January 2012 Archives

Burlington Arcade restoration begins

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Regular readers of our retail blog will recall an earlier entry on the brewing row between owners and tenants of the Burlington Arcade on Piccadilly, W1, over plans to breath new life into the building.

Meyer Bergman, the European real estate firm that bought the Grade II-listed arcade in October 2010, has now revealed the first pictures of proposed new restoration works following the receipt of Planning and Listed Building Consent.

 

 

 

Burlington Arcade 1.JPGWork has now started and the first phase, which will focus on restoring the upper elements of the arcade, is expected to be complete by the end of April. It involves the installation of up-lighting and the re-painting of the painted elements in the original ecru white colour used in 1819 when the arcade first opened. 

Work is being undertaken out of trading hours to allow shopkeepers to remain open for business throughout the process.

 

 

 

Burlington Arcade 2.JPGMarkus Meijer, chief executive of Meyer Bergman, Burlington Arcade's co-owner, said: "We expect these works to be complete in time for the Queen's Diamond Jubilee celebrations and I am particularly excited that, once complete, we will have a view not seen for over 100 years and possibly not since Queen Victoria celebrated her Diamond Jubilee in 1897."

 

Olympics set to fuel retail sales uplift

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I'm not going to dwell on the bad news that has hit high streets across the country this week. The collapse of Peacocks, Past Times and Pumpkin Patch is well reported on EGi.

 

Instead, I'm going to turn to an upbeat report which forecasts that the Olympics is set to drive a 3.5% growth in retail sales in the West End in 2012.

 

The research, compiled by Springboard for the New West End Company, shows that retailers in the West End are optimistic that sales will peak at £7.7bn this year with further momentum gained during the Queen's Olympic Jubilee.

 

The report, A 2012 Retail Outlook, also found that 17.8% of total annual additional retail spend will occur in June and July, and that West End retailers expect to make an extra £16.6m in revenue as a direct consequence of the Olympics.

 

London mayor Boris Johnson has the following erudite comment to make on the findings:

 

"2012 promises to be a summer like no other, and businesses throughout the West End now have a unique opportunity to reap the benefits when the world comes to the capital. London undoubtedly has the best shopping district in the world and I have every confidence that retailers are doing all they can to plan, prepare and profit from the Games."

 

Retail Crime: The 2011 Picture.

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The British Retail Consortium this week published the results from its annual survey on retail crime, and it makes for very interesting reading.

Taking a sample of 52 retailers who account for 53% of the total UK retail turnover, BRC painted a picture of retailers experiencing fewer acts of criminality than in 2010, but the cost per incident rising dramatically to the overall tune of 31%. This figure doesn't even include the costs of the August riots - which, instead of causing 2011 to become a giant anomaly, are spotlighted at the end of the report, rather than being factored into it.

Increased cost per incident is one theme seen throughout the report, as it goes through the various felonies in detail. Theft was down 19% on 2010, but each theft cost retailers £85.50, an increase of 21% year-on-year; and there's a similar tale with burglaries, the number of which decreased by 42% to the lowest figure in seven years, yet the cost per incident increased by 83% to £2,093 for every offence. Additionally, employee theft is down 24%, but the value stolen each time has gone up 18%. 

A clearer picture is given by the statistics for robbery, violence towards staff and criminal damage; all of which saw an increase of 20%, 83% and 63% respectively on 2010 figures. Little solace can be taken from the fact that the 83% increase in violence towards staff is mainly verbal, with the acts of actual physical violence the lowest in seven years. Abuse in the workplace is, as the BRC puts it, an 'unacceptable threat', and they encourage retailers to be more willing to report incidents across the board to help put a stop to this.

In addition, the BRC calls for further investment from retailers in crime prevention, an increased awareness of the damage caused by fraud and e-crime to retailers - seen as an 'easy opportunity' for criminals, and further co-operation between the BRC and police forces. The BRC state that a replication of the scenes of August 2011 are 'conceivable', given the deepening economic crisis, and that they can play an important role in communicating effectively with businesses during moments of unrest.

It was just such a moment in August which threw criminality against retailers into the public spotlight - and the figures outlined on the impact of said events are rather harrowing. The riots affected 20,000 employees - 1.5% of the UK's retail workforce; they cost the retailers in the survey £18.3 million in theft, criminal damage, burglary, arson and store closures. Additionally, an impact on sales was experienced by 56% of those surveyed.

One can't help but think that, were the figures from the UK riots included in the report, the figures that indicate 'below-7-year-average' figures for theft, burglary, robbery and criminal damage would not look quite so rosy. If the BRC are correct in their suggestion that a similar spate of lawlessness could hit the UK this year, retailers have to make sure that they are better safeguarded against experiencing a similar loss.

The full report is available here.

Online success shines through Christmas results

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This week has been quite a revealing week for the retail industry with some of the UK's biggest retailers producing their Christmas trading results.

 

There have been some clear successes. House of Fraser, John Lewis, Sainsbury's, New Look, SuperGroup, Debenhams, Majestic Wine, Foyles, Morrisons and JD Sports have all reported increased like-for-like sales figures.

