Customers will spend 1.4% less in town centres this year because they are buying online and in out-of-town shopping areas instead, new research suggests. Verdict Research says this is part of a long term trend in the face of online spending and predicts that ecommerce will become an integral part of high streets of the future.
Verdict estimates that town centre spending will fall by 1.4% to £117,643m in 2012. At the same time, says Carly Syme, senior retail analyst at Verdict Research, online retail sales have grown by 113% over the last five years. This has, she said, attracted “significant spend away from the town centre.”
She added: “This comes at a time when disposable incomes have been stretched since the downturn in 2008, causing consumers to be more conscious of their shopping budgets. The high street has seen a far greater impact from this than out-of-town retail due to important categories on the high street such as books and music and video being well suited to online retail.”
All of this adds up, she argues, to “less of a need for retail in the town centre.” Investment from the government in boosting the high street will “only be able to do so much,” she said. Rather, councils need to take a new approach to high streets. “Councils need to recognise that the role of the town centre is changing and a higher focus on leisure activities will continue,” said Syme. “Instead of being a major retail hub, town centres will be used more to support the e-retail channel with click and collect points and safe drop boxes for customers to collect their online orders as well as satellite stores opening for customers to make online purchases.”
The Verdict forecast is one of a number of recent predictions about the future of the high street. Last month Richard Cutherbertson of the Oxford Institute of Retail Management said the clock was ticking for traditional shops at a time when the traditional retail model was “clearly broken.” The role between online and the store needed to be rethought, he said as he launched an 18 month study into the future of retail.
Also last month Deloitte’s Store of the Future report suggested pressures from the economy and online would see four in 10 high street stores close over the next five years.