Write a short critical essay explaining how the poor economic climate in the UK
might affect the marketing mix of a start-up retail venture in the high street.
I will look critically at setting up a retail business on the high street in the current
economic climate and the affect this may have on the marketing mix. I will first give a
brief overview of the economic situation in the UK and high street retail in general.
The UK economy hasundergone a protracted period of instability since the banking crisis
of 2007/08, which sparked economic downturn for the UK and caused a dramatic fall in
both consumer and business confidence. Between 2008 and 2012, the UK experienced two
periods of recession and has been subject to austerity measures, such as public spending
cuts, welfare reforms and increased taxation, imposed by the UK Government in an
attempt to reduce the country’s budget deficit and reverse economic decline. These
measures coupled with high inflation, rising levels of unemployment and low wage growth
have contributed to less disposable household income and subsequently lower consumer
spending across most of the UK.
The economic constraints of the last five years, such as falling consumer spending,
increasing operating costs for businesses (20% rise since 2006) alongside less available,
affordable borrowing to businesses have led to large numbers of high street retailers
closing their doors. The Centre for Retail Research (2013) reported that 54 retail
companies went into receivership in 2012 alone, affecting almost 4,000 stores across the
UK. Administration of longstanding retailers such as Jessops, Woolworths, Comets and
Past Times has meant their departure from the high street leading to reduction in footfall
across many town centres.
Yet it is not just the economy that can have detrimental impact on UK high. Changing
technological and social trends have also attributed to its changing appearance. Mary
Portas (2011:2) stated in her report to the Government that “The phenomenal growth of
online retailing, the rise of mobile retailing… the epic and immersive experiences offered
by today’s new breed of shopping mall…have all conspired to change today’s retail
landscape.” Online shopping and out of town retail parks have taken the place of the more
traditional high street for many, with online sales now attributing 9.7% of total retail sales
in the UK during 2013. Town high streets have large numbers of store vacancies, 14.1%
across the country in March 2013, a rise of 161% since 2008.
