Recently in Retail sales Category

Online sales continue to hack away at the high street

By Graham Shone on May 8, 2013 11:04 AM | No Comments | No TrackBacks
The British Retail Consortium and KPMG today published their latest figures indicating year-on-year sales performance across the UK. 

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. 

Guest Post: The Supermarket Web

By Graham Shone on September 25, 2012 1:49 PM | No Comments | No TrackBacks
Thumbnail image for Matthew Hobbs.JPG
This week, Tesco has announced that it will be opening more "dark stores" in order to fulfil grocery orders placed over the internet. Matthew Hobbs, partner in Briant Champion Long's specialist foodstore team, looks at what this means for the future of supermarket retailing.

"Tesco's announcement about opening "dark stores" for fulfilling online grocery orders has brought into focus the future relationship between supermarkets and internet retailing.

Grocery sales on the internet are expected to double by 2015. If this trend continues it begs the question as to what the future holds for "bricks and mortar" supermarkets. The ability of supermarket chains to react to the increase in online shopping will depend upon the suitability of their property portfolios for conversion to an operation which serves internet demand.

The best supermarkets tend to be in easily accessible locations with a ready catchment of preferably affluent customers within easy driving distance and efficient servicing provisions. Critically from the point of view of the supermarket operators, the same factors that make a store good for the weekly trolley shop also apply to delivery of a successful internet fulfilment operation.

Although Tesco's stated strategy is to build new standalone "dark stores", in many locations internet fulfilment can also be easily and cost effectively dealt with in the "back-of-house" areas of existing stores. On this basis, as internet sales continue to take an increasing proportion of grocery sales, a larger proportion of supermarkets' floor areas will be dedicated to fulfilling these orders. If larger servicing areas for deliveries are needed, these can be accommodated by shrinking existing customer car parking areas as visitor numbers decline. Neither of these changes require major physical alterations or controversial planning consents.

The internet offers the opportunity for "footloose" retailing that is unconnected with where a shopper is located. However, even as the internet revolution takes hold, it will still be, paradoxically, the outlets that display the "traditional" attributes of proximity, market dominance, and access to a large, affluent catchment population that continue to perform most effectively.

So although we will see more new "dark stores" in future there will also be a quieter transformation that sees existing stores gradually reconfiguring to meet new online consumer habits."


TIAA-CREF jumps to the top of the leaderboard...

By Graham Shone on September 7, 2012 10:57 AM | No Comments | No TrackBacks
It was confirmed today that US pension fund, TIAA-CREF has completed its £280m purchase of Basingstoke's Festival Place. The deal becomes the largest retail investment transaction to complete in 2012, overtaking (by some distance) Hermes' £159m deal in February to take full ownership of three schemes previously part-owned by Westfield:


The fund ought to enjoy its position at the top of the tree while it lasts, as British Land and London & Stamford's chart-distorting £1.2 billion sale of Meadowhall ought to complete at some point in the very near future.

Analysis: April Sales Figures.

By Graham Shone on May 23, 2012 2:29 PM | No Comments | No TrackBacks
The ONS today released April's sales figures, revealing that on a month-to-month basis the British public has spent less across all sectors of retail - resulting in a 2.3% decrease in total retail sales.

This has, in fact, largely been the case over the last four years. March tends to provide an early-year boost to sales figures, resulting in a return to something approaching normalcy in April - indicated by the chart below.

March & April Information.JPG
Perhaps a fairer reflection on how April 2012 performed is to look at a year-on-year comparison. Yearly sales overall were down almost £500 million on April 2011, and sales excluding petrol were down by around £288 million. Some sectors, however, saw an increase in spending - namely non-specialised stores, household goods and non-store retailing - which I'll come to later. The graph below indicates that this April essentially returned to levels seen in years previous (when petrol sales are excluded) - this could point to April 2011 being something of a Royal-Wedding-inspired anomaly.
I think the decline in year on year figures can largely be explained away by a combination of the lack of nationally-celebrated nuptials (with the additional bonus of an extra bank holiday) and, of course, the wettest April since 1910. The fact that some sectors seem to have picked up since 12 months ago is also slightly encouraging.

One interesting piece of information I picked up from the figures is that although some sectors of retail increased slightly; the only one showing a steady increase over a number of years is 'non-store retailing' - which, one can surmise, reveals the ever-increasing tendency to shop online. 
This graph indicates the increase in sales figures for non-store retailing in the month of April since 2000. Despite the aforementioned £288 million decrease in overall sales from 2011-12, non-store sales increased by around £162.5 million overall. This simply points to the robustness of the on-line retail environment, and to the nature of the challenge facing those who wish to return Britain's high streets and town centres to their former glory. 

The on-line retail revolution was pointed to by GVA's 'Unlocking Town Centre Retail Developments' today as one of the main reasons for the high street decline - as retailers continue to row back their requirements for physical space in lieu of pursuing multi-channel sales. On this evidence, it's hard to see how the high street can fight back, and enjoy a similar upward curve in years to come.

KPMG: Mobile Technology to Decide High Street 'Battle'

By Graham Shone on February 14, 2012 9:02 AM | No Comments | No TrackBacks

KPMG have this week published research which indicates that retailers worldwide are beginning to come round to the view that effective implementation of mobile technology is eclipsing more traditional ways of generating business.

The research, compiled following a survey of 350 senior financial officers of global retailers and consumer brands, also indicates that a decrease in annual revenue is widely expected, with opinion varying from country to country on how far mobile technology can help to maximise sales.

The U.K. respondents appear to be the least enthused about the ability of mobile technology to deliver a much-needed boost to retail sales, with only 36% of the Britons surveyed stating that yes; the technology will drastically help improve sales over the next two years - compared with 46% in Germany, 44% in America, and 50% in India. 

Although it does indicate a lukewarm leaning towards the benefits of mobile transactions, those percentages seem incredibly low. Especially when considering further insight by KPMG published in September last year, which indicated that over 90% of financial services executives believed mobile payments were 'yet to go mainstream'. This is in spite of the fact that an estimated $3 billion worth of transactions were processed via mobiles last year - four times the amount for 2010.

What figures, then, can we expect when mobile transactions really take off? We could be looking at astronomical numbers - and it's then even more alarming to consider that less than four out of ten retail CFOs in this country remain, at present, unconvinced of its merits. Perhaps it's down to an inherent mistrust of new technologies, and 'Big Brother' paranoia thwarting appropriate progress in the fusion between the old and the new.

Do we, then, continue with the slow progression towards (and begrudging acceptance of) a coalescence of modern technology and traditional retail values; or do we do away with the myopia, and give mobile technology the chance it deserves in the immediate future to help resurrect a broken retail market?

I'd rather hope that more than 36% of retailers, agents and landlords in the U.K. would choose the latter.

Olympics set to fuel retail sales uplift

By Annabel Dixon on January 19, 2012 4:48 PM | No Comments | No TrackBacks

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."

 

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