Shoppers stay close to home as retailers fight crisis
In the fourth part of a series on how Covid-19 has upended the world, Rhiannon Curry examines the impact on the high street
‘Rather than shopping while they are at work, people have now realised that there is quite a good local shop’
When the British Retail Consortium lamented in January that 2019 had been the worst year for retail in 25 years, it could have had little idea what the following few months would hold. High streets quickly became one of the major casualties of the virus lockdown, and the roll call of troubled businesses as the UK emerges blinking into the autumn reads like a list of the great and the good of British retailing: Marks & Spencer, Debenhams, Monsoon Accessorize, John Lewis and Laura Ashley are just some of the brands bruised by the last few months.
While shops were allowed to reopen in mid-June, consumers have been hesitant to return en masse, although footfall is beginning to improve.
Figures released by Springboard showed shopper numbers across all UK retail destinations rose by 4.1pc last week – although numbers remain more than 30pc lower than last year.
As he revealed plans for a restructure, Steve Rowe, M&S boss, warned some shopper habits had been “changed forever” by the pandemic.
There have been two fundamental shifts, explains Kien Tan, senior retail adviser at PwC: what we’re buying and where we’re buying it – and these changes are likely to stick for at least the next couple of years.
Britons were already enthusiastic about online shopping compared to their European counterparts, but figures from the Office for National Statistics show a spike in internet retailing in May, when 32.8pc of all goods were bought online. The previous year, that figure had been
‘It took us 10 years to get from 10pc to 20pc internet penetration, and about two months to get from 20pc to 30pc’
18.8pc. “It took us 10 years to get from 10pc to 20pc internet penetration, and about two months to get from 20pc to 30pc,” Tan says.
Putting aside grocery shopping, he says the most surprising change is the speed at which the UK has embraced buying fashion online. It is a trend which experts expect to persist.
“Coronavirus meant many people tried online shopping for the first time,” says Kyle Monk, director of insights at the BRC. “While some of these people are already returning to the high street since lockdown ended, others are likely to continue with this new habit, giving online shopping a permanent boost into the future.”
So is this move to online the end of Britain as a nation of shopkeepers? Far from it, says Mat Oakley, head of European research at Savills, who suggests that the pandemic has done little more than accelerate what was already under way in the sector. In fact, he predicts independent businesses, which people came to rely on during the worst days of lockdown, could be a surprising beneficiary.
“I think a lot of people have rediscovered their local shops during the last few months,” he says. “Rather than shopping while they are at work, or getting in the car and travelling to their nearest large town, they have realised that there is quite a good local shop for something.”
According to Global Data, almost one in three British consumers say they will visit local shops more frequently than they did before the crisis. This, coupled with longer-term changes in how and where people work, could benefit smaller urban hotspots and suburban high streets, Oakley points out, but is likely to have a devastating impact on destination shopping areas such as the West End.
White-collar workers in particular are unlikely to return to their previous patterns of spending five days a week in an office.
At the intersection of greater use of online shopping and a desire to support independent businesses are third-party operations such as Pinga.
The app enables users to request items from shops, cafes or takeaways on their local high street and connects community members who can shop on their behalf and drop off on their doorstep.
Michael Goulden, one of Pinga’s co-founders, says he wants to offer a viable alternative to Amazon which benefits UK-based retailers. “We estimate at least 60pc of what you order from Amazon is available in a shop two kilometres from where you live, through an independent store or a big branded retailer, but you currently don’t know whether it’s in stock or if they deliver,” he says. The app allows customers to search for a product, locate it in a local store, and purchase it for same-day delivery.
What Pinga embraces is what Don Williams, retail partner at KPMG, calls a “move to ease”: consumers increasingly want to shop whenever and wherever they feel like it. “This is about how simple it is to interact with the product,” he says. In order to survive in a post-Covid world, retailers will need to improve their supply chains, and focus on building an intimate knowledge of their customers, increasingly relying on data analysis, he adds.
And if how we’re buying goods has shifted, so has what we’re buying: household goods have already seen a big recovery in sales as people spend more time in their homes.
Accordingly, retail parks, which are home to a large number of DIY and furniture stores, have bounced back more quickly than high streets.
“Clearly, some retailers have been in distress, but that is an acceleration of changes that were happening before,” Tan adds.
That said, the spectre of rows of empty shops looms large. “There is always some segment ready to take up excess space,” Oakley says confidently.
“In the late Nineties and early 2000s it was mobile phone shops. After the global financial crisis, it was coffee shops.”
One hundred councils across the country are currently waiting to find out whether their bids for a share of £1bn of government money earmarked for struggling high streets via the Future High Streets Fund will be successful. A number plan to use the money to fund events such as food markets, street festivals and live music intended to draw crowds back.
Roger Hawkins, founding partner of architects Hawkins\Brown, says it is these initiatives which could save high streets from becoming economic wastelands. “New, more resilient uses will inevitably start to take the place of vulnerable ones, accelerating the transition towards more experience-oriented high streets, where leisure, culture and employment uses play an increasingly important role,” he explains.
Tempting people back to the high street may prove difficult, but the retail sector can achieve much by meeting consumers where they are – which for the next year at least, is likely to be mostly at home.
Brixton florist Janet Edwards is among shop owners who have welcomed back customers