The best retailers are still presenting goods and services that engage and excite customers; they are still profitable. However, while retail expenditure is trending upwards in real terms, shop-based profits are down, as costs remain high compared to those online, and fundamentally, Christmas 2019 footfall was down 8% compared to 12 months earlier.
Shoppers, whether by choice or necessity, are increasingly flexing their purchasing muscle by leaving buying until the last moment, relying on fast delivery directly from manufacturers, short circuiting the retail journey and securing better prices. The increased rates discount for smaller high street businesses will deliver some relief, as may the fundamental review of business rates, but the retail-led town centre offer needs to change and financially rebase – and it needs to happen quickly.
In terms of what should be done the answer is, by necessity, complex. Most people participate in a range of activities; as workers, service users and as shoppers. They may purchase on the basis of price alone, convenience or on the basis of the quality of product, but increasingly consumer behaviour is following a generational shift away from simple consumption.
For example, shoppers are increasingly wanting to ensure that the product they are purchasing – be it the sourcing of raw materials or the production process – is both sustainable and ethically sound, and they are often willing to pay more to guarantee the provenance of their purchases. Physical connectivity can enable relationships to be built directly between producer and shopper. There are increasing trends towards personal, experiential activities.This offers hope and opportunity for our town centres.
A curated town centre that delivers a setting and offers a range of activities that attracts people, will be more successful than one that relies simply on market forces…