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High streets ‘must change to prosper’

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The importance to local communities and to consumers of developing new ways to shop that bring together stores and online has been underlined through two launches this week.

On the one hand, multichannel retailers are taking a lead in a forum that aims to develop a new way forward for high streets, helping to meet the challenges posed by factors including the rise of online shopping. And on the other, a new report from Conlumino and Hammerson emphasises the importance of giving consumers a reason to visit stores. Both see links between shops and online as vital to boosting local communities, and as necessary in meeting the needs of consumers who want both to shop online and to use stores.

Retailers including John Lewis and Boots will sit alongside representatives of trade bodies including the British Retail Consortium, the Association of Town & City Management, and the Association of Convenience Stores, on the Future High Streets Forum, set up this week by the Government.

The body will be co-chaired by Mark Prisk, local growth minister, and Alex Gourlay, chief executive, health and beauty division, at Alliance Boots. It will advise the government on the challenges facing high streets while helping to develop practical ways that town centres can adapt. Those challenges include adapting to a new era of online shopping.

Alex Gourlay said: “Boots UK strongly supports the pursuit of creating healthy and prosperous high streets which can be essential, if not the most critical, ingredient in supporting the regeneration of local communities. High streets are vital for the health of our communities, providing services and support that are accessible and within easy walking distance for many people. From speaking to our customers, we know that the survival of the high street is very important to them.”

Mark Prisk said: “It is clear that our high streets will need to change to prosper. There is already great work being done across the country to revitalise the town centres, but it needs to spread further faster. The Future High Streets Forum will help us do that.”

The new body comes at a time when the steady growth of ecommerce in recent years has both presented new opportunities and new competition to high street retailers. Most recently it has been blamed in part for the failure of high street traders including HMV, Jessops and Blockbuster.

But the message from the new Future High Streets Forum is that high streets can prosper – as long as they change to meet the new ways the consumers want to shop. The body aims to build on the work of 27 Portas Pilots that are already taking forward recommendations from the Portas review of the future of the high street.

The new body comes as ministers said they would also change planning restrictions to make it easy for an empty shop to be used by a start-up business or as a pop-up shop.

Meanwhile the need for shopping areas, including the high street, to adapt to the way consumers want to buy was underlined today in a new Reshaping of Retail report from retail analyst Conlumino, produced for retail property company Hammerson.

It says that consumers are moving from ‘careless consumption’ to ‘considered consumption’ that is more about selective buying than impulse-driven sales. It forecasts that by near year 69% of consumers will use three or more sales, while they will use their mobile devices to spend a collective £53.9bn, both directly and indirectly, by 2020. That will be more than a quarter of all retail sales.

The report also points out that 59% of consumers currently use click and collect services to shop, and that store numbers are expected to fall by 10% by 2020, with a focus for outlets in shopping centres and major cities.

Finally, the over-55s are expected to contribute nearly two-thirds of retail growth in the next decade.

All of this means, says Hammerson, that retailers must give consumers a reason to visit their stores. “Considered consumption reflects a consumer who is less concerned with the pure acquisition of products, and thinks more about what they are buying,” said Hammerson chief executive David Atkins. “It makes it vital for retailers to have a strong, differentiated brand, offer ‘must have’ products, and engage more frequently with their customers to give them a reason to visit their stores”

Neil Saunders, managing director, Conlumino, added: “Hammerson’s report reveals that Britain needs to rewrite the retail rules. Retailers must differentiate their ranges, engage more frequently with consumers and adapt their business model to a slower growth environment if they are to inspire, excite and compel shoppers in an era where consumers are calling the shots.”

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