Gloomy predictions about the future of the high street have been a common theme in the news over the last few years. A host of well-known brands are either gone or seem to be struggling against the modern shopper’s thirst for online options.

In the past year alone, high street stores covering a vast range of sectors have closed completely, from Maplin to Toys R Us. It seems time, then, to ask if the high street is really doomed and what, if anything, can be done about it?

The Closures and The Struggles

The first sign for many that the high street might not be as healthy as it once was came back in 2008, when high street stalwart Woolworths unexpectedly announced closure of all of its 807 storefronts. The result was job losses of 27,000 and a public wondering if this was a sign of things to come or simply the result of Woolworths failure to adapt to a modern marketplace. It turns out the answer could actually be both.

Since then, the UK high street has seen small spikes of reprieve, but internet shopping has only become more popular. This has resulted in an attendant, large drip in high street profits. In the last year alone, Maplin, Toys R Us, Mothercare, Prezzo and Carpetright have all closed, showing how the high street crisis reaches across all kinds of businesses. Within the last month, Poundworld has announced the appointment of administrators, and House of Fraser has outlined the need to close stores and cut costs. Only in the last week has New Look revealed a £243 million loss for the last financial year.

BDO, which monitors high street sales month to month, revealed that high street sales were down in May 2018 by 2.2 percent over last year, showing that it is now 8 months since like-for-like sales have grown by 1-percent or more.

The Possible Solutions

Business rates are a big area of contention currently, and a lowering could have real benefits. Labour has repeatedly stated that the business rates system is unfair and penalises brick and mortar stores, whilst online retailers are largely unaffected. The government increased business rates back in April – for the second time in two years. The major issue is that major online retailers like Amazon use out of town warehouses, which have much lower property values that city centre retailers. This has led many business leaders to point out the issue and decry it as unfair.

Beyond this, high street businesses will have to focus their attention on the online market, hoping they can offer in-house deals and service that will tempt online shoppers away from super-sized retailers like Amazon. High street retailers will have to get serious about their online offerings, or they may have nothing to offer at all. 

If your retail business needs a retail overdraft to help finance your growth plans, contact us to find out how we can help.

The UK economy is in a strange place. Employment figures are at a record high, but overall growth remains sluggish. Rosier figures for the long-term health of the economy come along, then they’re downgraded. Small businesses are flourishing, but major high street retailers are going out of business on a weekly basis.

One clear and strong success story, however, is the UK tech industry. Showing amazing growth and proving attractive to investors, there seems to be no slowing the sector.

The Facts

Fresh figures from Tech Nation have echoed other sources in showing the tech industry is growing 2.6 times faster than the rest of the UK economy. In 2016, it was worth £170 billion, in 2018 this figure has grown to £184 billion. The report also showed that, outside of London, there are 16 ‘silicon suburb’ towns across the UK with a much higher than average tech employment rate, with towns like Bristol leading the way.

The report also underlined how fast tech firms in the UK are growing. UK GDP grew by 1.7 percent in 2016-17, but over the same period the tech sector grew by 4.5 percent. Alongside this was a five-times rise in the number of jobs in the tech industry, making it one of the healthiest and fastest growing employment sectors.

The Investment

All of this growth inspires, and in turn is fuelled by, a great deal of investment. International investors were particularly enthused by the UK tech industry, pouring money into firms in the hopes of finding the next Deliveroo or Zoopla. In 2016-17, British tech companies raised a total of £4.5 billion from venture capital sources, a doubling of the previous years total.

This could be, in no small part, due to the fact that many of the UK’s tech firms have an international reach and investors see great technology with an in-built global reach. A full third of London tech businesses, for example, have foreign clients, which outstrips the reach of California’s Silicon Valley. Domestic and foreign investors are seeing companies that have a bright future, very healthy growth and international reach. So, it should come as no surprise UK tech companies represent an attractive investment.

This has been shown in a number of high profile exits. Machesterfashion.com was sold for £750 million to a private equity investor and Leeds firm CallCredit was purchased for £1 billion. The incredible growth and underlying base for UK tech firms is providing fertile ground for firms with good ideas and the drive to succeed, with buyers and investors on hand to capitalise.

If you’re an ambitious tech firm, take a look at our business finance and capital investment options, we can help you get your hands on the money you need to move forwards in one of the most vibrant, successful sectors in the world.