Ten days ago we opened Iceland’s 800th store in the UK - our greatest number ever, and the vast majority are on the high street.
Ten days ago we opened Iceland’s 800th store in the UK - our greatest number ever, and the vast majority are on the high street. So am I lying awake at night worrying about the grim future facing town centres in the digital age? Not for a second.
Because when famous retail chains go bust it is rarely the fault of greedy landlords, spiralling rates or draconian parking rules. It’s almost always down to lousy management.
Woolworths was a prime example. The concept wasn’t terminally outdated: there are numerous bargain chains successfully doing the same thing, without the benefit of a century-old household name. Sadly, Woolies was just badly run.
I feel the same about Iceland. While I was away a management culture developed that was obsessed with governance, process and procedures. As a result, no one apparently had time to consider the main things that mattered: staff morale and motivation, and driving sales. Remember those?
The prophets of doom are always with us. Not so long ago they were telling us that the dotcom boom would have finished bricks-and-mortar retailers by now. (Long before 2013 we were also supposed to have flying cars and eat only vitamin pills.)
Yes, some improvements in town centres are required. Business rates need urgent reform and ideally should be replaced with a tax on sales rather than assets.
Levying rates on empty properties is iniquitous and the planning system should be relaxed to make it easier for landlords to achieve a change of use for surplus retail assets.
But, as I have written before, landlords are a much maligned breed whose businesses are every bit as legitimate as those of their tenants, and it must ultimately be up to them to decide what they want to do with their own properties.
The last thing we need is Soviet-style central planning and compulsion, whether to force landlords to apply for changes of use or to collect a 0.25% levy on larger retailers’ sales to fund start-ups.
These ideas would simply wrap up our high streets in the same sort of bureaucratic red tape that I feel did so much damage to Iceland while I was taking my sabbatical with Cooltrader.
When Iceland was a quoted company back in the 1990s analysts concluded that we should not exist - and they were right. Our business survives by sheer force of will and a constant drive to innovate and so keep one step ahead of the best competition on the planet.
I too felt that we were running out of road back then when we got to 760 stores, and could see little scope to grow the business further. How times change.
We shrank our chain a bit after 2005, but since then have opened more than 140 new stores and this year we will easily beat our target of adding 40 more, and can continue to expand at this rate in the UK for some time to come.
We are also rolling out our online shopping offer (an idea we pioneered in the UK, then pulled back from) and developing our export business and retail presence overseas.
It’s called enterprise and it’s what ultimately pays for the whole public sector through taxes. My recipe for successful high streets is exactly the same as it was for Iceland in 2005: go for simplicity, focus and an acceptance of reality, and forget box-ticking and bureaucracy.
- Malcolm Walker is chief executive of Iceland