How to survive ever-changing retail market
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 firstname.lastname@example.org Grant Thornton (NI) LLP specialises in audit, tax and advisory services.
Bakery chain Greggs continues to grow and open stores within Belfast