While many town centres across Britain have suffered in recent years from falling visitors amid a shift to online shopping, not every retailer is closing their shutters.
For major businesses from Screwfix to Pets At Home and Mango to Waitrose have announced strategies in recent months to increase their number of stores.
Experts put the reversing trend down to a variety of factors including falling rents and a preference for in-store shopping amid frustrations over online returns.
It comes after official figures showed last Friday that the UK economy grew in August by 0.2 per cent after two months of flatlining earlier in the summer.
But the picture is not entirely rosy, given separate data from MRI Software revealed flooding is likely to have contributed to a 3 per cent fall in shopper visits last month.
And that came after disorder on the streets in August and concerns over rioting which saw footfall plunge by up to 75 per cent at times according to UKHospitality.
Jonathan De Mello, founder and chief executive of JDM Retail, said the high street was ‘proving to be more and more attractive to all sorts of occupiers – with many looking to expand – after a torrid time with first Covid then rampant inflation‘.
He told MailOnline: ‘Those that survived these two major ‘shocks’ are generally in good financial health, with less competition, a more streamlined business, and lower property costs given both rent and business rates have fallen by circa 30 per cent since 2019 on average.
ANALYSIS: Weaker retail models collapsed but the need for physical human experiences has not
By RICHARD HAMMOND
The narrative around the internet leading to the ‘death of the high street’ was always a simplistic shorthand in the same way TV was supposed to lead to the death of radio, or ebooks would lead to the death of paperbacks.
We now print and read more paper books than ever before, and indeed bookshops is another retail category in which fewer have closed than new openings in the last decade. But we also enjoy the convenience of ebooks, they work together.
Rapid step-change tends to separate the wheat from the chaff and that is what has happened in retail: a number of weaker models collapsed but the need for physical human experiences has not.
Toys R Us is a great case in point; it operated a business model that was logistics-based: shift as much product into as many stores as possible at the lowest cost and saturate by availability.
That made them horribly vulnerable when a much more efficient logistic option emerged in the shape of unlimited availability and low prices online. Toys R Us collapsed. But The Entertainer didn’t; that physical chain has flourished by combining good online tools with physical experiences that are nice to visit.
Experience-based models are winning again now that those retailers unable to adapt have fallen by the wayside, and indeed even Toys R Us itself as a brand is back and growing; this time as a great experience inside WHSmith in the UK – who bought the brand – and across hundreds of Macy’s stores in America.
Sephora is a master user of social media to drive sales but never neglected the physical experience; where some retailers were led astray by the new shiny toys. And this itself is typical of retailers winning now.
Screwfix led the way with its on-demand online ordering but made sure the stores were places where customers could ask questions and get easy answers, check items, and have a local experience with people they grew to trust.
Dull physical experiences that can be bettered online have mostly died off. We don’t need the hassle of going down the shops for a boring widget, but we do crave human experiences, even when we say we don’t.
Winning retailers have doubled down on facilitating great experiences wherever the customer wants to have them; online and in person.
Retail expert Richard Hammond is the chief executive and co-founder of analytics firm Uncrowd
‘With inflation now under control and interest rates set to drop further, and a relatively stable consumer demand backdrop, retail and leisure operators are taking advantage of this to push forward with their expansion plans.’
Mr De Mello added that the high street was also now relatively more attractive compared to online retailing, ‘given the spiralling cost of advertising online, increased business rates on warehousing and distribution hubs, and the significant and increasing cost of processing returns’.
He continued: ‘Whilst many online retailers are now charging for returns, this has obviously impacted demand. And many now realise that an omni-channel strategy is best, with a mix of brick and mortar sites to drive ‘halo’ to online – and process returns – and online fulfilment.’
Data from commercial property agent Avison Young has shown rents on Oxford Street in London are now 21 per cent cheaper than ten years ago.
And Robert Carruthers, director of research company ConsumerCast, cited the drop in retail rents as being behind a ‘fightback’ for physical retail.
But he also told MailOnline: ‘On the other hand, wages in retail and other costs like energy have rocketed, so the whole equation of running stores versus selling online is in huge flux and some retailers are rethinking the balance of how and where they sell.
‘Fundamentally, retailing is about delivering a service, and if that’s better provided in a physical environment – in terms of customer experience and convenience – in a way that can also be profitable, then retailers will always be looking to open shops to complement their online sales.’
Among the chains planning to expand is HAYS TRAVEL, which revealed last week that it was hunting for more deals to increase its number of stores on the high street.
Chair and owner of the travel agent, Irene Hays, told the Financial Times that ‘people want a human being there to help them out… if they have a problem, miss their connection somewhere, and need to get rebooked’.
Nearly 90 per cent of bookings come through retail outlets for the Sunderland-based firm, which has the highest number of travel shops in Britain.
In 2019, Hays took charge of all of Thomas Cook’s 555 travel agents across the UK, after the 178-year-old firm went out of business.
Trade retailer SCREWFIX last month launched a new store format called ‘Screwfix City’ which aims to give greater convenience to London‘s tradespeople.
The stores offer more than 3,000 essential products via click and collect with a further 31,000 available online for next day collection.
The firm has recently opened a further six City stores across London, including in Islington, Camden and Dulwich.
It plans to have up to 20 in total by the end of 2024, including the first stores in cities outside of London, and aims to open up to 100 over the next few years.
Screwfix is owned by Kingfisher, which also counts B&Q among its brands – and the chain has now opened 11 new local stores since 2020 on high streets.
