living standards. Despite these warnings, some, such as David Campbell Bannerman, MEP and cochair of the Brexit Sporting Conservatives for Britain, dismiss these forecasts as rubbish and argue that leaving the EU would actually stimulate the British economy through trade deals and immigration control. However, the consensus among many experts and organizations remains that the economic risks of leaving the EU outweigh the potential benefits.

• EU membership debate: Economic predictions and national identity: The EU membership debate involves complex economic predictions and touches on questions of national identity, with potential impacts on housing market, financial security, and long-term benefits.

  The EU membership debate is filled with uncertainty and confusion, with both sides presenting fantasy forecasts and mudslinging. The OECD's prediction of a weak economic recovery after the financial crisis highlights the challenges of predicting economic outcomes, especially for complex issues like EU membership. The housing market is one area of concern, with experts warning of potential negative impacts from a leave vote, including decreased home values and increased mortgage costs. However, some argue that these impacts may be short-term and that the long-term benefits, such as more space, freedom, and financial independence, could outweigh the costs. Ultimately, the EU membership debate goes beyond just economic considerations and touches on questions of national identity and financial security. Despite the uncertainty and confusion, it's clear that this is a big decision for the country, and the outcome will have significant implications for individuals and businesses alike.

• Brexit could impact UK property market with uncertainty: Experts predict potential instability in UK property market due to Brexit, but it's uncertain if house prices will rise or fall, causing some to hesitate on buying

  The outcome of the Brexit vote could potentially impact the UK property market, with experts suggesting it could cause instability and uncertainty for at least the next two years. However, it's important to note that predictions are just that - predictions - and no one can be certain what will happen. Some experts believe house prices could still rise, while others think they could fall. The uncertainty surrounding the vote seems to be causing some people to hold off on buying properties, waiting to see what happens. Ultimately, the impact on normal house buyers may not be significant, but for some high earners and those in the city, the uncertainty could make a difference. It's important for listeners to take these predictions with a grain of salt and consider the potential impact on their personal situation before making any decisions based on them.

• UK Housing Market Changes for Landlords: Higher Taxes: New tax rules for UK landlords could increase their tax payments, potentially leading some to sell properties and impacting the housing market.

  The UK's housing market, particularly for buy-to-let landlords, is facing significant changes due to tax reforms, which could lead to profit decreases for some. The new tax rules, which include the removal of mortgage interest relief and its replacement with a 20% tax credit, will result in higher tax payments for many landlords. For instance, someone with £15,000 in rental income and £10,800 in mortgage interest could see their tax payment rise from £1,680 to £3,840. These changes might lead landlords to consider selling their properties, potentially causing a ripple effect in the housing market. Additionally, the EU's impact on pensions is a topic of concern, with leave campaigners expressing frustration over potential pension reductions if the UK leaves the EU. However, it's important to note that these are potential scenarios, and individual experiences may vary.

• EU's Solvency 2 rule leads to £3bn costs for pension firms, impacting savers: The EU's Solvency 2 rule has led to £3bn in costs for pension firms, which have been passed on to savers in lower pension pots, while many are unaware they were previously contracted out of the state pension system, and those with low wages may need to carefully consider their retirement income needs.

  The EU's Solvency 2 rule, aimed at ensuring pension firms have enough cash for emergencies, has resulted in significant costs for firms, estimated at £3 billion. These costs have been passed on to savers in the form of lower pension pots. Meanwhile, many people are unaware that their pension schemes were previously contracted out of the state pension system, resulting in lower state pensions. For those earning low wages, the question of whether to save for a pension at all arises, as the state pension may not provide enough income in retirement. While saving for a pension through an employer offers advantages such as employer contributions and tax relief, those with limited income may need to carefully consider their retirement income needs.

• Navigating pension confusion for a comfortable retirement: Seek professional advice to maximize retirement savings and understand pension personality to make informed decisions.

  Individuals approaching retirement are often faced with confusion regarding their pension and retirement income, particularly with the introduction of the new flat rate state pension and pension freedoms. These uncertainties can lead to anxiety and indecision about saving for retirement. A helpful solution is seeking professional financial advice to maximize your nest egg and ensure a comfortable retirement. Additionally, understanding your own pension personality and the associated pitfalls can aid in making informed decisions. Overall, taking action to educate yourself and seek advice can help overcome the hurdles between you and a secure retirement.

• Balancing Retirement Priorities: Save or Spend?: Retirees can find balance between saving and enjoying present by investing in meaningful experiences or purchases, like a Tesla Model S, which offers both style and performance.

  Individuals approaching retirement may have conflicting financial priorities - some may prefer to save and invest their pension money, while others may want to enjoy the fruits of their labor and spend it. The Tesla Model S, as an example of a desirable and long-distance capable electric car, showcases the appeal of both saving for the future and indulging in the present. The speaker initially considered taking control of their pension money and investing it themselves, but after reading about potential mistrust and cash hoarding, they reconsidered and decided to embrace their namesake and become a "Spend It Simon." However, they clarified that they wouldn't spend their money on frivolous things, but rather on meaningful experiences and purchases, like a Tesla Model S. The Tesla Model S represents a revolution in the electric car industry, offering both style and performance that rivals traditional gasoline-powered cars. The speaker's wife was initially skeptical about the car's appearance, but was impressed by its sleek design. The Tesla's supercharger network allows for long-distance travel, making it a viable option for road trips. In retirement, individuals may face conflicting financial priorities, but it's essential to find a balance between saving for the future and enjoying the present. The Tesla Model S serves as a reminder that it's possible to have both.

• Planning for long electric vehicle journeys with limited supercharger access: Owning an electric vehicle with limited supercharger access necessitates careful planning due to uneven distribution. Superchargers offer quick charging, but their locations require long drives between points. Normal charging points take hours, and household sockets take even longer. Utilizing superchargers is the most efficient option for long journeys.

  Owning a Tesla or any electric vehicle with limited access to superchargers requires meticulous planning due to the uneven distribution of charging stations. The superchargers, primarily located in the southeast and southwest of the country with few in the north, necessitate long drives between charging points. Charging from a normal electric car charging point takes several hours, while charging from a household socket takes even longer. Therefore, utilizing superchargers for quick charging is the most efficient option. The speaker shared their personal experience of driving across the country, facing range anxiety, but making it back with some range to spare. The convenience of long journeys with Tesla's autopilot feature was also highlighted. Overall, the review emphasized that while Tesla performs well in urban areas, its capabilities in challenging conditions, such as a wet and cold weekend in rural Wales, remain to be seen.