Retail is facing a universal issue – caution – and in great waves.
Consumers question how they spend, occupiers deliberate store portfolios and property owners are concerned about the contagion of CVAs creating an unfair playing field, yet also want to attract independents. The result? A vicious circle of uncertainty. Here are some predictions, brands to watch and musings on what’s next.
The internet has brought fundamental changes in shopping. However, a new cultural phenomenon has gained momentum: sustainability. Consumers are more aware of their impact and want to reduce it. This is set to increase as ‘Generation Z’, inspired by Greta Thunberg and the Extinction Rebellion, takes on greater spending power, and we must adapt.
We can expect more sustainable collections and more charity and secondhand shops. Primark already offers a sustainable range; Asda is launching an in-store charity shop; and Macy’s is teaming up with online thrift store thredUP. Last month, Oxfam pioneered #SecondHandSeptember to encourage us to rethink the month associated with Fashion Week.
Some F&B players have already changed, but those struggling must now follow suit. Operators must strike the right balance between mass market and quality – people want locally sourced produce and the market trend has led to greater expectation of a personal experience where you engage with those making your food. Similarly, no vegan options? No non-alcoholic beverages? It just won’t cut the mustard anymore.
Restaurant chain Loungers does this exceptionally well by combining locally tailored interiors with flexible menus. You enjoy the independent experience while benefiting from the mass-market price point. Another clear winner is Greggs (pictured): following the success of its vegan sausage roll, it is now producing vegan alternatives for all best-selling items.
Trends aside, some brands are just better structurally equipped to manage uncertainty. This is creating polarisation between those that are making decisions and moving forward and those that are not. Joules and Mountain Warehouse are in the former camp; both have focused on getting to know what their customers want.
Other brands worth watching are those focused on innovation. Hotel Chocolat refined its offer in terms of click & collect while staying true to its original product vision. It has created a sense of affordable luxury and chosen transport hubs and other high-footfall locations to attract a time-poor, opportunistic shopper.
I expect to see more growth in health and wellbeing. As minor cosmetic treatments become mainstream, specialist operators such as Therapy and UK Skin and Laser want the sort of accessible locations that traditional shopping centres and high streets provide.
The great thing about retail is its ability to innovate more quickly than other sectors. The problem is that bricks and mortar is expensive. Market forces are reducing rents and will continue to find a sustainable base. However, we need to re-look at the rating system. Yes, I am beating a well-known drum, but it would give an instantaneous solution and free up resources, allowing those struggling to innovate and evolve.
Peter Courtney is head of London at Lunson Mitchenall