E&T's Future of the High Street frontispiece

Future of the High Street

Online purchasing, out-of-town retail parks, a double-dip recession: the high street is under siege. Commentators and policy-makers alike fear the prospect of empty and irrelevant town centres. But is it possible that, on the contrary, a mid-21st century economy will see a return to a socially active and dynamic high-street environment? We take a look at one iconic high street to work out what the future holds for our retailers.


When did you last go into a bank? Why would you need to? Surely it’s been replaced by modern technology. You do all your banking online, you get cash out of ATMs and you get paid electronically, so what’s the point of bank branches?

The trend is for more and more people to do their banking online. A 2009 survey by the Gartner Group found 47 per cent of people log on to manage their accounts, while last year nine out of ten people surveyed by McAfee in the UK said they had used online services. Conversely, www.payyourway.org.uk claimed only 13 per cent of UK Internet users visit their local bank branch every week.

And yet, there continues to be a sizeable percentage of Internet refuseniks. Figures compiled by Internet World Stats estimated that 39 per cent of the population of Europe doesn’t use it at all. As these are people who do not live a connected life and have no intention of getting connected, it’s unlikely this figure will fall much by 2020.

That doesn’t mean bank branches will stay the same. Once upon a time, banks were controlled by the bank manager, with whom all customers had a personal relationship. If you wanted a loan, you spoke to the manager face to face, and he would decide whether he liked the cut of your jib, thought you were a trustworthy sort, and could trust you with the bank’s money.

It was possible for him to know all his customers personally because there weren’t very many of them - not everyone had a bank account. Many people got paid in cash and used their weekly pay-packets to settle their bills and do their shopping; they had no need for a bank account. Even if they got paid by cheque, they would simply sign the back, take it to the bank and exchange it for cash.

Then technology brought change. Electronic payment of wages replaced the cash pay-packet. The increase in customers meant the branch manager couldn’t know them all personally anymore.

But that was OK because he no longer made the decisions about to whom he should lend. Control was centralised and computers totted up scores using a variety of criteria to decide whether the customer should be given that loan. If the computer said no then you could no longer get around the rules on the grounds that your father was a member of the same club as the bank manager.

At the same time, computers that connected branches together meant you no longer had to go to “your” branch in order to conduct your banking; you could cash a cheque at any branch of your particular bank.

Then automatic teller machines (ATMs) arrived and offered the wonderful innovation of being able to get money from any machine, not just those owned by your bank. You no longer had to queue up to cash a cheque and, what’s more, you could get money at any time of the day or night. You still, however, needed to go into the bank to pay into your account, as well as to pay your utility bills using the giro system.

But more automation was on the way. This took two forms. On the high street came semi-automated bank branches. These had far fewer bank staff on hand; instead, they housed machines, not just the familiar ATMs but also paying-in machines; staff were only needed when customers wanted advice or help.

At the same time came the revolution of telephone banking. Midland Bank (now part of HSBC) started up a dedicated telephone banking service, First Direct, in 1989. Within six years, it had half a million customers. But telephone banking was destined to be overtaken by the next innovation, thanks to the World Wide Web. By the mid-1990s online banking was available both as an add-on to existing accounts, and as dedicated online-only accounts. Being able to check your balance, transfer money and pay bills from your home removed yet another reason to visit the high street branch.

There are, however, many reasons people still need to visit the bank. Think of the shopkeeper who at the end of each day takes the contents of the till into the bank to be paid into the shop’s account. Machines will undoubtedly take over the duty of counting up the pennies and logging the cheques deposited, but it’s a function that still needs a visit to the local branch where the machine lives.

On the other hand, the latest developments may see cash used less and less. Banks are starting to experiment with using swipeless cards with RFID chips, so you don’t even have to take the card out of your wallet, and mobile phones that use near-field communication (NFC) to make payments. If these take off it may finally be practical to use plastic for small purchases - buying a magazine or a pint of milk.

Think back to those people refusing to use the Internet. There’s always going to be those who don’t want to change the way they do things, and won’t want to use new technology, or who worry about the security implications of those NFC devices, so it seems unlikely cash will vanish completely.

