Showing posts with label high street. Show all posts
Showing posts with label high street. Show all posts

Friday 20 March 2015

Relating retail business rates to sales performance - the unintended pay-off?

Over at The Telegraph, Graham Ruddick develops some good reasons for how local councils’ discretionary expenditure of retail business rates could transform the high street in terms of positive use of the funds at local level.

However, basing rates on sales achievement could result in even more positive benefits for the High Street...  By relating the business-rate to a retailer’s sales, rather than an out-of-date value of the property, the retailer could focus on driving business rather than covering overheads.

Even more importantly, the council could actually play an active role in helping business succeed…

As a stakeholder, the focus of the council could change, giving councillors a reason to make pro-active moves to help create an environment that meets the needs of all parties in the High Street.

This could bring a whole new purpose to maintaining building fabric, level and quality of domestic and retail occupancy, access and parking facilities, cleansing and lighting, and even some accountability…

These moves would eventually result in higher retail property values, but the council having a pro-active stake in thriving businesses, combined with the power to spend locally at their discretion, could get everyone there faster… 


Sunday 15 June 2014

Counterfeit Street, Manchester – a High Street underworld revival?

                                                                                                                             Pic: The Sunday Mirror
Investigators from The Sunday Mirror have discovered that, behind the locked doors of Bury New Road, in a maze of back alleys and basements, a new trade is flourishing – fake designer goods worth millions of pounds change hands here every year.

See details and pics here.

It’s a hidden shopping mall and cash-and-carry all rolled into one, a secret outlet village where rogue traders buy fake supplies in bulk and sell them on across the country. Young men - the spotters - lurk on street corners outside the locked shutters of closed-down shops. These men are the spotters. They bring customers in and keep police out.

The process raises big issues:
Apart from illegality, if someone can buy designer-fake for £20, take a gross margin of 43% by selling it on for £35, a retail price still far below that of the genuine article, what is the impact on consumer perception of brand-value?

In other words, if fake and genuine products are almost functionally similar, or at least close enough to satisfy consumer need, there will be a limit to the premium that consumers will be prepared to pay for a branded product that is certified as genuine…

This means that the only effective way to reduce the appeal of designer-fakes will be to reduce retail prices to levels that equate more closely with functional realities, especially in flat-line markets…

Tuesday 13 May 2014

Empty shop squatting - a high-street solution for a high street problem?

A new business has been designed to protect empty shops from squatters by moving in low-paying renters.

Intuitive Guardians’ new scheme aims to close a loop hole in 2012 legislation, which made squatting in residential properties a criminal offence but does not stop squats being set-up in commercial properties.

The business model has the firm supplying basic shower block and kitchen amenities, property owners paying as little as £50 a week to have their property secured while prospective guardians can get living space in Brighton and Hove at a heavily reduced rate of just £50 a week.

Apart from space protection, the key benefit has to be that local councils, businesses and shoppers become accustomed to a more 'lived-in' high street environment, and will hopefully lead to more creative use of a dying facility...


Monday 16 December 2013

Money-laundering Convenience on the High Street?

NAMs that may have noticed an increase in the numbers of High Street betting shops - those who have not, are probably working in the wrong areas - cannot miss the Fixed-Odds-Betting-Machines (FOBTs), often four per shop.

FOBTs can  be used for money laundering by paying cash into the terminal, making low-risk bets which involve a small relative loss, and withdrawing most of the proceeds as a voucher which are exchanged for cash at the shop counter.

Academically interested in how it works?
The most popular game is Roulette, which as you know pays out even money on Red and Black, and usually 35+ to 1 on the ‘Zero’ on the wheel.

NB. Thanks to Anonymous below, I have now made enquiries via 'trusted trade sources' and find that there is a £100 betting limit per game, so the amended illustration works out as follows:

A punter places £47.50 on Red, £47.50 on Black and £5 on Zero. A win on Red or Black pays £47.50 plus the original stake, and the £5 on Zero is lost.

The punter cashes in and walks out with £95, freshly laundered…  In other words, for a small charge i.e. the lost bets, most of the money is ‘cleansed’...

