Britain: The Rise and Fall of Retail Centres
As the Christmas season shopping continues the High Street retail shops have been deserted in comparison to previous years. And it is not just in London but throughout Britain as well. As a result retail sales have been weak with many pointing to the internet and in some locations weather as the culprits. And could it be consumers are waiting for the financial impact of the chaotic Brexit negotiations.
Oxford Street, London, One of Britain's Most Popular Shopping Districts
Reports show that almost 1,772 retail shops closed in Britain’s town centres in 2017 or almost five per day. As for internet sales like foreign companies such as Amazon are taking 18.2 % of every pound spent online. In 2008 just 4.9% os sales were made online but by August 2018 sales had risen to18.2%.
The loss of large anchor stores has put additional constraints on the local retail sales market.
Nelson Blackley, Senior Research Associate at Nottingham Business School told the BBC:
'If centres close, particularly in small towns, it will be catastrophic.’
'We have too many of them, doing exactly the same - the same range of stores and
products - and basically that's not attractive.’
'If the major anchor store moves out, that has a halo effect on other stores in that
centre. It's a downward spiral and you can't fill shopping centres with nail bars and
The Daily Mail reports that as many as 100,000 retail positions had been eliminated over the past three years in High Street retail outlets.
Also reporting their figures on job losses is the Office of National Statistics which says that between June 2015 and June 2018 almost 98,000 employees have been axed from the retail sector.
Retailer John Lewis is reported to have had its profits drop a whopping 99% to £1.2 million for the first half of 2018. It is now reported in a Financial Times analysis that £2.5 billion worth of shopping centre and retail properties are being sold in locations around Britain.
But it is not just the large name retailers faced with difficult sales results as smaller family-owned business retailers are being affected as well. Lack of sales and high rents have made operations difficult.
Georgia Duffy, 28, a former healthcare worker opened an independent bookshop in Harrogate, North Yorkshire a year ago. She recently told the Daily Mail:
'Things have been tough recently – today the worst day ever.’
She said the one-year anniversary of her store's opening that her shop had only taken £12.34 all day.
One retailer being affected by the internet is Richard Hunt, 72, the owner of Hunt’s of Marlow in Buckinghamshire. He also just reported ti the Daily Mail:
'We used to do a lot of model railways but the internet killed that stone dead.’
'We get people who come in to look, touch and feel. You show them it running and
off they go to buy it online.’
Hunt’s of Marlowe moved from the High Street to another location 11 years ago due to the cost of rents.
'Marlow itself is a very busy, lively town but there's a total change of trading in the town.’
'I couldn't believe how many coffee shops there are in the town and they have always got people in them.’
The Evening Standard is reporting that one in four shoppers could 'abandon' high street shopping completely by 2021. Their findings include:
'...shopping on social media and found that Instagram is the most popular social platform for 18-34 year olds to buy from with an average spend of £59.60 per purchase.'
But as the shopping centres close is their a chance of re-development a sort of life after death use for the properties.
Daniel Mead, of asset management firm APAM tells the Daily Mail that retail centres could eventually be used for schools, libraries and medical complexes citing that closed properties in wealthier areas could be saved.
As for the current Christmas season for retailers Steve Richardson, director at ShopperTrak says:
‘Unprecedented levels of pre-Christmas discounting, with retailers running Black Friday
deals throughout November, coupled with Boxing Day sales now starting online at midnight on Christmas Day, has changed the nature of Boxing Day shopping.’
Just this week the Daily Mail reported that high street stores were ‘knocking as much as 80 per cent off their wares.’
Rachel Lund, Head of Insights and Analytics at the British Retail Consortium, tells the Evening Standard:
“Approximately 95 per cent of food purchases are currently made in bricks-and-mortar stores, meaning it is unlikely that we will see many consumers completely avoiding physical stores any time soon.
“While consumer habits are changing in response to changes in technology, physical stores continue to play an important role in retailing: Many consumers enjoy the in-store shopping experience,while the ability to try before you buy in stores plays a vital part inthe customer journey – which helps explain why eight out of the top ten internet retailers also have physical stores.”