Link, share, join, listen ...
Link, share, join, listen ...
It’s disappointing to hear that HMV, an iconic retail brand has decided to close 60 stores following poor Christmas trading. I would have thought that being the only music and entertainment retailer on the high street would be a saving grace for the business but the competition from on-line retailers and supermarkets combined with the increase of digital downloads and music streaming is proving too much. Despite diversifying into live music venues, ticketing, cinemas and widening the product proposition, the future looks tough having just appointed KPMG’s debt advisory team.
Ordnance Survey have recently compared 27 million retail addresses between now and October 2008 when the financial crisis began. It found that banks, recruitment agencies, estate agents and pubs were increasingly leaving the high street while the prevalence of betting shops and hairdressers grew. The data showed there were 280 more betting shops on the high street compared to before the recession, representing a 5% rise. The change represents a consumer shift to the internet for shopping, and services including job searches and travel bookings. However services that cannot be accessed online have seen their presence grow on the high street with a 3% rise in hairdressers and a massive 28% increase in the number of car washes.
Demand for pound shops, pawnbrokers and bakers are also in evidence from the figures, “demonstrating the increasing social stratification of the high street as wealthier shoppers drive to out-of-town retail parks and malls”. Known as the “doughnut effect” in the US, where shoppers migrate from the centre of town to the periphery, Britain’s high street is fast becoming boarded up with the national high street vacancy rate soon to exceed 15%.
I’m hopeful that HMV doesn’t ultimately go the same way as Woolworths. The Chief Executive of the British Property Federation commented that “there is no point harking back to the old high streets we claimed to love. We need to be more creative in looking for new roles and uses for these empty shops”. I’d be interested to hear your views on what the high street is going to look like in the future, surely we’ve reached saturation point with mobile phone and coffee shops and with the big chains finding they can cover the county with 50 stores and a decent website what is going to fill the increasing number of vacant buildings, after all aren’t we supposed to be a nation of shopkeepers?
Jonathan Flynn is Head of Retail at Interim Partners.
Click here to read other blogs on the Consumer sector
To ensure your blog response is published please provide your first and second name together with an email address that matches the one you used when registering on the IP site. Blog responses will only be published if we can identify who you are and/or that you are registered with Interim Partners. Please click here if you wish to register
January 21st, 2011 at 10:44 pm
It’s an issue we’ve been exploring for ten years, after we started using empty shops as temporary gallery space. With the Empty Shops Network we’re now networking hundreds of projects across the country, and monitoring all the figures – like the ones you mention here – and looking at both hard economic facts and anecdotal evidence it’s clear things are changing.
My prediction is that town centre shopping is becoming a leisure activity. For convenience, out of town or a shopping mall is easier; for price and choice, the internet wins. The places that are doing well combine interesting, niche retail with good quality arts and culture, decent public realm, local distinctiveness and a vibrant, varied cafe culture. Think North Laine in Brighton, or Lewes, or Seven Dials in London.
I predict smaller town centres becoming niche destinations, with high quality independents offering more than just traditional retail (bookshops with readings and signings and a book club; record shops with instore sessions and a monthly music club, for example). Pop-up shops will add variety to the mix, and some spaces will become semi-permanent spaces for temporary activity. Town centres will house more community activity, like festivals, street markets and fairs.
As for HMV; regardless of what it sells, it’s a miserable, soul-less place to shop. It’s not failing because of anything other than being a bad place to shop.
January 24th, 2011 at 10:59 am
Dan Thompson makes some good points in his reply. At the Local Data Company we are physically walking 800 towns and cities twice a year and have some great insight on this change. By 2012 we will be covering 2,000 centres. The reality is that shopping is changing and that retailers want large store formats to show their full offer, they want ease of access for logistics and minimal interference from the council! The result is that out of town in clusters with other strong multiples is the place to be or large edge/intown shopping centres! Add into this the growth of the internet to over 8% and supermarkets having c.40% of non food retail spend then you can see that the high street is the least attractive option both in terms of cost, footfall and clustering.
The OS data, whilst I question the detail based on addressing, shows what we see day in and day out. The lack of business rates relief has forced landlords to let their empty shops for anything upwards from covering their bills. This does create opportunities for small businesses in towns where their is sufficient affluence and consumer support to sustain them. Services, specialist independents and community are the future of the high street. More in-town residential provision and less restriction from councils on planning, parking and events will help massively.
Come along to the BPF Retail Seminar on 15th February to hear multiple views on this important subject. http://www.bpf.org.uk/en/events/event/Breakfast_seminar_-_retail_vacancies_15_February_2011.php
January 28th, 2011 at 7:34 am
Well, Britain may want to be a nation of shopkeepers, but it is, at the same time, a nation where service sucks.
I have lived and worked in more than 12 different countries but nowhere in the world is the overall standart of service and the professional competence of retail staff anywhere near the poor level of British retail.
But then, is it a surprise? While in Germany you have to undergo a rigourous 3 years apprenticeship to learn how to serve, how to sell and all about your product before unleashed, and while in the US he who doesn’t demonstrate the utmost customer service orientation is considered a fool, a career in retail in Britain seems to be considered the emergency job for anyone not finding anything better.
Retailers hire the cheapest staff they can find, give them a half day induction and as long as they are able to speak at least pidgin English and walk upright from rack A to rack B, they got the job, and because of the lousy pay they leave it again as soon as they can.
How come that some retail business are doing great (Harrods in 2010 hit he 1 billion turnover mark, M&S is doing well and Tesco is still growing) while others disappear (quite rightly so)? Not because of the economy or the consumer, just because of the quality some of them are able to offer and some other’s don’t.
January 28th, 2011 at 11:35 am
There will continue to be a need for bricks and mortar businesses but the trick will be for how the retailers and owners of bricks and mortar dovetail their strategies with their online businesses. next seem to making a good fist of it, using the stores as consumer depots fort heir online shoppers. others have kept the two businesses apart making them competitive as opposed to complimentary operations – this is the challenge for HMV.
February 17th, 2011 at 1:51 pm
Dear Jonathan
An interesting piece.
I think that we are really on the cusp of some big changes in retail this year as the many forces of change start to have a profound impact – multi channel strategies, positioning brands for growth both domestically and potentially internationally etc. For some retailers the risk of inertia, however, is failure.
Kind regards,
Jonathan