Bill Gleeson: City centre shops in fear of Grosvenor

Feb 20 2008 by Bill Gleeson, Liverpool Daily Post

A GROWING number of Liverpool’s independent retailers fear that Grosvenor’s new £1bn shopping centre could pose a huge threat to their trade.

As a result, they are considering forming their own trade group to represent their interests.

The feeling is that current trade groups, such as Liverpool’s Business Improvement District and the city’s Chamber of Commerce, fail to do so, presumably because they are too cosy with Liverpool City Council.

The council has promoted the Big Dig, all the roadworks we have seen in the past two years, which have hurt many retailers in the city. It has also promoted the construction of Grosvenor’s shopping development, which will add to their woes once it opens its doors for business. Grosvenor’s 180 new shops are bound to take trade away from some of the city’s traditional streets such as Bold Street.

To mark its opening, Grosvenor will spend large sums on marketing its own development. And why should it not? The Duke of Westminster and his fellow investors are here to compete, not be a friend to all and sundry.

However, that means that the existing retailers need to fight back to try to retain trade. The big retailers, such as Marks & Spencer, can utilise their own budgets and national resources, but smaller businesses are going to have to band together and act for themselves by organising their own advertising and promotional activity. Otherwise the Duke’s big steamroller will flatten them.

PHEW, what a relief! HM Treasury, the Bank of England and the City were awaiting Barclays trading results yesterday with a deep sense of trepidation, but they needn’t have worried.

The relief comes despite a whopping £1.6bn write-off for bad debts arising from the problems with the sub-prime home loans market in the United States. It’s a big figure, but nothing like as bad as it could have been.

Barclays, it seems, has heeded the call of Mervyn King, the Governor of the Bank of England, to come clean about the full extent of their losses and therefore yesterday’s write-off should be the last of it.

The City’s relief was tangible. Barclays’ shares rose 5% on the news. And little wonder they shot up. Barclays, despite the write-off, still managed to report £7bn pre-tax profit, the sort of figure that a year or so ago would have had the lefties up in arms demanding windfall profits. Strange, those voices aren’t so loud presently. Maybe they’ll be back again once the current fears have subsided.

Barclays results put the impact of the credit crunch in context. Barclays’ losses, while painful, are far from critical. Hopefully the same is true for the rest of the UK banking sector. There’s a big benchmark to come today, when Alliance & Leicester reports its figures. Some analysts have suggested it could be badly hit, but today’s figures should tell us for certain.

But the fact British banks may have escaped lightly doesn’t mean we are out of the woods yet. There could still be more ambushes lurking in the US in the months ahead. The current uncertainty and stock market volatility is going to remain with us for a few more months at least.

It’s as well that Barclays’ results were good and the bank appears safe. Imagine the hundreds of billions that it would cost if UK taxpayer had to bail it out. It’s been expensive enough with Northern Rock, a relatively small mortgage lender.

It’s a mystery to me why the Government has helped the Newcastle lender. It was a big mistake.

It should have been allowed to go to the wall, or at the very least sold to the private sector.