Retail Futures: Changing Consumers, Changing Retail Trends. Professor Joshua Bamfield Director, Centre for Retail Research

Retail Futures: Changing Consumers, Changing Retail Trends Professor Joshua Bamfield Director, Centre for Retail Research Retail - It’s Only Shops!...
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Retail Futures: Changing Consumers, Changing Retail Trends

Professor Joshua Bamfield Director, Centre for Retail Research

Retail - It’s Only Shops!  Nationally, 3 mn employees+ Distribution  Sales £318,000 mn  Good shops attract visits and extra leisure

spend; poor shops drive them away.  Retail rents, rates and employment are significant part of the local economy. Wider Mansfield area retail= around £1.3 bn and with restaurants/cafes/pubs £1.8 bn

Centre for Retail Research, Nottingham

It’s the Economy of Town Centres  It’s not (just) the High Street.  Offices, council staff, shops, industry, cafes, pubs,

leisure, cinema, libraries, health centres, post offices and visitors create consumer footfall and literally feed off each other.  Location of retail is changing and in central areas services (eating out, pubs, entertainment, health) must increase to replace declining retail.  Mansfield/Ashfield+ opportunity because of Nottingham retail problems.

Centre for Retail Research, Nottingham

Our Retail Industry Was Once World Beating

How Have We Got Here?

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The Failing Retail Sector  Insolvent businesses:

HMV, Comet, Blockbuster, Barratts, Arc, Internaçionale, Modelzone, Dwell, Dreams, West One, Jessops, JJB Sports, Julian Graves etc. Vacancy Rate Main Shopping Areas  The frugal consumer. 2007-2013  Shop vacancy rate 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Nov-13

Centre for Retail Research, Nottingham

Caused by three factors……  The recession  Changing consumer trends  Online growth

Centre for Retail Research, Nottingham

Caused by ………..  The recession

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Changing Consumers  Changing consumer trends  Online growth

Centre for Retail Research, Nottingham

Traditional Retail Model is Broken  Slow sales growth – we are worse off than 2008  Retail profits weak  Disruptive effect of the internet  Occupancy costs excessive: rates and rents  The call of the Mall

 ‘Logic’ of retail centres – is now being

undermined by shop vacancies.  Multiples ‘pruning’ their portfolios

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Store Numbers

Centre for Retail Research, Nottingham

Store Numbers Continue to Fall  To 220,000 (unless things improve)  Consumers shop differently – there are now too    

many shops Online growth, say 20%-plus by 2018-2020 Trend to multi-channel or omnichannel Not every high street and every town We argue: many town centres need topping and tailing – logical planning – houses, services, other facilities.

Centre for Retail Research, Nottingham

Problems of Town Centres  Portas Survey  Grimsey Survey

It is clear that  20 years of decline can not be overcome in one

year  Needs a national strategy and local strategies  Run town centre as a business

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Town Centre problems  Town centre share of retail spend falls from 50%

in 2000 to 40% in 2014 (Genecom).  Out of town retail provision  Big box stores, the race for scale – but away from town centres.  Online retail sellers start eating up specialist retailers – on price, range, convenience, customer service.

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Consumer trends  ‘Digital’ areas (books, computers, games, soft   

ware) switch to online Many specialists cannot compete with supermarkets and online. Fuel costs+convenience+economy= families shop more often in more shops. Grocery non-food is shifting to online & discounters Online growth continues at around 14% per year.

Centre for Retail Research, Nottingham

Retailer trends  The search for quality (eg Leeds Trinity,     

Westfield) Looking for ‘modern’ sites. Big boxes are now too large. The grocery ‘space war’ is over. They are assessing their portfolio of shops and look to eliminate long tail of zero-profit stores. Fierce bargaining on rents Therefore: LAs looking to support independents and small regional multiples. Centre for Retail Research, Nottingham

Support for High Streets My local area would be worse off without (my) high street 53%

strongly agree

30%

tend to agree

10%

neither agree nor disagree

4%

tend to disagree

2%

strongly disagree

1%

don't know

Source: IPSOS MORI Nov 2013

0%

10%

20%

30%

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40%

50%

60%

High Street Opinion  42% said that out-of-town shopping centres are

nicer places to shop than my local high street  34% said ‘my high street’ is getting worse and only 18% that it was improving.

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Which of these would encourage you to visit your local high street more often? better selection of shops

42%

greater variety of shops

34%

fewer empty shops

31%

more independent shops

29%

good choice cafes/restaurants

28%

better parking

27%

shops selling local produce

26%

outdoor market

21%

special events, eg farmers' markets or seasonal

19%

fewer betting shops

14%

better/more pleasant environment

14%

covered shopping area

Source: IPSOS MORI Nov 2013

13%

less traffic

12%

pedestrian shopping centre

12%

better transport links

7% 0%

10%

20%

Centre for Retail Research, Nottingham

30%

40%

50%

Developing Ideas  LA takes charge. BIDs and MiniBIDs  An agreed strategy and direction of travel  Encourage development, eliminating eyesores.    

Eliminate the negative etc Parking and transport problems tackled Tackling tenant mix and adjacencies. Markets, artisan, Christmas fayres etc Problems of mix of landlords

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Making rational choices.  All retail centres have an equal chance (?)  Need a sustainable strategy and means of    

carrying it through. More independents alongside multiples More houses More services – cafes and restaurants Magic solutions, artwork, pop-up shops, art galleries etc – short-term but may create interest

Centre for Retail Research, Nottingham

In brief ---- The retail growth model is broken.  Slow growth in consumer spending + online growth of    

retail sales forces massive retail change. This change cannot be stopped. Many high streets can be helped to become growth zones or specialist areas. For others, you need to manage decline. Housing conversion is part of this in some areas.

Centre for Retail Research, Nottingham

Thank You Prof Joshua Bamfield Centre for Retail Research Nottingham NG22 9HQ 01623 867559 www.retailresearch.org Twitter: cristobel75

Centre for Retail Research, Nottingham