Hannah Fletcher
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Woolworths, Adams, MFI, Zavvi and now Viyella. Barely a day passes without another fixture of the British high street disappearing. By the end of the recession, whenever that may be, what will the retail landscape look like?
We asked Maureen Hinton, an analyst at Verdict, the retail research company, to predict its future. The outlook may be bleak now but it's not all bad news. Hinton believes that in five years the retail sector will come out of this downturn, and in seven it will have started on a growth curve, offering opportunity for innovative, hard-working, consumer-driven companies.
Here, she and the Verdict team offer their predictions for the future of the British high street.
Pubs and bars
The chain bar concept is becoming tired and falling out of favour. The smoking
ban, an ageing population and a growing trend for drinking at home will also
affect these businesses. Even the traditional British pub could become an
anachronism. In its place expect to see more gastropubs and other food
outlets.
Pharmacies
High street pharmacies will become increasingly about health services as much
as about products and will offer optical, dental and health facilities. They
will replace our local GPs as the first port of call for basic advice.
Stores will also cater for an ageing population that is eager to stay
looking youthful. So expect more services designed for this purpose, such as
nail and brow bars, and beauty clinics.
Supermarkets
There will be much more fragmentation in the supermarket industry as dicount
food shops take their share and more convenience stores pop up to capitalise
on a trend for top-up shopping.
Supermarkets will open more local one-stop convenience shops, offering health and postal services as well as food. They will be completely self-service and will have home-delivery networks. But, once our spending power returns, the discounters are unlikely to retain our loyalty, as quality becomes more important.
Growing emphasis will be placed on locally sourced food as we try to become more self-sufficient. Coffee shops In a few years' time there could well be a new drinks fad, as health and wellbeing become more important. Tea could become more fashionable and coffee shops may be replaced by Japanese-style tea houses.
As it stands, many areas in the UK are reaching coffee chain saturation. But retailers could start using these spaces as customer collection points for goods purchased online. And coffee shops could become connectivity hubs where people can recharge phones and laptops and use the internet. They may find themselves in increasing competition with traditional retailers, however, who may look to serve more refreshments.
Music, games, DVD shops
These will disappear from the high street as we turn to the internet for all
our music, films and games. While a few will have branches in out-of-town
retail parks, the majority will operate purely online, offering a
click-and-collect service for customers to pick up their purchases from the
location of their choice. Any that remain on the high street will do so in
even larger stores, giving up space to cafés and moving into new markets.
Charity shops
Lots of free space on the high street and cheaper rents will be good for
charity shops. But they will have to put in some work as well. They will
find themselves competing against a lot more mainstream ethical brands and
will have to raise their retail standards if they want to profit.
Just because something is ethical doesn't mean that we're going to buy it - it has to be desirable as well. Charities must adopt professional retail models, including marketing, and integrate much more into the high street. In seven years' time, we should be able to walk into a charity shop without even realising it.
Mobile phone shops
There will be far fewer mobile phone stores on our high streets. Instead,
they will be incorporated into huge, out-of-town warehouse stores as part of
one technology and electrical retailer - probably Best Buy, the US
electrical retailer. Future electrical stores will be about connectivity,
not about one type of device. They will help people to manage their
electronic lives rather than just sell them products. Advice and service
will become much more significant, especially for an ever more tech-savvy
customer base.
Off-licences
We will always need wine, but whether we will need specialist retailers
selling it is debatable. Wine merchants are feeling the pinch already as
people cut back on more expensive wines. But all alcohol could become even
more expensive if the Government tries to use it to replace lost revenue on
smoking.
Supermarkets have had a big impact, stocking huge ranges from cheap plonk to premium labels. Off-licences will have to compete with them by offering wider ranges and expert knowledge to justify increasing prices.
Clothes stores
There will be far fewer clothing stores as retailers use the internet and
central distribution centres to deliver. Prices will rise because of higher
sourcing costs, and consumers will become more selective, with design
driving purchasing rather than price. Perhaps we will even see the rise of
the local tailor. The desire for niche, premium lifestyle brands will see
specialist retailers emerge. The challenge will be for the supermarkets, who
need to move their clothing offers on. We could envisage a tie-up between a
supermarket and a retailer, such as Sainsbury's and Marks & Spencer or
even an acquisition.
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