Still profit, not doom, on High Street

Economy: Most retailers are cautiously optimistic about consumer spending as the Christmas trading period begins

THE KENTISH town of Gravesend, which sits unobtrusively on the south side of the Thames, is not feeling as funereal as it sounds.

The cold wind which seems to start in Siberia and whips up the river from the east has so far failed to bring with it the economic ills of Russia, Asia - or those nearer to home.

Earlier this week the Office of National Statistics showed that unemployment had increased on two key measures for the first time in six years. The Bank of England, at the same time, gave an optimistic forecast that Britain should avoid slipping into recession. But many remain unconvinced.

Gravesend is as good a place as any to test the mood in the High Street. In every election since the war, Gravesend has chosen an MP belonging to the party that formed the government. It is regarded as something of a political bellwether and could equally perform the same job for the economy.

Over the past decade, unemployment in the Gravesham Borough area has almost exactly mirrored the national picture. In the southern part of the constituency there is a rural sprawl sprinkled with farms and farmers, but dominated by the middle classes, many of whom commute into London.

In Gravesend itself, in the northern part of the borough, there is a strong Asian contingent living alongside a traditional working class community and pockets of real deprivation.

The town's retailers have learnt to live with only minimal patronage by those who live in the rural villages, who have increasingly looked to the massive Lakeside shopping complex in Essex just across the river. A new threat on the horizon is the Bluewater development a few miles upriver, opening next year, which will provide a Kentish rival to Lakeside and could suck more business out of Gravesend.

As in many British towns, supermarkets such as Sainsbury and Safeway have fled to the outskirts, leaving the centre to more "downmarket" retailers.

Three years ago Gravesend began to look like a ghost town but it has since recovered. Like many urban areas it has learnt to provide a service for the less moneyed classes, for those without cars, for pensioners.

Perhaps this market change has helped it withstand the present economic chill.

Tony Cestaro, who has been in business in the town for 40 years, acts as a father confessor to businessmen in the area. As a barber he gets to hear most things.

"I've seen one or two recessions in my time and this does not have the feel of the kind of thing we've suffered in the past. If there is going to be a recession, it's not going to be as bad," he said.

Lessons have been learnt from the last severe economic downturn, which proved to be both deep and long. "The Government has learnt lessons, and so have the retailers, landlords and those who set the business rates. They aren't like they were in the Eighties. They are being more reasonable. We can now negotiate a sensible rent, for instance."

Perhaps manufacturers were suffering - and those who have to wait for debts to be repaid - but most retailers in Gravesend still seem to be keeping their heads above water.

An unpublished economic assessment by the borough council seems to agree with Mr Cestaro. Only 3 per cent of companies in Gravesend are forecasting that employment will fall in their business, compared with 27 per cent in 1996.

"In the light of speculation that the UK economy is going back into recession, these votes of confidence in the Gravesham economy are a good sign," the analysis says.

But not all in the Kentish town is lovely. Shops selling upmarket and "fancy" clothes have had a tough time. An emporium selling frilly knickers, for instance, has seen its clientele disappear over the river to Lakeside. "With Bluewater looming and my lease coming to an end, I thought it was time to call it a day," said the proprietor, Susan Atkins. "People just don't come into town anymore," she said.

Nearby Dave Theze, a fishmonger, and Trevor Payne, a butcher, are having similar experiences, although they are soldiering on.

Mike Kelly, manager of the St George's shopping centre in Gravesend, was sanguine: "I'm not going to say - recession, what recession? Some traders are having a tough time, but many others are doing well. St George's is fully occupied for the first time in three years. That must be a positive sign."

He conceded that "value traders" were performing better than those who insisted on high profit margins or who sold expensive white goods.

The new Bluewater development could be a plus because it would bring 6,000 extra wage earners into the area, he argued.

And Michael Savell, chief executive of the Gravesham Chamber of Commerce, said that while manufacturing and exporters might be feeling the pinch, it was unlikely to have a big impact on Gravesend: "Demand is still strong and there are buoyant times ahead."

The Art Shop

JAMES MUNNS, proprietor of a stationery, art materials and gifts store: "I'd say we're just plugging along, but we're slightly up on last year although I'm not sure why. As to whether there's a recession, business has been slow for the last 5 or 10 years. And if you ask me where I'll be in 5 years' time, I hope I'll still be in business."

The Card Shop

KEITH HUNTER, proprietor of Bargain Cards - a greetings card business: "I used to run a remaindered book shop, - the abolition of the Net Price Agreement brought an end to that. Although that was a forced decision, we've never looked back since we started selling cards. Turnover is up and I see no evidence of recession."

The General Store

STEVE DAY, manager of Gravesend Woolworths: "This store is the biggest retailer of entertainment products in the town and as such has seen some very strong sales in CD-Roms, computer games, CDs and videos. Other key areas such as toys ... have also performed well ... we are looking forward to a successful [Christmas] sales period."

The Restaurant

MARILYN HART, manager of the Pastapaolo restaurant: "As far as I am aware there is no economic downturn, although there do seem to be fewer people in town. Recently, we were getting about 40 into lunch, now it's 60 or 70. This is the first year of the business and we are growing despite peaks and troughs."

The Hairdresser

TONY CESTARO, proprietor of a ladies' and gents' hairdstylist: "If there is a recession on its way, manufacturing will be the first to be hit and retailing usually the last. It's the same with the recovery ... Most of the business people who come into my shop don't think there's much of a problem at the moment."

The Tobacconist

PATRICIA NASH, proprietor of a confectionery, tobacco and greetings card store: "We are closing the shop. Turnover is about 10 per cent down on last year and we see no point in continuing. Perhaps ... it's because people are more choosy about what they want to spend [money] on. There's a lot of unemployment around."

The Butcher

TREVOR PAYNE, co-proprietor of a butcher's shop:

"We certainly don't see the same number of people in the town centre. People also seem to be frightened of spending their money. They are holding on to it ... We're about 10 per cent down on our normal level of business. I think it's a long-term economic problem."

The Fishmonger

DAVE THEZE, proprietor of a fishmongers: "We've been hit by tighter fish quotas and the high price of cod, which is our biggest seller and has gone up 30 or 40 per cent. My accountant told me halfway through the year that we were 10 per cent down. It's the worst I've experienced since I set up five years ago."