Besides, cash will be needed for emergencies and for those times when technology fails: power goes out, computers crash and networks go down. We need a backup for when the machine stops.

So what does this mean for the future of the high street bank?

Perhaps we’ll see a lot more of those hybrid bank branches: a building that houses lots of automated machines, and very few staff to deal with those situations that computers can’t handle.

Those machines will offer access to the things that the connected can now get online. Instead of sitting down with a human to discuss mortgage options, if you can’t use Go Compare or moneysupermarket.com at home, you will be able to use a terminal in the branch to find out about all the options the bank offers and select the one that’s best for you.

Or, maybe that function will move out of banks entirely. Just as supermarkets, garages and shopping centres now have cash machines that are not attached to a bank branch, and may not even be owned by the big high street banks, why shouldn’t Tesco or Sainsbury’s install machines that let you check out mortgage deals and apply for a loan even if you don’t have a computer of your own?

What will that leave for bank branches? Just the specialist services that require face to face interaction, discussion with a human, that can’t be reduced to options presented by a computer. The branches will have to extend their opening hours, too: in this 24-hour society they won’t be able to get away with closing their doors at 4.30pm if they want to keep customers.

How successful the branches will be at finding services to hold their customers’ loyalty will depend, in part, on how nimble they can be about using the data they hold on their customers spending habits. This resource can be mined to identify their future needs, develop new products, and reinstate the waning loyalty.

It seems, then, there will continue to be a need for the local bank branch, but not so many. The days of every bank company having a branch in the same high street will come to an end. These branches will be more automated, with fewer staff that offer specialist services to those that need them.

Until everybody is connected and money is replaced by ones and zeroes, the bank branches will still be there. 

Fiona Craig


Grocer & butcher

The high-street record store has one big advantage over other high-street retailers. Its primary competition is now the virtual world. Supermarkets have little interest in carrying the minority-interest music that keeps the independent record store alive. This protects the specialist record store from the creeping growth of micro, mini and maxi supermarkets across the land.

When it comes to food, it’s a different matter and it is not good news for the independent or smaller grocer or butcher. As supermarkets have expanded, food has become less important to them. Wal-Mart in the US sees 40 per cent or less of its sales from food out of its major outlets. But the massive buying power of the supermarket has made it extremely difficult for specialists to compete. According to a 2011 study performed by ResPublica, the 8,000 supermarket outlets across the UK now account for 97 per cent of total grocery sales.

The growth in supermarket sales has practically destroyed the specialist grocer and butcher shop. The Competition Commission estimated that there were close to 45,000 grocers in UK high streets in the 1950s. This fell to fewer than 10,000 by 2000 and, according to the Department for Business Innovation and Skills, the number of specialist high-street food shops fell by a further third during the following decade. Is there anything that can be done to save the grocer and butcher?

One option is, as with the record store, to choose the theme park option - offer cooking and preparation demonstrations to customers in the hope they will stock up on a side of beef or a bag of artichoke hearts on the way out. But, even if independents were to take advantage of this more interactive method of selling, there is little to stop supermarkets doing the same. Also, in a media-saturated environment, it is hard to move for cookery programmes on TV, many of which are extending onto the Internet through sites such as YouTube.

The future for the fresh food shops may lie in the supply chain rather than trying to use entertainment to pull in the passing trade. As supermarket power has increased, it has forced suppliers to accept lower prices as the gross margin is transferred from them to the big retailers. Going direct in the style of farmers’ markets can provide a potentially more profitable outlet for locally grown food that could even include produce from allotments and private gardens if it were possible to assure a consistent level of quality.

Governments themselves may find it worth investing in or subsidising fresh food stores in the hope of encouraging healthier eating. The Swedish Systembolaget stores were a response to the problem of alcoholism. The government nationalised sales of alcohol in the hope of rationing alcohol misuse out of the system. Government-sponsored grocers and butchers would take the opposite approach: making cheaper fresh food more accessible to those who cannot afford to drive to the nearest out-of-town supermarket.

Without intervention, the chain-owned mini-supermarket will become the future of the high-street grocer or butcher, a future in which the high street as a retail centre will disappear entirely. But if those streets are reworked to become residential centres, will that matter?

