Research by leading global financial advisory and investment banking firm, Duff & Phelps, shows that UK consumers already consider themselves to be multi-channel shoppers and expect retailers to be the same. If the high street is to survive today’s market conditions, it must adapt to this change or risk vanishing forever.
UK retail sales values grew in November, boosted by sales of clothing and footwear – which saw its best growth since last Christmas – according to the latest figures issued by the British Retail Consortium. Like-for-like retail sales values increased by 1.5% in September this year, compared with the same period last year, while on a total basis, sales rose 3.4% against a 2.5% rise a year earlier.
The main driver for this, Duff & Phelps states, is the rise of online shopping and the continued growth of the out-of-town retail park. According to figures from the IMRG Capgemini eRetail Sales Index, some £5.8b was spent online in August alone, an 11% increase month-on-month.
“The Local Data Company has found that 14.6% of retail premises in the UK are now vacant, indicating that around 50,000 high street units are empty. The Javelin Group has predicted that if current trends continue, a quarter of all non-food retail outlets in the UK could be vacant by 2020,” says Phil.
“Another major trend is the rise of what we would term ‘destination shopping centres’, such as The Trafford Centre in Manchester, or Westfield in West, and now East London. Those retailers that focus their energies in these hot spots are likely to survive in the current economy.
“There is no doubt that these destination shopping centres have affected historic high streets, but their growth is now being limited. In the interest of maintaining town centres, there has been a marked increase in legislation to discourage out-of-town development and encourage investment in traditional shopping locations,” Phil continues.
“Those retailers that keep their nerve, and focus on adapting to changing buying habits, will be the ones that survive the current economic challenges. Let the market change and put the consumer in the driving seat and the sector will rebound.”