Everyone in the retail warehouse market will be glad to see the back of 2008. Retailers and landlords alike have endured a miserable year, all stemming from the collapse in the market for furniture and home improvement.

Weaker players like ScS, Floors To Go and New Heights have gone into administration, while others like Land of Leather have teetered on the brink. Even the very strongest players, such as DFS and Carpetright, have found the going exceptionally tough and had to adjust their businesses accordingly.

While those businesses that have collapsed were weaker businesses to start with, there’s no doubt that the collapse of the housing market has completely clobbered this part of the industry.

Optimists will say people invest more in their existing house if they’re not moving, but that’s simply not borne out by the evidence. People aren’t moving house and they’re not buying furniture or, for that matter, the other related retail park staple: white electricals goods.

But look hard enough and there are some positives out there. The success of TK Maxx’s HomeSense format, and of Dunelm, shows that customers are willing to spend on smaller items for their homes, as long as there is a strong value message.

High street fashion retailers are still eager to up their presence out of town, taking advantage of the better deals available, and the supermarkets are pressing ahead with their standalone non-food formats.

But times are undeniably hard and everyone needs to be a little bit creative in order to deal with what are pretty extreme circumstances. As John Ryan writes on page 10, retailers need to be sure that their store environment is as good as the best in-town stores, while landlords need to be flexible about the terms they demand and invest in improving the retail park experience.

And while the overall outlook may be gloomy for some time, the arrival of Best Buy will provide a huge shake-up for UK electricals retailing. What its move also does is show faith that one of the world’s best retailers believes in a bright future for out-of-town retail in the UK.

Topics