Why Shopfronts need to be Re-Vamped
One in seven shops in the UK now stands empty and this is likely to be one in five by 2018 according to new research carried out by the Centre for Retail Research (CRR). This means a potential loss of 316,000 jobs if the predicted 62,000 stores close down. Nearly 15,000 jobs have already been lost this year with 16 major retailers going into administration. 164 further retail firms are predicted to follow suit in the next five years which will affect the livelihoods of 140,000 people. Our High Streets are not looking good.
Boarded up shopfronts is a common sight in High Streets throughout the UK, not just in deprived areas and this is a worsening trend. The CRR have stated that vacancy rates have increased by 161% from 5.4% in December 2008 to 14.1% in March 2013. Unfortunately, store vacancy is projected to double over the next five years, reaching a 24% high by 2018. Consequently, the number of shops in the UK could drop from 281,930 to 220,000 if closures continue as predicted by CRR.
A High Street pocked with closures obviously discourages customers from exploration, but the demise of High Street retail is partly due to an increase in people shopping on the internet and the CRR predict that this trend will double to 21.5% of shopping being done online. In 2000, 50% of all spending was in High Street stores, but it is expected to fall to 40.2% next year.
As well as shopping online more rather than going into the High Streets, consumers are also travelling to retail parks and town centres. The way that they shop is different as well. A customer may look at a retailer’s website, research reviews on the store and individual products and use smart phones for price comparisons as well as visit the shops themselves on the High Street.
Wherever a customer spends their money, they are not spending as much as they used to. According to the Office for National Statistics (ONS), the volume of retail sales only increased by 0.5% this year which is lower than expected. Furthermore, hard economic times have permeated all aspects of retail. One of the main reasons for so many empty premises is that overheads for opening a High Street shop are much higher than for an online warehouse. The CRR report cites the example of a small shop in the Midlands costing approximately £10,000 per month on the High Street whereas the cost of an out of town warehouse could be as low as £650 a month. Even though consumers have been spending 12% more since 2006, the running costs for retailers have rocketed up to a 20% increase.
Professor Joshua Barnfield’s report, Retail Futures 2018 forecasts our once bustling High Streets are likely to become housing if the current decline continues. The CRR state the growing retail crisis is likely to hit Wales the hardest with 29% of High Street shops set to close, followed by the North West. The types of shops that are most at risk of going out of business are pharmacies and health and beauty shops followed by music, books, cards, stationery and gift shops. DIY shops are also not expected to fare well.
Professor Barnfield understands that regenerating High Streets is an enormous task requiring funding and realistic planning, especially in lower income areas. The CRR report urges the Government to invest £320 million into problem town centres and recommends empty shops be used for accommodation, entertainment, leisure and business in order to attract consumers.
The High Streets and the retail sector in general have already had some input perpetuated by extensive coverage in the media over the past two years. The Government’s collaboration with Mary Portas has highlighted how High Streets can be revitalised through collective effort. Themes and concepts for High Streets or town centres as a whole can be embraced to lift the public’s perception of a shopping centre and the refurbishment of just one or two outlets can make an enormous difference. Individual shopsfronts can be transformed in order to attract customers and this needn’t be a costly or time consuming venture.
It is essential that retailers have a strategy for adapting to how consumers shop. Physical stores need to be run alongside the store website and businesses would do well to embrace social media as well as creating smart phone offers.
Retail stores can still be an important part of our town centres as High Streets are essential for generating employment and liveliness. It will just take a little forward planning and enthusiasm to adapt to the changing face of British shopping and the rest of the world is watching. The UK has the largest proportion of retail sales made online and we are a potential template for the world to follow in terms of renovating High Streets.