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26/07/2016

New retail applications drop by 9%

Words: Laura Edgar

The number of applications to build new retail stores has fallen by 9 per cent in the last year, according to latest figures.

Statistics from commercial law firm EMW suggest there has been a fall from 7,360 to 6,700 applications.

In 2015/16, applications fell for the seventh consecutive year, with applications down 44 per cent when compared with a pre-recession peak of 11,900 in 2008/09.

EMW explained that while traditional retailers have expanded their online services and are focused on them, many are often “still failing to compete effectively” with online retailers like ASOS and Boohoo.

The recent failures of BHS, Austin Reed and Morrisons’ My Local, were, in part, caused by the “continued of success of online only brands”.

Aimee Barrable, principal at EMW, said: “With online retailers continuing to win market share, high street firms have less of an appetite to open new shops, instead opting to develop online services or squeeze extra profits from existing space by changing the shopping experience or re-purposing stores to act more as showrooms or collection points.”

She said recent high-profile closures will lead to more retail space becoming available on the market. Retailers that are looking to expand their high street presence might look to acquire some of these recently vacated stores, instead of applying for any new retail developments.

“Also, it may be that many retailers wait before committing to any new shop developments until they have a clearer picture of the economy in the aftermath of the Brexit vote.”

The focus on digital offerings suggests that retailers are continuing to adapt to change consumer habits as “they move even more towards online shopping and home deliveries”.

“It seems that online retailers and those who are more successful at building a complementary online presence make their digital offering a major part of their business model; they see it as key to their success. As a result, more traditional ‘bricks and mortar’ retailers are now putting even greater effort into their online presence instead of looking to expand their property portfolio.”

While BHS expanded its digital presence, Barrable said some commentators had criticised the investment in its e-commerce offering for failing to focus on the content and message being delivering online. Austin Reed was said to have failed to appeal to younger shoppers and it didn’t address the fact that technology allows male shoppers to be more aware of shopping alternatives.

“Often,” she concluded, “it's the quality of a company's digital offerings that matter most in remaining competitive."

Chris Shepley, retiring chair of the National Retail Planning Forum, said the figures “hardly come as a surprise”.

“Closures of chains such as BHS and Austin Reed, continued growth in online retailing and the implications of Brexit all amount to bad news for retail floorspace, not just in town centres.”

While the role of the High Street is changing, “as it always has,” Shepley said he isn’t pessimistic about its future.

“They will adapt; there are growth sectors, and there are opportunities for independent retailers who could bring a breath of fresh air to the more formulaic centres if and when the economy starts to improve.

“Retail areas may contract and other uses may need to be brought in. But this needs to be planned, centres need to be managed, rents may need to fall. Town centres are much more than just retail and their whole function as the centres of social and economic activity, as meeting places and the heartbeat of towns and cities needs continually to be protected and promoted.”


The Planner recently attended the National Retail Planning Forum’s seminar on ‘The Changing Faces of Retailing’.

One of the key messages from the event was that a habit of “fighting yesterday’s battles”, a failure to update use classes to match new approaches to retail, and slow responses to the impact of digital shopping trends has left many town centres facing the prospect of long-term commercial decline.

“High streets really need to look at how they promote and market themselves to younger generations. That’s the future of town centres,” said Steve Norris, head of retail at Carter Jonas.

The Planner’s report of the event can be found here.


Image credit | Shuttershock

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