An FOBT allows players to bet on the outcome of various games and events with fixed odds, mainly roulette. The minimum amount wagered per spin is £1. The maximum bet cannot exceed a payout of £500 (i.e. putting £14.00 on a single number on roulette). The largest single payout cannot exceed £500.

The terminals arrived in Britain in 2001 and were lightly regulated from the outset. Punters in bookmakers found that they could bet £100 every 20 seconds on roulette. The temptation of high-speed, high-stake casino games in the high street proved irresistible: there are now 33,345 FOBTs in the UK.

Like all casino games, the "house" (i.e. the casino) has a built-in advantage, with current margins on roulette games being theoretically between 2.7% and 5%.

So it can be said there are still signs of life, and death, on the High Street… 


Tuesday 12 November 2013

Shops Closed, meaning c-l-o-s-e-d!

                                                                                             pic: Brian Moore - Preston Street, Brighton

..........until an acknowledgement of overcapacity allows a return to domestic accommodation

Wednesday 6 November 2013

"clicks to bricks" - Online retailers move into the High Street


Rapha Cycle Club on Brewer Street, near Piccadilly Circus
"Retail observers have been significantly overestimating our use of online and digital technology for shopping - we like shopping in stores," says Nicole Flasch-Mihalko of LIM College, which carried out a survey with the National Retail Federation in the US.

A number of online retailers have taken the survey findings to heart....
For instance, Rapha, which started as an online business in 2004 selling high-performance cyclewear, opened its first store or Cycle Club in San Francisco in 2011. Now it also has branches in London, Osaka, New York and Sydney.

Rapha says its stores have been a big hit with customers, offering a showcase for its clothing but also acting as a place to absorb cycle culture - to drink coffee, join in organised cycle rides and watch major races on big screens.

For High Street landlords with vacant space to rent as well as online start-ups this trend is good news, says Ross Bailey, founder and chief executive of Appear Here. His firm brings together shop landlords and mainly e-commerce entrepreneurs, with the aim of making renting a pop-up or permanent physical shop easier and more flexible.

The key idea is online retailers - Ronliners -, with no baggage or no preconceived notion of what works in classic retailing, but especially with little to fear from the emergence of online, can focus on the shopper's experiential interaction with the product, secure in the knowledge that they have already secured the ongoing deal...

...while their traditional competitors focus on restricting access to the instore wifi... 

Tuesday 4 June 2013

Shop window coverage of the G8 summit...?

                                      Flanagan’s – a former butcher’s in Belcoo Pic: Bryan O’Brien
Hundreds of thousands of pounds have been spent on a Fermanagh facelift in Northern Ireland as the county prepares for the G8 summit in just under three weeks’ time. More than 100 properties within range of the sumptuous Lough Erne resort which hosts the world’s wealthiest leaders, have been tidied up, painted or power-hosed.

Just a few weeks ago, Flanagan’s – a former butcher’s and vegetable shop in the village of Belcoo– was cleaned and repainted with bespoke images of a thriving business placed in the windows. Any G8 delegate forgetting to wind down the rose-tinted limo-window on the way to discuss global capitalism would easily be fooled into thinking that all is well with the free-market system in Fermanagh.

But, as anyone outside the venue knows, the facts are different…..

In a high street in any other part of the UK, disguising empty shop windows can be a means of encouraging the consumer to spend, instead of being put off by reminders of ‘triple-dip’ flat-lining…

Covering shop windows close to a G8 summit becomes a political statement….

However, our world leaders know more than we the political realities and consequences of their decisions and hopefully the sight of Flanagan’s will generate more than a sound-bite on arrival at the Lough Erne resort....

Wednesday 29 May 2013

High Street affordability?

Whilst shoppers may be deserting the high street in favour of cheaper, faster alternatives out-of-town, the fact that retail costs are rising by 21 per cent and sales by 12 per cent, raises the issue that retailers may also be finding the high street too expensive…

As always those retailers fortunate enough to have a pivotal impact on some high streets are able to aggressively renegotiate leases and rents. This week, for example, sees the deadline set by Sports Direct for landlords to accept either sales-based rents at its Republic fashion chain or sharp rental cuts, thus causing landlords to share some of the risk of operating in a declining channel.

