The rich and the poor: “Two nations between whom there is no intercourse and no sympathy…

…who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets.”

The quote, of course, is Disraeli’s, and it was brought to mind after I read this piece by Marcus Leroux in Monday’s paywalled Times.

The gist of the article (for those of you without a Times subscription) is that 25% of non-essential retail spending takes place in just 3% of Britain’s shopping areas.  Of course, the crushing dominance of London – West End, City, Knightsbridge, Westfield – will help to skew those numbers, as London’s share of tourist retail is exceptionally high.  But forecasters CACI have reviewed 4,000 different shopping destinations, grading them from A to E, with anything below a C having questionable long-term viability.

The retail landscape has become more differentiated in recent years, as a combination of demographic polarisation, plus online, supermarket and out-of-town shopping, has caused the geography of the UK to divide more starkly between winners and losers.  I pondered this in a blog I published at the start of this year, seeking to identify 80 centres that I believed had future relevance; in Leroux’s piece, he notes that around half of Thorntons and Argos stores are in D and E banded locations.  And when stores close, which centres do you think will bear the brunt?

Well, here’s the good news (he said, a little acidly): the clone town will be a thing of the past.  No longer will there be identical parades and malls of the same jewellers, fashion stores, chocolatiers and gift shops, from Cornwall to the Highlands; instead, we risk a brutally stratified selection of pound shops, pawn shops and cheap booze in struggling towns and suburbs, while chi-chi boutiques and cafes overwhelm the rest.

I’m not convinced this is a good thing (I am a One Nation kind of guy); and I wonder if all of the government’s attempts to focus on local retailers (Portas towns et al) only takes us a short way down the road.  I very much support reducing business rates, slackening planning red tape and freeing up parking in order to revitalise a shopping district – but that revitalisation requires strong and solid national chains as well as entrepreneurs and start-ups.  Any smart indie retailer understands the appeal of well-known neighbours, preferably robust and well-managed ones.

There is a significant risk that squeezed, mid-market retailers will be closing in the top locations, pushed out by high occupancy costs and sophisticated online shoppers; and closing also in the poorer towns, where falling sales are precipitated by falling employment, collapsing aspirations and a general hopelessness.

We may need to move away from the purist “you can’t buck the market” view to a more nuanced standpoint that recognises that decent communities need a well-balanced high street (as well as good jobs, schools, healthcare, housing…), and that allowing high streets in densely populated areas to fail is akin to leaving broken windows unattended.  Of course, those retailers need to provide goods and services that their customers need – which of course is what mid-market chains have always delivered, tweaking their value offer as appropriate to local demographics.  But once “some quarters in the City” (Leroux) have prevailed on Argos et al to close their D and E locations, recovery in those towns will become just that little bit more difficult.

Blindingly obvious “two nations” photo: Cheryl de Carteret on Flickr

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Shapps/Portas – and now…?

Housing Minister Grant Shapps has announced the government’s official response to the 2011 Portas Review.  You can read the Communities & Local Government Office’s full text here.

It’s been quite a week for retailers, with the government promoting local shopping by manufacturing a petrol shortage which will ensure we’ll only be spending at shops we can walk to this weekend.  Much more seriously, the impact of channel change on established and historically successful retailers is being felt across the world – Game Group’s administration, the collapse of leading Dutch bookseller Selexyz, famous for creating the “world’s most beautiful bookshop“, and today the announcement from Best Buy that (a) it’s closing 50 US stores and (b), short of slashing costs and talking hopefully about online opportunities, it’s a bit short on strategy.

So, back in Britain, there are plenty of feelgood elements to Grant Shapps’ announcement: market days and Town Teams were particularly eye-catching back in December, so they get full support, but there’s relatively little money forthcoming – around £12.8m, which will fund a few more Portas Pilots, but is a tiny sum of cash – it’s rather less than, say, Foyles in Charing Cross Road turns over in a year, or under a third of the estimated cost of the Leveson Enquiry.