Chris Edwards


Coffee shop

The coffee shop has already invented its future: going full-circle to its original role as a shared work and meeting space. The coffee houses of the 17th and 18th centuries practically fuelled the growth of capitalism and contributed to several stock-market bubbles in the process. Garraway’s in the City of London is now famous as the home of the worst excesses of the South Sea Bubble. As modern share-trading is now centred on highly automated server rooms sitting close to what were once teeming open-outcry floors, coffee shops are no longer the agents of economic collapse. They are helping to keep numerous small businesses afloat and online.

Metered Internet is arguably the coffee shop’s biggest ally in selling double grande skinny caramel decaf mochaccinos - just as long as the metering only happens at home. Realising how long people can nurse an empty paper cup while they take root next to an electrical outlet, some coffee shops in New York have banned the use of laptops.

Places such as Urban Station in Buenos Aires have done the opposite, turning the coffee shop into an open-plan shared office. Owners of dedicated co-working spaces argue that the role of coffee shop and shared office are different, pointing to research such as the Second Global Co-working Survey, which argues that the biggest competitor to the high-street office is the home rather than the coffee shop. Approximately 60 per cent of people choosing to work in shared office spaces said they had moved out from their home office, with just 4 per cent moving from their favourite seats near the power socket in a coffee shop.

Many of those in co-working spaces said that they also used cafés, but the café was a distant second choice, at 14 per cent of those surveyed, compared with the home office at 80 per cent.

What is different at the moment is profitability. A third of co-working-space companies are planning to expand this year, but fewer than half of those are profitable. Coffee shops have, so far, enjoyed a massive and largely profitable expansion - moving into dedicated high-street premises as well as co-locating with out-of-town supermarkets and other high-street stores. In the midst of a recession, sales climbed 10 per cent from 2010 to 2011 according to specialist research group Allegra Strategies. Collectively, the shops sold more than £2bn in drinks and food, double the take of 2005.

However, the expansion across the UK was not evenly distributed. A third of Londoners visit a coffee shop on a daily basis. Nationwide, that number falls to 16 per cent suggesting that the coffee shop is more important to major cities than less population-dense areas. And these cities are where the high streets have suffered less. Footfall for high-street shops outside central London fell more than 10 per cent in just three years, according to Colliers International. While the coffee shop may be reinventing the future of small service businesses in cities, it’s not likely to be evenly distributed.

Chris Edwards


Travel agent

The first step on any holiday used to be on the path to the local travel agent, who would talk through your options, advise on where to go and when, and send you back home with a few suggestions to consider and a heavy pile of brochures to consult. Now, the majority of our travel plans are made not across a travel agent’s desk, but on our own home computers. Many industry insiders believe the high street travel agent is on a journey to nowhere.

Every aspect of picking a holiday has changed. We don’t want to look and book, we want to immerse ourselves in the virtual destination before packing for the real one. We’re no longer content to begin by browsing through brochures or scanning uniform Web pages, we want a full-blown experience of our intended destination. Augmented reality apps are being introduced by tour operators, tourist boards and airlines. The Welcome to Scotland website boasts that its new app has “all of Scotland’s Munros and Corbetts” for you to enjoy wherever you are. Kuoni is one of the first UK tour operators to use augmented reality; customers will be prompted to view extra content and video through smartphones and iPads using image-recognition technology.

These digital journeys aren’t instead of a trip, but a taster for it. But how much more exciting would the pre-flight experiences be if they happened up your high street?

Personalisation is also believed to be the key to all future travel - putting the individual traveller’s needs first. Air France has recently introduced personalised My Account services where customers can securely store personal data including payment details and seat and meal preferences, much like many train companies already do. Not only what you eat, but with whom you eat can also be a personal preference. Airlines are already testing ‘social seating’ software that allows travellers to peek at other passengers’ Facebook or LinkedIn profiles before they take off together. They can choose the perfect person - based on professional interests and preferred looks - to sit next to and message them before the flight. Dutch airline KLM and Malaysia Airlines are both testing the software, dubbed ‘in-flight dating’.