However, retailers’ “average” sales conceal wide variations. These are partly product-based – jewellery, for example, has done much better than appliances in the past four years – but they also reflect changes in shopping channels. These changes make it increasingly difficult for retailers to account for sales by channel
The alternative ways of shopping explain why, as Julie Carlyle, head of retail at Ernst & Young, says “retailers are struggling [with] how to put this in their accounting”.

In addition, the high cost of home delivery vs the £5 fee per drop, will need revising upwards to reflect actual-cost reality in the accounts, or credibility will suffer...

The result is that store groups are coming under pressure from investors and analysts to be clearer about the contribution online sales make to underlying sales performances.  With some retailers adding online sales to their traditional outlet like-for-likes, and accounting separately for online growth, there is an increasing pressure to satisfy analysts’ (and suppliers’) needs for insight on where the business is coming from, and going to….

By the same token, suppliers need to be able to spell out the contribution made to a retailer's bottom line by their combination of margin, free credit, trade funding and deductions, in order to arrive at accurate and defensible payments of performance-based reward.

Whilst some stakeholders may simply be interested in overall sales and the bottom line, and the marketers focused on consumer lifetime value, in these unprecedented times accurate measurement of reward for risk remains crucial.
New ways of defining assets, factoring in show-rooming and shopper value will need to found.

Meanwhile, it is only by examining a credible return on the capital tied up in the business, compared with available alternatives, that a sufficiently robust picture emerges, sufficient to justify additional investment by all stakeholders, amidst all of the uncertainty…

Thursday 28 February 2013

High Street Winners & Losers: 'Just gimme the facts, NAM'*

High Street store closures: Just the facts... 
The BBC have highlighted analysis from PwC and the Local Data Company revealing that chains shut an average of 20 shops a day last year.

The facts: 
WINNERS
Payday Loans +20%
Pawnbrokers +13.2%
Poundshops +13%
Supermarkets +3.6%
Coffee shops +3.4%
Betting shops +3.3%
Charity shops +2.7%

LOSERS
Computer Games -45%
Health food -24.7%
Card shops -23.4%
Recruitment -15.1%
General clothes -8.7%
Women's clothes -7.2%
Banks/financial -2.9%
Net change in units in 2012. Source: Local Data Company

Who?
See KamBlog for list of 'casualties'

Why?
At the very least, the above figures reveal chronic over-capacity. This is only partly driven by retailers' inability to evolve an omni-channel response to the emergence of online.

Why now?
In turn, this overcapacity reflects equivalent levels of supplier-side ability to produce more than is now required as we continue to awaken from a thirty year dream of borrowing-based demand….

New demands from the super-savvy consumer
A new complication has been the meat crisis, merely the tip of an iceberg that is becoming a fundamental challenge to brand integrity. This is causing the super-savvy consumer to demand proof that ingredients actually match up to on-tin descriptions, adding this new requirement to their now constant demand for demonstrable value for money.

How to survive and thrive
For those that are managing to survive this mother-of-all-wake-up calls, paradoxically the way forward has to be a step back to basics, a fundamental review of consumer need, a realistic comparison with alternatives available, and then a stripping-back of the brand-offer to a precise fit with need, and priced accordingly…all communicated and made available, however, wherever and whenever the consumer beckons…
This is the new fact-based reality, folks….

* 'Just gimme the facts, MAM' was a catch-phrase from Dragnet, perhaps the most famous and influential police procedural drama in media history. The radio and TV series gave millions of audience members a feel for the boredom and drudgery, as well as the danger and heroism, of real-life police work.

Jack Webb wrote, produced and played lead Joe Friday. He insisted on realism in every aspect of the show. The dialogue was clipped, understated and sparse, influenced by the hard-boiled school of crime fiction. Scripts were fast moving but didn’t seem rushed. Every aspect of police work was chronicled, step by step: From patrols and paperwork, to crime scene investigation, lab work and questioning witnesses or suspects. The detectives’ personal lives were mentioned but rarely took centre stage.
A bit like the new-era role of the NAM, really…..

