Alternative visions of the UK high street were put under the microscope at an expert scoping panel workshop on 7 February 2013, convened by researchers at Southampton University.
Their High Street Futures study (www.highstreetfutures.co.uk) has been funded by the Economic and Social Research Council (ESRC) with the support of Tesco. It comes in response to recommendations from the Mary Portas’ review and is designed to bring together leaders from the retail and property industries, central and local government plus academics, to look at the ways in which UK town centres and high streets are likely to adapt and change in order to survive over the next 25 years. Fiona Briggs reports
Ian Anderson, head of national and retail planning at commercial property and real estates advisor, CBRE, which advises on 10m sq ft of retail/mixed use development in the UK and lists John Lewis and Waitrose as clients, said the sector was facing a perfect storm with recessionary pressure on the high street driving up retail failures.
Town centres have lost an estimated 15,000 shops between 2000 and 2009 and a further 10,000 between 2009 and 2011, he said.
Anderson described a so-called ‘cycle of vacancy’, where empty stores reduce footfall to a locality, and have a domino effect on those close by.
“That’s what we are starting to see in a number of the depression high streets at the moment,” he said.
The increase in online retailing is having a further impact with retailers beginning to focus on an omni-channel strategy.
Anderson said retailers recognise they can serve 80% of the population from existing sites and via “canny pre-pack administrations” were closing poorer performing stores.
Growing smart phone usage – purchasing via smart phones is reported to have increased by 500% in the last two years – is having a further impact on real estates, he said. Tablets and laptops also facilitate on the move purchasing, while social media has created a ‘me generation’ of consumers.
“We are going towards a generation of shoppers without shops,” said Anderson.
Anderson said planning was too complex and it should be an enabler not a restriction on retail development. However, he admitted not all town centre development was viable; although it was right to remain on a Town Centre First policy basis.
Town centres need to focus on their USPs and become places to dwell, live and shop, he said.
“Spending will become part of the trip but shopping will not be the raison d’etre to get people into town centres.”
Many of the recent administrations and collapses on the UK high street have been bad retailers, according to Kantar retail insights director, Bryan Roberts.
“It’s a lot down to the retailers for not being very good,” he said.
And he railed against independent retailers who believe they have a God-given right to trade.
“What riles me is the sense of entitlement independent retailers have,” he said. “Being an independent is not an excuse for mediocrity.”
However, shopper behaviour has had the biggest impact on retailers’ demise, said Roberts.
“It’s shoppers’ fault this has happened,” he said. “Poor assortments, lacklustre execution and an underdeveloped multi-channel capability have encouraged them to seek alternatives,” he said.
Roberts highlighted recent shopper trends to reduce their spend by shopping in discount stores and buying more own label, for example.
He criticised the industry’s obsession with low pricing and argued shoppers wanted value, which combines price, quality and service.
He urged retailers to consider other aspects of value, such as saving time, money and angst; and maximising speed of service, relevant pricing and convenience.
Huw Williams, partner at retail and leisure property consultants, Chase & Partners, explored what retailers want from town centres but conceded the industry knew very little about what drives shopper footfall.
Competition is the lifeblood of retailing, he said. It exists between retailers, between town centres and out of town, between centres, and between stores and online retailing.
Williams presented the drawbacks of town centres including difficult access, expensive parking, safety issues, limited range and choice and costs for retailers.
Retailers’ location strategy has changed, he said. Today, they are operating fewer stores complemented by online business and that has driven a fundamental change in town centre development.
Some centres are responding to the challenge with better access and affordable parking and clear strategies for the future.
However, there is too much control in town centres and they should be allowed to diversify, said Williams.
Will McKee, CEO at retail warehouse property promoter, Accessible Retail, called for a rebalancing of the Town Centre First policy.
“The policy ignores that times have changed. Town Centre First is too crude, it needs to be adjusted. If a retailer is going to stay in business, they have got to go to a different format.”
