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High Street must differentiate to survive, say experts as shop vacancy levels rise

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Experts say high street shops must stand out while also adapting to the realities of multichannel commerce if they are to survive in an internet world.

Scott Dacko, associate professor of marketing and strategic management at Warwick Business School and Christine Elliott, chief executive of the Institute for Turnaround, were speaking in response to the news that the national town centre vacancy rate, as measured by the British Retail Consortium (BRC)/Springboard Footfall and Vacancies Monitor April 2013, has risen to unprecedented levels.

The figures showed a UK national town centre vacancy rate of 11.9% in April 2013, up from 10.9% in January 2013, and the highest rate since the survey began in July 2011.

Dacko said: “There is so much online competition stores need to differentiate themselves to survive. On the one hand they need to be seamlessly integrated with their online offerings. And at the same time they need to offer something different in their stores. It is too easy for consumers to make price comparisons these days, so it makes sense that stores look to make themselves different.

“They can do that by emphasising local needs, which could be the bakery or butchers using locally sourced food. Or they can offer a unique ambience, a unique shopping experience, Wi-Fi, high quality products or service. They could offer exceptional value like the 99p stores or click and collect.”

Meanwhile, Christine Elliott, chief executive of the Institute for Turnaround, told Economic Voice that: "Retailers must adapt quickly and adopt a new role alongside online retailers. To do so, high street businesses must develop a loyalty based relationship with their customers built on strong customer service and an engaging brand experience. High street businesses must also take advantage of the fact that in a shop customers can touch and experience their products, something that a specialist online retailer is unable to offer.”

This week’s BRC figures also showed a contrasting higher level of footfall in the high streets, up by 3.4%, compared to the same time last year, and the strongest performance since December 2011. Out-of-town footfall stayed flat (+0.3%) while shopping centre footfall fell by 3%.

Helen Dickinson, British Retail Consortium director general, said of the report: "It's a major concern that the vacancy rate has reached a record high, driven by increases in almost every part of the UK, with some regions like the South West seeing a significant leap in empty shop numbers. With high streets topping the agenda for many now, there's a real opportunity here to seize the moment and stem the tide of further closures. Comparatively small steps to tackle deep-rooted issues such as parking, accessibility and rising business costs could make a huge difference to the health of town centres.

"At least there's some cheer on offer in the footfall figures, driven by a respectable showing for high streets, but this compares against a very rainy April 2012, when bad weather left a lot of shoppers running for cover.”
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