Monday 11 February 2013

Twenty Retailers that will save the High Street

Unlike brand marketing, where new products enjoy high status, the NAM/KAM system tends not to acknowledge the presence of new retailers until they achieve 5%+ of our business. In fact new, low profile retailers tend to operate under the radar until a chance discovery by our competitors…(think back to early Pound Shops, for starters…)

The 20 fastest growing high-street retailers are niche-carvers, multi-channel strategists, and go-to addresses for affordable goods. All of them have found their own particular edge that enables them to look to 2013 with optimism, despite challenging market conditions.

At the same time, they are diverse. The only thing all of the business on this list have in common is growth. Store numbers range from a single one to hundreds across the country; turnover from just over £200,000 to hundreds of millions. Business growth is very much present across the spectrum, with the right strategy in place.

Real Business and Jordans have identified the 20 UK retailers that are defying the downturn, with super-smart tactics and awesome growth.

Not all will be of direct interest (yet?) but five minutes studying the list of CAGR performances might be worth a ‘mabey’…??  or perhaps a 'what if'? see below

Criteria:
  • Sales greater than £5m in latest year’s accounts
  • Ebitda greater than £50k in latest year’s accounts
  • Latest accounts must be filed in 2011 or 2012
  • Latest year and previous three years financial info to be provided (regardless of year or last filed accounts)
  • UK based company
  • The company needs to have grown turnover over each of the three periods, and most importantly in the final year
  • Company to have been profitable in each of the three periods
What-if?
Perhaps even worth applying the above criteria to the tail-end of your customer portfolio, or the little player that naively requested a call, just-in-case?

Wednesday 9 January 2013

Everything is negotiable, when the chips are down…

Keith Ewing, owner of Number Eight Clothing in Stirling, commented that Independent retailers need to "put their heads above the parapet", as his shop was nominated as one of the UK's "top 100 inspiring shops" for 2013 by Draper's magazine. He listed rent-reviews, online, buying and display as key needs in independent retailing.

NAMs could help by sharing their negotiating expertise with appropriate retailers, as follows:

In practice, independent retailers can help themselves to survive by adapting the supplier-approach to business development:
  • Cutting-costs: rent and rates are currently too high in these unprecedented times. Landlords and local government know this and are vulnerable to the ‘walk-away’ threat by retailers. In other words, retailers should calculate the level of rent and rates (seek help from commercial architects that can provide a broader view) that make the business viable, and renegotiate on this basis, ideally via a combination of lower rent and a ‘per cent of sales’ model, to force landlords to share the business risk.
  • Driving sales: develop a strong online strategy by mining your customer records and collecting email addresses going forward in order to extend your reach beyond a shop visit. Optimise supplier help by negotiating better prices, terms and supply arrangement and especially instore merchandising in exchange for customer stats and enthusiastic/ innovative collaboration. Suppliers want you to succeed as a counterbalance to major multiple retailers and are willing to negotiate flexible packages for the right customers.
Being a business consultant to the retailer can optimise the trade partnership and broaden the NAM’s expertise in managing other customers.

Sharing negotiating expertise can help....

Wednesday 15 August 2012

Living above the shop – optimising incremental space in retail


Houses and gardens have been built on top of the eight-storey Jiutian International Plaza in the densely populated Chinese city of Zhuzhou, where residential space is scarce at ground level.

In Brazil, false ceilings within reach of shoppers are used to merchandise Easter-eggs  with shoppers helping themselves (and paying!) during trips in the run-up to Easter.

Making chewing gum more Six-siting 
On a more mundane but equally creative level, unfazed by a dual-siting tradition, Adams gum were able to secure six separate sitings of their medicated chewing gum in Loblaws of Canada  by creating incremental space via blister-packs on walls and columns throughout the store near dental, confectionery, medicine, kids lunch and strong-tasting food categories, each site separately coded to check ROI per location.