 

But there was a more worrying picture being painted by the likes of Home Retail Group, Tesco, Mothercare, Halfords and Thorntons, which all flagged up falling sales. Some of these lacklustre results come despite widespread discounting in the run up to Christmas, which will have hit retailers' pockets.

 

A clear opportunity or warning sign (depending if your glass is half full or half empty) for both retailers and landlords to pick out of these results lies in the blossoming online sales figures. They helped some retailers push through a tough trading period.

 

John Lewis said: "Our very successful multichannel and online operations have been at the heart of John Lewis' performance. All three John Lewis markets were instrumental in driving sales in this area, with johnlewis.com outperforming its market and seeing 27.2% growth."

 

"As the 'Click and Collect' facility has proved to be so popular, from next month the number of collection outlets will more than double to 116, including collection points in 84 Waitrose branches, with more being planned."

 

Debenhams' like-for-like sales increased by 1.4% including VAT in the 18 weeks to 7 January 2012. However, its online business, which it says is a key component of its multi-channel offer, delivered like-for-like sales increase of 34.8%. 

 

Ellen Flood, retail expert from Shopow says: "The internet is developing as a key element of the retail landscape. Online shopping offers shoppers an incredible amount of choice, convenience and savings."

 

"What we will see this year is the evolution of the high street with leading retailers changing their approach, and in many cases their product lines, to reflect the tastes of the modern shopper."

Big Brother Debate Sparks Unnecessary Fuss

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No, not the "celebrity" one.

There has been some furore recently emanating from human rights groups over the 'revelation' that shoppers' behavioural patterns are being tracked within retail schemes via their mobile phones.

It appears that, in a bid to better understand consumer behaviour, some of the major players in the market have advocated the tracking of mobile phones within their malls, indicating how shoppers operate. As the story has broken, it has inevitably sparked a 'Big Brother'-esque paranoia, despite the technology being categorically unable to store phone numbers, messages, internet history or any other personal information.

Upon reading what the technology does - I thought of it like this: You go into a mall, and Mr. Eye-in-the-sky stops seeing you as a human being with a past, two parents and a set of organs, and instead sees a neon cube with an identity code. Cube 30496745 then does X,Y,Z - leaves the mall, and then goes back to being a person.

The response to the use of tracking technology would suggest that there is a swat team on the roof of every mall in the country, waiting for the tracker to feed it something like: "Graham Shone just used a 'Next' voucher, then had a coffee - he's clearly a terrorist - move! move! move!". Perhaps its a personal thing, but I have no problem at all with anyone knowing where and in what order I do my shopping. In fact, good luck to them. My last trip to Westfield was so scattergun it would probably break the computer.

Using this technology is basically a more comprehensive and time-saving way of conducting surveys. The tracking is not designed to pigeon-hole individuals, but to create a better environment and experience for the collective. In addition, the technology is not only used in retail - as this eye-opening news item testifies. Why not embrace everything you can to help improve life for you and your customers?

A simplistic view, perhaps, but if you're that worried about your phone being tracked while you shop, then leave it at home - or switch it off. Yes, there are limits as to what should be monitored, but in my opinion this doesn't get near them. And think about this - if you're paying by card for your shopping, then surely your bank has even more sensitive information than Land Securities or Westfield will ever get hold of.

A New Year in Retail: 2012 Expectations.

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I think it's fair to say that 2011 was a turbulent year for the retail market, so it's hardly surprising that the New Year's Day hangovers had barely been allowed to pass before industry experts broke out the crystal ball and tarot cards to prognosticate what the new year would deliver.

There were mixed messages coming out immediately after January 1st, as reports of a festive boost in footfall for many high profile schemes were then counterbalanced with disappointing figures for footfall on New Year's Day. This can be explained, of course, by the fact that Boxing Day 2010 and January 1st 2012 were both Sundays; yet it's a neat microcosm of an industry that seems to breed a gloomy, mood-ruining story for every uplifting one.

The success stories over Christmas 2011 are fronted by the fact that both John Lewis and JJB Sports enjoyed moderately successful festive periods. We've also heard about a record year for Domino's Pizza, and that JoJo Maman Bebe are joining Next on the expansion trail.

However, the rose-tinted spectacles go straight in the bin when you read that the government's austerity measures are 'threatening secondary shopping centres and poor regional high streets' (Henderson); or that 'retail in particular is due to suffer' (Deloitte). Ongoing problems for Barratts, Blacks, HMV and Thorntons are now shared by Hawkin's Bazaar and La Senza, and with opinion divided on how effective the implementation of the Portas Review will be, the retail market may need to steel itself for a chaotic and potentially disastrous twelve months.

One of the main reasons for this is the fact that the heavyweight issues behind the slump in the market do not look like being resolved any time soon. Consumer confidence remains low, and the propensity to spend will reduce even further as real wages continue to be concertinaed by cost of living increases. This coupled with the dent to market confidence caused by such high profile stores in danger of extinction indicates that 2012 may be a real struggle for the industry. 

With the March rent day now a giant cloud on many retailers' horizons, it's difficult to predict which will display the fortitude to carry on, and which will go the way of so many once-treasured brands. Sadly, by next Christmas, we might well have lost some of the brands at the foot of this Company Watch league table to the now more-brutal-than-ever retail market.

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This page is an archive of entries from January 2012 listed from newest to oldest.

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