Retail has changed dramatically in the last year and, more importantly, the rate of change seems to be getting faster and faster.
Looking at my local high street in Hampstead this last weekend, I pondered how many of the stores currently there would have been there 20 years ago. The answer was zero.
Both high street and out of town shopping has changed beyond recognition and continues to change. All the old certainties now look a bit shaky. Probably the biggest story is what is going on in food. The big four have reported nightmarish problems. It used to be the case that shares in Tesco and Sainsbury’s would be the really safe bet. Not any more; at least not for now. Arcadia seems to be closing a lot of stores in some of its older brands and there is a whole slew of newcomers coming into the market. Who had heard of Jack Wills 20 years ago?
So, what is happening?
Well, our industry is proving that it is becoming ever more dynamic and even more fiercely competitive. This is a good thing. Whilst Tesco and Sainsbury’s are not enjoying their current discomfort, I suspect that most in those businesses would accept that they do not own their market share by divine right and the market has changed dramatically.
People are less inclined to do the big weekly shop and the high street is returning to pre-eminence. Those “scoundrel” Germans have entered the market and have started a discount revolution. We all thought it would be the Americans that would do that when Walmart bought Asda. Aldi has now overtaken Waitrose as the sixth largest food retailer.
It’s no accident that food prices are cheaper now than they were a year ago and consumers have much more to look forward to. Of course world food prices are falling, but the intense competition in the supermarket industry is a good thing for the country and for the consumer.
But is it good for our industry? Well yes, actually. It is becoming ever more efficient and it would be a foolish commentator to write off Sainsbury’s and Tesco. These are wealthy, clever businesses and you can be sure that they are not sitting in Holborn and Welwyn wringing their hands with angst. Their recovery is being carefully planned and will be expertly executed. Morrisons looks like the biggest loser in that sector for now, but that too can change. As our population grows there is room for all the current players and it is a sign of a healthy and dynamic industry that no one business has an automatic right to a place at the top.
I mentioned Arcadia closing some stores. That is probably more about the distortions in the property market and the absurd business rating system than it is about Arcadia. In any event, trade moves and areas change.
What is so interesting now is that any shopping street or centre is liable to keep changing and a continuous march to refresh itself seems to be speeding up. Has online destroyed bricks and mortar? Of course not. Shopping is one of our most treasured leisure experiences (although not mine) and, with the superb Westfield shopping centres spreading across the country, that experience will only get better.
A final note of caution: if history repeats itself, and it always does, we are probably nearer the next recession than we are the last. There will be casualties when that comes. But the good people from those casualties will not find it hard to find roles in the new and up and coming retailers and our high streets and shopping malls will become ever more interesting.
Retail Human Resources Plc