In other words, when pressed for space in retail, creating incremental space can be the answer…

Application in the High Street
In the same way, incremental restoration of the living space above the shop could be a way of reviving UK high streets (see High Street revival recipe )

The online space-threat
However, for the truely creative thinker, the real use/threat of incremental space in retail has to be the growth of online in a flat-line market means that with a 13% share and growing at 14%, physical retail space in the UK is already 13% over capacity….
This means that retailers have to be increasingly open to ideas for optimisation of existing and incremental space by imaginative NAMs…

Couldn’t work here?
Perhaps these initiatives need to be forced a little, in these unprecedented times? 

Monday 23 July 2012

Pop-up Britain, an answer for UK High Streets?


                                                                                         pic: Business Matters Magazine

StartUp Britain has today opened the first of its revolutionary PopUp Britain shops, offering start-up businesses a unique low-cost opportunity to experience life on the high street.

This unprecedented scheme will help to revive the UK’s flagging high street by making use of co-funded empty shops. StartUpBritain’s first PopUp, opposite Richmond station, will provide retail space for six start-up businesses. The store will get backing from the scheme's sponsors: John Lewis will fit-out the shop, the businesses will be insured by AXA. Each business will also get a Dell laptop, access to PayPal's online internet payment system and a copy of Intuit's Quickbooks accounting software.

StartUp Britain was founded 15 months ago by a group of eight entrepreneurs to encourage small business startups, winning support from government. However they rely for funding from the private sector via sponsorship.

A great idea in unprecedented times, but as David Prosser in the
Independent notes, ‘if the state is going to leave it to volunteers to deliver its stated desire of boosting entrepreneurialism, it must at least have the decency to get out of the way. If local authorities play ball, and the scheme gets a fair wind from other public-sector bodies, StartUp High Street is an idea which might just make a real difference. For example, local authorities will need to be supportive about allowing these retailers to trade — waiving planning permission restrictions, say’.

Friday 4 May 2012

Target to delist Kindle, fed-up ‘show-rooming’ for online...

Target, the US mass market discounter, communicated the decision to stores last week, and underlines growing antagonism between Amazon and bricks ‘n mortar retailers, which are threatened by the online retailer’s aggressive discounting, entry into new merchandise categories and attractive shipping service.
Target reported last November that the Kindle was the best-selling tablet in its stores on the day after the Thanksgiving holiday, typically the busiest shopping day of the year.
Target has in the past complained about the practice of “show-rooming”, a growing habit by shoppers to view a product in-store and then buy it from an online seller.
Apart from threatening the stability of routes to market for a number of key non-food categories, this move raises an important issue re the relationship between suppliers and specialist retailers.

Specialist shops viability
Essentially, as you know, the purpose of specialist shops in categories such as toys, bookselling, consumer-electronics and home entertainment is to meet a fundamental consumer-shopper need to physically experience the product. When specialists’ retail prices are so out of line with alternative formats, it is inevitable that having ‘pressed the buttons’ on a piece of electronic equipment in a specialist outlet, the shopper will invariably make a purchase online at a significant discount. There is no legal way of ensuring fulfilment of the sale by the specialist retailer unless via a price differential that is so low that purchasing elsewhere is not worth the trouble.

Even the mass retailers are under pressure from Amazon 
It has to be expected that as bricks ‘n mortar specialist shops cannot compete with online providers they need help in optimising their business model. The major multiples have reached market dominance by taking state-of-art retailing to new highs, in effect becoming expert shopkeepers.  In fact, these major multiple retailers have set global standards in state-of-art retailing that have redefined shop-keeping, and these standards need to be met by specialist retailers in order to survive.

Role of the supplier in helping the survival of specialist retailers
In practice, suppliers need to be retail business consultants to specialist and independent shops, helping them to adapt state-of-art retailing techniques and practices to their operations.  However, as the cost of this level of service would rarely be covered by the size of the resulting order, suppliers need to change their approach to calculating the profitability of some customer types. Because specialist and sometimes independent customers are ‘educating’ the consumer and ‘show-rooming’ the product, they are in fact performing an advertising function for the brand. They therefore need compensation by way of additional margin and help in becoming more effective shopkeepers.

Budgeting tip to help specialist retailers
Should we not therefore charge say 50% of the cost of servicing them to the advertising budget, and continue to call if the remaining cost is covered by size of average order?
Otherwise find a new way of show-rooming your brand and re-engaging the consumer….

