As every week goes by, it seems yet another story emerges of retailers consolidating their store portfolios.
As every week goes by, it seems yet another story emerges of retailers consolidating their store portfolios. Last month at The Cloud Retail Week Conference, Aurora Fashions president Stewart Binnie said the retailer could dispense with more than half of its stores as the web continues to reshape the retail industry. Multichannel isn’t the only factor shifting the outlook for bricks-and-mortar retailing. Those battling against the downturn are also looking to slash costs by closing stores – among the many is Comet, which last month revealed it has earmarked 60 shops for closure.
The retail property landscape is changing, and changing fast. But, it’s not over for the high street, it just requires a radical think, as Sainsbury’s chief executive Justin King has pointed out. He believes the best high streets will comprise more than just retail, and that there should be the courage to take the plunge and allow empty shops to be converted for other uses.
Just as changing shopper habits are altering the outlook for the high street, they are changing the grocery property world too. Convenience stores are the name of the game, and big is not necessarily best. Following Tesco group chief executive Philip Clarke’s comments questioning the future of further hypermarkets in the UK, we look at how the big supermarket groups are realigning their store spend.
Meanwhile, shopping centres are also evolving in a bid to lure customers away from shopping on their laptops or mobile devices. As they work on developing their retail destination credentials, restaurants and cafes are no longer an afterthought, but instead becoming an ever more important part of the mix to enhance the customer experience.
It’s not just the country’s mega malls that are receiving a bit of beauty treatment. Landlords are working hard to improve the environment of shopping centres and malls of all shapes and sizes. The end result is not just the creation of better spaces to fill for retailers, but added value to the retail park or shopping centre in question.
In addition, it’s not as if development has stalled completely. There are still exciting projects ahead that will significantly enhance retail opportunities in cities around the UK.
These may be challenging times that require real thought about how to make retail property space work. But there is good news on the horizon. By 2015, 50% of leases across the UK will expire, providing an ample rent negotiation opportunity and a chance to relinquish poor performing outlets. What’s more, we look at why shorter leases and break clauses might become the norm, giving more power to retailers. So while the retail property landscape is changing fast, with some careful thought and planning, it’s not necessarily changing for the worse.
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