How to sur­vive ever-chang­ing re­tail mar­ket

Belfast Telegraph - Business Telegraph - - News - By emma an­drews, As­so­ci­ate di­rec­tor, Au­dit and as­sur­ance @grant­thorn­tonni

It has been very clear from the start of the year that our high streets and shop­ping cen­tres are con­tin­u­ing to trans­form and there have been sig­nif­i­cant shop clo­sures to well-known brands, such as New Look, Toys r Us and Maplin.

The re­cent ad­min­is­tra­tion of House of Fraser is fur­ther ev­i­dence. Pres­sure from online shop­ping, min­i­mum wage in­creases and eco­nomic un­cer­tainty aris­ing from Brexit have all taken their toll on re­tail­ers.

It is ev­i­dent that change is re­quired. Robert Swan­nell, for­mer chair­man of Marks and Spencer plc, noted in the com­pany’s 2017 an­nual re­port, that after a dif­fi­cult year, it is mak­ing changes and that “our stores will be more rel­e­vant to the chang­ing needs and habits of our cus­tomers in a dig­i­tal world”.

It is not all doom and gloom how­ever, and there are a num­ber of com­pa­nies that con­tinue to grow and to trade suc­cess­fully on our high street. Re­tail­ers such as Hol­land & Bar­rett, Greggs, B&M Bar­gains, Lush and Water­stones con­tinue to grow and open stores.

Where some of the ma­jor re­tail­ers, such as Marks and Spencer and Tesco are de­creas­ing store size, Hol­land & Bar­rett are open­ing larger stores, up to 10,000 square foot, with the in­ten­tion of of­fer­ing con­sumers ad­di­tional choice. Other re­tail­ers that are see­ing growth in this way in­clude Sains­bury’s and Water­stones.

Sains­bury’s an­nounced record Christ­mas sales and at­tribute much of this to the ad­di­tional choice that they can now of­fer con­sumers, through a dif­fer­en­ti­ated food range and the ac­qui­si­tion of Ar­gos. The com­pany states that it con­tin­ues to in­vest in chan­nels to meet con­sumers’ chang­ing shop­ping habits.

Water­stones an­nounced an 80% in­crease in prof­its after mak­ing sig­nif­i­cant changes. The book chain has seen sig­nif­i­cant growth and much of this has been at­trib­uted to the open­ing of cof­fee shops within the stores.

Chang­ing the cus­tomer ex­pe­ri­ence has also re­turned re­wards in the food sec­tor, with high street food out­lets now able to use the likes of De­liv­eroo to de­liver to their cus­tomers’ homes. There are a num­ber of city cen­tre food out­lets that are ben­e­fit­ing from the new model and sourc­ing re­tail space to fa­cil­i­tate both de­liv­ery and on-site eat­ing.

Whilst many re­tail­ers are achiev­ing growth through an en­hanced cus­tomer ex­pe­ri­ence and in­vest­ment in tech­nol­ogy, at the other end of the spec­trum we have seen the growth of the dis­count store. B&M Bar­gains, Lidl and pound shops have con­tin­ued to open up stores in North­ern Ire­land over the last few years.

Al­though the stores may con­tain sig­nif­i­cant bar­gains, the ap­pear­ance is ba­sic and online shop­ping is limited.

The dif­fi­cul­ties ex­pe­ri­enced by Pound­land should serve as a re­minder how­ever, that no sub-sec­tion of the re­tail mar­ket is truly im­mune from a chang­ing mar­ket­place.

In this time of change, it is very clear that re­tail­ers need to be kept on top of chang­ing con­sumer pref­er­ences. Adapt­ing the busi­ness model to meet a chang­ing de­mand for value, choice and ser­vice from the con­sumer, and to pro­vide ex­cel­lent re­tail ex­pe­ri­ences, will be key to high street sur­vival.

For fur­ther in­for­ma­tion or ad­vice, Emma An­drews can be con­tacted at­ Grant Thorn­ton (NI) LLP spe­cialises in au­dit, tax and ad­vi­sory ser­vices.

Bak­ery chain Greggs con­tin­ues to grow and open stores within Belfast

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