Meanwhile, have a long, experiential weekend, from the NamNews Team! 

Thursday 29 March 2012

The Future of the British High Street: Voice of Russia Radio (formerly Radio Moscow)



This is a recording of a radio discussion that will be broadcast next week involving the British Retail Consortium, The New Economics Foundation and NamNews, covering key issues and predictions affecting future viability of the High Street, from the perspective of key stakeholders.

Topics include:

- Need for commercial viability
- Role of mults, charity shops, & suppliers
- Domestic-retail balance
- Legal & Rating issues
- Banks as landlords
- Predictions ref. High St, out-of-town and online shares

FYI, Voice of Russia Radio is apparently No. 3 in the world to the BBC and Voice of America.

NB. For a priority copy of the new NamNews High Street Survival Recipe, contact bmoore@namnews.com

Wednesday 21 March 2012

The Battle Against Obsolescence in the High Street

The high street is successfully fighting for its life on many fronts, but in some categories it is a lost cause, and scarce resources should be focused on realistic revival prospects.
For instance, given the inevitable drift of business to new delivery systems like downloading, in categories such as DVD sale and rental, along with retailing of CDs, books and even games, it is important to distinguish denial from planned demise in a product or category lifecycle.  Anyone in doubt need only think of the declining fortunes/demise of Blockbuster, HMV, Borders and GameStop for some high-profile examples of the trend.
The inevitability of the life-cycle 
Essentially, it is important to accept that all brands go through a natural lifecycle from innovation to growth, maturity and decline in response to market demand.  Whilst the latter stages can be delayed, the process of prolonging active life usually becomes increasingly expensive and produces diminishing returns.  However, in some circumstances, the life of a brand can be prolonged profitably by constant innovation and ‘reinvention’ in the absence of serious threat from substitution.
Retail format life-cycle...
However, if we accept that a home entertainment retail format offering video-rental and sale, like a brand, has a life cycle, we need to acknowledge that the format passes through stages such as innovation, growth, maturity and decline, as night follows day…  Here the download alternative provides convenience, choice and ‘instant’ gratification in a way that is impossible for traditional outlets.  As the download providers take increasing shares of these categories, in time their low cost-base will allow them to complete the process via price-cutting the traditional outlets out of existence.  In these circumstances it is important for traditional home entertainment retailers not to deny the inevitable, but rather to proactively manage the maturity and decline of their format.
Meanwhile, at the receiving end... 
For store-owners, the ultimate question of how long the mature and decline phases will last has to be replaced by one reflecting the owner’s lifestyle expectation in terms of return on investment, coupled with their risk-profile (risk-averse, risk-neutral or risk-seeking).  This will help the owner to determine a satisfactory risk-reward relationship that will help them to decide whether to persevere for five or ten years, or seek a radical reinvention of the home entertainment format.   As entrepreneurs at heart, store-owners will be accustomed to making business decisions that offer a realistic balance of risk and reward in a market undergoing constant change.
Obsolescence is but another variable in the game….in which suppliers have a strategic role

Monday 12 March 2012

Innovation in retail multichannel management, an opportunity via the new Post Office?

In retail, increasingly innovation will be linked to the development of multichannel retailing, particularly as sales migrate to new channels, the role of multichannel director is emerging as the most likely route to becoming chief executive of a major retailer. 
Suppliers need to mirror the role-moves.
Need for innovation focus
Korn/Ferry Whitehead Mann have found that, despite profound change in the retailing sector, many were prioritising existing goods and services, rather than reinventing themselves with breakthrough ideas. 
This week’s guest-Kamblogger, Gary Coyle, a thought leader in the Postal sector, updates NAMs on upcoming consumer-access opportunities via the Post Office network.
Post Office rebirth
The UK Post Office network is in decline – 5,000 Post Offices have closed over the last 6 years with 8 million fewer weekly customer visits.  The Government have promised funding of £1.34bn over the next four years to help modernise and re-energise the retail network.
In fact, as the largest retail network in the UK, the Post Office now needs to innovate, take some calculated risks and be radical in its approach to adopting a new business model in order to optimise ever challenging consumer demands.
See Gary’s free white paper: Post Offices – Time for a Digital Reinvention as a Unique Route to Consumer? 