Paradoxically, though, I’m not calling for loads more cash; I’d prefer to see more real local power and accountability, with councils mandated to create a successful business environment for the communities they serve.  This will be the acid test of the programme, as there is much promised on revoking archaic bylaws and reforning planning  – will local councils have the guts to go the whole way, and will the government be prepared to devolve real decision-making and – at council level – revenue raising powers?  Step forward the first council that wants to tell Grant Shapps that, actually, we think a 5.4% increase in business rates is a little steep in the current environment, so here in Tomorrowtown, we’d like to do things a little differently.

Well, I can dream.  But beware of short-term revitalisation and too great a focus on heritage and bringing back “the old high street”.  There is, understandably, much hand-wringing about the number of vacant shops across the country – 14.6% of total stock across the country, it says here.

But hang on just a second – is that the number of empty premises, or the volume of empty space?  Or, to turn the numbers around (without knowing the answer) what is the total volume of trading square footage in retail today, compared to ten or twenty years ago?  I’m going to bet that the number has gone up, but that old stock has been allowed to rot on the vine.

As retail commentator HatmanPro has observed on Twitter, much of our empty retail space exists because newer space has superseded it.  In too many town centres, successive new developments – blocks of stores, little shopping centres – have been dumped into vacant spaces, increasing the total volume of footage and laying waste to older shopping streets and districts, on the assumption that, as the population grows and we all become wealthier, more and more shops can prosper.  Even without the internet, this is patent nonsense – I’d like to see new shopping centre openings accompanied by a structured reduction in dead space; a recognition that, with 10.7% of all retail spend now online (and that number will grow and grow), even the most Pollyannaish assumptions of future economic recovery will not merit the number of old shops cluttering up our old towns.

Will Town Teams and local councils have the ambition, the power and the cojones to repurpose spaces?  Will they be able to do so, and maintain the variety of chains and independents, generalists and specialists, commodity sellers and boutiques, that a thriving town centre needs?  I really hope so.  But the “beating heart of the community” needs to be strong and vigorous, and must look beyond the reduction of street furniture and controls on levels of parking fines – if 15%, 20% of all retail spend is going online (because that’s what the consumer wants), then those high streets need to reflect tomorrow’s needs, rather than yesterday’s longings.

And having said all of that – if this comes off, when those first Town Teams cajole their councils into really making a change and doing  things differently, this is going to be damned exciting.  Retailing is one of the things we do best in the UK, and everyone who’s committed to a retail career wants to make it better.

Pictures: The Sun; bhbeat.com


Modern Warfare

There is, sadly, little sense of surprise in the news that Game Group has finally called in the administrators, as the chain’s poor Christmas was followed by the reluctance of the banks to prop up a struggling enterprise, and then the progressive withdrawal of support from its suppliers.  However, what does shock is the speed at which a plc can go from success to failure, once the storm starts to rage.  In 2009, Game Group posted pre-tax profits of £119m, up 75% in two years – here was a company that was beating the consumer recession – although this proved to be the last of the good news, as the absence of new platforms, lower pricing from online competitors, and the growth in downloaded content progressively reduced profitability and investor confidence.

Game themselves – slick and capable operators who’d innovated in many ways (eg by mainstreaming the second-hand market) – now had a brand that was too anodyne for the hardcore gamer.  They should have repositioned their primary brand to better serve that market, rather than chasing the more family-friendly (and fickle) Wii market.  Instead they sought to serve the hardcore through the rougher and readier Gamestation brand, having committed the Retail Deadly Sin of acquiring a parallel business in 2007 and then having to post-rationalise it (see Clintons/Birthdays, Mothercare/ELC, WH Smith/Waterstone’s and many more down the ages).

Their second Deadly Sin was to focus on international expansion at the expense of the home business, when they should have been replicating their physical dominance (a one-third market share at peak) in the online sphere.  That’s a tough, going-on-impossible trick to pull off when the competition includes retailers like Amazon and developers like Zynga and Rovio, but it was where the market was going and it’s where Game should have gone, in a fair and equal world.

However, this world ain’t fair nor equal, and a retailer – any retailer – committed to decades-long leases in prime pitch locations at the most expensive malls is naturally going to be focused on how maximise those stores’ sustainable profitability, how to turn them around – in short, how to protect the legacy/millstone that they’ve inherited.

