Johnny Marr: Blame landlords --- not just the internet -- for the demise of record stores

"To me a record shop isn’t a “specialist” shop, or a thrift store either, it’s just a kind of shop, a very important kind of shop.

Record shops were meeting places where you learnt about music, clothes, style and clubs. Everyone in my town who was interesting was in the record shop at some point.
There’s so much talk about the death of vinyl versus the download boom as if we all fled away from records because we love our iPods too much, but that isn’t exactly the whole story.

One of the main reasons why vinyl sales have declined is because when we walk down our streets we don’t see any. The greed of local councils and lease owning landlords has meant that our towns and cities have replaced the record shops (and clothes shops) we all liked with over priced sandwich shops and Bistro Bars.

All through the nineties stores that were rented and run by enthusiasts of say, photography and cameras, as well as music, got totally priced out of their premises and livelihoods, and our culture, by councils and landlords with The Next Quid and Starbucks Dollar in their eyes, it wasn’t all the fault of The Megabyte and Pixel, and now what’s left ?, high streets that are so expensive to rent that only the richest, and therefore blandest of commercial giants can afford to ride out the recession there; bad news for us, especially if you want a great piece of cultural art, which is what a record actually is."

http://www.slicingupeyeballs.com/2014/04/19/johnny-marr-on-the-loss-of-record-stores/

 

I also blame the shunning of the CD...forcing feeding vinyl in a digital age is bound to fail...I've been to few record stores that treat the CD like an enemy instead of a friend...also Landlords pay high property tax therefore brings the burden to the renter...it goes deeper than the "greedy landlord" ...

 

"However the greed was also at the record companies who vastly overcharged for compact discs long after the cost of pressing dropped to a minimal level. And also the death of the specialty labels which “nurtured” new bands while they found their voices – greedy corporations bought up all the labels they could and starved out the others. A “Greatest Hits” cd might outsell a new album by a factor of two or even ten, but if there are no new albums, where do the Greatest Hits come from?"

 

"He’s absolutely right, at least for record stores in urban locations. A lot of record stores even into the early 00s were slightly profitable or breaking even in the face of internet downloading and the big box retail spaces, but then landlords saw they could make more money by letting a Nike store, high-end boutique, or Starbucks move in, so they would jack up rents or cancel leases. It’s difficult for a small business to afford a high-traffic location in the commercial district of a city nowadays; I wonder how many of the good record stores that have lasted own their buildings."

 

He's got a point. In the UK at least, how many more Costa Coffee, Pret, Starbucks, Cafe Nero do they need? I'm a Londoner born and bred, and I remember the days when the record stores were in some of those prime high street addresses.

 

yea like new vinyl is a bargain, eh? yea right...if ever a record store would be successful with a large used CD section it would be today...

 

That is why Marr mentions local councils, alongside landlords, as being equally culpable. In Marr's hometown of Manchester, where he still lives, it is the city council that sets Council Tax (i.e. property tax) rates.

Marr is right, of course, and the problem in Britain goes beyond small business. Affordable housing is a massive social issue, since Thatcher's government facilitated the transference of council-owned residential properties into private ownership.

 

It is not only about records. High streets in France and Italy are full of local independent shows, particularly food shops, that tell the story of a place and make each town different. British high streets are corporate clones, payday lenders and betting shops.

 

He re in Cambridge, there was a big HMV in the Lion Yard shopping centre, but it closed, with accusations it had been forced out.
http://www.cambridge-news.co.uk/Home/HMV-forced-out-of-Lion-Yard-shopping-centre-14052012.htm

There seems to be a drive by the owners of the centre to push it more upmarket, and music retail doesnt bring in the right sort of customers.
That the site where HMV was, has since become an expensive jewellers says it all.
HMV has since reopened near the Grafton Centre, which is the more working class shopping area, with a Poundland nearby.

After HMV closed, a small independent called Head Music opened opposite to where HMV previously was.
This seemed to be doing well, and had a great vinyl selection. It also closed, and again there is the implication that it wasn't for lack of custom, but more that their image doesn't fit.

http://www.cambridge-news.co.uk/News/Cambridge-record-store-to-close-13022013.htm

The unit Head music were in has remained vacant since they closed. That, to me, sends a much worse message than having a thriving music shop. But, then, if head were still trading, and RSD bought out a long queue of ugh ugh, record collectors, imagine how downmarket that would make Cambridge look!

