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RIP the high street?

Posted on February 17, 2012 by laura

Insight with Passion’s Senior Partner Kate Hardcastle was interviewed on Sky today over the latest news from the high street.

Retail figures or January show that British shoppers splashed out with sales volumes increasing to provide the strongest increase since the Royal Wedding last April.

It’s good news or retailers, but as Kate said on Sky, we can’t be complacent.

Much of the boost stems from discounting so consumers are more likely to shop because they think they are getting a good deal.

The focus needs to go back to the customer and retailers need to focus on improving their experience. When there are stories of doom and gloom associated with the high street we often put the blame on local authorities. We blame councils, parking, pavements, infrastructure but that suggests that retailers can do nothing themselves to tackle the problems they are facing.

Great customer service, combined with a positive shopping experience will ensure people leave a shop feeling happy and content, rather than frustrated and stressed.

This week Insight with Passion’s Retail Clinics began in Bradford and Hull. The feedback in Hull was that the event was useful, our advice was engaging and informative and that it was good to see that people still care about local retail trade.

On Sky this afternoon it was suggested the high street is dead, we should move on and just focus on internet retail. The high street is a relic o the past and has nothing to do with the mdoern consumer. Not true, says Kate.

A high street has to be the heart and soul o our community, we all have to work together to ensure they improve and offer some diversity combining retail and a social element.

Below is the original news article which sparked the debate on Sky.

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Retail Sales Jump In Face Of Mass Store Closures

UK retail sales rose unexpectedly in January, while other data reveals the mass closures of chain stores on the high street.

Retail sales for the first month of 2011 were up by 1.9% year-on-year, according to Office for National Statistics (ONS) figures published on Friday.

Sales volumes, excluding fuel, were up by 1.2% compared to the previous month.

In January an estimated £24.6bn was spent in the retail sector, compared to £42.1bn in December and £23.6bn in January 2011.

The surprise jump helped drag retail inflation down to its lowest level for more than two years.

Shoppers benefited from heavy discounting as retailers tried to lure in cash-strapped customers.

Richard Dodd, of the British Retail Consortium (BRC), told Sky News that the ONS figures did not represent growth in spending, but “people getting more for their money”.

He added: “The reason that’s happening is because retailers are discounting and running really big promotions.

“That has serious implications for their margins and in some cases for their viability.”

Fears for the future of the UK high street were also driven by the fact that internet outlets and supermarkets were among the biggest drivers of the increase in sales volumes.

Separate data published on the same day revealed big high street chains closed an average of 14 stores a day across Britain in 2011.

Multiple retailers like bookshops, electrical stores, home furnishings and menswear shops fell in numbers while charity shops, pound stores and credit unions bucked the trend.

According to data compiled on behalf of PwC by the Local Data Company (LDC), multiple retailers reduced their high street presence by 0.25% – a reduction of 174 shops in 2011.

Mike Jervis, PwC insolvency partner and retail specialist, said: “A common feature of the retailers in distress who we are dealing with is that they have too many locations.

“Relatively long leases were entered into in a growth phase of the economy which are no longer appropriate.

“Electricals and bookshops have suffered as these products are now increasingly bought online but retailers in this sector are typically carrying unnecessarily large property portfolios.”

In the Greater Manchester town of Altrincham, a quarter of all shops are empty.

Mark Rubin, a retail space landlord says some of his tenants are struggling to stay open.

“On a number of occasions I have listened to tenants and decided the rent should be lowered. But that’s not a situation that can continue forever. I have to explain to them that one day the landlord is going to be in trouble.”

Florist Janet Smith has been trading for 27 years but recently nearly went out of business. Her landlord reduced the rent.

UK Cities: Worst Shop Vacancy Rates

City/ Vacancy Rate
Nottingham 29.6
Stoke on Trent 25.0
Sheffield 23.3
Newcastle upon Tyne 23.2
Gloucester 22.3
Bristol 22.1
Manchester 21.8
Glasgow 21.5
Hull 21.4
Ashford 21.1

Source: LDC

“It took the strain off us – the landlord knows that he would rather have us here than have to take over the property himself,” she said.