It’s this lack of flexibility than can kill even market leaders in the current consumer climate; their lease commitments are so onerous that they have to focus on hauling those locations back towards profitability, even though there are precious few examples of gone-bad retail locations miraculouly coming good again.

Game Group’s collapse is the worst, in terms of potential job losses, since Woolworth at the end of 2008, and it is to be fervently hoped that some jobs, stores and the brand can be saved.  However, it once again throws the plight of the middle market into sharp relief, as a profitable core of Game stores won’t prosper unless the online/download/value challenges I instanced above can be resolved.  (And any good news that all of this represents for HMV will be short-lived too.)

Meanwhile, the less attractive or affluent high streets and shopping centres are being hollowed-out by store closures.  The Portas Review rightly promotes the conversion of retail premises to other uses, but what strategies, one wonders, are the shopping centre landlords contemplating?  The biggest and best – the Westfields, the Meadowhalls – can thrive, but all those poky, low-ceilinged 80s developments with their shallow shop units, the natural home of Game and many other 2011-12 retail casualties – how will they be repurposed?  Which major landlord is going to break ranks and announce a new strategic approach to asset management that isn’t built on the old assumption that everything will remain largely the same as it was before?

In February 2012, 10.7% of all UK retail sales – including food – were executed online.  In February 2011, the figure stood at 8.3%.  That’s a lift of £140m in a dull month, when overall retail sales were flattish at the very best.  Factor in Christmas, and you’re looking at the thick end of £2 billion transferring from bricks and mortar to online over the course of 2012.

Despite all of this, I personally remain convinced that physical retail has a strong future but – as my headline suggests – bricks and mortar is trapped in a losing war at the moment.  That war will end – a truce will be called, and a new equilibrium established – and it will be consumers en masse who end hostilities, once a new balance of online purchasing (for value and convenience) and physical retail (for the experience of the product, the face-to-face benefits, the “localness”) has been established.  

Of course, online and physical will blur, as they already have for successful, robust businesses like John Lewis or Apple (this hoarding is just two doors down from Game in Kingston’s Bentall Centre).  It’s proved to be very much easier for customers to evolve into multi-channel operators than it is for the retailers that serve them.

But the biggest and the best will survive and thrive, as will the smaller operators, who know their market, understand their customers and can move swiftly without too much legacy encumbrance.  The mass, the middle market?  That’s proving to be much more difficult.

Author’s note: My alma mater, Borders Group, of course committed more than a few Deadly Sins in its time; but the concession agreement we had with Game in the UK was highly successful for both brands during its all-too-brief existence.    

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My eBook, A Year at Front of Store, is available in these Amazon Kindle territories – 

United StatesUnited KingdomGermanyFranceItaly and Spain.  


A showroom with a view – the future of high streets

Frankly, you could cancel most of the drama series on TV nowadays and instead stream a live tale of everyday retailers into the nation’s homes.  Tesco, Peacocks/EWM, Game, Iceland and many others are all delivering stories of real tragedy (job losses), hubris, separation and (in Malcolm Walker’s case) triumph.

It’s edge-of-the-seat stuff, and today’s sensational news of Richard Brasher’s exit from Tesco is just the latest exciting plot twist.  Furthermore, this is interactive experience, as customers are the ultimate arbiters of who succeeds and who fails.

It’s also a tale of legacy and inheritance – too many stores in the wrong places, old management styles or an immature multichannel offer all presage disaster ahead.  Stand by for next month’s Titanic metaphors…

Last Friday’s Retail Week devoted several glossy pages to a gallery of multichannel leaders from across the sector, representing companies as diverse as Harrods, Sainsbury’s and Wickes.  In a very short time, “multichannel” is moving towards “omnichannel” (thanks Gareth), as consumers move faster than stores to blend their online, mobile, and bricks-and-mortar shopping activities.  The customer is always right, and – frustratingly for both parties – the customer is now often several steps ahead of the retailer.

