Fewer, better shops are the future of retail

In fairness, Peter Williams has vast experience with bricks and mortar retailers like Selfridges and more recently JJB, but nevertheless there was something symbolic and slihtly painful for the massed property industry in listening to the success story of Asos.

This year’s BCSC was a more business-like affair than previous years, and away from the upbeat proclamations from the big property companies the general feeling was that while some retailers are taking space again, many are bottom-feeding in a once-in a-lifetime tenants’ market.

What’s happening in the retail property market is more than just short-term opportunism. There is a fundamental change taking place in how retailers use property. Where once you needed 300 stores to have national coverage, today’s growing retailers can do it with 100 or 150 and a website. For secondary retail centres that spells disaster.

Emboldened by the success of JJB, there will be more CVAs next year and more retailers looking to slim down their portfolios to concentrate on their best stores. Shopping centre development in all but the very best locations is not going to be viable until someone comes up with a new business model, probably incorporating smaller anchor stores and a bigger leisure element.

That means more pain ahead for many in a property world that grew used to thinking the good times were never going to end, but it is inevitable. The realisation in Manchester this week was that the multichannel world of the future means fewer, better shops.

October’s sales message

October’s BRC sales figures may have been against soft comparatives but they nevertheless represent a strong sales performance and show that the efforts retailers are making to demonstrate they offer value are working and drawing consumers back into the shops.

There are real concerns about 2010, but does the October performance spell a blockbuster Christmas in the meantime? We shouldn’t get carried away. Confidence is still fragile and consumers are planning more carefully, which may have pulled forward some festive spending. Christmas 2009 is likely to be a good one rather than a great one.