High-street travel agents of the future will do much more than matchmake and take bookings. They will be one-stop holiday shops. They will organise visas, arrange inoculations, and even purchase your swimsuit, sun lotion and salopettes for you, delivering them to your home. They will arrange for someone to clear the post from your letterbox while you’re away, as well as feed the cat. The secret of success is the added value the agents add. “There will always be a role for travel agents who can provide added value services - whether this is trip planning, finding complex routings or integrated travel booking of multiple forms of transport, accommodation and leisure activities,” says futurist Rohit Talwar. “The ability to source and organise unique experiences and hard-to-book restaurants and shows will also be seen as added value.”

There are limits to arranging everything. It might be fine if you’re travelling to Berlin or Brisbane, but not everywhere in the world will be equally technologically advanced. In fact, the very reason you might want to go to the deepest bush or canoe up the darkest river is because it is so different from, and so less developed than, home.

“Travellers wanting to go further afield will want to replicate this, but factors limit the Web’s scope into Africa,” says Tim Henshall, managing director of Kamili Safaris. “Organising travel within Africa sensibly remains the domain of the experienced travel expert. Distances can be huge, locations easily confused - some still think Cape Town to Vic Falls is a day trip - and 200 miles on a straight European motorway is in no way comparable to the same distance on African roads where seasonally routes might be impassable.”

To the relief of the Internet refuseniks, personal service and expertise is what travellers are searching for. As long as the local travel agent keeps up with these trends, then they’ll survive as a hardy tribe.

Dea Birkett


Estate agent

Unlike post offices, banks or travel agents, estate agents aren’t generally considered to provide a public service, just a necessary one. No one is going to campaign to keep the local estate agent open. We’d love to simply rent, buy and sell our own homes, but the legal intricacies and financial implications prevent us from doing so. We feel we ought to call in the experts; we wish we didn’t have to.

It’s in the field of expert advice that estate agents may still find their niche. If you want an oast house or a private island, then you might well want to sit down and have a chat about your needs. But you also might want far more than an informed conversation. You might want to try out what it’s like living in the home of your dreams. No longer will high-street estate agents turn their computer screen towards you so you can see a few photos of the sitting room, or hand you photocopied details and a floor plan. You can move in and try out being lord of the manor in the estate agent’s augmented reality booth.

The estate agent would be your guide to this new property, much as a tour guide would be to China or Nepal. He or she will show you around, point out things you ought to see, explain what they mean. That hairline crack in the ceiling you can now spot as you’re spread out on your potential new home’s sofa - they can reassure you that’s nothing to worry about. The future estate agents’ service won’t end there. Why should they stop at selling property? Estate agents of the future will also offer to furnish your home and give advice on décor. Then your choices will be morphed onto the existing property, to see how they look.

Estate agents won’t be just about financial transactions and making sure the survey is done correctly. They’ll be about helping you choose and then construct a dream home. Then perhaps we’ll like them a little more. 

Dea Birkett


Record shop

The future of the record store may not lie in selling records, but rather in everything that goes around the recording. The sign that hung outside 52 Gold Street in Northampton in the weeks before 21 April 2012 declared that day to be Record Store Day. But there was barely a record in sight. What was the independent record store John Lever Records from the 1960s through the 1980s is now more or less a fashion shop that happens to sell records.

Record Store Day was marked by independent record stores in the UK and US, and was meant to encourage people to go back to shops they might not have visited for years, lured in by live gigs and events.

For a day, the record store became a performance-art venue. In the same way that many music acts now make comparatively greater income from live shows and memorabilia - as neither is easy to copy and distribute online - the record store is turning into a venue for both. Events and the merchandising around them could turn into the core business, marking a shift towards what Joseph Pine calls the “experience-based economy”.

Record stores have run public signings and short promotional performances for years, but it was not a significant income driver during an era of mass-market vinyl and CD sales. The Virgin Megastore in London’s Oxford Street would often have launch gigs - or at least the opportunity to mime - for major releases in the heyday of the CD.

Stores such as Rough Trade East, which sits in the former Stella Artois brewery in London’s East End, have diversified into events. Entry to some of the gigs is through a wristband you can get when you buy the artist’s latest album, with any left over going on a first-come-first-served basis.

