Return of the British high street

Glynn Davis - Thu 27 Jul, 2006

...The good old British high street appears to be making something of a comeback as shoppers are returning to city and town centres in increasing numbers...

 
 
- It’s been denigrated by the competition, written-off by social commentators, left for dead by the media and deserted by the consumer.

- But what’s this – the good old British high street appears to be making something of a comeback as shoppers are returning to city and town centres in increasing numbers.

- Recent research from Key Note found that 77 per cent of people questioned, regularly shop in-town whereas only 44 per cent make regular visits to retail parks and 43.5 per cent make frequent journeys to out-of-town shopping centres.

Return of the British high street: The big shift

- This is a big difference on three years ago when only 50 per cent of people regularly shopped in-town. This big shift to the high street is partly down to the emergence of new high-quality in-town shopping centres and the refurbishment and extension of existing malls.

- This investment looks set to continue as a leading commercial property developer recently revealed that for the first time in many years the pipeline of new retail space in-town exceeded that coming on-stream for out-of-town developments.

- Certainly it has (finally) had an effect on the supermarkets, who have started snapping up batches of convenience stores. In addition, the supermarkets are developing outlets focused specifically on homewares and on clothing, some of which may well be sited in town centre locations.

- What has also been picking up pace is the backlash against identikit high streets with the same ubiquitous names – the usual suspects of Dixons, The Carphone Warehouse and Starbucks are all typically present.

- To offset this, some big names including Tesco (with its Express format) and Vodafone have recently started to play around with tailoring the look of individual stores to their locations.

Return of the British high street: The smaller independents

- Also, some local authorities, working with landlords, have at last started to try and differentiate their high streets by attracting small interesting independents. But what has historically made it difficult for these smaller operators to gain space has been the onerous leasing arrangements entrenched in UK retail property.

- However, things are finally changing as many senior retail property specialists now believe that this rigid rental system is on the way out in order that the UK is brought in-line with the rest of Europe.

- John Bywater, a senior director at major property developer Hammerson, predicts that the old structures will be "demolished" and that we will see a convergence in retail rentals with the UK adopting shorter, more flexible leases, like those seen in France.

- The burgeoning demand for a more varied and vibrant independent mix of retailers on the high street is most prevalent in major city centres as a result of changing social trends which have seen young professionals choosing to live in-town.

- Another potential driver of more local shopping on the high street is the desire by people to reduce car emissions and limit the damage to the environment from the continued building of out-of-town retail emporiums.

Return of the British high street: Convenience

- Research from the Institute of Grocery Distribution (IGD) found that town centres are also benefiting from a variety of other trends such as the average consumers’ increased frequency of shopping as well as the growing trend towards convenience – as clearly recognised by the supermarkets.

- As a result Matalan, which has historically sited its stores in edge-of-town locations, has been losing business to aggressive competitors such as Primark that are located in prime central locations. So the key – as ever in retail - is about the quality of the location: having a prime location on the high street remains an essential ingredient of success.

- The ultimate in convenience shopping is of course the internet and recent research from information systems company CACI has shown that it has had an adverse effect on the high street in certain locations such as Norwich and Nottingham where affluent 30 to 50-years-olds are leading the way with online shopping.

- However, it has also been found by retailers with a multi-channel proposition, such as John Lewis, that shoppers who use more than one channel are significantly more loyal and valuable customers. For such retailers there is clearly an opportunity to use the high street as a complimentary channel to their online store.

Return of the British high street: New trends

- The IGD has also picked up on the growth in the number of smaller households who do not need to religiously undertake a weekly/monthly shop to out-of-town supermarkets but might instead be able to purchase their provisions more frequently and in smaller batches from their local high street.

- The ageing population is also leading to more local neighbourhood shopping as this demographic is again less likely to jump into their cars to travel out-of-town to shop.

- With all trends leading to the high street it is now up to the retailers to ensure that they provide a tailored range and level of service that is sufficiently attractive to allow the high street to thrive once again.

- A failure to do so will represent a missed opportunity as many shoppers will find it all too easy to hop back into their gas-guzzling 4x4s and head straight back out-of-town again.


Regards,

Glynn Davis
for The Daily Reckoning
  

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