The shopping crisis: what can we learn from history?

As the recession squeezes profits, Chris Bowlby asks Dr Sonia Ashmore how Britain’s flagship department stores have risen to the challenges of the past 150 years

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Shopping has seemed like one of the great success stories of postwar Britain. Rising standards of living have increased everyone’s purchasing power. Major companies have been built on the back of successful retailing. Changing fashions and international trade have added greatly to the variety of what is for sale. And shopping itself has become, for many, a regular leisure activity as much as a routine necessity.

And yet the retail trade’s vulnerability has been starkly demonstrated in recent months, as closing shops leave sudden gaps in the high street. Woolworths has arguably been the highest profile casualty of the downturn. Other retailers face not only the shock of recession but also the longer term challenges of social change, and competition from new rivals like online shopping.

Shopping has seemed like one of the great success stories of postwar Britain. Rising standards of living have increased everyone’s purchasing power. Major companies have been built on the back of successful retailing. Changing fashions and international trade have added greatly to the variety of what is for sale. And shopping itself has become, for many, a regular leisure activity as much as a routine necessity.

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And yet the retail trade’s vulnerability has been starkly demonstrated in recent months, as closing shops leave sudden gaps in the high street. Woolworths has arguably been the highest profile casualty of the downturn. Other retailers face not only the shock of recession but also the longer term challenges of social change, and competition from new rivals like online shopping.

So is this kind of turbulence something new? Or has shopping in recent decades always been in a state of flux, as it attempts to keep up with changes in the incomes, aspirations and lifestyles of its customers? I’ve been exploring the rich history of London’s department stores – flagships of British retail – with Dr Sonia Ashmore of the Victoria & Albert museum, who worked on the Economic and Social Research Council’s recent ‘Cultures of Consumption’ project. 

Have department stores in a place like London always been in a state of rapid change?
Sonia Ashmore: Department stores have always had to adapt to survive. Most of the surviving landmark London department stores began life as small 19th‑century drapers’ shops, like Debenham & Freebody (Debenhams), or grocers, like Harrods. As with supermarkets today, many people were concerned that such stores would crowd smaller shops out of the market.

The great department stores offered the spectacle of an unprecedented and seductive array of consumer goods, novel urban spaces particularly attractive to women, an account, and personal service, almost literally from cradle to grave. As a result, customers developed loyalties to particular stores. During the 1920s and even 1930s, department stores doubled in number and expanded in size, providing a level of service that was to become unsustainable later.

In the 1950s, having survived bomb damage, wartime restrictions, lack of goods and general austerity, many stores did not attempt much in the way of modernisation, but benefitted from the needs of materially deprived consumers and slowly increasing affluence. To meet competition from the expanding multiple chain stores, some companies adopted strategies such as ‘trading down’, just as some stores are attempting to meet the current recession by offering their customers discounts.

Department stores faced what was arguably their greatest challenge to date in the 60s, as the emergence of ‘Swinging London’ as a youth oriented fashion capital offered consumers alternative attractions. Some stores adapted and even prospered as the fashion boom attracted tourists to London (although currency fluctuations regularly affected this trade).

Others came to be perceived as old fashioned by a new generation of wage-earners. By the 1970s, many commentators were referring to department stores as redundant, using metaphors such as ‘dinosaur’, ‘ostrich’ and ‘shipwreck’. High rents and overheads, widespread recession, the loss of the tourist trade (which had diverted attention from more fundamental problems) and a general decline in the appearance of the West End had fatal consequences for some big stores. By 1982 nine large central London stores had closed.

How far has retailing in Britain been affected by other economic trends?
SA: One problem for the stores has been their attraction to investors as commodities. In the mid-20th century, this led entrepreneurs and property speculators like Hugh Fraser and Charles Clore to employ aggressive acquisition tactics. These were men driven by the strategic accumulation and shedding of businesses rather than by an interest in retailing or fashion.

Retail businesses have not generally remained under family control for more than three generations, but the family approach can bring advantages. Anne Horton, from one of the few family-owned department store groups, Hoopers, has commented that their recent acquisition of freeholds has put them in a stronger position during the recession.

The popularity of particular locations in the capital has also ebbed and flowed over the years. By the mid-19th century, the focus of fashionable shopping had moved from the City of London to the West End; during the City boom of the 1980s and 90s some shops once again opened City branches. Neighbourhoods go in and out of fashion, and retailers respond accordingly.

Has the nature of shopping itself changed fundamentally?
SA: The character of department stores has certainly been transformed, with the paternalist, comprehensive organisations of the mid-20th century being repackaged as brand outlets. And yet, despite these massive changes, they have survived for nearly a century and a half.

The grand department stores provided city landmarks and labyrinthine environments that gave shoppers a sense of adventure and luxury. But can the initial novelty and visual excitement of new shopping malls, such as Westfield in London’s Shepherd’s Bush, replace the traditional, but sometimes faded glamour of stand-alone department stores? Do shoppers, however much they are tuned into online shopping, still prefer a city centre environment with street life? These remain open questions.

The present recession possesses too many novel factors to enable analysts to make comparisons with say, the 1980s and 1990s, when the balance of Britain’s economy shifted towards the service sector. The globalised nature of both this recession and retailing itself may mark a different kind of shift in the customer bases of our department stores. But falls in property prices could also help a new generation of retail business make a start, just as today’s giants began as small shops.

Pundit from the past: John Spedan Lewis

What would a behemoth of British retailing make of today’s high-street woes?

One of the most striking figures in British retailing history was John Spedan Lewis, who shaped what is now the retailing empire including the John Lewis department stores and Waitrose supermarkets.

Lewis, born in 1885, was given a partnership in the family retail business in Oxford Street in London, but criticised his father’s methods for producing unjustifiable inequalities in the way owners and employees were rewarded. “It is all wrong to have millionaires before you have ceased to have slums,” he once stated.

Through what the Dictionary of National Biography calls Lewis’s “mixture of autocracy and altruism” he created a company in which the employees, to this day, have a kind of co-ownership of the business. Lewis might well believe that the turbulent existence of many of today’s retail companies, bought and sold or radically changed as their market price varies, vindicates his idea that employee co-ownership makes for a more stable and successful enterprise, with less need to hire and fire employees as economic conditions fluctuate.

But there have been moments in recent decades when that co-ownership has been called into question. And Lewis would have been disappointed that his model did not spread as widely through the economy as he had hoped.

Lewis also pioneered the close control of costs and the spreading of information on changing customer preferences throughout his workforce. As Dr Ashmore points out, the John Lewis Partnership continued in more recent times to go to “great lengths to study not only the competition but the minds of their customers, and their local preferences”.

Today the emphasis on responding to the customer is greater than ever, as retailers know they cannot live on tradition alone. Lewis would have approved of – and feared – the ability of rivals like Tesco in modern times to amass instant information about customers’ purchases and habits.

As a man with a great belief in the role of loyalty – of customers as well as employees – in the continuity of business institutions, John Spedan Lewis would perhaps have been alarmed at the potential fragmentation of the retail sector amid international competition – and the spread of alternatives such as online shopping. It is retailers’ constant attempts to monitor and exploit the way society is changing that makes their business so historically revealing.

Dr Sonia Ashmore is a research fellow at the Victoria & Albert museum and has written extensively on shopping and retailing

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This series is produced with History & Policy. You can find out more about them and read their papers at www.historyandpolicy.org.