McKee highlighted the structural changes in retail and a shift from secondary to primary centres.
As a result, retailers have been left with “wrongly configured and uneconomic estates”, he said.
Some secondary malls and high streets are beyond saving in their current format and town centres and high streets cannot compete effectively with multi-channel rivals.
McKee said the town centre decline has been blamed on out of town retailing. However, research by the GVA showed decline was just as likely to be from competition from nearby town centres.
Further, other studies showed out of town retail was more efficient than town centre retailing.
McKee presented AR research with in-town and out of town retailers, which found more out of town stores would be needed in future and fewer in-town stores. Click and collect services would be important for both locations, however.
Landlords, like out of town, are not so culpable either, said McKee. Lease lengths have fallen and monthly rents are now available, for example.
From an investment perspective, meanwhile, out of town retailing is the most valuable sector in terms of income generation, he said.
McKee concluded with tips for retailers to remain competitive in today’s marketplace including reviewing their units and leases but urged them to consider whether they were in the right location and consider a move out of town.
Tesco corporate affairs manager, John Timothy, highlighted the supermarket’s retail strategy but stressed having scale does not guarantee success.
He addressed customer needs and the value of Club Card in tailoring the offer and increasing personalisation. Timothy focused on Tesco’s investment in store staff – general assistants and specialists – to improve service.
Timothy said the emphasis in terms of planning was on a multi-format strategy, less new space but better quality space. Within the current estate Tesco is investing in improving the store ambience.
Tesco is examining footfall drivers in different stores; while innovation is across formats and not just stores. Integrating online and stores will be key to future development, Timothy said.
Future consumers will not differentiate between the models.
The fashion line F&F is being developed as a standalone brand; while click and collect grocery is facilitating drive through food shopping. Tesco is also using its Express convenience store estate to drive collections from its Direct online business.
In the next stage of development Tesco is opening dedicated dot centres to serve London, said Timothy. Previously orders have been fulfilled by local stores.
Steve Norris, partner at independent retail planning, town centre and economic development consultancy, Strategic Perspectives, discussed how town centres can fight back against a backdrop of out of town development, recessionary impacts and the growth in internet shopping – non-store sales are tipped to account for one fifth of total sales by 2030.
And he reminded delegates to consider the future of the high street from the kids’ perspective – the next generation of users.
According to Norris, town centres will remain the social and economic heart beat but there was no silver bullet and all town centres are different.
Norris said he was relieved the industry has maintained a Town Centre First approach but advised to plan for decline as well as growth.
Norris welcomed aspects of the Portas’ review – notably getting town centres on the agenda but said short-term, quick fixes are not the answer to the downturn.
“For high streets to survive and grow they need a vision and a strategy,” he said.
Norris highlighted Wandsworth – one of the beneficiaries of the £100,000 funding made available by the Government in response to the Portas’ review – as a Borough Council that has established a long-term view. It includes developing USPs for each of its centres (Balham, Clapham, Putney, Wandsworth and Tooting), which Norris said was a bold move; plus a brand image and identity for each centre.
Norris showcased a case study of a town centre redevelopment in Newbury, Berkshire, which was being squeezed by local towns including Reading, Swindon and Basingstoke.
With a new vision – Newbury 2025 – Newbury identified and developed a new shopping centre site, connecting with the high street and green space. It opened in late 2011, anchored by Debenhams and John Lewis at Home.
According Norris, it proved “town centres can, to varying degrees, fight back against a tidal wave of challenges”.
Towns need a robust vision strategy, however, and to look beyond just shopping with leisure and entertainment facilities, he said,
Martin Blackwell from the Association of Town Centre Management (ATCM) presented his organisation’s 100 Ways to Help the High Street; which includes:
- Getting people to work together
- Ensuring a safe and secure high street
- Developing consumer marketing and events, including use of digital technology such as NFC communications to drive footfall
- Getting access right
- Attracting investment and getting the mix right of investors
- Developing an evening and night time economy
- Training and development and accreditation