The more this snowball gathers speed, the more quickly prescriptions about the high street become out-of-date.  So here are a few thoughts, wrapped around a simple statement:

Showrooming is here to stay

At least it is for as long as the showrooms can remain open.  But the ease with which customers of all ages have embraced comparison shopping, and the unemotional way they’ve ditched their old loyalties in favour of better value in tough times, has come as a nasty surprise to many retailers.

You spend years building your brand, extending your storebase, cementing a reputation for value and/or service and then, without so much as a Gerald Ratner speech, the whole house of cards is blown away, and the company is left not with a proud legacy, but a horrible mess of bank debt, unprofitable shops and over-complicated management structures.

Nevertheless, customers enjoy showrooming, and no large retailer can succeed in the future without an integrated offer that recognises stores are showrooms.  It needs to have few enough of them, in cost-effective enough locations, for the whole P&L equation to add up.  John Lewis Partnership (reported last week to be investing £450m in “growth and multichannel leadership”) will build its JL and Waitrose online offers, not as “alternative stores”, but as an integrated part of their consumer offer.

Companies with an optimum number of stores can integrate their online commerce/service offer with bricks and mortar and move forward.  But – and this painful – not enough stores are being closed, yet.  This in large part is due to the challenges leaseholders face when managing their real estate legacy – leases are long, penalties are onerous, and landlords are struggling to see where replacement tenants will come from.

Winners and losers

Leaving the food sector to one side, I envisage a future where large, successful chains, selling unique merchandise, are able to sustain a reasonable sized store-base, with customers using the brand’s services through any combination of physical and virtual contact points.  These companies will be able to leverage their use of technology to stay ahead of their competitors, but they must always look forward.  Retail legacies are of no more real value than the beautiful company histories that retailers used to commission – interesting for the archivist, irrelevant to the customer.

This means embracing technology that has the capability to kill much of your bricks and mortar offer – because if you don’t close down your weakest branches, someone else will shut down the whole lot.

As an example, one techology that has been talked about and tested for a long time is the virtual changing room.  This is a great gadget for boutiques – but can you imagine the fractious queue for the magic mirror in a small provincial Top Shop on a wet Saturday afternoon?  Much more efficient to provide the technology as an app that customers can use through their online-enabled 42″ TV screens in the privacy of their own homes.  I can easily envisage “magic mirror parties” at home – much more fun than a chick-flick.

Winners will run forward with new applications, and will be unsentimental about store closures.  They’ll have uniqueness on their side – must-have products available nowhere else.  Physical shops will still matter, but they won’t be required in the numbers that they have been historically, adding weight to the “fewer, better stores” trend.

There will be more losers.  If you’re selling branded merchandise available from multiple suppliers, if you’re selling products manufactured in the Far East and sold, unchanged, around the world, if you’re selling a product with limited touch-and-feel qualities, if you’re selling generic or commodity products, then the road ahead is a very thorny one.  Is marrying Comet and Game likely to be a good idea?  Rephrasing the question, and assuming (rather rashly) that both business’s unwanted legacy real estate can be disposed of, are the brightest and best within Comet and Game able to focus on a future in which physical stores are just a part (a small part), and leading-edge technology will enable them to sell more products, more effectively and more profitably, than Amazon?

We have moved on very quickly from dead record shops and dying book shops.  Any sector, any shop, that cannot provide a vivid reason for customers to continue to shop there starts to look like a showroom for online brands to exploit.  (Shortly afterwards, it looks like an empty store.)  But does this mean (roll of drums) the Death Of The High Street?

I think not.  It means the radical reshaping of the high street, though, and without getting all butchers-and-bakers-and-candlestick-makers, it does mean combining the best of the past with the most desirable elements of the future.

It means far fewer shops – 20% less, 30% less?  The number will vary depending on the prosperity and lifestyles of the local customers, or the effectiveness with which that high street (or shopping centre) can act as a regional or national magnet.  But the good town centres of the future will either be local, or super-regional – in-between won’t stack up anymore.

It means a high street which (as the supermarket chains have figured out) provides the staples you need in a hurry, and (as the best independents have figured out) a choice of goods that you simply can’t buy anywhere else.