 

Sure, the rise in rental yields in city centres has pushed independent record shops out, but I don't see why we should blame landlords. If a business is running on such thin margins that it can't afford a market rent, what do you expect landlords to do about it? Charge lower rents? Why would they do that?

Given that record shops can more easily operate by mail order these days, the sting had been taken out of having lower footfall ... especially since music buying has become more of a niche and casual shoppers are less likely to buy music in the first place. That's just the way things have gone. If people want record shops in their local mall, perhaps they should band together and subscribe to cover the rent. Shaking their fists at coffee chains is pretty pointless.

If you think that retail rents are the problem, consider HMV which presumably pays the same rent but which has given a declining proportion of that space to music. It's not the landlord asking for that.

 

Its not just record shops. Any shop is vulnerable. Its obvious that landlords will want to charge the most they can get. But the market is skewed by the presence of several big players, who are multinational, and who pay no tax: Starbucks, Tesco. Landlords know that Tesco and Starbucks can subsidise a failing store, by cross funding from across their big, non tax paying empires. This makes for an unfair situation, where eventually, we have only Starbucks, Tescos and a few others remaining.

In the case I quoted here, a unit has been empty since february 2013, so obviously the rent rise did not work. It pushed out a shop that was doing well. It does look like the shopping centre in the centre of cambridge has shops chosen that reflect the desired image, rather than ones who can simply pay the rent.

So, no, I don't blame landlords per se. I do blame The current government, and its predecessor, for not tackling tax avoidance by these big multinational companies. But then these companies have pretty much captured the governments now, so its unlikely anything will be done.

 

There seem to be two problems with that story: if the shop was doing well why couldn't it cover the rise in rent and what sort of landlord kicks out a tenant so that they can charge higher rent and then leaves the property empty? You realise that the landlord is paying business rates on that empty shop?

Most likely what happened is that the lease had been running for a few years and the landlord asked for a market increase at the renewal date and the record shop owners wouldn't (or couldn't) pay it so they decided it was time to move out. It's entirely possible that the landlord was asking for a lower-than-market increases or had previously given a renewal without asking for an increase ... because the reality of retail leasing is that landlords don't want to lose stable tenants. The idea that landlord kick out paying tenants in the hope of getting a Starbucks is pretty far-fetched.

 

It kind of is an enemy these days. Shops can make a decent profit on a record but not enough to stay in business on a new cds alone. So on new product they need a healthy percentage of customers buying vinyl to survive. They would like you to buy the record. Stores can do well on used cd's- but the artists, of course, do not do so well on those.

There is always a rub. Remember those commercials where they say "We eliminate the middle man, and sell factory direct to you" Well that's great for some but not if you are the middle man.

 

The shop was only there a few months. If you read the link it says the shop and landlord could not agree on tenancy. Presumably the landlord wanted more money than the store wanted to pay. It is a tiny unit, and was previously Harpers Bazaar, selling gizmos and cheap toys. Obviously i have no inside knowledge but It does from the outside look like the landlord preferred to have the unit empty, rather than accept a lower rent. Head music have other stores, and seem to be expanding. This is not an old shop on its last legs.

 

I have to say the main reason given by record store owners (here in Dublin) for closing down was the 'rent' they had to pay. Not low sales, not downloads but rent! Every one of them said vinyl was their big seller, some of them didn't take secondhand CDs but would always buy secondhand vinyl!

HMV reopened their main shop on Record Store Day (19th April), didn't partake in the Record Store Day event by stocking RSD items, but instead were very sneaky but reducing all their vinyl stock by 40%, the place was packed. It hurt the independent traders but did they care, like hell they did! I went in yesterday, the day after RSD but their vinyl racks were still 'full', serves them right for trying to pull a 'stroke'.

JG

 

Maybe the CDs are a Frenemy?

 

Not wishing to be pedantic but I'm going to be. In England local councils only set property taxes for domestic properties, non-domestic property taxes (aka business rates) are collected by local councils but set by central government who set the business rate multiplier which is then applied to the property's rateable value (set by the Valuation Office) . See here for how non-domestic property taxes in Britain are set: https://www.gov.uk/introduction-to-business-rates/how-your-rates-are-calculated

Obviously none of the above helps the independent record store owner but if we are going to apportion blame for the high level of business rates let's blame the correct culprits!

