Future of Retail: Shop numbers forecast to slump
WITH the sector in a state of flux as increasing number of shoppers move online the number of stores retailers wish to operate is set to fall sharply, experts believe.
There are 290,000 retail outlets in the UK and recent analysis has suggested that some retailers may have to reduce their property portfolios by up to 40% in the next five years as they adapt to meet the changing demands of consumers.
We’ve seen with the recent rescue from administration of Game, that its new owner OpCapita, favours a ‘less is more approach’ to its future structure after acquiring around 330 of the best-performing shops. At the time of its insolvency in March, Game had nearly 610 outlets.
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According to Rupert Eastell, partner and head of retail at Baker Tilly, few retail businesses need more than 70 stores to create a full UK presence.
“A lot of retailers are over-spaced and over-rented. There are very focussed attempts to reduce space by all retailers. They are focusing on fewer, larger, more eye-catching units.”
He believes retailers are following Apple’s lead, where essentially the shops become about an experience and where customers can touch, test and interact with products.
“The store is becoming the showroom, the place to show off the product, and less about actual selling,” he argues.
Property agent Colliers International agrees that there is a disconnect between what retailers want and the available stock.
Head of retail Stuart La Frenais says: “Retailers’ standard shop requirements now are for larger store sizes of 2,500-5,000 sq ft and these are limited in their availability. Much of the stock available is less than 1,500 sq ft,”
DWF’s retail expert Duncan Vaughan says consumer convenience is a big driver for a lot of the changes retail has seen: “Compare and contrast high street retail with out-of-town, where there is convenient free parking, or online, where there is a full range available compared to a more limited choice.
“You can try to hold back the tide or say it’s an opportunity to look elsewhere.”
It is however too simplistic to say the future of the shop is doomed. Home shopping company N Brown – which specialises in plus-size clothing – has started to trial shops for its Simply Be and Jacamo brands.
N Brown chief executive Alan White says the move is helping the retailer fight for market share: “Perhaps 80% of our market place is still on the high street and although we firmly believe the online channel will be the fastest growing channel, we are in the mode of opening a few stores in big catchment areas and hoping to take some of that stores channel as well.”
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