High street help - Property Week Reports on #Retail Rocks
Posted by Property Week on 27th Jun 2014
Against the backdrop of a stabilised retail environment in terms of both investment and occupiers, said Ellandi managing director Morgan Garfield at the firm’s annual Retail Rocks event, “growth is back on the agenda”.
The afternoon conference circled widely around the theme of Ellandi’s chosen target, community shopping centres. Discount retail came under the spotlight several times — Mark Robinson, investment director at Ellandi, said in relation to the UK’s acceptance of discount: “We believe the UK has had to change, it’s permanent and will become more pronounced over time.”
Robinson also spoke about another recurring theme of the day: the government’s role in rescuing ailing high streets. Citing Ellandi’s centre in St Austell, which brought the local government offices to the centre of the town, he said: “The government should take a more active role to help councils focus on town centre first.”
Property Week reports on the two panel discussions.
Panel one: Shopping centres and communities
“The high street has changed and will continue to change, but it does have a future,” said Matthew Hopkinson, director at Local Data Company — his words sum up the tenor of the first panel. The debate focussed on how to draw consumers back to town centres, and the role of local authorities in doing so.
Hopkinson took on Ellandi’s concept of community: “What is community? The only people who talk about it are politicians, who we don’t trust, and supermarkets, who we don’t trust.” He outlined the main problem of high streets as a lack of balance between homes, employment and retail.
Mark Williams, chair of the Government Distressed Retail Property Taskforce, gave his own take on the main problem faced by high streets: “There’s too much retail floorspace in the UK. It has throttled other uses, so we need to bring back the function of town centres, which is mixed-use. Lots of schemes that were built at the end of the 1980s will shrink. There is a smaller retail future, and a bigger future for resi and leisure.”
Williams suggested converting whole retail streets to residential, particularly in the South East where towns are failing to fulfil housing needs. Other facilities also need to be brought to the town centre, such as education amenities. When questioned on whose job it was to bring this change about, he answered that local authorities need to say what they want and let the private sector respond.
Third to speak, Chris Wade, chief executive at Towns Alive, highlighted how mixed leisure facilities are already drawing people back into the centre of towns such as Barrhead in Glasgow.
Panel two: Could the internet save the high street?
Preceding the second panel discussion, a presentation from Mark Teale, head of retail research at CBRE, highlighted just how bad we have been at predicting the effect of technology. Panic predictions over the years that online sales will savage in-store sales have not quite come to pass, and online sales growth has slowed — though it is still growing.
One point highlighted by Teale is that Tesco dominates online grocery sales, but only has six dark stores (distribution centres for online shopping) in the UK; four around London’s fringe and two in the commuter belt below London. Though many analysts predict sharp rises for online grocery sales, this condensed coverage doesn’t highlight that this pattern will change soon.
Teale ended his presentation with his belief that the internet is only a sideshow to the real problem with retail; we have destroyed beautiful buildings in town centres to make way for unattractive retail frontages, so why would people visit?
The following panel drew from Teale’s statistics that detailed how little retailers currently make from online sales, and compared the approach of two very different retailers; Ted Baker and 99p Stores.
Craig Smith, brand communications director at Ted Baker, highlighted that offering online sales is considered part of the service for the business, and the brand is still early on in its journey to capitalise on this. Hussein Lalani, chief executive of 99p Stores, then explained why an online store hasn’t so far fitted into the business model of his brand, though he did say he was “playing his cards close to his chest” and will be online in some way in the future.
James Roper, chairman of the Interactive Media in Retail Group, highlighted the need for many retailers to connect online and offline offerings more elegantly.
“Huge developments in delivery will fundamentally change the consumer model,” he prophesied, saying that there’s very little in terms of consumerism that can’t go online, except possibly a haircut.
He highlighted Chinese brand Alibaba, which with a $250bn turnover, 80% of the online retail market in China and its eyes on the rest of the world, is reversing the flow of people into urban environments with delivery possibilities. The internet may well change the way we live even more fundamentally as it continues to develop.