Retail Futures: Changing Consumers, Changing Retail Trends Professor Joshua Bamfield Director, Centre for Retail Research
Retail - It’s Only Shops! Nationally, 3 mn employees+ Distribution Sales £318,000 mn Good shops attract visits and extra leisure spend; poor shops drive them away. Retail rents, rates and employment are significant part of the local economy. Wider Mansfield area retail= around £1.3 bn and with restaurants/cafes/pubs £1.8 bn Centre for Retail Research, Nottingham
It’s the Economy of Town Centres It’s not (just) the High Street. Offices, council staff, shops, industry, cafes, pubs, leisure, cinema, libraries, health centres, post offices and visitors create consumer footfall and literally feed off each other. Location of retail is changing and in central areas services (eating out, pubs, entertainment, health) must increase to replace declining retail. Mansfield/Ashfield+ opportunity because of Nottingham retail problems. Centre for Retail Research, Nottingham
Our Retail Industry Was Once World Beating How Have We Got Here? Centre for Retail Research, Nottingham
The Failing Retail Sector Insolvent businesses: HMV, Comet, Blockbuster, Barratts, Arc, Internaçionale, Modelzone, Dwell, Dreams, West One, Jessops, JJB Sports, Julian Graves etc. The frugal consumer. Vacancy Rate Main Shopping Areas 2007-2013 Shop vacancy rate 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Nov-13 Centre for Retail Research, Nottingham
Caused by three factors…… The recession Changing consumer trends Online growth Centre for Retail Research, Nottingham
Caused by ……….. The recession Centre for Retail Research, Nottingham
Changing Consumers Changing consumer trends Online growth Centre for Retail Research, Nottingham
Traditional Retail Model is Broken Slow sales growth – we are worse off than 2008 Retail profits weak Disruptive effect of the internet Occupancy costs excessive: rates and rents The call of the Mall ‘Logic’ of retail centres – is now being undermined by shop vacancies. Multiples ‘pruning’ their port- folios Centre for Retail Research, Nottingham
Store Numbers Centre for Retail Research, Nottingham
Store Numbers Continue to Fall To 220,000 (unless things improve) Consumers shop differently – there are now too many shops Online growth, say 20%-plus by 2018-2020 Trend to multi-channel or omnichannel Not every high street and every town We argue: many town centres need topping and tailing – logical planning – houses, services, other facilities . Centre for Retail Research, Nottingham
Problems of Town Centres Portas Survey Grimsey Survey It is clear that - 20 years of decline can not be overcome in one year Needs a national strategy and local strategies Run town centre as a business Centre for Retail Research, Nottingham
Town Centre problems Town centre share of retail spend falls from 50% in 2000 to 40% in 2014 (Genecom). Out of town retail provision Big box stores, the race for scale – but away from town centres. Online retail sellers start eating up specialist retailers – on price, range, convenience, customer service. Centre for Retail Research, Nottingham
Consumer trends ‘Digital’ areas (books, computers, games, soft - ware) switch to online Many specialists cannot compete with supermarkets and online. Fuel costs+convenience+economy= families shop more often in more shops. Grocery non-food is shifting to online & discounters Online growth continues at around 14% per year. Centre for Retail Research, Nottingham
Retailer trends The search for quality (eg Leeds Trinity, Westfield) Looking for ‘modern’ sites. Big boxes are now too large. The grocery ‘space war’ is over . They are assessing their portfolio of shops and look to eliminate long tail of zero-profit stores. Fierce bargaining on rents Therefore: LAs looking to support independents and small regional multiples. Centre for Retail Research, Nottingham
Support for High Streets My local area would be worse off without (my) high street strongly agree 53% tend to agree 30% neither agree nor disagree 10% tend to disagree 4% strongly disagree 2% 1% don't know 0% 10% 20% 30% 40% 50% 60% Source : IPSOS MORI Nov 2013 Centre for Retail Research, Nottingham
High Street Opinion 42% said that out-of-town shopping centres are nicer places to shop than my local high street 34% said ‘my high street’ is getting worse and only 18% that it was improving. Centre for Retail Research, Nottingham
Which of these would encourage you to visit your local high street more often? better selection of shops 42% greater variety of shops 34% fewer empty shops 31% more independent shops 29% good choice cafes/restaurants 28% better parking 27% shops selling local produce 26% outdoor market 21% special events, eg farmers' markets or seasonal 19% fewer betting shops 14% better/more pleasant environment 14% covered shopping area 13% less traffic 12% pedestrian shopping centre 12% better transport links 7% Source: IPSOS MORI Nov 2013 0% 10% 20% 30% 40% 50% Centre for Retail Research, Nottingham
Developing Ideas LA takes charge. BIDs and MiniBIDs An agreed strategy and direction of travel Encourage development, eliminating eyesores. Eliminate the negative etc Parking and transport problems tackled Tackling tenant mix and adjacencies. Markets, artisan, Christmas fayres etc Problems of mix of landlords Centre for Retail Research, Nottingham
Making rational choices. All retail centres have an equal chance (?) Need a sustainable strategy and means of carrying it through. More independents alongside multiples More houses More services – cafes and restaurants Magic solutions, artwork, pop-up shops, art galleries etc – short-term but may create interest Centre for Retail Research, Nottingham
In brief ----- The retail growth model is broken. Slow growth in consumer spending + online growth of retail sales forces massive retail change. This change cannot be stopped. Many high streets can be helped to become growth zones or specialist areas. For others, you need to manage decline. Housing conversion is part of this in some areas. Centre for Retail Research, Nottingham
Thank You Prof Joshua Bamfield Centre for Retail Research Nottingham NG22 9HQ 01623 867559 www.retailresearch.org Twitter: cristobel75 Centre for Retail Research, Nottingham
Recommend
More recommend