It means a high street that provides entertainment, community, and relaxation – not one where hours are spent in unpleasant shops, buying commodity goods.  There’ll be more meeting up (facilitated by phone, of course), more coffee, more chat; more escapism, more novelty, less stress.  Because there are fewer shops, there’ll be less traipsing.  Parking provision might even improve (well, I can dream – though more shoppers’ buses would be welcome).

Manufacturers will run showrooms – if the value chain in many categories has eliminated the margin a physical retailer requires, then technology companies, for instance, will have to follow Apple’s lead and provide opportunities for consumers to see their goods, prior to buying them at the best price from whichever online supplier works best for them.

So the future of the local high street becomes a blend of entertainment, uniqueness, staples and showrooms.  Customers would appreciate this, but it would require some categories to disappear completely, and others to reinvent themselves.  Can the retailers, the landlords and local/central government – if government post-Portas is paying attention – do this, or will too much business transfer to Amazon before the necessary changes are made?


Tools of Change: the Front of Store New York presentation

I’m just back from New York, and the very stimulating, content-packed Tools of Change conference hosted by O’Reilly Media.  On Tuesday morning I gave a short talk on a couple of my current thoughts.

Regular readers of the Front of Store blog will be familiar with some of this, but (a) we’re bringing on new readers all the time, and (b) there’s new stuff here, as well as new thoughts on older stuff.

Marriott organisation scored a little less than 10/10 for our session, so our panel had to canter through their presentations with minimal time for questions.   So this post consists of my presentation, fleshed out and extrapolated, with slides where appropriate.  Here we go, with a cheerful message that echoes much post-Portas thinking, including Justin King’s speech last night.

First up, it was important to remind a “book world” audience that, although the book sector is undergoing revolutionary change at the moment, all retail categories and locations are being affected by consumers switching from physical stores to online shopping.  As I noted, the growth in online selling is changing the entire complexion of the retail industry – not just bookselling.  Whole swathes of real estate will become redundant.  And in the UK, we are leading the world in online retail penetration.

Around 60% of all adults shop online in the UK and, as this blog noted last month, approaching 10% of all UK retail spending is now online, including about 7% of all food and groceries.  Bain’s comparison between Britain and other developed countries underlines how far ahead we are in the UK; in United States, France, Germany, Sweden, only about 30% of adults are shopping online.  Of course, China is joining the race from a standing start, and will quickly build their online share.

Again, these statistics and projections have already made one appearance at Front of Store, but they serve to emphasise that sales in many UK retail categories have already been hugely diminished by eCommerce.  As far as books are concerned, Amazon and the supermarkets sell around 50% of all printed books, but of course total unit sales of pBooks, whatever the channel, are now being diminished again by the Kindle.

The most vigorous illustration of the impact of channel shifting came from Tesco, the UK’s biggest supermarket chain, where CEO Phil Clarke has indicated that Tesco will be shrinking future store sizes, and reducing their instore non-food commitment.

So, in terms of book sales, it isn’t just these guys who are getting hammered by the internet:

It’s these guys too:

This is a pretty quick shift for supermarkets, from “voracious baddie” to “another victim”, but it has fundamental ramifications for publishers.  Supermarkets account for around 20% of all UK book sales.  Sales of physical books will fall in supermarkets, so the commitment of Tesco and its competitors to books will be reduced appropriately.

Given the pace of growth in ebook readership – and the crossover between the most effective ebook content (narrative works, eg fiction, biography etc), and supermarkets’ key adult categories (narrative works), supermarket to books will be reduced.  The impact of this on the publishing industry will be more fundamental than the loss of a specialist chain.  The supermarkets sell the mass-market stuff that pays for the literary stuff.  Are publishers planning appropriately for this very significant shift?

However, physical retail still matters, and will continue to matter even as the number of specialist booksellers falls, and the commitment of the supermarkets wanes.  A considerable number of consumers will still want to buy print books from physical stores – and, by-the-bye, I’m going to guess that the average publishing conglomerate would prefer a situation where orphan sales didn’t automatically default to Amazon.

