Attention to Retail

The most stark indication of this attitude came from Distressed Property Taskforce chairman Mark Williams, who said categorically that the industry group was focused solely on the future - and it looks like being one borne of something of a revolution in retail property. 

Williams said what everyone already knows - that there is an oversupply of retail space in this country; but added that in some locations the oversupply is by a factor of around 50%, and that levels of regeneration not seen since World War II are necessary to recalibrate the retail market in those long-suffering locales.

Last year's BCSC Conference was laden with references to 'managing' town centres as one would a major shopping centre - and that theme was heavily expanded on yesterday. New River Retail's Charles Miller told the room that investment in a major mall is not just about what you're buying, but the surrounding area; and how crucial it is to create fusion, rather than friction, between the two.

It was mentioned on numerous occasions by more than one speaker that fractured town centre ownership is stymieing the requisite improvement in high streets, and engenders the old-style laissez-faire landlordship once leases are secured. 

In the interest of combating such attitudes, Peter Brett Associates launched their 'Town Centre Investment Management' (TCIM) initiative during the afternoon session. It is designed with the expressed intention of bringing investment back into the high street by using an adapted form of Local Authorities' CPO powers to bring about uniformity of town centre ownership.

Whilst these aren't necessarily new ideas, the belief is that with the momentum currently behind town centre regeneration and the ongoing political discussions around the subject, now could be the best time to force political will in the direction of supplying proper solutions to those well-documented town centre problems.

Political will could yet prove to be the greatest stumbling block to securing that bright future for the retail industry. Consents still fly in for out-of-town developments, occasionally going against the recommendation of planning officers, and there was a palpable scepticism in the room when asked if Local Authorities had the collective desire to make a policy such as TCIM work in the long term.

BCSC President and Chaiman Marcus Kilby said in his summary of the day's discussions that 2013 could yet be the year looked back on in a decade or so as the year in which the retail industry began its crucial evolution into an overwhelming success story. The first shoots of that evolution are present, without question; but there remain several overarching caveats that must be addressed before that first great leap forward.

The figures showed that April, hamstrung by March smuggling away (in part) the bonanza Easter weekend, has suffered the first drop in overall spend in comparison to 2012. They also pointed to continued growth in on-line retailing which, despite the overall sales drop, jumped 8.3% on the previous year:I mentioned on here about a year ago that the rumbling on-line retail machine was effectively immune from any kind of fluctuation in overall sales, and would simply continue to rise. This has been overwhelmingly corroborated by all KPMG & BRC updates over the past year, which indicate a year-on-year increase in on-line sales every month; peaking at a 17.8% rise in December 2012.

What it effectively means for retailers is that they will have to continue to manage their physical retail presence to cater for a public who are increasingly using the internet as their one-stop shopping arena. 

Retailers' trading updates now often give strong indicators that they are looking to reduce physical space in order to focus on multi-channel sales, and not before time. On-line sales now account for just above 10% of all transactions nationwide - and it wouldn't surprise me in the slightest to see that figure continue to creep upwards over the coming years. 

Whilst it's uncomfortable news for landlords, what is still required is a slimming-down of store portfolios in order to recalibrate retail footprints to accurately reflect the modern marketplace. Several brands have done so this year already - albeit via the unwanted conduit of administration; a discomfort which needn't be necessary if retailers are alive to the realities of the environment in which they operate.