Posts Tagged ‘High Street’

How retail needs to evolve to survive

Posted on: by Chas Arya

By Ratio Law’s Joanna Norris 

Just as it appears that market conditions are improving for businesses across the board, there is  yet another report about how the retail sector is lagging. A recent paper by Centre for Retail Research predicts that by 2018, the total number of shops in the UK will decrease by 22% with a further 164 major or medium-sized companies likely to face administration, meaning a loss of some 22,600 stores and 140,000 jobs.

It’s long been agreed that the rise of internet shopping has played a huge part in the demise of the high street, but what can bricks and mortar retailers do to not only survive, but thrive?

1: Make it easier for the customer: One of the perks of online shopping is the ability to buy anything, at any time and get it delivered anywhere (all within reason, of course). We’re living increasingly busy lives, meaning many people simply don’t have the time to go to the shops and wander around aimlessly, before leaving empty handed because they can’t find what they want.

But while online shopping allows customers to buy virtually anything quickly and easily, there are often issues when it comes to receiving the goods. A survey by Which? found more than 60 per cent of consumers have faced delivery problems when receiving an online purchase. Whether it’s because people get fed up of coming home to a doormat full of ‘sorry we missed you’ cards, or their workplace has clamped down on getting personal parcels delivered to the office, consumers want more control and flexibility when it comes to accessing  their purchases.

This is why services like Click and Collect have soared in popularity over the last couple of years. And it’s not just a service that traditional bricks & mortars are offering, online retailers are getting in on the action too. For example, Amazon has placed lockers in a number of retail units  across the country, enabling customers to collect their purchases at a time and location that suits them.

Although Click and Collect services provide increased convenience for consumers, they are not a panacea and there are a number of potential issues retailers need to consider if they decide to provide access to the service. For example, do they have the space available not only to hold the stock, but to also cater for the number of customers coming to collect items? Is it a service that they can offer out of normal trading hours? In addition, how can they ensure that restricted goods such as alcohol, tobacco and knives, are sold only to the appropriate age group?

2. Relax Sunday trading rules: Following on from the theme of making it easier for the customer, relaxing Sunday trading rules is one possible solution that many businesses would like to see implemented. Currently, retailers are only allowed to trade for six hours on a Sunday, between 10am and 6pm. However, smaller stores of less than 3,000 sq ft are able to open for longer.

The restrictions were suspended during the Olympics and Paralympics, and many retailers now want them to be lifted all together. While supporters of the idea believe it will provide more convenience for consumers, boost spending and increase job opportunities, critics worry it will harm smaller retailers and that it could have an adverse effect on British traditions.

3. Rethink the purpose of the store: Although more and more people are purchasing goods online, many consumers still like to go into an actual shop and see or try the products in real life. Many retailers have noticed a trend for ‘showrooming’, that is going to look at a product in a store but then buying it at a lower price online. While this practice can be damaging to smaller retailers who lose out to the bigger companies who can beat them on cost online, some retailers are recognising this is a trend they can take advantage of.

As a result, it may not be long until we start seeing traditional bricks and mortar stores as ‘retail destinations’ where consumers can go and view a few samples – which they can touch and feel, rather than simply a place where they go and purchase goods. Retailers who evolve in this way may well start to exploit technology, such as interactive screens, to help immerse consumers into the brand as well.

If this trend takes off, we could well see the look of the high street change. Large premises may be turned into smaller, independent units, or bigger spaces may take on more of a department store feel through smaller concession retailers. Of course, if retail units are adapted for  viewing, as opposed to buying, the existing trading laws may not apply or require adaptation to support these changes.

What do you think – are there ways that retailers can adapt to survive on the high street?

The High Street or Retail Park: Choosing the Best Retail Location

Posted on: by Chas Arya

In this post we pose the question; which is the best location for today’s retailers to do business – on the high street, or in a retail park?

 

Traditionally; retail parks were dominated by retailers of white goods, furniture and DIY items. However, in recent years there’s been a sea change, with ‘softer’ retailers such as Boots, Next and even banks such as Metro Bank moving in.

 

Added to this new type of retailer, the ‘leisure’ crowd have also taken a piece of the action, with cinemas, bowling alleys and restaurants fast becoming synonymous with out-of-town locations.

 

So which is better – the high street or the retail park?

 

Some retailers choose maintain a presence in both, for example – as already mentioned – Boots and Next. Others have very clearly defined parameters when it comes to store locations. Primark, for example, has just one retail park shop in Milton Keynes, and recently confirmed it would not expand into any other out-of-town locations.

 

Retail parks can offer convenience, free parking and those with a leisure element, a meal, movie or afternoon of bowling. Many are also home to a wide range of different retailers, and often provide the convenience element of an on-site or nearby supermarket.

 

In terms of benefits for retailers, these tend to include flexibility of space available, free parking for customers, and often a wide variety of complementary stores – which can help to draw the crowds. Of most importance for many portfolio managers is, of course, cost. Retail park rents are still typically lower than town centre properties, although the very popular centres sometimes buck this trend.

 

On the flip side, retail parks may struggle to attract the same levels of passing trade that high street retailers benefit from. Additionally, without the ‘draw’ of a heavyweight or flagship retailer such as House of Fraser or Marks and Spencer, retail parks can fall out of favour with shoppers. This can lead to a downward cycle with retailers moving out, and portfolio managers struggling to attract replacement tenants.

 

Although the high street has been described variously as ‘dying’, ‘on its last legs’ and ‘in need of help’, it has thus far refused to roll over and die. The benefits of the high street for retailers are varied. From a location perspective; high streets are often convenient for workers popping out for lunch or after work. British town centres also tend to be well served by public transport, although parking availability and costs may provide a hurdle when it comes to encouraging shoppers to visit from further afield.

 

Tourist attractions such as historical buildings, museums and art galleries should not be forgotten. These are commonly located centrally and attract tourists in their own right. Of course, these travellers can also be tempted into visiting nearby retailers.

 

In addition, the high street is also typically the home of the independent outlet; shops of course, but also restaurants and coffee shops, which remain attractive to a certain kind of shopper.

 

Finally, it’s important to consider the social aspect of shopping; that is an hour or two spent in the shops, and then lunch or even mid-afternoon cocktails.  Whilst many retail parks have aped the retail/leisure mix often found on the high street, many shoppers continue to choose the high streets of Britain as their ultimate shopping and entertainment destination.

 

In essence, retail parks and high street locations offer different benefits and challenges alike for retailers. Existing or wannabe retailers should take careful note of these when making decisions about location, and must be careful not to rush into long and expensive leases before carrying out a detailed analysis of the pros and cons associated with both.

 

For information and advice on retail law, landlord and tenant law and property law matters, please contact Joanna Norris on 0161 464 9540, or by email: joanna.norris@ratiolaw.co.uk.