A couple of weeks ago, I sat on the judging panel for a book marketing award.  Despite these major channel changes, only one of the entries, out of a field of about 30, placed its physical books anywhere other than in traditional outlets – bookshops, supermarkets and the like.  Publishers must consider alternative retail channel strategies.

Here’s why:

There will still be bookshops in the future.  But the democratisation of reading and access is going into reverse (at the same time as the library sector is under fundamental threat).

In the future, great little bookstores will serve communities of real book lovers – educated, affluent, intellectual people.  They’ll run events, sell online and offer click-and-collect, home delivery and all sorts of customer-first offers.  They’ll support their sales of books with gifts, toys, stationery and coffee, catering to a wide area… they’ll be just like little superstores.    Critically, they must be integrated into the ebook food-chain, because the recommendation of a good bookseller cannot be replicated through any online “search-and-browse” mechanic.

Deliberately provocative, I noted that there’ll be plenty of these bookstores in the sort of places that people like me and the conference delegates live and work – London, Oxford or Edinburgh, New York, Boston or San Francisco.

But the economics won’t work in smaller, poorer or less well-educated communities.  I don’t believe – and I’m not sure if anyone believes it – that there will be room in the near future for 300 Waterstones or 700 Barnes & Noble stores.  The two-century long surge in long-form book reading driven by 19th century serialisation and rail travel, and by 20th century drug stores, book clubs, mall stores, superstores, air travel and fancy vacations, is coming to an end.

But we’re also seeing the first signs of Ebook sales flattening, as new technology diminishes the importance and visibility of the book, and provides device users with many viable alternatives to books.  School kids and commuters aren’t carrying paperbacks like they used to – they’re playing games on their iPhones.

We – the whole of the book trade, not just Amazon – needs to format and sell books and content, to maintain pertinence for the mass-market.  This isn’t about existing heavy readers transferring to eReaders, as most of those interested in the US and UK have already made the switch.  Instead, it’s about the next generation of uncommitted potential readers.

Long-form reading isn’t going to die, bookshops won’t disappear, and great writing will persist.  But there’s a risk that the audience for all of these things will diminish significantly – and, as I noted above, the withdrawal of physical books from everyday retail locations will cause a large proportion of the customer base simply to stop buying books.

We saw this when Borders closed in the UK – around half of Borders’ total sales just disappeared from the market, instead of transferring to other retailers – and this was nine months before the Kindle arrived in Britain.  So while people living in nice places will still have great bookshops, the places in between won’t be as well served.  The industry will then have to persuade people to start reading long-form again, buying physical books or content online.  Whatever the format, it’s a fundamental challenge for the industry.

Thus far, I’ve just been discussing the big English language markets.  However, change is afoot in continental Europe.

I’ve just described scenarios in Britain and America.  But suddenly, the protected European markets are looking vulnerable.  Countries like Germany, France and Spain have significant market and cultural controls in place, which have ensured historically that printed books are sold at the same price (or, in France, with no more than a 5% dicount) – the publisher’s RRP – whatever the outlet.  Specialist bookshops, supermarkets, Amazon have all had to abide by the law.

In the past few months, everything has changed.  Kindle and Kobo have started to take off in these key territories, and of course – as Rudiger Wischenbart demonstrated at TOC in Frankfurt – the selling prices (the RRP) of ebooks can be 20%, 30%, 40% lower than pBooks in those territories.  This means that consumers in France, Germany and elsewhere are seeing seriously discounted book prices for the first time ever.

No amount of cultural legislation can create price parity between very different formats.

The Fnac expansion story and the stability of Thalia in Germany both start to look suspect in the new market conditions, where economic squeeze and technological change look as though they will finally upset those stable, mature European markets.  Managing massive change – which was recently an operational problem only in English-speaking territories – has rapidly gone global.

