Survivors of a 'consumer-led retail revolution' will be 'those who adapt'
More retailers will fail in 2013 as a “consumer-led retail revolution” continues to change the way we shop. The survivors will be those who have adapted to the new reality of online and multichannel shopping.
So says Rupert Eastell, head of retail at Baker Tilly. Commenting on a Baker Tilly
report that shows only 40% of retailers expect sales to increase over the next year, 36% expect profits to fall and 60% see potential falls in domestic demand as their main threat for 2013, he said it was not surprising that high street confidence was “very much strained” in the wake of the failure of companies such as Jessops and HMV .
“We are in the middle of a consumer-led retail revolution which means that unfortunately I think we’ll see more retailers going to the wall over the coming year,” said Eastell. “The survivors will be those that have adapted quickly to become fit for purpose.” Some 67% of respondents to the study said they expected to benefit as their competitors failed.
While outlook for overall sales and profits were bleak, four in 10 respondents to Baker Tilly’s Your Outlook for 2013 – a business survey
said they expected to see ecommerce sales grow.
“It is no surprise that forty per cent of the retailers surveyed said they saw the internet as an area of growth,” said Eastell. “The web has changed the way the consumer shops and so the High Street needs to look different in the future.”
That new look for the high street is likely to include more outlets for retailers such as Krispy Kreme and Dunkin Donuts, both of whom have recently said they will expand. Eastell said: “Companies like these that offer something that can’t be done online – such as eating, drinking or exercising – will form parts of smaller integrated central, community areas that will integrate great retailers in the future.”
Elsewhere in the report, half of the businesses surveyed said they planned to cut costs in the year while 38% said paying down debt would be their priority.