End of the line for iconic stores?

Fa­mous names in danger of shut­ting up shop as con­sumers’ habits change

The Sunday Post (Newcastle) - - NEWS - By Ste­vie Gal­lacher sgal­lacher@sundaypost.com

For gen­er­a­tions, they have been the grand­est, most fa­mous stores in Scot­land.

But our iconic de­part­ment stores could dis­ap­pear.

Sev­eral are in fi­nan­cial trou­ble and last week House of Fraser said it plans to close shops with more than 6,000 em­ploy­ees and 11,500 con­ces­sion staff thought to be at risk.

And Wil­liam Watt, owner of fel­low de­part­ment store Watt Brothers, said last week the flag­ship four-storey Sauchiehall Street branch in Glas­gow might be sold.

The com­pany posted losses of nearly £ 750,000 last year, but be­lieve they can turn around their for­tunes.

Here, we ask five ex­perts why cus­tomers are turn­ing away from the iconic shops and if the fu­ture of our fa­mous de­part­ment stores is all in the past?

Wil­lie Watt Owner of de­part­ment store Watt Brothers

At the mo­ment we’re work­ing on in­vest­ing in the busi­ness and are look­ing to in­vest in new stores.

Peo­ple used to go into town and they still do but it’s not as pop­u­lar – and park­ing cer­tainly isn’t free.

We’re cur­rently look­ing at the fu­ture of the shops and we’d cer­tainly like to stay in town but I don’t know if it’ll be in the cur­rent form.

In­stead of shops with two or three floors, cus­tomers these days pre­fer shop­ping on one floor.

But most de­part­ment stores, such as Frasers and Deben­hams, face the same chal­lenges – huge com­pe­ti­tion.

It’s com­ing from out- of- town re­tail parks – which is an area we are mov­ing into – as well as the in­ter­net.

When it comes to so­cial me­dia we’ve come a long way. We had a mil­lion hits on Face­book last year, mak­ing us one of the most pop­u­lar Scot­tish shops for our size.

The way we’re com­pet­ing is sim­ple – we’re sell­ing things cheaper than else­where, and that in­cludes the in­ter­net.

In pound shops you can buy three bars of choco­late for a pound. With us it’s 89p.

Pro­fes­sor Leigh Sparks Pro­fes­sor of re­tail stud­ies, Stir­ling Univer­sity

De­part­ment stores have clearly been in a state of flux for a very long time.

In the re­cent past we’ve had BHS, C&A and McEwan’s of Perth shut­ting up shop.

If you go back to the 1930s there were about 15 de­part­ment stores in Stir­ling alone. Their dis­ap­pear­ance is a re­flec­tion of the chang­ing face of re­tail.

Con­sumers have changed, shop­ping pat­terns have changed, look what you can get on the in­ter­net? There­fore de­part­ment stores need to pro­vide shoppers with some­thing dis­tinc­tive.

Many de­part­ment stores look the same and they have got brands and con­ces­sions in them which you can find cheaper on the in­ter­net.

If you look at Har­rods, Sel­fridges and the good John Lewis stores, then there are real points of dif­fer­ence with other less suc­cess­ful shops, so they have mas­sive foot­fall and they will be sus­tained.

Look­ing at House of Fraser I have less con­cern about the Glas­gow shop – which has a large foot­fall – than I do about Ed­in­burgh.

Can Princes Street re­ally have Frasers and Jen­ners in such a small area? The costs to run them are high, and the own­ers will be ask­ing what the dif­fer­ence is be­tween the two stores.

John Han­nett Gen­eral sec­re­tary of shop­work­ers’ union USDAW

The re­tail sec­tor is go­ing through a very chal­leng­ing pe­riod and that is hav­ing an ob­vi­ous im­pact on our mem­bers.

It is a mixed pic­ture of win­ners and

losers, but we are see­ing an alarm­ing num­ber of store clo­sures.

We are ver y con­cerned about the im­pact of Brexit in­creas­ing prices at the same time as in­comes be­ing squeezed, cus­tomers chang­ing their shop­ping habits and new tech­nol­ogy be­ing in­tro­duced.

We be­lieve that suc­cess­ful re­tail­ers need a good on-line pres­ence as well as tra­di­tional bricks and mor­tar stores, but they also need the right busi­ness en­vi­ron­ment.