“But the real problems are with rates – they are too high and there is no negotiation when times are bad.”

Matthew Hopkinson, director of the Local Data Company, said: “In the past the closures were offset by openings but 2011 has shown a true decline in multiple retail and leisure outlets across Great Britain.

“With the move to out-of-town locations and the numbers of closures being announced currently, this decline is likely to continue into 2012 and thus lead to a rise in vacancy rates.”

Some experts believe the high street needs to rethink how it attracts trade or run the risk of “terminal decline”.

Tarlok Teji, retail analyst at Manchester Business School, said: “The majority of new space has been in shopping centres such as Westfield in London and Liverpool ONE.

“These are substantially better shopping environments than the high street often with free parking so it’s not a surprise that consumer footfall migrates away from the high street.

“Add the growth of online shopping and we then have a high street in terminal decline.”

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Our second Retail Clinic and a story from Hull

Posted on February 15, 2012 by laura

On Thursday 16^th February, Insight with Passion will hold the second in a series of Retail Clinics, this time in Hull.

Our ambition is to encourage all those with a vested interest in the high street and town centre, be they developers, retailers, shoppers, residents, councillors or tourists to join together and have their say about what they feel the issues are and how they can tackle them, together.

We have been talking to businesses and retailers ahead of each Clinic to encourage them to share their stories and raise their profile of the event.

Below is Mark’s story and the issues he feels he is facing as a retailer in Hull.

“An independent retailer wants parking charges cut in Hull to win back customers

Mark, from Hullaballoon with two shops in Hull believes high parking charges in Hull City Centre and outside independent stores like his are encouraging shoppers to head to out of towns outlets with free parking and are damaging the high street.

Retailers and commuters in Beverley have already accused traffic wardens of deliberately targeting drivers. Car parking charges are set to rise by 5% in East Riding in April.

What Mark feels is that while there is free parking elsewhere shoppers will not be inclined to go to Hull or Beverley. It makes it harder for them to compete. Hullaballoon attracts a great deal of customers through its website and online presence. However, when customers come to buy from their store in Hull there are double yellow lines outside the store. It makes it harder for the store to encourage shoppers to come back as it just makes it harder for people to pop in and then pop out, particularly if they have children or a buggy they need to get out of the car.

“One of my customers parked outside and came in to buy a balloon, she was spending £20. When she went out she had a parking ticket, even though she had a blue badge”.

Mark believes there has been an imbalance in terms of regeneration in Hull, with funding directed towards shopping centres within the city, deterring shoppers from smaller streets, like his own where there are other shops.

He is calling for greater support from the local authority. While independent retailers, like himself, are trying to increase footfall and encourage people to come to Hull the council should support them as best they can.”

Kate Hardcastle, Senior Partner at Insight with Passion will be on BBC Radio Humber tomorrow morning to talk about the Retail Clinic. The programme will also hear from Mark.

Ted Sobanski runs The Cooker Centre in Bradford

Posted on February 13, 2012 by Paul

At one corner of Rawson Square in Bradford stands the kind of store you will only find in a town centre. The Cooker Centre runs a steady trade in furniture, kitchen and home appliances. Customers pop in and pop out, peering around corners, examining what is on offer. Owner Ted Sobonski reassures them that if they don’t have the bookcase or bedside table they are looking for this week, they may have it next.

Looking down across the square and along John Street and Darley Street, the store has a good vantage point to see what is happening in Bradford city centre, and Ted is worried. He and his fellow retailers, he says, are struggling.

“Every year it’s harder”, he says. The store has had to adapt to stay open. He once sold just white goods, they have had to expand their line to include furniture. He used to employ several members of staff. Now he serves customers alone.

“I’ve cut costs to a minimum”. Yet it doesn’t feel as though it is enough.

