City Centre Retail: Dead Or Merely Exaggerated?

Posted on Sep 08, 2020. by NTI

"What is your favourite pudding?" Tracee asked Billy at lunchtime yesterday. "You can only choose one." Tracee knows her brother's penchant for prevarication.

"Hmm. It has to be Banoffee Pie," Billy replied, "although you can't beat an Eton Mess ... or a Brownie." Three for three, Billy, but those weren't Tracee's rules. Is it just men, or do we all love to hedge our bets? Try this one; buying clothes; the convenience of online shopping, or being able to feel fabric, breathe deeply in before a mirror and see the colour of a pair of jeans in often extremely unnatural light?

The obituary of high street retail has been written virtually every day in the press in the past six months. It's lazy journalism, easy to play on the immediate responses of a sector in dire trouble, but calling death at August 2020? Surely too soon. Not for the British Retail Consortium (BRC), who are the latest to dangle their legs off the bandwagon and give a health check of high street and online spending. They are clearly in a bad mood and have expressed a gloomy view, backed up by the latest survey of employment trends from the consultancy group Manpower.

The BRC said total sales were up year on year by almost 4 per cent, but reported a pronounced difference between booming digital spending and bricks-and-mortar outlets, particularly those selling clothes and beauty products. Really? So why would a canny retail operator like Next buy three huge Debenhams' stores to further promote their concept beauty halls in Intu malls? Two retail heavyweights in opposite corners with contrasting points of view, surely there's an economist lurking somewhere to set us straight? Oh, here's one, Andy Haldane, the Bank of England's chief economist, says today that retail and other employers should adapt fast to a less painful way of running their businesses (helpful):  “For me ... if the burden was shared across the workforce for those companies for which demand hadn’t fully returned, and shared through . . . somewhat lower pay rises or somewhat shorter hours rather than all the burden being taken in job losses for a smaller number of people.”

The latest footfall figures from Springboard showed that the number of people visiting high streets rose by 2.6 per cent last week, while Barclaycard said a 9 per cent increase in transactions in restaurants and bars meant its measure of consumer spending had edged above pre-pandemic levels. If people are eating out, won't they want to shop out, too? Certainly Primark think so. The store has no online presence but is publishing some staggeringly good retail figures for last month. Associated British Foods, the conglomerate that owns Primark, said in an update yesterday that all the retailer’s outlets had returned to trading between May and July after lockdown and its fourth quarter had been strong, including record market share in the latest four-week period.

The performance at Primark has varied by store, reflecting customer circumstances such as home-working and a fall in commuting and tourism. Sales at retail parks are higher than a year ago while shopping centre and regional high street stores are “broadly in line” year-on-year. However, large city centre stores, which rely on tourism and commuters, have suffered a “significant decline in footfall”. Primark’s 16 largest city centre stores contributed 13 per cent of sales before Covid, compared with 8 per cent after reopening.

If there is any conclusion to this piece (and that would be like going directly from the opening credits of a James Bond movie with all the silhouettes of waggling guns and borderline decently clad women, to the explosion seeing off the baddy's underground empire - too soon, we think) it is that high street retail is far from dead, it is just adjusting to new-life differently in one place compared with another.

Economists? "We predict a significant downturn of between three and 21 per cent in a three month to four year period, allowing for adjustments in a wide range, determined by market conditions." Where is James Bond's waggling gun when you need it?


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