To conclude, we can see what is happening, but we don’t understand how the consumer market for books will settle; I believe that publishers need to be driving that future much more pro-actively.  As my final slide notes:

So, there are a lot of unknowns, and a great deal to think about, to plan and deliver.  I very much hope – indeed, I’m pretty certain – that among the Tools of Change delegates were those who can and will fashion the future, rather than being buffeted by economics, technology and Our Friends In Seattle.  This market is big enough for more than one player, so whether you’re a legacy player or a new start-up, you need to make yourselves some good luck, and create a future publishing/bookselling industry that you want.

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My eBook, A Year at Front of Store, is available in all Amazon Kindle territories – United StatesUnited KingdomGermanyFranceItaly and Spain.  


The new Canada Water Library at Rotherhithe

I spent some of my formative years in Rotherhithe, SE16, and returned there a couple of weeks ago to explore its splendid new library.  Big thanks to Pam Usher, Southwark Council’s Library Service Manager, for her hospitality – I’ve written about my visit in this piece in The Bookseller.

Plenty of good photos (interiors and exteriors) at this blogsite.


The Top Eighty retail locations in Britain?

A consistent theme in retail analysis over the past 12 months has been that, whereas 5/10/20 years ago, a non-food chain required 200/300/500 stores to achieve national coverage, today only 50-80 might be needed.

I don’t think that any one person is the author of this insight (but I’ll credit them if I’m mistaken).  The thinking is as follows:

We now have a network of modern city centres and regional malls across the UK.  These provide up-to-date retail space, with the flexibility in size and height that modern retail chains seek.  By way of comparison, here’s Westfield at White City:

…and here’s a typical mall from the 1980s (in this case, a roofed-over 1960s construction):

The best shopping centres are offering their customers more than ever before; the rest of the field is struggling to keep up.  And a high proportion of the total population is now within 30 minutes drive-time of a first class mall or city centre.

The other motor of change is, of course, online shopping; as this blog far-from-exclusively confirmed last week, the UK leads the world in adopting online retail, with 9% of all sales (by value) going to internet sites rather than bricks-and-mortar stores.

Two of Britain’s strongest retailers, John Lewis and Next, announced their Christmas trading results yesterday, and they underline the trends above.  JLP has had a soaraway Christmas, with its stores anchoring many of the “key 80” locations.  Total Partnership sales from physical stores are up by 9.3%, and online growth has roared away, up 27.9%.  Next’s total sales were up by 3.1%, but this was a tale of two formats; stores were down -2.7%, and online was up +16.9%.  John Lewis has fewer than 40 department stores; Next has around 500 shops.

Of course, different stores have different demographics.  A high-fashion teen chain and a smart furniture business might both prosper with 50 stores nationwide, but their customers wouldn’t all be best served by the same locations.

Nevertheless, in the spirit of digging out a hornet’s nest and poking it with a sharp stick, I thought I’d define 80 primary British locations for 2012.  I’ve grouped them by location type, which I’ll enlarge on as we go along:

All of these centres are well-established, and are pretty evenly distributed across the country.  Metrocentre is the oldest, but their owners continue to invest to keep abreast of consumer and tenant requirements.  With the exception of Merry Hill (now a Westfield), they all sit on motorway junctions, rather than in city centres, and attract customers from a wide geographical region.  Typically these megamalls are close to a retail park, so that big-box sellers of furniture and DIY are also represented.  (And I appreciate that Braehead and Silverburn are different malls in different parts of Glasgow, so I’m already making two count for one…)

Just a few years ago, central London’s shopping offer consisted of the West End and Knightsbridge, with the offer elsewhere pretty strictly local.  Today, a 40 minute ride on the Central Line takes you from one vast Westfield to the other, and en route you pass through (or at least close by) four other huge, separate markets.  The City has evolved from a few poky high street stores on Cheapside to a major retail offer stretching from One New Change to Fenchurch Street (with an appendage out at Canary Wharf), and stores have grown bigger and more numerous in Covent Garden and Knightsbridge/King’s Road.  The West End – from Fitzrovia to St James’s – offers the finest concentration of shopping in the world, and it’s the world that now shops here; increasingly, London caters for a global rather than national catchment, as the old family shopping trips from the provinces to the West End are replaced by crowds of Chinese tourists with their newly enabled credit cards, leading the charge at the Selfridges sale.

