Comment: Retailers are wasting money on new shops

Time was when retailers waited for spanking new shopping developments to rise out of the ground and then there was something of a headlong rush to join the party. That was quite a long time ago and this year, Land Securities’ Trinity Leeds scheme is the only shopping centre that will open to shoppers eager to see something new.

This is hardly surprising. Depending on where you go in this country, vacancy rates can be as high as 28.3% and one in seven shops now stands empty, apparently. There are plenty of available shops. To an extent, the numbers are the outcome of a string of administrations during 2012 and the first couple of months of this year have hardly proved auspicious – it seems probable more will follow.

Why therefore would any retailer seek a new, purpose-built shop? There are, in fact, very few that seem to be doing so and for the green lobby this must be an unintended beneficial consequence of the decimation that has been taking place across the sector.

The disturbing bit however is the manner in which money is still showered on perfectly good units that come courtesy of one or more previous tenants. Talk to design consultants and it won’t be long before you are informed that when a previously-owned shop unit is taken on, the brief provided is frequently to strip the interior completely and to start over.

This is good news if you happen to be a shop designer or a shopfitter, but at a time when margins are under severe pressure it does seem surprising that structural, rather than cosmetic, makeovers seem to be the order of the day.

The question is what can be done for less money and how effective is it likely to be? A lick of paint (preferably in a different colour), some eye-catching graphics and a decent lighting scheme will probably suffice. Indeed, even before the fixtures hit the floor, if a space is properly lit, then the chances are good that a store will be worth a shopper’s time of day.

Capital expenditure and ROI have always been uppermost in the minds of most retail CEOs and yet the tendency still seems to be to throw money at a newly acquired unit. It doesn’t have to be this way. The best ideas are rarely the most expensive and perhaps thought should be given to making the most of what’s there, rather than ripping everything out to create a blank canvas. It would also make the business of reviving flagging high streets just a little easier.