How the recession turned Margate into a ghost town

River Island has gone. So has M&S. And of course Woolworths. In fact, shops on Margate's high street are closing at a faster rate than anywhere else, it was revealed this week. Michael Savage finds out why

In times gone by, a hot summer's day in the school holidays would have had retailers on Margate's high street rubbing their hands with glee at the prospect of a steady flow of shoppers making a trip to the town centre, just a short walk from the seaside resort's sandy beach.

But the benign conditions bring few shoppers to the town centre now. A stroll down the main strip quickly reveals why. Clusters of empty shop facades outnumber the surviving businesses in places. Faint lettering has left a reminder that the likes of River Island and Marks & Spencer have moved out. A Woolworths remains unoccupied. An array of charity shops and pound stores has filled some of the vacated units, the only outlets seemingly able to attract the dwindling numbers of customers.

"It's embarrassing," says Pauline Dunnill, owner of Pauline's Café at the top of the High Street. "I get people coming in here asking me where all the shops are. I have to tell them, they've gone. There aren't any. You can see the High Street's in trouble. It's not unusual to see the bailiffs here." Her resilient café sits amid a graveyard of failed stores. "This lot managed to get out just before the bailiffs arrived," she says, gesturing to the now vacant café next door. The Polish convenience store across the road fared no better. "That closed down after no time at all," she says.

Even its staunchest defenders have to concede that Margate is suffering from an acute case of high-street decline, a diagnosis borne out by the statistics. It was found to have Britain's worst rate of shop closures this year, with one in four shops closing, according to figures released recently by the Local Data Company (LDC). However, Margate is by no means alone. Three times more shops are now closing across the country's town centres than did last year, with 19,000 shops shutting so far in 2009. Most of those were independent stores.

Pauline has managed to survive by remaining popular with local regulars, but her business has not gone unaffected. She has also been hit by the credit crunch after her bank withdrew a £4,000 overdraft facility. While her utility bills have increased by 30 to 40 per cent, sales are down 30 per cent on five years ago. She has had to let two members of staff go, now works seven days a week and has not taken a holiday in four years.

While shopkeepers admit that the recession has not helped, the overwhelming feeling is that the town's problems cannot be blamed on the global financial crisis. For Margate, like so many other town centres across Britain, the onset of the economic crisis was simply another black cloud contributing to a perfect storm hitting the high street. The impact of a new out-of-town shopping complex, Westwood Cross, is the principal gripe. "They've encouraged all the big shops to head there," muses Steve Duggan, owner of SJ Shoe Repairs, as he cuts a pair of keys. "If they'd got them to come here, it would've been a different place. Why would you come here now? If Primark disappears, too, you may as well blow the place up and be done with it. Ask anyone. That's the way it's gone. Next door's changed several times. It was a clothes shop, then it was a pound shop. Now it's a charity shop. And that's what the rest of Margate's eventually going to be. Charity shops."

The lack of parking, higher bills, the effect of internet shopping, and the closure of the Dreamland amusement park are other factors that crop up as contributing to the current struggles. Business groups have told The Independent that new rules planned by the Competition Commission could put the final nail in the coffin of the high street. The commission believes its new "competition test" will save consumers money by stopping a supermarket dominant in an area from opening further stores, while boosting competition and forcing down prices. However, small traders argue that they will be squeezed even further as a result.

"Having a different big player is back to square one, as far as we are concerned," said Stephen Alambritis, chief spokesman for the Federation of Small Businesses (FSB). "What we need is a test put in place to decide, whenever a major supermarket wants to open another big store, what impact it will have on the independent business sector. Otherwise, our high streets could be finished. We want to be able to go to our high streets and still have some choice, other than a choice between a selection of the four big supermarkets."

Despite warnings, the commission has said it will push on with its plans. Meanwhile, traders in Margate see little sign of anything changing in the town centre soon. "Every few months," says Pauline, "I get a glossy a magazine, explaining how they are going to redevelop Margate. There's plenty spent on studies, but nothing seems to happen."

However, there are attempts to try to counter the high street's forlorn appearance. To lessen the visual impact of rows of vacant stores, the local council has installed artworks in some of the windows and painted the shop fronts bright colours. Though many locals are nonplussed by the art, there is general consensus that the sight of an odd, papier-mâché cup-cake is preferable to the eyesore of a boarded-up shop fronts or broken windows.

It is an approach that has impressed the Government, which announced this week that it was giving 57 of the worst-affected towns £50,000 each for similar projects. "There is no need to see unused shops on our high streets going to waste, especially when we know that it doesn't take a lot to turn a vacant shop into something beneficial for the community," said the Secretary of State for Communities, John Denham.

Despite the positive public response, the handout is little more than a temporary sticking plaster, aimed at addressing the bleak aesthetic created by the economic destruction wrought on Britain's high street, rather than tackling its problems. Within local government, though, there are telling signs that some have begun to understand that these projects my not be so short term. Council workers have begun to talk about preparing the town centre for an age in which it is not solely a shopping centre at all, but one in which former stores are used as university classrooms, community centres or art installations.

The end of the retail-dominated high street suddenly looms on the horizon. The first signs are already here. Housed in the building formerly occupied by Marks & Spencer, sitting uneasily between a pound store and the empty shell of a bygone River Island, is the Turner Contemporary Project Space. It is currently home to an exhibition of art by local artists. It, too, will close in September, though the council promises an "exciting project" to replace it.

Together with the construction of the Turner Contemporary gallery on the harbour and an attempt to attract higher quality shops to the old part of the town, the projects form part of a plan to relaunch Margate through the arts. Dreamland is also set to reopen by 2012 to help attract day visitors back from London.

"We think the way forward for Margate is to build on its arts credentials and its cultural and social history, to try to create a boutique type of offer that you will not get in other towns or the out-of-town shopping centres," says Derek Harding, head of the Margate Renewal Partnership, spearheading the regeneration of the town. "It does need to function as a local centre. But the bottom line is that national chains and the type of retailers you expect in a town centre aren't attracted to Margate. Changing that is a long-term project. It's been a difficult path... But we are now beginning to see big projects take off."

His optimism is shared by marketing agent Lucy Borda, 30, who said: "I originally come from London and have seen what happened in the Docklands, which saw a place written off by many people totally rejuvenated. I think Margate will be like a phoenix from the ashes. There are lots of people trying to help it. I love Margate and there are areas that are recovering, like the old town."

The notion that the hearts of British cities may no longer be synonymous with the bustling hubub of trade is a radical one, which many locals struggle to understand. "Now we're going to get the Turner thing," says Rory McNally, manger of a local fruit and veg store. "So it'll be art one end, and charity shops the other. They don't exactly go together do they." There may be fresh ideas here, but the battle for Margate's future looks set to continue to be a painful one.