England and the Octopus was the title of a book published a hundred years ago by Clough Williams-Ellis, in which he expressed his concern that London, the Great Maw, would consume the countryside around it, growing unstoppably.  At the time, he was probably worried about the rural charms of Dollis Hill or Morden; today, London dominates the economic activity of everything in an eighty mile radius – commuting distance for the capital’s huge workforce.

Much (too much?) of the UK’s wealth is concentrated into this region, which extends from the outer suburbs (Brent Cross, Romford) to the great University cities and the coast.  Many of these towns are smaller than, say, Huddersfield, and some are debatable – is Crawley more worthy than High Wycombe, Newbury or Basingstoke?  Brent Cross is just too small for the Megamall list, and – with expansion repeatedly stalled – is no longer the thing of wonder it once was.

Travelling across the Octopus is often a challenge – only a stark fool would drive the eleven miles from Kingston and Croydon unless his life depended on it – so there are plenty of prosperous shopping hubs; this list only covers the larger and more obvious among them.

A slightly contentious list here, particularly as some of these towns are proper regional centres in their own right – Bath, Chester and York have been important for 2000 years.  However, what all these towns have in common is high tourist spend, and enviable concentrations of local wealth.  Indeed, it’s the history at Aquae Sulis, Deva and Eboracum that ensures the tourists keep coming.

Cornwall is a poor county, but a strong tourist destination – there are national fashion chains a-plenty in small towns like Newquay and St Ives.  The same effect can be seen in pockets elsewhere in the UK – Aldeburgh in Suffolk boasts a Jack Wills, for instance.

This is perhaps the most obvious schedule.  Almost all of the major cities of England, Scotland and Wales have seen huge, strategic redevelopment in their city centres to ensure that they retain their importance.  Schemes like Liverpool One, Cardiff St David’s and Bristol’s Cabot Place have brought new vigour into previously moribund centres; there are still a handful of cities on this list where development has stalled, and there’s the Athens of the North, where the ongoing tram developments might have been specifically designed to keep consumers out.  Nevertheless, these are great cities that can guarantee footfall and spending.  (nb: if I’d included Ireland, Belfast (UK) and Dublin (RoI) would of course be on this list.)

“The Best of the Rest” is an ugly term, and it covers a broad sweep of locations, from affluent Solihull to struggling Stoke.  It’s a list that could easily inflame local loyalties – I haven’t found room for Portsmouth, Taunton, Blackpool or Stirling, but in setting an arbitrary figure of 80, I had to call a halt somewhere.  Some of these locations are significant population centres, but they aren’t generating growth, and their town centres are sorry echoes of their former selves.  Doncaster is here in part because it was Mary Portas’s focus, but it also stands for many other post-industrial towns in Yorkshire, Lancashire and the West Midlands that have seen better times.

And that’s my 80.  It won’t be the same as yours, and it certainly won’t be the same as any particular retail chain’s.  This is a blog, it isn’t science.  Before signing any lease, a good retailer will match careful demographic analysis against their own gut feeling and enterprise; they’ll be looking for the next right place to be, not a town that enjoyed its greatness in the 19th or 20th centuries.  I’ve missed off the outlet parks (Bicester, Gun Wharf), and I’ve largely skipped over the retail parks in places like Broughton, Birstall and Kinnaird – huge destinations locally, but little known outside their catchments.

But – most importantly – getting reductive to 80 underlines the challenges facing the smaller towns.  Let’s travel from Watford to Nottingham on the M1 – 110 miles, passing Milton Keynes and Leicester (shoo-ins for the list) and Northampton (very borderline), but omitting (deep breath) Hemel Hempstead, Luton, Dunstable, Bedford, Bletchley, Rugby, Wellingborough, Kettering, Market Harborough, Nuneaton, Loughborough, Burton… twelve towns among the hundreds that were once must-have locations for national retailers.  They still have stores there, but now, increasingly, they’ll be looking at their leases and reconsidering their options.

Images: overseaspropertymall.com; superstock.co.uk