Record Shops Facing Tipping Point in 2019…

The Vinyl Revival may have seen an increase in record shop numbers, but record buyers can ill-afford to take their local record shops for granted…

In case you have been distracted by other, less important political issues such as Brexit and volatile US presidents, it won’t have escaped your notice there has been a miraculous revival in the number of record shops in the UK. Just ten years after supermarkets, the internet and offshore-VAT loopholes combined to deliver near-existential blows to independently owned stores across the nation, over a hundred new record shops have opened their doors.

And what a good news story this has been. Having plummeted from 2,200 shops in the 1980s to just 269 in 2009, record shops were in shorter supply than long service employee awards are in Donald Trump’s White House.

In 2008 record distributor Graham Jones wrote a book, “Last Shop Standing: Whatever Happened To Record Shops?” which highlighted the decline. He talked to fifty shops to discover the stories behind their troubles. Jones spotlighted some vibrant businesses and showcased how they stayed in business during tough times.

Fast forward ten years, and a combination of factors including Record Store Day and the scrapping of the VAT loophole (low value consignment relief) from offshore sellers levelled the playing field a little and sparked a Vinyl Revival, leading to 40% growth in the number of shops.

Jones has recorded this in a new book, “The Vinyl Revival and the Shops That Made It Happen” which tells the story and acts as an indispensable handbook to the UK’s record emporiums, allowing intrepid vinyl-heads to find a record shop in every corner of the UK. Organised by county, it lists pretty much every independent record shop in the country, tells you who runs it, what their story is and how they came to be a record store owner.

The stories vary from those who gambled their redundancy money on a new shop, to quite a few former music industry veterans chancing their arms at retail as the music industry shrank.

It also gives hints and tips to look out for. There’s a shop in Hampshire that sells ten singles for £1. There’s a shop in Essex that runs a record fair on the first Saturday of the month. There’s a vegan and vinyl shop, coffee and vinyl shops, a wine and vinyl shop, a record shop with a bourbon bar, a pie, mash and vinyl shop. There’s a shop that began as a vintage hifi shop and began to sell records to go with the equipment. In Kent, there’s a shop with an original sixties listening booth, and comics for the kids to read while parents look through the records. In East London (where else?) there’s a record shop where you can play Hungry Hippos and learn to make pasta. Yet another will produce a rubber snake whenever anyone asks for anything by Whitesnake, saying “will this do?”.

The point being, that successful record shops become a part of the community that each serves, and do whatever it takes to meet the needs of their customers, whether they be hipster millennials or wine-connoisseur baby boomers. Or even Whitesnake fans.

So all good, right?

Well, not quite…

It may not feel like it after the global financial crisis in 2009, but the last eight years have been pretty benign from a business and economic point of view. There has been steady economic growth, with the economy proving resilient despite what the politicians throw at us. Record shops have been able to proliferate.

However, the UK’s high street is suffering from a severe decline in shoppers and shops alike – 20,000 retail jobs have been lost in 2018 alone according to recent reports – and the economy is “late in the cycle” as economists euphemistically state (ie “a recession is overdue”). We can see this through the woes of New Look, M&S, Toys R Us, House of Fraser, Debenhams, Coast, Maplin, Prezzo and many others.

And that persistent threat – the internet – continues to take a brutal toll. Internet sales have continued to grow at the expense of footfall in the high street, which means fewer people going into town centres and more people buying things online. Shops have high fixed costs: staff, rent and rates, the latter of which has risen significantly in the last couple of years. Fewer passing shoppers usually mean lower sales, and growing input costs (a weaker pound makes oil dollar-based vinyl more expensive) means either prices have to rise or profit margins get squeezed.

Add to that the collapse in CD sales, as digital income from streaming subscriptions, downloads and video advertising revenue now outweigh income from physical sales, and record shops are now less important to the record industry than digital channels.

In the US some major retailers (Best Buy) have stopped selling CDs altogether or will only stock them on a “sale or return” basis (Target), which means they don’t take the risk on the stock and can return unsold items.

That favourable arrangement is not something independent record shops enjoy in the UK, meaning they have to pay for every record or CD they keep in stock, which ties up cash. And if your cash reserves are spent on buying stock that stays on the shelf, a bad month of sales can mean you don’t have the cash to pay wages or rent, and that can lead to the failure of a business.

Graham Jones also warned Music Week of a threat from within the music industry:

“Over the past few years some record companies have started to offer exclusive vinyl albums that can only be purchased through their websites” Jones explained,

“It is beyond frustrating for a record shop when a customer asks for an item that is only available from the record company direct. Even worse, the shop must direct the consumer to a company website that is effectively harming their business.”

It feels rather miserable to say so, but all the signs are there to suggest 2019 could well be a tipping point: the year we see a return to declining record shop numbers. Anecdotally, record shop owners are reporting a very mixed 2018 – a good Record Store Day, but a sluggish year in general. Replayed Records in Weymouth have announced they will be closing due to business conditions and there may be more to follow.

So this is now urgent.

Here’s what we need to do:

• if you are a shop owner, you need to see what your competitors across the country are doing, and learn from their successes. Selling slow-moving stock online to generate and conserve cash now looks essential. Graham Jones’ book might well give you a few other ideas…

• And as a consumer, if you live near a local record store, please make sure you don’t buy that big Christmas vinyl/CD box set from Amazon unless you can help it. Even if it means you save a few quid.

Because what’s a few quid compared to the joy of having a vibrant, local record shop being at the centre of your local community?