Long live the Queen of Shops

Mary Portas was an inspired choice by the government to investigate the plight of high street shopping.

She combines the independence and the imagination to make a real impact when she reports, which she is due to do tomorrow. Whether her recommendations survive the encounter with Downing Street remain to be seen.

But whatever the result of her report, it is clear that the Queen of Shops understands the central truth of nef’s Clone Town campaign – that the key to high street survival is interdependent, inter-trading local businesses.

The Clone Town campaign has been grasped by politicians, where they have grasped it at all, as if it was about a purely aesthetic issue. In fact, the heart of our approach is an economics case, based on a study of how money flows around a local economy. How many times money circulates in an area is just as important as the amount of money flowing into it, both into cities or into the high streets that make them up.

For example, although you might have high streets with the same amount of money flowing into them through customer footfall, if that money gets spent in the supermarket and then leaves the local area straight away, then its economic impact is less than, for example, spending it in retailers with a localised supply chain which also employ local people.

This spending and re-spending creates a multiplied impact. It means that the money is working harder for the local economy, and is creating local wealth.

Of course outside investment is important if it is available, but the money that is flowing through the local economy can be used more effectively if local businesses rely on each other for custom, and if that business is diverse enough. This is what lies at the heart of the economic argument for diverse and distinctive high streets.

The lesson for high streets is that they need to be aware of where the money goes and where the leaks are, and to look for opportunities to create businesses to minimise the leaks. 

It means that big retail investments that only include big chains may often bring money in business rates at the expense of the health of the local economy, making it less resilient in the face of economic shocks. 

This is especially so when the superstore is not actually an ‘anchor’ at all, but competes with, undercuts, and eventually undermines the surrounding businesses.

So the arguments that will follow in the next few days – probably about whether there needs to be a moratorium on out of town stores (there does) – are, in a way, less important that the money flows argument.

We have not been arguing that clone towns are unpleasant to look at. Or simply that we have some kind of animus against Tesco. That isn’t it at all.

We have to convince local government that clone towns, and corrosive anchor stores, are actually making places poorer – they are undermining long-term recovery and frustrating economic independence.

There is a great deal more research that needs to be done into this area – most of the available research is from the USA – but policy makers need to grasp the central idea, and to grasp it urgently. 

How far the Portas recommendations recognise that central idea - that bustle and interconnection and distinctiveness underpin economic success - is the question we are all waiting to answer.