02-07-2013, 12:34 PM
Rural retailing: a sector in decline?
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Abstract
Purpose – The paper reviews dynamic forms of rural retailing, by location, that have innovated through a mixture of actions leading to growth, adaptation, diversification and differentiation.
Design/methodology/approach – Reviews relevant academic literature and draws upon contemporary policy-related material that details recent innovation within the sector. A rural retail typology by location is presented: retailing within market towns, village shops and stand-alone retailing forms (farm shops and speciality rural retail outlets).
Findings – Since the nature together with form of what characterises dynamic and innovative rural retailing differs by location, the typology is based on the above schema. First, market towns have used growth and differentiation opportunities as strategic foci. Secondly, innovative village shops have applied strategies that seek to counter their structural weaknesses, harness the community and yield new revenue streams. Thirdly, the manner in which stand-alone retailing forms, such as farm shops together with speciality rural retail outlets, have grown and developed is reviewed.
Introduction
Rural retailers are disadvantaged due to geographic isolation, unfavourable cost structures and restricted population catchments (Figure I). Consequently, trading conditions may be inefficient and pressured. Since rural retailers can be social hubs fostering the community, the sector’s contraction (NEF, 2003) has impacted negatively. Diversity and heterogeneity characterises rural areas. Whilst associated with economic decline, low incomes and poor service provision, any analysis should avoid generalisations (Hodge and Monk, 2004). Notwithstanding geographic isolation, there are varying levels of remoteness with less remote districts experiencing leakage to larger retail centres. Secondly, certain retail forms, such as farm shops, have grown and differentiated with innovation being juxtaposed against more marginal sub-sectors. Stereotyping the sector is erroneous.
Rural retailing
Defining ‘rural’ and ‘rural retailing’
Amongst the multitude of rural definitions, there are common variables: the number of settlements below a certain threshold, population density and finally, 'non-urban' areas (Shucksmith, 1990). Rural areas are those of a settlement size of less that ten thousand, which incorporates villages, hamlets and isolated dwellings (Countryside Agency, 2004d). Although this defines the parameters, differing levels of remoteness and peripherality from large population concentrations are not accounted for. However, the Scottish Executive (2002) has distinguished between accessible rural areas – defined as within 30 minutes drive of a town above 10,000 – as opposed to remote rural areas. This only begins to capture variations.
Scale of rural retailing
Dawson (2000) commented on the inadequacy and gaps in retail data, whilst Smith and Sparks (2001) highlighted inconsistencies that make data interpretation problematic. Hill (2003) expressed dissatisfaction with the quality of rural statistics and data. Notwithstanding these limitations in available data, rural services across the UK have declined and contracted with net closures being the on-going pattern for village shops (Countryside Agency, 2005). Parallels can be drawn with the US where an increasing number of rural enterprises fail to develop or continue trading (Miller, 2001), whilst Home (2002) indicated that the number of rural stores in Finland in 2001 was only a third compared to 1985.
Trading conditions and customer trends
Bates (1976), Jones and Oliphant (1976), Dawson and Kirby (1979) and Dawson (1983) highlighted the generic problems of small shops. These have been attributed, first, to inadequacies in the trading environment such as economic and social change, competition from multiple retailers and locational difficulties. Secondly, there were a series of identified inadequacies in the retail form: operating costs, investment capital availability and supply problems. Finally, a lack of management expertise was identified as a key constraint. In addition, the Rural Shops Alliance (2005) discussed the costs of regulatory compliance that burdens and inhibits rural retailers.
'Localness' and distinctiveness in rural areas
Notwithstanding these trends, there are positive external drivers. By capitalising on the distinctive and valued characteristics of rurality connected with amenity and identity, a series of viable business opportunities have emerged (Anderson and McAuley, 1999). Consumer interest has focused on using the quality and 'localness' attributes of rural products as marketing assets (Morris and Buller, 2003), while Burnett and Danson (2004) linked this form of diversification with distinct and specific representations of local culture. Weatherell et al. (2003) noted greater interest in locally derived food produce. In targeting segments with the necessary inclination, mobility and discretionary spend, there has been a corresponding growth in retail enterprises.