“Gone are the days of a casual list – our markets haven’t been at full capacity for years. Traders aren’t passing their businesses on to their children anymore.”
Market Manager, Stockton-on-Tees Roadshow
This is the biggest issue facing the traditional retail markets sector in the UK. It is clear to both NABMA and the NMTF that in a few short years, the retail industry has changed radically and many traditional retail markets have struggled to adapt with the pace.
Supermarkets are kings of convenience. Big brand retailers are beasts on our nation’s high streets. And in times of austerity, the general public are prioritising convenience, shopping little and often. Our traditional retail markets have been squeezed.
In five years the retail markets sector has shrunk by over a third. From 2009 to 2015, £1 billion has been wiped from the ledgers and 12,000 businesses have packed up their stalls and ceased trading. The sector now has a collective turnover of £2.5 billion a year from around 33,000 market traders.
Retail markets are not alone in this decline. Since 2008 UK plc has struggled in the aftermath of one of the deepest and most prolonged recessions in recent history. Tentative signs of a national recovery began in 2014 but many regions continue to feel the impact of the downturn.
The outcome for many retail markets has been to operate under capacity. The average stall occupancy of retail market in England is 72%. This figure plummets to 46% if you assume that businesses only occupy one pitch each. Effectively, traders are doubling up and spreading out.
But it’s not all doom and gloom. In 2013 the retail sector turned a corner – the Office for National Statistics reported a net gain in independent retailers and the highest amount of new entrants for ten years. In 2014 RBS noted that 40% of early age entrepreneurs wanted to start a business in retail.
In the same year, areas of the UK which had experienced major industrial decline were reported by Start Up Britain to have above average amounts of start-ups. Companies House also noted that the number of firms dropping out of their register fell 6% from the previous year.
In 2015, Lord Young, the Prime Minister’s advisor on enterprise, heralded a “golden age” for small business. He emphasised the need for incubation space for start-ups, which includes short-term, flexible lease options and tailored business support in order to accelerate growth.
This is where markets can make an impact. As a platform for trading, the greatest strength of the market format is its flexibility and adaptability. Put simply, markets give customers what they want. If there is demand, markets give traders the opportunity to grow their business.
“New traders need to be well prepared for market trading – investing £50 in stock and sitting behind a stall just won’t work.”
Market Trader, NMTF AGM
There are great examples from all over the UK of traders who have recently started and grown businesses from retail markets. Initiatives such as the NMTF’s First Pitch start-up scheme and NABMA’s Love Your Local Market campaign demonstrate this.
Since 2012, through NABMA’s annual Love Your Local Market campaign 10,000 pitches have been pledged to new traders at discounted rates to test out their business ideas. Over 1200 markets took part in 2015 and the message of LYLM made over 60 million imprints in social media.
In 2013, the NMTF’s national start-up scheme, First Pitch, received over 350 applications for 100 pitches on markets all over the UK. After receiving a business support package that included discounted rent and mentoring, over a third are still trading on markets or market-type events.
Both initiatives were successful in securing £50,000 each from external backers. For NABMA, this was the UK Government and for the NMTF, the RBS Group. The continuation of the two schemes is now in jeopardy as the funding was awarded on a short-term basis.
However, for many market operators the experience of engaging with the initiatives has encouraged them to consider creating their own schemes aimed at supporting entrepreneurs and developing talent in their communities. Operators must move quickly to deliver these schemes.
For many market officers within local authorities, the delivery of schemes will include working with a suite of departments and external agencies, especially with regards access to financial support and peer-to-peer mentoring. This goes further than a regulatory model of market management.
The benefit of running start-up schemes is evident but without active management and a strategy for the markets the retention rate of new entrants will be low. NABMA and the NMTF agree; it’s not the role of an operator to train a trader but to provide a platform for small businesses to thrive.
“Young people are entering the sector; they’re just not trading on traditional markets – they’re on festivals, fairs and shows.”
Field Support Officer, NMTF AGM
In the 2015 survey, respondents identified hot and cold food and drink, baked goods, handmade crafts, fruit and vegetables and mobile phone accessories to be most successful product lines. These new trends have fuelled the growth in temporary specialist markets.
The rise of the street food sector epitomises this – these are markets operated by private companies and community groups which are run as events, which include cultural attractions, such as art, theatre and music. It is common for these events to be at weekends in the evenings.
These events also trade in social and cultural capital and have quickly become popular with a younger demographic. An article in The Telegraph cited mobile catering as one of the best businesses to start in 2014 alongside microbreweries and Victorian-themed businesses.
Festivals and shows are also on the up, increasing in size and frequency all over the UK. These are markets as spectacles that confidently deliver an experience to huge crowds with waiting lists of traders jostling for a pitch. More festivals are even taking place out of the traditional season.
However, with market-type events such as fairs, festivals and shows comes a new set of rules for trading. Traders report escalating pitch fees, poor pitch locations and endless paperwork. The introduction of cashless payment systems is also causing concern within the sector.
But on the positive side, traders on these events report massive returns. Businesses trading on large festivals can turn over tens of thousands of pounds. Circuits are established, reputations are built and backed-up by an online presence in which repeat custom is made through e-commerce.
“New entrants reach out to customers online; why would they trade on a general market when they know their customers aren’t there?”
Market Manager, London Roadshow
Traders on these market-type events are digital natives. They promote themselves on Twitter, Facebook and Instagram. They take bookings for events through interactive websites and accept cashless payments from their stall. They develop communities of customers.
NABMA and the NMTF agree that the retail markets sector needs to up its game on the digital offer. Within the sector 38% of market traders accept cashless payments (e.g. credit or debit cards) and for two thirds of these businesses less than 30% of their stock is paid for with them.
The benefits of market operators running specialist, temporary markets or reshaping retail markets to incorporate an element of these lines is clear in the short-term. It is stressed that change must be managed sensitively and appropriately within a retail market’s unique context.
The next generation of market traders are here, they are entering the industry and searching for opportunities to reach their customers and to make money. Retail markets must act to engage these entrepreneurs in order for the sector to begin to renew.
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Mission For Markets is a campaign run jointly by NABMA and NMTF