Under four weeks to go until Christmas, and the retail stories are falling thicker and faster than last year’s snow. And – like the snow – there’s precious little good news in most of them – but kudos to The Scotsman, which looks to the future and makes some strong points.
Although struggling/challenging stories have been running for many months (Comet, Black’s, Game etc), it took Philip Green’s (accidental?) candour to set the hares running across the weekend papers. Although Arcadia tried to play down the suggestion that 10-15% of their stores may close, tried to suggest that this was no more than robust landlord/tenant manoeuvring, if you were PG – well, of course, you’d be planning to close stores – lots of them.
Simon Laffin writes occasional columns for Retail Week that are always worth reading. This week, he reflects on the swing back to smaller stores, whereby those dreadful supermarket chains have revitalised high streets by opening convenience stores and small supermarkets that are greatly superior to the old local food offer. He also notes that, with changing work patterns and social structures, the big Saturday shop is no longer the routine it used to be.
Is there a contradiction here? I don’t think so. What Laffin’s article and Arcadia’s intentions underline is the extent to which the retail landscape is permanently changing. The shoppers of today and tomorrow are using the following channels with enthusiasm:
Big regional malls and centres: Westfield Stratford is hogging the seasonal headlines, but Bluewater, Meadowhall et al are all still going strong. Big cities that have wisely invested in their shopping environment – Liverpool, Manchester, Bristol, London’s Regent Street – are also enjoying strong footfall, and will eventually be the primary beneficiaries of the Christmas boom.
“Open A1” retail parks: The big out-of-town parks with open planning consent will continue to offer a regional, one-stop draw. At Fosse Park, Teesside or Fort Kinnaird, the shopping experience is safe, structured and functional, with intelligent tenant management ensuring the retail offer meets customers’ needs. Good parks can often be found outside cities where the retail offer has deteriorated, or where car access is poor.
Online: What proportion of Christmas gift shopping will be online this year – 12%? 15%? According to IBM, “Black Friday” retail sales in the US are up 24.3% against last year, and although a day is hardly a measure of a season, it’s one hell of a jump in a struggling economy. Online offers convenience, value, long tail and one-stop. There is much more growth to come.
Local: Per the Laffin article, local is getting better, but we’re talking about “real local” here – proper high streets that customers can walk to, where chains and indies can exist harmoniously, and where shopkeepers know their customers by name. Not Bedford Falls, but a regular feature of dense cities and suburbs, where a car is more of a hindrance than a help.
Three of these channels are Big – a reflection of the global market; one of these channels is Small. Which leaves the Squeezed Middle, the medium-sized offer that was good enough when we knew no better, but is not much good now.
Overall retail spending is falling, and more of it is going online. Furthermore, other high street users are suffering – Thomas Cook will be closing around 20% of their agency locations (more will follow), and any product or service that can be digitised has to adapt or die.
There isn’t going to room in the future for shops to hang on and hope. Of course, a quiet retail frontage might contain a global online business, but medium-sized shops and medium-sized town centres no longer offer great experiences, great value, or great convenience. In order for these centres to be sustainable, they will have to be shrunk and repurposed. That means fewer, better shops, easier access (public and private transport), more and better town centre residential (not just buy-to-let hutches), and rent deals that sustain, rather than drive out, commercial users.
Are councils carrying out this sort of long-term planning, or are their horizons no further than the next election? As a smug Londoner, I have easy access to world-class retail and great local shopping, but beyond the M25 there are millions of consumers whose spending is constrained by recession, and who see no incentive to spend (indeed, little incentive to hope) in their town centres. How many of Arcadia’s anticipated lease-ends are in these towns, and how will landlords/councils make streets, malls and open spaces work in the future? The current approach shown by some (hike up parking charges, close libraries, let parks go to ruin, cancel Christmas lights) is distinctly short-term.
At a time of constrained public spending (though with a promise of capital expenditure in tomorrow’s much-trailed Autumn Statement), councils would be open to criticism if they spent money on merely prettifying high streets. Strategic rethinking, though, is more important, more exciting, and ultimately more urgent. Can it be done?
Afterword: Wednesday November 30th:
My thanks to My Retail Media, who have republished this piece today in their “Insight” section. myretailmedia.com is a website dedicated to the Retail Sector, covering all the major retail categories, and offering finance news, videos, comment and insight. They also produce News at Nine, a free daily eNewsletter, and offer bespoke subscription services, aggregating retail news from over 4,000 sources, and tailored for individual subscribers.