Ted’s biggest expense is his business rates. These are a local tax paid by every non-domestic and business property in England and Wales. They are calculated and collected by each local authority and help pay for local services. For The Cooker Centre, these rates represent more than a third of their outgoings. Ted has written a letter to Bradford Council asking for them to be reduced, he believes they provide too much of a drain on small city centre businesses who are struggling in a difficult financial climate.

“I have appealed for them to be reduced. Bradford is not the same town centre it was. (The business rates) need to reflect that”.

Parking is another major issue, he notes. He worries that with customers unable to park directly outside his store they will be less likely to buy big items.

He used to be able to have street furniture outside his shop, now he has been told to remove it. Bits of furniture for sale directing shoppers inside now he thinks his customers think he’s closed because there is nothing outside.

With plans for the new Westfield Shopping Centre in Bradford, Ted feels the future is uncertain, although not necessarily negative.

“At the moment there’s nothing to come to Bradford for. Perhaps it will give people a reason to come. Maybe it will take away the business that’s already here, but we don’t know”.

Ted’s is just one shop, one view of Bradford.
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A visit to Maison & Objet, Paris

Posted on January 22, 2012 by Kate

A vibrant scene of colour and texture is to be found again at Maison & Objet, Paris.

It’s always delightful to see one of the sectors I am passionate about come to life and exhibitors invest so much time and effort into displaying their new season.

I always hope enough of the UK interiors retailers will get inspired here – not just on product but on the theatre of merchandising.

I truly believe if the end consumer could experience this buzz and excitement, we wouldn’t see another slump in the sector.

Our homes represent our only real footprint and the passion to furnish them lovingly just needs igniting.

This will not be achieved in a flat and lifeless retail environment.

We help businesses to evolve into more exciting retailers. Contact us to find out more

I praise loudly, I blame softly

Posted on January 16, 2012 by Kate

Catherine the Great had her enemies, but in the main was considered a successful monarch. The above quote – credited to Catherine is certainly an interesting stance for leadership and indeed transactional life.

I was reminded of this saying when I was sat in a discussion group on retail this week – with many unsatisfied customers who were commenting on what seemed to be a growing phenomenon. Businesses who were unable to take on critique or feedback when something isn’t right?

What’s so wrong with saying you are unhappy with a paid good or service if it was not as sold? Why should you suffer in silence? Should you really be expected to appease someone in a business to make them feel better?

I was amazed at how many people feel the same and some of the customer service disasters I had heard about of late.
I wonder whether there needs to be a stronger voice for so many consumers out there who feel over promised and under delivered – and a charter of service created.

Liz Jones is certainly achieving it – and I have to say that this could be the start of something revolutionary –
http://www.dailymail.co.uk/femail/article-2085349/Liz-Jones-Why-dont-women-moan-like-me.html

Think about it – money is harder come by, everyone is already at snapping point, life’s really a challenge right now – and then when you do have to make a purchase – if you get an issue and the business aren’t savvy enough to handle it providing instead - attitude and excuses. The consumer is understandably going to start to rebel.

Can you imagine in the case when its not a matter of a life essential/needed purchase but it’s actually a ‘nice to have’ – a treat that the consumer has saved for (spa day, luxury garment, hotel stay) – and that then turns into a disaster…the consumer is going to feel more extreme frustration and emotion as the business has taken a rare and precious joy and ruined it and the golden moment with it.

And that’s when we get a split – businesses reactions to complaints fall into the good, (often, the mediocre), the bad and the ugly.

In a customer complaint situation, a business can create a better impression than even a simple transaction – and yet many more businesses take the option to become awkward or unresponsive and in some cases – argumentative.

If you are a business who wants to take competitor advantage – then firstly – try to ensure that the grounds for getting it wrong and complaints are minimised – and then find your own way of handling challenging situations if it does go wrong. Set a benchmark – that you haven’t achieved satisfaction if that customer isn’t going to come back and tell friends what a great job you did in turning it all around.

If you need help with your customer service – call us – we can help. Don’t end up on Liz Jones list!