Retail Rocks Roundup

Posted by Jaya on 23rd Jun 2014
On Thursday 19th June, Ellandi hosted its third annual retail conference. Almost 130 of the UK’s most influential retail professionals rocked up at The Geological Society, Piccadilly for an afternoon of facts, figures and debate with a side order of electro rock. 

The event titled “Future Retailing – Techno vs Old Skool” commenced with Ellandi Managing Director, Morgan Garfield pointing out that a lot has changed in the retail property market and at Ellandi in the last year. He also introduced research that showed strong macro-economic forces provide a positive rationale for investing in Community Shopping Centres. This was swiftly followed by Investment Director, Mark Robinson who provided a definition of “Community Shopping Centres” and Ellandi’s specialist approach to investing in and managing these assets. 

The first of two panel discussions facilitated by former Property Week Editor Mike Phillips was “Shopping Centres at the heart of the community”. The panel members consisted of Mark Williams of Hark Group, who is also the Chair of the Government Distressed Retail Property Taskforce and an author of the Beyond Retail Report; Matthew Hopkinson, Director of the Local Data Company; and Chris Wade, Chief Executive of Towns Alive, formally known as Action for Market Towns. 

The discussion got fairly heated with Mark Williams suggesting that the Property Industry might be to blame for the Business Rates crisis by pushing rental values to the maximum in 2008. Panellists broadly agreed that “We have too much retail space in our town centres, we need to recalibrate retail to bring in more uses such as offices, education & leisure.” However, there was less agreement as to how to solve the problem, with alternative views surrounding issues such as car parking and the importance of ‘profitable’ outcomes for Landlords. 

The second panel session “Could the Internet Save the High Street?” Followed a presentation by Mark Teale, Head of Retail Research at CBRE, who stated that “The Internet is nothing but a side show on the side of a side show”. 

Mark argued that the online industry is inclined to grossly exaggerate sales figures and that only electronically transferable goods have made a successful transition to online retailing. He suggested that most physically deliverable goods sold on-line serve to erode retailer margins and for many the internet is a loss making business line, as the cost of delivery and fulfilment is passed from the customer to the retailer. He provided figures showing that 90%+ of all retail transaction still happen in store or rely upon a physical shop and argues that the demise of the high street was linked to economic down turn and poor town management rather than the internet. 

The panel continued this debate. Hussein Lalani of 99p Stores Ltd and Craig Smith of Ted Baker spoke about their own experiences whilst James Roper, CEO of IMRG, spoke for the e-retail community.

Craig explained that Ted Baker see their website as a means to interact with their customers and to promote the brand. It contributes 10% of sales but very much works in tandem with their store portfolio, offering high quality service with free delivery and returns being essential as it is both expected by customers and offered by competitors.  

Hussein Lalani of 99p Stores was a little more sceptical and felt that “…Internet retailing is a bit of a band wagon, people jump on because they feel they have to.” He felt that the high cost of entry (investment) and uncertainty as to profitability made it a higher risk strategy than growing their store portfolio. 

James Roper pointed out that in 1994 there were no websites whilst there are now 900 million. As such, the internet is still young and evolving quickly, with the evolution of m-commerce this pace of change will continue. The panel were in agreement that we are only at the start of the journey and retailers would carefully evaluate the internet and how it fits within a multi-channel strategy where shops retain an important role. 

In closing the conference, soundings were taken from the audience and the conclusion seemed to be that there were exciting opportunities within the retail property industry but given the pace of change there were also risks. Maximising the opportunity and mitigating the risks will require project specific expert analysis and business plan implementation. 

For those who missed out, download the presentation from the link below 

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