Rough Trade’s beginnings were not that dissimilar from John Lever’s. In their early days both also operated a record label - Lever started by providing Ian Hunter, who later joined Mott the Hoople, an outlet. Rough Trade launched bands such as The Smiths, although the shops and record label soon separated.

Rather than move back into the record-pressing business directly in the hunt for diversification, Rough Trade has started promoting a lot more than gigs. The shop teamed up with Technology Will Save Us to offer courses in basic electronics - building things from soil sensors to basic musical instruments such as the Lumiphone.

Chris Edwards



When you see an intriguing new title on the shelf of your local bookshop, can you resist flicking through it for a few minutes before going straight home and paying less for it from an online retailer?
The evidence is that many readers are following their wallets rather than their hearts, regardless of their affection for the traditional well-stocked bookshop that has long been a social hub for many towns.

According to the latest annual Books & Consumers survey carried out by Bowker Market Research, UK consumers bought 344 million books last year, with online retailers’ sales outstripping that of chain and independent outlets. But although that number was more than in the previous year, the amount of money people are spending on books continues to fall. Sales of just over £2bn in 2011 were down 9 per cent on 2008.

A rule of thumb for industry analysts is that the UK market follows where the US went three years ago. That suggests Britain is approaching the exponential growth that saw e-book purchases by US consumers rise from 5 per cent of the market to 13 per cent between October 2010 and January 2011.

That rate has slowed in the past year, but with electronic editions now estimated to account for approaching 20 per cent of US book sales, British shop owners are bracing themselves for a bumpy ride.

Their response has met with varied success. Google announced in April this year that it was shutting an e-book reseller programme for independent stores that it launched in the UK in October 2011, saying it had “not gained the traction” the company had hoped it would. The scheme, which saw Google acting as a wholesaler of e-books to retailers, will be replaced by an ‘affiliate’ programme that shows Google titles on a retailer’s website, but directs customers to Google to complete their purchase.

The Booksellers Association (BA), which represents more than 95 per cent of UK and Irish specialist booksellers and brokered the Google deal, doesn’t expect the move to be popular with members, who it says would receive a minimal return on sales when handing over customers. It is, however, in what it describes as “active discussion” with two other e-book platforms to help independents get into this market.

More positive news on links between tech companies and retailers came with the recent announcement that Microsoft is investing $300m in Nook, an e-reader developed by America’s largest bookstore chain Barnes & Noble. As part of the deal, which will bolster a rapidly growing part of B&N’s business, the Windows 8 operating system will feature a Nook e-reading application, creating an immediate competitor for Amazon’s Kindle and Apple’s iPad.

Probably the best known chain in the UK is Waterstones, with nearly 300 shops. As vulnerable as any retailer in its sector in spite of its size, it’s reluctant to discuss its strategy for maintaining a presence on the high street, but says it plans to be around for a long time and is investing in new systems as well as encouraging author events, improving its website and developing apps.

The advantage of a specialist bookstore over, say, a supermarket is that it’s the only place many titles will ever be stocked, and therefore the only place people can browse them, says Waterstones’ PR and events manager Jon Howells.

“Yes, some of those people will go on to purchase them online, but without bookshops showcasing titles - new and old - even those sales are at risk,” Howells told E&T. “A good bookshop is as much a part of its community as the school, the GP, sports club, media etc, and it is by making this community aspect more and more important that we will move into the future.”

Independent bookshops are also emphasising their importance to the community in their battle against digital-only competitors. The BA has launched a ‘Keep Books on the High Street’ campaign appealing to local and national government to make a special case. BA membership numbers reveal that the number of dedicated bookshops has fallen by more than a quarter in the past six years. Until 2011, new stores compensated to some extent for closures, but between January and September the BA reported only 23 new members compared with 50 the previous year.

What can be done? A recent survey of BA members found that the most significant concern that local and national government could address was rates, closely followed by parking and planning. It’s in these areas that the organisation thinks booksellers deserve a helping hand.

According to BA chief executive Tim Godfray, this isn’t just an issue for his members, but is about preserving the diversity of town centres. “Maintaining bookshops on our high street is vital to literacy, the future economic prosperity of UK plc and the cultural health of the nation,” he says.