Thursday 26 January 2012

High Street survival and leases

For many years, UK and Irish retail property markets have been compromised by the existence of 25 year upward-only leases with no break clauses. This has ensured that institutional landlords like banks have been able to put the leases on their balance sheets as assets with a guaranteed income stream. In fact commercial property is valued not on its sale price, but rather as a multiple of annual rental*.
This explains why bank-landlords cannot renegotiate rentals, in that to acknowledge a lower yield means lowering the value of the asset in the balance sheet, leading to a need for re-capitalisation…God forbid,,,
Because of the global financial crisis, a two-tiermarket has emerged for high street leases depending on whether they have an upwards-only reviews or not.
For retailers the new leases mean there is a stronger focus on the unit, the pitch, the covenant and the lease terms. In other words, a more realistic, commercial approach to risk-sharing by the landlord.
There is a commercial logic to aligning the interests of the landlord and the tenant to ensure both maximise the performance of their capital. But it requires a more forensic approach to retail development in the future, with developers/investors, governments and banks taking a greater, long-term interest in how a retailer will trade.
Until then high street retail will continue on a downward spiral, as most of the action moves to the suburbs and retail parks…


* Deep down the same logic applies to domestic housing. In most countries outside the UK & Ireland, houses are regarded as places where people live, and are not seen as investments. In other words a house is valued at approximately 20 times its annual rental…a yield of 5%. This may explain the periodic housing bubbles that occur when consumers lose track of what their houses are really worth...
Incidentally, why not sit down with a strong coffee and try the 20x multiple on your home…?

Wednesday 14 December 2011

Live above a shop: new homes built for retail therapy


A way forward for the high street, starting at the top, naturally....
Be part of the cappuccino culture. Buy a new home above a smart London high street and meet your friends for coffee at Chelsea Walk, in Fulham Road, which will have 56 flats and 14 retail units (above).
You’ll also find it happening in Bloomsbury and Belgravia, Marylebone and Mayfair, South Kensington and the Square Mile, Notting Hill and Knightsbridge — Londoners are moving to be close to their shops.
Not those predictable high street chains but individual shops, where owners are serious about their food and homeware, their crafted goods, their cheeses and delicious treats, home-made breads, butchery and bistros. The attraction of these retailers is so strong that developers have recognised buyers’ desire to live near them, in attractive new homes where they join a “village” community in areas with genuine cachet.
Lucky for some, but therein lies the germ of an idea to regenerate traditional high streets. 
Obviously it means taking a proper dose of reality by landlords and local government, running the numbers, and dissolving some long term upward-only leases, but how about converting vacant retail properties back to domestic accommodation, before circumstances force the move…? Video: Scale of problem 

Tuesday 13 December 2011

John Lewis opens its first virtual shop in Brighton


All of the retailer's ‘top 30 things to buy for Christmas’ are included in a QR window display at a branch of Waitrose.
Customers can scan the QR code of the item they want, which will then take them to the John Lewis mobile site to complete their purchase.
After ordering online, customers can pick the item up after 2pm the following day from any John Lewis or participating Waitrose store, if the order is place before 7pm the previous day.
The most famous, and possibly most successful, example was Tesco Korea's virtual supermarket shelf in a subway in Korea, which resulted in a 130% increase in online sales.
The issue will be what KPIs JLP will use to measure success before rollout:
-       Sales per item listed (need to segregate window vs. website sales)
-       Sales per window (aggregation of above)
-       Opportunity cost of window space (Waitrose tends to use blanked-out windows in this location)
This raises several issues:
-       Is it a poster?
-       Is it a ‘shop’?
-       Is it a calalogue?
Either way a worthwhile experiment, but meanwhile a possible temporary/permanent answer to all of those empty windows in the high street?
And the space behind the empty windows?
How about using this now low rent, minimal/zero rates space as back-up storage for healthy shops nearby, thus allowing them to eliminate all instore storage space in in high-cost rental areas?