With less commuting and more time spent exploring the shops and cafes on our doorstep, it comes as little surprise that localism is seeing a resurgence in 2021. Retail Week explores the small store formats popping up on the high street.
Local high streets have seen a resurgence during the pandemic and the trend is touted to continue as many people plan to work from home more post-Covid.
“Local high streets are benefiting from the restrictions on consumer movement due to the pandemic,” explains Harper Dennis Hobbs head of retail consultancy Andy Metherell.
“This enforced ‘hyper-localism’ will help consumers reconnect with their local high streets and communities.”
Research from Harper Dennis Hobbs backs up this trend.The HDH Vitality ranking, which looks at the health of retail locations, was topped by small affluent market towns, such as Beaconsfield and Henley-on-Thames.
“With commuting off the table for many, people have moved their disposable income away from employment hubs towards their local high streets”
Joanna Parman, Kantar
The ranking looks very different to previous years, with more geographical spread across the country and a lesser focus on destination shopping locations.
Towns such as Beaconsfield and Henley-on-Thames would have benefited from commuters working – and seemingly shopping – at home for the best part of the year.
Kantar strategic insights director Joanna Parman agrees. ”With commuting off the table for many, people have moved their disposable income away from employment hubs towards their local high streets.”
It is unsurprising, therefore, that retailers are looking at opening local neighbourhood and suburban stores to capture this growing part of the market.
Bringing out-of-town on to the high street
For some businesses, this means radically adapting their offer to fit local high streets.
Big-box retailers, which usually trade from retail parks, have already made moves, with both Dobbies and Homebase opening smaller high street stores over the past year.
Little Dobbies
Garden centre chain Dobbies launched its first Little Dobbies format in November 2020 in Edinburgh’s Stockbridge suburb in a bid to “bring horticultural products to customers in a more local and accessible way”.
The retailer said the idea had been in The Works for a while, but the pandemic provided a great opportunity to adapt to the changing needs of the customer.
“With the growth of gardening in 2020 creating 3 million new gardeners and houseplants proving to be more popular than ever before, October was the perfect time to announce the new concept store, which then opened in November,” a spokesperson said. “The core of the Little Dobbies offering is horticulturally focused with a range of convenience gardening products, complemented by a carefully curated range of houseplants and selected seasonal ranges.
“Little Dobbies is designed for those customers who live in communities where traditional-format garden centres don’t exist and where Dobbies can be part of the local community.”
The retailer plans to open a second Little Dobbies store in Clifton, Bristol, this March, with more planned for later this year and beyond.
The Little Dobbies format will range between 1,700 and 2,500 sq ft and stores will also house a coffee counter.
Metherell says other types of retailers, such as variety stores, could also capitalise on providing more localised offers.
“The main thing is for brands to ensure that they are engaging with their shoppers in the most productive way to meet their demands. Online has grown significantly, but local high streets can provide another route, too.”
Localising the offer to suit the needs of the community seems to be a key theme for those retailers looking to open smaller-concept stores.
“Online has grown significantly, but local high streets can provide another route”
Andy Metherell, Harper Dennis Hobbs
Parman believes home and DIY stores are best placed to “become stalwarts of our local high streets”.
“We know that customer loyalty is incredibly low for homeware retailers and people want to browse and compare brands in store on the high street if they can,” she explains.
“Consumers still want to visit physical retailers to touch, feel and see DIY supplies before purchasing, something that is signalled by the fact that DIY shopping online fell back to pre-Covid levels between lockdowns.”
She also believes that high street DIY stores could broaden retailers’ appeal to a younger audience.
“Younger DIY-ers are more likely to find large, traditional formats ‘overwhelming’, so retailers will be considering how smaller high street formats can attract and retain their business in future,” she says.
B&Q
B&Q first ventured into smaller formats with its GoodHome trial in 2019, but the retailer is now taking a new approach.
While GoodHome acted as a design studio and click-and-collect location, chief executive Graham Bell is now pursuing a convenience model in small stores.
