Covid has had many impacts on various elements of society that will continue long after the threat from the virus has passed – and none more so than retail patterns.
Clearly, to assign the changes in our shopping habit purely to Covid, would be disingenuous.
Significant change in the world of retail was underway long before we first heard of the emergence of the virus, but, if nothing more, it has accelerated a trend that was emerging strongly.
The decline of the High Street has run in parallel with the rise of out of town shopping. There are a number of factors for that.
Firstly, as inflationary pressures continue to grow and household incomes are squeezed, people tend to spend a higher proportion of their income on the essentials, and less on leisure shopping.
Out of town developments cater more for that sort of retail with a high presence of food, carpets, furniture, technology and DIY.
City centre retails needs a number of things to happen in terms of planning and an overhaul of the rating system for it to revitalise and be lifted from the doldrums.
There needs to be a fresh approach on planning to encourage more change of use to residential and increase footfall. It needs to be far more flexible if we are to see real change, and that is what is needed.
Locally, for example, there is a plan in Leamington – a town which to an extent bucks this trend – to convert a former M&S store into offices and potentially bring more than 200 workers into the town centre. That will be a pattern across the country.
We are almost getting to a stage where town centre retail value has dropped to a point – sometimes by 60-70 per cent – to enable that regeneration to happen.
The attitude has to change from being one of the institutional investor who wants 25 years rent from a large anchor store to a more active management which drives more place-making and shows an increased entrepreneurial and flexible approach.
You find that that happening in parts of London and, locally, with FarGo Village in Coventry – a more vibrant and changing scene. Social patterns are changing and retail has to keep pace. Young people don’t always want to own a car and go to a department store, but they want to drink good coffee, practice yoga, be vegan and play crazy golf.
There is a constant search for the next experience, which is why pop-ups do so well, and why there are now specialist agencies advising investors and large institutional funders in how they can adjust to meet the trends.
That means we may well end up with a model that has two very distinct ends. The one is almost wholly leisure and experiential, while the other – mostly out of town – is very essential and efficient.
We have done a great deal of work in the latter end of the market and have recently built Sofology and Lidl stores in Birmingham. Quite often now, a food store is the anchor of a wider development which contains those essentials, and those larger units with car parking will be more appealing to those who remain Covid cautious.
We have a track record in creating out-of-town stores across the country and we are expecting that more conversion work will come through the pipeline
The cost of that is always quite high so value levels still have to fall to make it work economically, but that is starting to happen. The return the office, which appears to be accelerating, will help the High Street leisure businesses.
There will be further twists and turns in all areas of our lives as we emerge further from the last two years, but there is increasing clarity around the future of retail and we believe, as a business, we are well placed to serve both ends of the new market.
Eleanor Deeley, joint managing director