 

The shop was only there a few months. If you read the link it says the shop and landlord could not agree on tenancy. Presumably the landlord wanted more money than the store wanted to pay. It is a tiny unit, and was previously Harpers Bazaar, selling gizmos and cheap toys. Obviously i have no inside knowlIt does look like the landlord preferred to have the unit empty, rather than accept a lower rent.

 

Reading this reminds me a few years ago of Spin-More records in Kent, Ohio. The buildings owner told Phil (Spin-More) that he could make more in rent by leasing the space to a Jimmy Johns sandwich shop instead.
So after 20+ years, my favorite local record store was no more.

 

I don't think they do. Business rates are set by central government, which is why businesses have been complaining of late; the government hasn't actually recalculated the rate despite the fall in property prices.

 

I have been collecting and buying records for 40 years. I am also a niche retailer in London (not records). It is clear to me that if done properly then small record shops can do very well. By that I mean that the owners will not become rich but should do well enough to make a decent living. I regularly visit record shops which look busy and the sales teams seem busy. Some examples include Reckless Records, Flashback Records, Rough Trade.
What do I expect from a small specialised business:
1. Good and constantly updated stock
2. Reasonable prices - not necessarily cheap, but reasonable
3. If second hand, then accurate description of the condition. Goods which are not in good condition should be cheap and put separately in a bargain box, not mixed with good quality stock.
4. Ability to listen to samples on the premises
5. Knowledgeable and enthusiastic staff
6. Goods that are organised so it is easy to find records easily by genre or alphabetical. Messy and dirty shops are, in my experience, exciting for some people who seem to enjoy looking through mountains of rubbish, but for me this makes browsing a dirty and unenjoyable chore
Location - within reason this is the least important factor. I am prepared to travel to a good shop. By definition a niche shop relies on customers who specifically look for this niche product. Such people will make more of an effort than the casual shopper. So the argument about high rents in city centres does not hold. Of course, the shop owners must do their research and find locations where there are potential customers of their product. So in London successful record shops are located mostly in secondary locations in Soho or Islington. In New York City many have relocated to Brooklyn (Williamsburg and Greenpoint). I was in New York last week and some of these record shops are in what looks like cheap rental locations which were sometimes hard to find, but they were still very busy and had great stock.
So, I personally think that landlords and council rates have very little to do with the success or failure of record shops. If a business does not succeed it is either because there is no demand for the products they sell or because the owners have not done a proper business plan

 

As someone who has had shops and has also made enquiries about rents and rates in the last 18 months I think Marr is pretty much spot on, to rent any premises near me will cost so much that you will immediately be forced above the VAT threshold and that is an additional burden that I've seen kill record shops. Landlords seem to be happier to have empty premises than rent them at a lower, but still fair rent, in the UK many retail properties are now owned by big companies who have no interest in communities and see their properties purely as investments, not the very fabric of our towns and cities. We all know the problem, generic high streets full of charity shops, coffee shops, fast food takeaways, estate agents, bars, betting shops and baby supermarkets, every street made from the exact same kit of parts and yet for all the talk nobody in power has done a thing to stop it.

Yes, there are other issues specific to records, books or clothes, but they can be overcome, though only if you can actually afford to open a shop in the first place, the market is there, the potential shop owners are there, unfortunately unless a lot of things change the vinyl revival will hit the buffers.

 

As well as high-priced coffee shops, big name fast-food outlets, there is an inordinate number of cell phone gizmo providers.

In this backwoods part of the world, pet food supply outlets also proliferate.

 

Johnny Marr must be living in another world. The reason why 90s albums are so expensive on vinyl is because not many were actually sold. People shifted to CD. Chain stores such as HMV and Virgin were able to offer sales of popular titles that independent stores couldn't match. Then came along the internet. Not only could you download albums for free, but giants such as Amazon could offer you essentially any album at below competitor's prices. The resurgence of vinyl is about the only thing keeping many of the remaining stores open. Yes, rents and rates play a part, but only a small part. Bookstores have similarly disappeared (which reminds me, the UK has some of the smallest houses in Europe and people are pretty minimalistic these days; another reason why people are discarding physical records, CDs, and books).

 

I can name three of the best record shops I've ever visited and all three of them were trading very well and closed because the landlord thought they could get huge rent increases, something the businesses couldn't afford, in one case the premises is still empty more than a decade later.

It's not about whether shops can survive on their own merits, it's about them not even getting the chance because almost nobody can afford to open a specialist shop any more.