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It’s disappointing to hear that HMV, an iconic retail brand has decided to close 60 stores following poor Christmas trading. I would have thought that being the only music and entertainment retailer on the high street would be a saving grace for the business but the competition from on-line retailers and supermarkets combined with the increase of digital downloads and music streaming is proving too much. Despite diversifying into live music venues, ticketing, cinemas and widening the product proposition, the future looks tough having just appointed KPMG’s debt advisory team.
Ordnance Survey have recently compared 27 million retail addresses between now and October 2008 when the financial crisis began. It found that banks, recruitment agencies, estate agents and pubs were increasingly leaving the high street while the prevalence of betting shops and hairdressers grew. The data showed there were 280 more betting shops on the high street compared to before the recession, representing a 5% rise. The change represents a consumer shift to the internet for shopping, and services including job searches and travel bookings. However services that cannot be accessed online have seen their presence grow on the high street with a 3% rise in hairdressers and a massive 28% increase in the number of car washes.
Demand for pound shops, pawnbrokers and bakers are also in evidence from the figures, “demonstrating the increasing social stratification of the high street as wealthier shoppers drive to out-of-town retail parks and malls”. Known as the “doughnut effect” in the US, where shoppers migrate from the centre of town to the periphery, Britain’s high street is fast becoming boarded up with the national high street vacancy rate soon to exceed 15%.
I’m hopeful that HMV doesn’t ultimately go the same way as Woolworths. The Chief Executive of the British Property Federation commented that “there is no point harking back to the old high streets we claimed to love. We need to be more creative in looking for new roles and uses for these empty shops”. I’d be interested to hear your views on what the high street is going to look like in the future, surely we’ve reached saturation point with mobile phone and coffee shops and with the big chains finding they can cover the county with 50 stores and a decent website what is going to fill the increasing number of vacant buildings, after all aren’t we supposed to be a nation of shopkeepers?
Jonathan Flynn is Head of Retail at Interim Partners.
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January 21st, 2011 at 10:44 pm
It’s an issue we’ve been exploring for ten years, after we started using empty shops as temporary gallery space. With the Empty Shops Network we’re now networking hundreds of projects across the country, and monitoring all the figures - like the ones you mention here - and looking at both hard economic facts and anecdotal evidence it’s clear things are changing.
My prediction is that town centre shopping is becoming a leisure activity. For convenience, out of town or a shopping mall is easier; for price and choice, the internet wins. The places that are doing well combine interesting, niche retail with good quality arts and culture, decent public realm, local distinctiveness and a vibrant, varied cafe culture. Think North Laine in Brighton, or Lewes, or Seven Dials in London.
I predict smaller town centres becoming niche destinations, with high quality independents offering more than just traditional retail (bookshops with readings and signings and a book club; record shops with instore sessions and a monthly music club, for example). Pop-up shops will add variety to the mix, and some spaces will become semi-permanent spaces for temporary activity. Town centres will house more community activity, like festivals, street markets and fairs.
As for HMV; regardless of what it sells, it’s a miserable, soul-less place to shop. It’s not failing because of anything other than being a bad place to shop.
January 24th, 2011 at 10:59 am
Dan Thompson makes some good points in his reply. At the Local Data Company we are physically walking 800 towns and cities twice a year and have some great insight on this change. By 2012 we will be covering 2,000 centres. The reality is that shopping is changing and that retailers want large store formats to show their full offer, they want ease of access for logistics and minimal interference from the council! The result is that out of town in clusters with other strong multiples is the place to be or large edge/intown shopping centres! Add into this the growth of the internet to over 8% and supermarkets having c.40% of non food retail spend then you can see that the high street is the least attractive option both in terms of cost, footfall and clustering.
The OS data, whilst I question the detail based on addressing, shows what we see day in and day out. The lack of business rates relief has forced landlords to let their empty shops for anything upwards from covering their bills. This does create opportunities for small businesses in towns where their is sufficient affluence and consumer support to sustain them. Services, specialist independents and community are the future of the high street. More in-town residential provision and less restriction from councils on planning, parking and events will help massively.
Come along to the BPF Retail Seminar on 15th February to hear multiple views on this important subject. http://www.bpf.org.uk/en/events/event/Breakfast_seminar_-_retail_vacancies_15_February_2011.php