It also said in March last year that it planned to open at least 50 small and medium-sized stores across the UK and was working out how it could better sell kitchens and bathrooms there.
Another chain opening up smaller shops is PETS AT HOME which is targeting up to 20 such stores within the M25 ‘over the next few years’.
Trade retailer SCREWFIX last month launched a new store format called ‘Screwfix City’
The pet chain has seven concept stores around London so far, located in Balham, Beckenham, Camden, Ealing, Sutton, Putney and Whetstone.
Its chief executive Lyssa McGowan told Retail Gazette in May: ‘Historically, we’ve underserved London as a pet market because we’ve had a big out-of-town format.
‘As we’ve cracked this new, smaller format, we’ve been able to open up the Pets at Home experience to younger, more Generation Z, consumers who actually love what we’ve got to offer.’
She also estimated at the time that the company will be able to fit 20 smaller stores in London ‘over the next few years’.
Pets at Home opened its seventh smaller shop last week, spending £1million on a store in Beckenham, Kent – which is also the first to also include a vet’s practice.
Spanish fashion chain MANGO has existed in Britain since 1999 but has recently carried out a series of store openings, with ten new outlets last year taking its UK total to 60.
PETS AT HOME is targeting up to 20 smaller stores within the M25 ‘over the next few years’
A further 20 will have opened by the end of this year – including four in London as well as increasing its presence in Scotland and reaching Northern Ireland for the first time.
Make-up firm SEPHORA is also expanding across Britain, and plans to open its seventh store in Kent’s Bluewater shopping centre this winter.
The French beauty brand exited the British market in 2005 after opening six UK stores in five years as it struggled to compete with Boots and Superdrug, but then relaunched in the UK in 2022.
The firm also has stores in major shopping centres such as Westfield Stratford in East London and the Bullring in Birmingham.
Supermarkets are also plotting expansion plans, with WAITROSE announcing in August that it planned to open to 100 convenience shops across the UK over the next five years.
These will be Waitrose’s first store openings since 2018 as the upmarket chain invests £1billion into expanding its high street presence and also puts together plans for four larger branches.
HAYS TRAVEL revealed last week that it was hunting for more deals to increase its number of stores on the high street
The first new outlet is set to open later this year in Hampton Hill, South West London – with the second elsewhere in the capital in early 2025.
Fellow upmarket chain MARKS & SPENCER is also plotting an expansion, with 13 new stores on the way across the UK by next summer.
It also hopes to launch two new food halls in London and ‘modernise’ 12 existing stores in the capital to give them bigger in-store bakeries, dedicated flower and wine shops and click-and-collect facilities.
In addition, M&S is ramping up its festive recruitment with plans to hire more than 11,000 extra workers – 1,000 more than last year.
Supermarket rival SAINSBURY’S is also working on expanding its store offering, having announced in August that it had reached an agreement to acquire 10 leasehold stores from Homebase for conversion into Sainsbury’s supermarkets.
HOTEL CHOCOLAT said in May that it hopes to open 20 new stores over the next 18 months
In February, the chain said it was hoping to open 75 new Sainsbury’s Local stores to be opened over the next three years.
In the fashion market, SOSANDAR – which has been billed the ‘Asos for the over-30s’ – announced plans to open 50 stores over the next three to five years.
The firm, which has been an online retailer since being founded in 2016, is openings its first stores this autumn after a successful partnership with Sainsbury’s which saw its clothes stocked in supermarkets.
It is targeting affluent town centres, and co-founder Julie Lavington told The Times last month that customers wanted to be shop both in-store and online.
She said: ‘We asked them if they wanted us to open shops and virtually 100 per cent of them want us to open shops because they like being able to do both things.’
Meanwhile home and furniture retailer DUNELM said last month that it would be opening its first Central London store as it ‘gains confidence’ with new store sizes and formats.
HOTEL CHOCOLAT said in May that it hopes to open 20 new stores over the next 18 months in out-of-town retail parks.
Amy Harman, its head of customer marketing told a Retail Gazette conference: ‘In store, we’re very much focused on opening up as much chocolate as we can.
‘No one wants to go into a chocolate shop and just see boxes of chocolates. You want to go in there and see, smell and feel the chocolate – and that’s very much what we’re looking to do in our stores.’
Fashion and lifestyle brand WHITE STUFF began a tie-up with Marks & Spencer in 2021, and announced plans in June to open in a further 10 M&S stores this year.
The openings – including in Southampton, Watford and Sheffield – will take its total store number to 20.
Meanwhile home and furniture retailer DUNELM said last month that it would be opening its first Central London store as it ‘gains confidence’ with new store sizes and formats.
The 4,500 sq ft store at Westfield shopping centre in White City, West London, will open this winter.
Nick Wilkinson, the chief executive of Dunelm, told The Times last month: ‘I’ve been working in retail for 20-odd years and the death of the store has been foretold probably on an annual basis.
‘In each of those years – and probably no more so than during the pandemic, when the shops were closed – everyone was saying, ‘Well, everyone’s now an online-only shopper.’ But we’ve seen a huge resurgence of stores since the pandemic.’
Discount retailer B&M BARGAINS announced last November that it expects to ‘open not less than 125’ new stores across the UK over the next three years.
The total – which will add ‘up to 20 per cent to our sales area’ – is thought to include the 51 former Wilko sites acquired by the chain last September when Wilko fell into administration.
Some 14 of the new stores opened over the summer – including in Hull, Bristol, Nottingham, Manchester and Derby.