England soul searching over its high street
The hemorrhaging continues. Since the beginning of the year, UK high streets watched as Jessops (photography), HMV (music and books) and Blockbusters (videos) filed for bankruptcy. The result was a number of store closings and a considerable change to the retail landscape in city centres.
The local and national press in Britain cannot stop talking about the transformation of its “high street,” which only a few years ago were home to the jewels of British retailing. But since the bankruptcy of Woolworths in late 2008, many others businesses have had to shut down, with discounters, lottery offices and fast food businesses filling in the gaps. Or sometimes the stores are just closed for good.
Just a few weeks ago, the Local Data Company (LDC), a specialist in data collection on retail, estimated that 1,400 stores had recently closed or were threatened with closure in the UK. Over 45% of them are located on main thoroughfares. LDC said that at the national level, commercial vacancy rates are now over 10%, and could reach 19% if the store properties are not rented out to new tenants.
The website This is Money also cites Julie Palmer, partner at corporate recovery specialist company Begbies Traynor, who believes that 140 British chains are on the “critical watchlist.”
Rethinking the city
In this context, retailers as well as cities are starting to edit their vision of the bricks and mortar retail business, such as the Aurora Fashions group, which operates the Oasis, Warehouse and Coast brands. The company just announced a restructuring, especially to cope with the slowdown in its stores. ““Retailing is no longer about gearing your operating model around bricks and mortar,” said Aurora Chairman Derek Lovelock, “something we have realized as a result of our omni-channel success. Instead, our businesses must adapt and utilize a number of distribution channels to ensure we continue to capitalize on the changing global retail environment.”
For municipalities, this means that now is the time to reconsider their concept for city centers. Such is the take-away from an article in the Huffington Post dated March 6, citing the Royal Town Planning Institute: “Town centers should look to be renewed via the development of what the commission terms ‘lifetime neighborhoods’.” Or in other words, city centers need to transform into hubs of public services such as education, health and community organizations.
If England really does need to revitalize its main thoroughfares with activities other than retail, such a transition is going to take some time. It is hard to imagine that storeowners, lulled by decades of (often) affordable rents, will easily abandon their lucrative habits.
However, the consensus is still that retail is not dead. It is adapting and for large chains, it is focusing on the retail centers of cities where there is a lot of foot traffic from both locals and tourists. More than ever, efficiency on the part of stores is the key to survival for bricks-and-mortar retail. And the Huffington Post cites the example of Regent street, which created a shared logistics site and distribution service for all stores at another location off the street. The initiative reduced truck deliveries by 80% on the street itself and enabled stores to expand their retail space by freeing up square footage once used for storage. Other strategies include an integration of e-commerce, window displays designed to communicate with passerbys depending on the day or hour or even the future use of 3D printers to offer a personalized, bespoke service.
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