B&Q has developed three different iterations of smaller store to cater to local communities: stores to serve high-density populations on high streets with no parking; stores in suburban areas on the outskirts of key cities; and stores in rural catchments.
Each of the three types carry a core range of just 7,000 to 8,000 products to cater to the day-to-day needs of customers, while also acting as click-and-collect hubs.
“Customers want that convenience – they don’t always want to travel to those big stores, especially in the pandemic,” explains Bell.
“They want something in their local community. We’re going to have a core range that caters to all the top line generic projects you’d do, as well as designing kitchens and bathrooms and click-and-collect of the whole range.”
“We’re not looking to grow the number of bigger stores – we think we’re pretty well covered there – but we’ll be growing new small stores, trialling new concepts.”
Good deals for big brands and indies
One by-product of the pandemic has been a rebalancing of retail rents as vacancy rates have increased.
This provides an opportunity for retailers with the cash to spare to plug gaps on local high streets.
Pets at Home
Pets at Home unveiled two new high street stores in Camden and Putney late last year to cater to customers within the M25.
“We’re typically a retail park operator, but you can’t do that in London and we’ve always wanted to expand there,” says boss Peter Pritchard.
“Two things have happened: one is a definite improvement in the availability of sites – unfortunately, because of other retailers’ demise – and second, we’ve got a format that we think works well.”
Pritchard plans to roll out around 25 new small Pets at Home stores on local high streets around the London area in the next few years, each employing around 15 staff members.
“It’s essentially a mini-pet care centre,” he says. “It’s still a combination of services and retail, but really fine-tuned on a ranging perspective for London customers.
“Typically, there are more cat owners than dog owners in London, shoppers will have slightly smaller bag sizes because of their ability to carry, rather than visit in a car, and they usually buy more premium ranges.”
Pets at Home is poised to take advantage of any opportunities that pop up around London, working to find stores to fit its requirements on local high streets.
This not only creates an opportuntiy for big brands, but also for independent retailers.
Menswear mini-chain Simon Carter trades from shops in the London districts of Blackheath and Crystal Palace, as well as more central locations such as Mayfair.
Owner Simon Carter recently snapped up two more stores – one in Chiswick, west London, which opened just before Christmas, and another in Hyde Park Estate’s new Connaught Village location.
He told fashion news website The Industry that he was persuaded to take on new shops because there were “very good deals to be had that certainly won’t be there in a year’s time”.
“I see opportunity presently as landlords are being much more realistic and keen to do deals. Although central London, and city centres generally, have been hollowed out by coronavirus, we are experiencing an era of ‘hyperlocalisation’, as I’ve termed it.
“Millions of us are living, working and spending from home, and creating a prosperity ripple in suburbs and regions that are becoming virtuous circles. I’ve always favoured these ‘villages’ and have seen a 20% increase in sales at my Crystal Palace shop, for instance, during the months it could open.”
“Independent music stores have managed to grab a significant share of vinyl spend, taking 29% of sales despite various lockdowns”
James Foti, Kantar
It’s not just indie fashion that could take advantage of this. Kantar consumer insight director James Foti believes independent record stores is another key growth sector.
“In 2020, people swapped nights out and gigs for authentic music experiences at home, and sales of vinyl records grew by over 40% in the year to January 10, 2021, accounting for almost half of all physical music sales,” he says.
“Independent music stores have managed to grab a significant share of that spend, taking 29% of sales despite various lockdowns.”
Next Door Records, for example, opened in Shepherd’s Bush after the first lockdown regulations were lifted.
The store combines a record shop, cafe and bar, selling records, wine and food as well as hosting events, DJ sets, live music, exhibitions and workshops.
The retailer is also planning to play host to pop-up chefs and kitchens to keep the food offer new and exciting.
While no plans are in place to roll out the concept further, Next Door was created through crowdfunding, showing the desire for such a place in the local community.
Local high streets have been vibrant during lockdown and this purple patch looks set to continue when the UK reopens. Smart retailers are looking at how they can form a part of this new resurgent retail location.
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