Lo­cal gov­ern­ment needs to en­sure their town cen­tre and car park­ing poli­cies at­tract shoppers and that com­mer­cial rates and rents are af­ford­able.

Na­tional gov­ern­ment must en­sure a level play­ing field on re­tail­ers pay­ing their taxes in the UK and them not un­der­cut­ting each other on terms and con­di­tions of em­ploy­ment.

Re­tail­ers must in­vest in their staff, cus­tomer ser­vice is cru­cial and that is best de­liv­ered by well- re­warded, fully- trained shop­work­ers, who are re­spected and val­ued.

Ewan Mac­Don­ald-Rus­sell Head of pol­icy, Scot­tish Re­tail Con­sor­tium

The chal­lenges de­part­ment stores face are a mi­cro­cosm of the im­mense changes af­fect­ing the re­tail in­dus­try.

As more con­sumers shop on-line, there is a chal­lenge to en­cour­age shoppers into stores, and then to get them to spend when they are there.

One of the big trends we are see­ing is re­tail­ers in­no­vat­ing to try and cre­ate a num­ber of rea­sons for cus­tomers to visit the store.

That can be through of­fer­ing food and drink, dif­fer­ent ser­vices, and by in­vest­ing in cus­tomer ser­vice.

The big ad­van­tage a phys­i­cal re­tailer has is those trained help­ful col­leagues who can pro­vide de­tailed guid­ance on prod­ucts to help cus­tomers.

Those re­tail­ers in­vest­ing in mak­ing stores more at­trac­tive, and their work­ers more en­gaged, are those which have per­formed the best.

How­ever, these stores are in di­rect com­pe­ti­tion with dig­i­tal re­tail be­cause many of their prod­ucts are branded, and con­se­quen­tially avail­able from a num­ber of sources, where his­tor­i­cally a sin­gle re­tailer in a town would be the sole source.

It’s no­table those re­tail­ers who have in­vested in evolv­ing from purely phys­i­cal re­tail to a mul­ti­chan­nel of­fer­ing are those who are in the strong­est po­si­tion.

Many of the larger stores are par­tic­u­larly af­fected by gov­ern­ment pol­icy which has con­sis­tently made op­er­at­ing from prop­erty more ex­pen­sive.

As an ex­am­ple, in Scot­land, busi­nesses op­er­at­ing from prop­erty with a rate­able value above £51,000 are li­able for a Large Busi­ness Sup­ple­ment which is dou­ble the English equiv­a­lent. This trans­lates to a higher rates bill for large shops.

With mar­gins so tight, that tax bur­den is mak­ing life dif­fi­cult for High Street re­tail­ers.

Dr Julie Mc­Coll Se­nior mar­ket­ing lec­turer at Glas­gow Cale­do­nian Univer­sity

Watt Brothers’ Sauchiehall Street branch is an iconic store but it’s fo­cused on bulk dis­counted goods and not re­ally rep­re­sen­ta­tive of what de­part­ment stores were good at.

De­part­ment stores were known for their va­ri­ety of up­mar­ket goods but now shoppers pre­fer to buy these on­line.

Be­sides we’ re much more in­ter­ested in ex­pe­ri­ences now – money is spent on go­ing on a trip or an ad­ven­ture you can share on Face­book or In­sta­gram.

De­part­ment stores tend to sell things such as gifts – but the gift mar­ket now is mostly on­line.

While Watt Brothers are mov­ing out-of-town, Frasers and Deben­hams are still in city cen­tres.

Shoppers now tend to buy from cheaper shops or smaller stores with fewer over­heads where they can get a more cus­tomer-fo­cused ex­pe­ri­ence – think Ted Baker.

John Lewis are a good ex­am­ple of a de­part­ment store do­ing things right – they’ve em­braced click and col­lect, you can park next to John Lewis, and they’re fo­cused in what they sell.

De­part­ment stores are use­ful in a sense that peo­ple can go in and look at prod­ucts they want, but every­one im­me­di­ately checks the price on their mo­bile phone to see where they can get it cheaper.

As for the fu­ture of de­part­ment stores, I’m not sure what it will be.

Times have changed for de­part­ment stores such as Sel­fridges – seen here in the ITV drama, Mr Sel­fridge – and they face an un­cer­tain fu­ture as they face stern re­tail com­pe­ti­tion

Glas­gow’s House of Fraser store

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