Signs are that if bookstores can retain the loyalty of customers who want their books on paper, and come to terms with the costs of operating from town-centre premises, they won’t look all that different in the years to come. With emphasis on the things that competitors can’t do - social events, opportunities to meet authors, advice from expert staff - the bookshop of the future may well be one place on the high street that remains a refuge from technology.

Dominic Lenton



Once a common feature of city centres across the UK, the humble high-street fleapit has over the last couple of decades been bludgeoned into near submission by its air-conditioned aircraft-hangar-sized sibling, the suburban multiplex.

The independent cinemas that have survived have done so largely by offering specialist arthouse fare to a loyal niche audience. But the rapid development of digital projection and distribution since the turn of the millennium looks likely to tighten the stranglehold on independent cinemas further. In fact, Screen Digest predicts the vast majority of movie theatres will be digital by 2015. All this adds up to independent cinemas facing the tough decision of adopting new technologies they can ill afford or drawing down the curtain for the final time.

With the advent of broadband, piracy and video-on-demand services such as LoveFilm and Netflix, even the multiplex is starting to look like a wheezing, wizened has-been.

According to figures released by the Film Distributors’ Association, cinema attendance in the UK actually increased last year with 65.23 million tickets being sold. This was up more than three million from 2010. Prior to that, attendance had been on a gradual slide down from the previous high of 66.53m in 2007. Many industry insiders have accredited this blip to the release of several high-profile blockbusters using the newly revamped 3D technology.

But hailing 3D as the saviour of cinema seems short-sighted at best. Counting its often forgotten birth in the 1950s and the red and blue anaglyph glasses period of the 1980s, 3D has been pushed as the next big thing by the studios twice already. The glasses may be less conspicuous this time around, but the medium just doesn’t add enough to the cinematic experience, especially when the 3D effects are ham-fistedly trowelled on in post-production, as is often the case. In fact, figures for the start of 2012 already show a two million a month drop in attendance compared with last year. It seems the novelty of 3D is wearing off. Again.

One potential ploy to keep the big screen alive is to reinvent it as part of a larger spectacle. Secret Cinema in London has been hosting pop-up movie events that are part film screening, part club night and part carnival since 2007. Several other organisations are following suit with some independent cinemas, such as east London’s Troxy, also hosting interactive events. But while these are frequently well attended, it seems the appeal for such things is unlikely to extend to the mainstream.

Elsewhere, with 4G video streaming already a reality for consumers in the US and the UK 4G spectrum auction scheduled for late 2012, it could be the small screen that ultimately strikes the coup de grâce on its less technologically agile cousin. Somewhat ironically, cinema may well see a triumphant return to the high street by 2020, though not as the main attraction but on the phones and tablets carried in pockets, bags and purses of those there for other reasons. 

Jason Goodyer


Post office

Depending on who you ask, post offices will either disappear from Britain’s high streets in the next few years, or they will bounce back thanks to a revolutionary new business model.

But there is one thing upon which everyone agrees: they won’t remain as they are today. The post office is simultaneously one of the most loved - and one of the most irritating - institutions in modern Britain. Surveys have shown that more than 90 per cent of us trust our post offices, an approval figure which major retailers could never hope to match.

But ask consumers about their experience of visiting a post office and they more than likely focus on inconvenient opening hours, long queues and drab interiors.

That is one reason why we’re making fewer visits. In 2000, the Post Office had around 28 million customer visits each week. By 2010 this had fallen to fewer than 20 million.

The other major reason for this decline is the rise of online retailing. Today you can do everything from buying stamps to ordering a tax disc for your car via the Internet, at any time of day, without having to leave the comfort of your home. Pensions and benefits are paid directly into the recipients’ bank accounts. The one remaining product available only through a post office is the good old postal order.

While about 40 per cent of over-55s use their post office weekly, less than 20 per cent of those people aged 16-24 do so. The resulting fall in revenues means the Post Office has been a loss-making concern since 2000. This trend, says consultant Graham Whitehead, only leads one way. “I see the village post office going, I see the high street post office going, very similar to the way the banks went,” he predicts.

Whitehead joined the Post Office in 1968 and worked for the company in all its forms for more than 39 years, leaving BT five years ago. Today he runs BowZer Productions, a futures consultancy company.

