With large retail brands closing their doors for the final time, what does the future hold for high street shops?
As more and more town centres reflect the fortunes of some large retail brandswith fading facia boards on empty shops you have to ask how is it that some town centres are thriving and others are dying. Local councils are desperate to maintain a retail centrefor their towns and the desire from the communities is one of similar support. How is it then that so many towns are unable to provide an attractive retail offer. Excuses abound from both the large retailers and independents of declining customer numbers and their disposable income spend, however looking at the large out of town retail shopping centres the numbers and spend still seems healthy.
Six reasons for town centre failure
Analysing the recent spate of store closures and a number of town centres leads to some interesting conclusions as to why we have so many poor high streets in the UK. It boils down to six reasons:
Macro-economics affecting the available spend within a larger area
- Failure of the High Street to adapt to a larger retail offer coming in to the area
- Poor retail offer and/or operation not inspiring consumers
- Poor council support in parking, transportation, policing and environment making it difficult or unappealing to shop in the High Street
- Big brand retailers over-reaching themselves and taking bold regressive steps to reduce costs
- Internet offering too compelling in certain categories.
The fact is that many of the town centres will suffer from a number of these ills at once and that no single factor will be responsible for the final nail for a particular store or High Street. The Government view echoes the local council's view that dying town centres are not only a poor reflection of the economy they are potential vote loser too. Employing Mary Portas to investigate and consult on solutions is a reaction to this as is the Department for Business, Innovation and Skills "Healthy High Street" Questionnaire. Ms Portaswill bring a common sense approach as well as a sense of urgency to the debate yet without real investment in training for both councils and retailers at the grass roots level, it is unlikely to be a game changer.
If the first four issues can be improved upon by simply creating better retailers through training and development, the final two rely on a more mature understanding of the market place from retailers who should know better. The likes of Thorntons and TJ Hughes leaving the High Street is no real surprise given their limited offer and mediocre operation, it stands as a stark warning to prevent the over-extension of retailers who have confused brand density with retail effectiveness. This may seem a harsh judgement yet the High Street is littered with examples of big brands who fail to achieve expected customer numbers and resort to gimmicks and off brand offers to make up for the poor store position.
The internet can be blamed for the proliferation of some "niche" retail although these were never staples of the High Street. Where consumer purchases are based on brand loyalty, product specification and price then the High Street is bound to lose out as customers can compare all this more easily on line than anywhere else. C ompound this with the fact that the larger items are then often home delivered, it is no surprise that the large electrical stores have reduced their retail sales share from 5.2% to 3.8% in the last 5 years. It is just easier to do all this on line and when was the last time you spent over £100 on household electrical item without comparing it on-line ?
So is the High Street Dead ?
No, although there is too much retailspace out there, that promotes the development of poor retail by cheaper rates from desperate landlords, the High Street can bounce back. The larger players will rethink their High Street offer and either tailor it accordingly from the perspective of offer and costs or will pull out to the out of town shopping centres only . This will leave the High Street to the local player who can run an attractive business by understanding the consumer and respond with great product and consistently personal service, emphasising their point of difference. It will need councils to work with Landlords to entice and nurture the retail talent back to the High Street and support through improving the customer's environment. It will also need forward thinking councils to invest in programmes that assist the development of retail talent, re-capturing the High Street as the exciting place to shop once more.