New shopping centres set to transform West Midlands’ retail sector
A FLOOD of new retail openings in the West Midlands is set to change the region’s shopping fortunes and reverse a trend which has seen the overall number of shops in the area decline.
PwC said its research suggested that events such as the opening of Poundland’s 600th store in Bilston, the reopening of Harvey Nichols and the Mailbox in Birmingham, and the much-anticipated opening of Grand Central would have a massive impact on the region’s retail sector.
While Marks & Spencer and Morrisons have revealed plans to close stores in the area this year, the expansion of the Aldi network, new stores opening in Walsall and the opening of Marks & Spencer’s giant new store at Longbridge will more than offset the closures. Added to this is the opening later this year of a 51-unit outlet mall at the new Resorts Word Birmingham complex at the NEC.
These events may even reverse the trend seen last year when reduced store openings meant fewer shops open on the region’s high street.
The research, compiled for PwC by the Local Data Company (LDC), found that the overall number of shops on the region’s high streets fell last year, as retailers continued their drastic overhaul in response to the advance of online sales and changing consumer demand.
Last year, 524 outlets closed in the West Midlands compared to 371 openings. This equates to a net reduction of 153 shops as fewer shops opened despite similar numbers closing year on year. This reduction increased from 76 closures in 2013, when 471 stores opened in the region and 547 stores closed.
Andy Lyon, partner and retail expert at PwC in the West Midlands, said: “The next LDC research will be announced later this year and it will be interesting to see whether there’s been a turnaround on the West Midlands high street in our more buoyant economy, and as shops start to embrace the digital revolution.
“Despite the continuing problem of closures in 2014, new sub-sectors, such as discount shops and charity shops keep growing, so it’s no surprise to see the 600th Poundland store open in Bilston. In March this year, we predicted that change will continue and the area to watch would be the battle of the convenience and food store sector as supermarkets, the discounters and pound shops fight it out.
“The continued effects of the digital revolution and consequent change in customer behaviour has also been playing out on the high street, and we’ve expected the rate of closures to continue. The generation that has grown up with online shopping has a different relationship with traditional high streets, and shops need to evolve to be relevant to the future.”
He said stores such as John Lewis were embracing this challenge and recognising the multiple ways people now shop, had provided new services such as ‘click and collect’ and online interactions in physical stores to cater for changing customer habits.
“It’s no accident that the new (John Lewis) store is by a major transport hub with more than half of online purchases over Christmas being collected in store,” he added.
“It will be very interesting to see what impact the reopening of top-end Harvey Nichols, the revamped Mailbox, and the opening of Grand Central with its 250,000 sq ft John Lewis department store has on high street trends in the West Midlands.”
PwC’s next research report on store openings and closings will be released later this year.
