Thursday, 12 December 2013

The changing face of retail...

Being part of the construction industry we know how hard the recession has been.

There are not many industries which have been as hard hit as construction but retail must be a contender. Not only has it been effected by reduced spending but also the way people shop has changed dramatically.

This change in spending is having an impact on all forms if retail, be it high street or out of town. 

As people increase the level of online shopping the supermarkets are left with an growing amount of unused out of town square footage which is not generating turnover or profit. Their smaller local shops are growing but these deliver a smaller profit per square foot.

The non food retail sector has similar if not greater challenges. We have already seen the demise of the traditional bookstore and record shop as people have either bought books and music  online or converted to downloads. 

Book stores and music shops  still exist but now they have moved to a more specialist offer.

Clothing and electrical goods are now being effected by the growth of online trade. With lower overheads the online store can offer a  lower price for the same product.

So where doses this leave retail in the future. I think the out of town mall faces one of the biggest challenges. The retail offer will reduce  and these malls will become a destination or leisure venue. Restaurants, cinemas and coffee shops will be interspersed with specialist shops.

The out if town retail park faces the biggest challenge. Big shed shopping does have low costs but it has to compete with the Internet on price.

The real opportunity is in the high street as shoppers change their habits. Shopping has become far more local, specialist and social. Families will carry out their large shopping on line but this will be supplemented with fresh and specialist produce such as meat and vegetables. The mass produced produce will be used but will be enhanced by specialist offers

The social aspects of the high street will continue to grow. We will have even more coffee shops, bars and restaurants where people can meet. This mix will attract people throughout the day and night making the high street the centre of the community.

We have come full circle from where we were 30 years ago where the corner shop played a central role in the community.

While the high streets prosper we will see decline and change out of town. Retailers will try new ideas and concepts to adapt their existing space. We are already seeing Tesco adding restaurants and coffee shops to their stores however I am not convinced that these will provide a long term alternative to the high street community.

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