Report on 9TH LDC RETAIL SUMMIT – by NIKOLAOS-FOIVOS NTOUNIS
How are our town centres performing? Which are the main indicators measuring the high street’s health? Which consumer trends influence retailing today? These were some of the questions that were discussed in the 9th Local Data Company Retail Summit which took place in London, where LDC’s director, Matthew Hopkinson, presented key findings from the 2013 LDC vacancy report, entitled “Divide and Rule”.
The 90-minute event, which included a review of town centres’ performance in 2013 and a discussion with retail and property experts, circled around vacancy rates, lease lengths, the divide/polarisation between North and South, and the continuous influence of technology on the retail industry.
The report’s key findings revealed that vacancy rates have dropped from 14.6% in February 2012 to 13.9% in the end of 2013, mainly due to the reoccupation of shops on the high streets. There was also a dramatic drop in retail and leisure vacancy rates (12.2% at the end of 2013). Overall, Scotland and England had almost equal vacancies (12.1% and 12.2% respectively) whereas Wales’s empty shops are at 15.7%.
The comprehensive LDC review revealed – not surprisingly – big differences in vacancy rates between town centres in the North and South of England. The North West seems to suffer the most from what seems to be a difficulty to sustain retailers on the high street. Vacancy rates in the region are 17.4%, more than double than the figure of Greater London (8.1%) and 3.5% more than the national average.
News is also not so bright for medium town centres (201-400 units) either. They are expected to continue to decline, as secondary towns are in the shadow of “super centres” and out-of-town shopping establishments. On the contrary, small centres seem to be quite vibrant, driven by specialised independent retail offerings and a sense of community spirit.
Whereas the report claims that 2013 had been a turning point for retail and leisure centres overall, it is evident that there is still a lot to be done to ensure the high street’s health in the UK and especially outside of London. A vibrant independent sector shows signs of promise for driving changes on the high street, but more retailers and property owners need to understand the relationship between “bricks and clicks” and consumers’ needs and wants, as retailing is constantly changing the way the high street should operate. Also, the car is still the king, and convenience will still be a no.1 priority for shoppers, therefore, it would seem, car parking needs to be on top of each town centre’s agenda.
The event’s panellists also showed optimism about the future of the high street, citing big retailers’ successes (e.g. Argos’s click and collect strategy). It is claimed that retailers still value the high street and might regret moving away from it once leases expire, but it is also unlikely that many businesses can survive under current business rates, rent costs, and outdated infrastructure.
Therefore, it is not about less demand for property but about the costs of having a shop in the high street and about the unsuitability of existent properties to cater the needs of today’s retailers and consumers. As technological developments rapidly change retailing, properties need to facilitate those changes. But as property changes are slow and clunky, there is a potential for this to harm the high street. Defragmentation of property ownership, privatisation of data, and collaboration with local councils and property owners might eventually ease the ways of doing business in the high street.
Footfall, and how it can enliven a town centre, was also discussed in the panel, and it seems that for small town centres, it is their biggest concern. A Witham MP who participated in the dialogue stressed the fact that her town centre is unknown to most people, and she claimed that the town’s retail offering is not the only solution for an increase in footfall. Towns need to try to bring people in their centres in ways that can have meaning to them.
Other interesting approaches were also discussed, from social media geo-locationally driven approaches to attract people in shopping centres to changes in planning and shopping hours in order to increase footfall and create demand for new shopping establishments. 2014 seems like an exciting year for the high street and one that might bring considerable changes to it. It will be interesting to see how retailers can cope with the increasing demand for click and collect stores and if collaborations between landlords, retailers, and local councils can deliver vibrant town centres.