The way we shop now sees the retail market having to evolve. Our click and collect or deliver mentality where we order online means that the Internet marketplace has led to pressures on high street retailing. There’s a drive to survive for those retailers with a property presence who have embraced the multi-channel shopping culture and those who haven’t.
Many operators are downsizing floor areas and store numbers. Witness the situation Toys R Us found itself in during the run-up to Christmas when it had to restructure to shore-up against its future pension liabilities.
The discounter market remains strong, albeit we are seeing rapid consolidation in this sector as operators’ property portfolios mature. As ever, it will be the survival of the fittest and that does not always mean the biggest in the modern retail environment.
Setting aside the grocery sector, retail commentators point to consumer demand for ‘affordable luxury’ when it comes to fashion and high-quality value – not be confused with ‘discount’– for some other goods.
Prospering are those retailers whose online and on-site presence – whether the latter be on a high street, shopping centre or retail park – have coalesced in their business plans and offering to increasingly savvy customers.
Retailer, Next’s latest trading statement of 03 January made for an interesting read. Retailers, such as Next, who have invested heavily in online infrastructure, are reaping the benefits with a 13.6 percent rise for its online sales offsetting a 6.1 percent decline of sales instore in the run-up to 24 December 2017.
Affordable retailers with good multi-channel and online presences are the ones flourishing. Add to Next, John Lewis - whose online sales for the 2017 Christmas trading period may well match, if not exceed, its increase of 31 percent reported for Christmas 2016 - and you catch the drift of where retail success now lies.
Such leading retailers who have a high-level online presence acknowledge that for some products, such as audio-visual, tech gadgets and white goods, shoppers are looking for in-store expert advice. These are the retailers who are willing to freely give their knowledge and are content in knowing that the shopper is going away to order online. The advice is given in the hope – although not necessarily the expectation – the shopper will use the retailers’ own website service.
Which begs the question what do with those physical, retail spaces?
One of the answers is surely revealed by a falling away of the line of demarcation between shopping and leisure experiences. The rapid rise of the food and beverage sector within high street locations across the UK is a testament to this.
Modern expectations of ‘shopping’ now include meeting to have a coffee, cake, a hot or cold snack, lunch and, perhaps, afternoon tea or, even, dinner. Those retail locations responding to our changing shopping and eating habits are where cafés and restaurants are prevalent and are attracting the footfall in our market towns and regional cities.
Regional locations, such as Peterborough, which were once seen as non-prime by national operators, are coming to the fore with food and beverage sector outlets in particular.
Commercial property in Peterborough is at a low: 4.5 percent when compared with the national average of 12 percent. This, partly, reflects the compact nature of the central shopping area and also the efforts of the City Council and private stakeholders in improving the environment for customers and retailers alike.
Our city is a good example of the changing look and feel of retail and shopping experiences. There are a number of new operators opening in and around Cathedral Square and the immediate surrounding area.This is turning previously traditional retail pitches into more leisure and lifestyle-led locations.
Some retailers are content to run without a physical presence on the high street. For the moment, those who successfully manage to combine their physical and digital operations reign supreme.
However, high streets - once so heavily dependent on retail can only evolve where there is a flexible approach to planning and a departure from conventional views of what makes retail and shopping work as we head towards the third decade of the 21st Century.
For more information about retail opportunities, contact Julian Welch on 01733 897722.