The largest retail groups in Europe are mobilising new strategies

The three biggest retail groups in Europe are mobilising new strategies. All have recently changed their chief executives, albeit in very different circumstances: Sir Terry Leahy left Tesco crowned in glory, Dr Eckhard Cordes exited Metro up the down escalator and Lars Olofsson quit Carrefour in the quagmire.

Massive stores have been the bedrock of their success, but small is now the new big. The big box is being trumped by the small shop and the small screen; and their common denominator is mobility. A new study by the Consumer Electronics Association, to be published on March 20 (The Mobile Commerce – Reinventing the Way Consumers Shop) shows that 37% of US mobile device owners engage in some form of m-commerce. Nine out of 10 consumers own a tablet, smartphone or cell, so it’s no surprise that m-commerce now accounts for over a third of all online transactions.

But if consumers are on the move so too are the shopkeepers – many, sadly, on the way out. In a recent Morgan Stanley note on “dying high streets”, Geoff Ruddell, in conjunction with the Local Data Company, draws attention to dramatic variations in town centre vacancy rates: on average these affect one in seven UK stores, but in some towns they’re nearer 40%.

Other centres, of course, stay strong. But this apparent polarisation between weak and strong centres disguises more complex patterns of trade. The so-called weaker high streets might well be shrinking in their expanse but they’ve become more tightly focused around core shopping areas which continue to be fertile ground – not least for the fast-moving value retail players (Home Bargains, for example, is opening a new store every week).

Prime trading opportunities in sub-prime centres are being unlocked by these nimbler retailers through astute negotiations with the landlords, not least when leases mature.

Discounted renewals, threatened relocations, rent-free periods, landlord contributions, waived dilapidations: it can be a tenants’ market out there. But for those big legacy retailers that are saddled with freeholds or long expensive leases on over-sized stores in weaker town centres, mobility is hardly an option. Over the next 10 years, as Geoff Ruddell observes, “many retailers with ill-configured store estates … are going to be at a big disadvantage”.

The Jack Wills lifestyle brand, untrammelled by bricks-and-mortar legacies and with its finger on the digital pulse, is mobilising an entirely new way of thinking in how to trade, as well as how to communicate, with its customers. 

Jack Wills, for whom the jeunesse dorée clamour in unison – not just in the UK but the US and Hong Kong too – has opened a store in Chichester that wilfully disobeys the fashion retailer’s real estate rulebook. Located far from the high street in a beautiful period house, thus snubbing the Zone A rentals that beset most high street multiples, Jack Wills has gained destination status in a way off-pitch location.

This clever sidestepping move to divert its upwardly mobile, loyal clientele could catch the bigger boys standing, and with their pants down; immobilised so to speak.