Town centres must become attractions in their own right, while retailers must focus hard on what the customer wants. Those were some of the key messages when representatives of M&S, New Look and Lakeland Leather spoke to Parliament’s Housing, Communities and Local Government Committee this week about the future of retailing and the high street.
Marks & Spencer on closing stores and future high streets
Marks and Spencer has already said it plans to close 100 full line stores as it moves more of its clothing and homewares sales online. It is targeting 33% of sales in these areas, up from 20% currently, and it is closing around a quarter of its clothing and homewares store space at the same time.
Asked how the decision is made about which stores to close, Tony Ginty, head of public affairs at M&S, said the retailer focused on commercial performance, the nature of the property – whether freehold or leased, and the length of that lease, and on how easy it is to redeploy staff to nearby stores. Currently, he said, “Something like 35% of M&S’ store estate is pre-war– it’s older, not modernised and in high streets where it’s hard to argue for investment.” So far, he said, 80% of staff from 30 stores that have already closed have been redeployed.
Ginty says ultimately town centres must become end locations in their own right, that don’t rely on retailing alone but balance retail with services and residential.
“In 10 years time, online penetration will grow more than it already has done,” he said. “Platforms and formats are changing. There’ll be much more multichannel than you had in the past, so pure online retailers will take on property – Amazon is already looking at that. Eight out of top 10 retailers are multichannel and you’ll get much more mixture there.
“Whatever type of retailer, they have to deliver three things: convenience, making it easy to shop, value, and experience,” he said. “That last one is the really big new one – why should I come into this particular town, this shop? It’s not just about one activity but 10. Give me a reason to come in.”
He added: “If you don’t give people reason to physically go there, when they can just press buttons as an alternative, then you are in trouble.” The business rate system, he said, was broken and unsustainable longer term.
New Look on the customer
New Look, too, is closing stores on the high street as it rightsizes its store estate for a future in which more customer buy online.
Richard Collyer, chief financial officer at New Look, said its own decisions on store closures were ultimately driven by the customer.
“The customer will decide whether or not we’ll move,” he said, adding, “How do we drive people go into the store, so that online and offline work together? We need to make a virtue of the fact that they can collect rather than waiting for delivery. That’s about making sure it’s convenient, making sure there’s free parking. Click and collect needs to be something that they want.”
In the future, he said, “Retailers will become customer-focused, obsessed by what the customer wants. We need to adapt and that’s what retail has done for many years and will continue to do as it evolves. We need to make sure it’s fit for purpose, for the future.”
Lakeland Leather on adapting to online
Martin Foster, managing director of Lakeland Leather, a third-generation family business founded in 1955 in Ambleside, which now has 15 stores, said that retailers were good at innovating and like change – but that it’s expensive. The arrival of new technologies, from 5G to driverless cars and drone delivery, would all have further impacts in the future on the high street. “We’re getting much more into personal shopping, experience opportunity,” he said. “We’re enhancing the way we do that, we’re going to be putting fashion shows on in-store. We’re connecting bricks and mortar to online. It is changing, those are exciting opportunities but we need a level of profitability in order to invest.”
Image: InternetRetailing Media/Paul Skeldon