He gives small village post offices three or four years at the most. “If you can’t keep pubs open, who’s going to be interested in post offices?”

There has been a paradigm shift within a generation of the Internet arriving in the early 1990s. “Will people still be sending stuff, with stamps for letters now costing 50 or 60 pence? By 2020 it’s likely to be about £2 a letter.

“Email’s cheap. All the old people who were worried about email, in eight years quite a few of them won’t be around anymore. The young kids at the moment can’t believe that you wrote something in longhand, folded it and put it in a little pocket.”

Whitehead can see the likes of Tesco and Sainsbury’s stepping in to take over some of the core functions of post offices. Got a parcel to post? Print out the postage online and drop it off at the supermarket for posting. At the same time, you could pick up the parcels you ordered on Amazon the day before.

Post offices might survive in one of two ways, he suggests. The first is being run by community volunteers, rather like some libraries that would otherwise have closed. “That’s eminently possible, on the grounds that it has almost zero cost.”

The other? “The only way you could probably keep them going is to do what McDonald’s do - it’s a franchise.”

Whether post offices do survive may depend on the ability of the coalition government to keep its promises. A few months after it came to power in 2010, the government set out its stall in a document, ‘Securing the Post Office Network in a Digital Age’.

This lambasted the previous administration’s two closure programmes, which saw 5,000 post offices gone forever. “There will be no programme of closures on our watch,” wrote Business Secretary Vince Cable and Edward Davey MP, then minister for postal services.

“Instead, the Post Office will be reaching out to new customers and winning back those who have drifted away, refurbishing its branches, extending its opening hours, reducing queues, and developing its presence online.”

This brave new world, backed by £1.34bn of Treasury money, is about to go live. Today there are about 11,500 post offices in the UK, 10,000 of which are sub post offices - run as independent businesses. A massive restructuring programme will see 4,000 town and city centre branches become main Post Offices, with a further 2,000 sub post offices converted into Post Office Locals.

The main branches will retain a traditional standalone counter service. They will be modernised, equipped with new technology such as fast self-service machines, open for longer and offer a much bigger range of products and services.

The locals will be post offices operating within other stores, dishing out core post office services from the same counter as you buy your baked beans.

One of the statutory duties of Consumer Focus is to monitor the number and location of post offices and to promote the interests of consumers in relation to the network.

Andy Burrows is head of post offices at Consumer Focus, and he believes these changes could mark a turning point. Post Office Locals will be more cost-effective as, instead of being run by a sub postmaster whose salary is paid for by Post Office Ltd, they will be run by a franchisee within an existing business.

“That could be in a petrol station, or it could be in a convenience store - it could be in somewhere like a garden centre, and we’ve even got a few examples of more left-field locations like vets for example,” Burrows says.

So you could potentially send a parcel while you wait for Tiddles to be given his de-worming tablets.

But offering a cheaper, more convenient service is only half the story. Once that’s sorted, “the challenge is to re-invent what post offices do and to start offering more, and different, products and services that respond to changing consumer needs”.

Post Office Ltd has identified two main growth areas. The first is banking. “The present government has ruled out the Post Office becoming a fully-fledged bank in its own right,” Burrows says. “But through its current arrangements with third party providers, there is scope to rapidly and quite significantly increase the range of banking services you can access at a post office.”

The other growth area is what is known collectively as the “front office for government”. Some local authorities already allow citizens to pay their council taxes at post offices. Other uses could be identity verification - you take along your ID to be checked and scanned at your local branch giving you access to various online State services or benefits.

Pilot projects have identified consumer concerns about the new-style post offices - issues over privacy and security, for example. Consumer Focus wants to see these problems addressed, and plans put in place for better staff training. It will also be monitoring “the long-term viability” of the new model.

Generally, however, Burrows is positive about the opportunities afforded by the restructuring. A local post office incorporated into a shop with longer opening hours could let you pick up online orders in a much more convenient way than queuing in a Royal Mail sorting office, for example.

“The vision is there for a more sustainable and affordable network in future and for us to firmly move beyond the kind of narrative of managed decline of the last ten or 15 years,” says Burrows.

“If the vision is delivered, then the Post Office can have a bright future.”

Chris Titley

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