The high street has been one of the main focal points of the retail industry since the beginning of the recession, with its various ups and downs becoming something of a barometer to measure the overall health of the industry as a whole. However, this year will present a whole new set of challenges for town and city centres throughout the country according to Deloitte, as many major retailers are approaching the expiry dates for leases.
Head of retail at the business advisory firm, Ian Geddes, has warned that the upcoming lease renewal period faced by many retailers could further widen the gap between vacancy rates in the North and South of the country.
At present, the vacancy rate in northern towns and cities is more than double that of their southern counterparts, meaning that if a significant proportion of retailers chose to end their lease agreements this could have a devastating impact upon northern economies.
Mr Geddes believes that retailers, while keen to retain a presence on the high street, will also be determined to align their commercial property portfolios with new omni-channel initiatives brought about by the advent of online retailing.
He says; “The supply of anything but the most prime retail space continues to outstrip demand, but much of the existing space on the high street is no longer fit for purpose.
“The wave of impending lease expiries provides retailers with a fundamental opportunity to exit unsuitable space and realign their portfolios to their new omni-channel strategies.”
One of the major aspects retailers will be considering, he believes, is whether existing premises would be suitable for customers to easily access click and collect services. Deloitte has predicted consumers will increasingly choose this method of online purchasing rather than home delivery in 2015 – especially as the number of click and collect locations rose by 20 per cent during 2014 in the UK.
In this regard, out of town shopping parks may be the first place retailers look as a means of replacing their high street units, as the free parking and more flexible units available will both prove highly attractive. Recent research has shown that retailers now seek fewer, larger units as a means of enhancing the efficiency of omni-channel, spelling bad news for traditional market towns which tend to have smaller high street stores.
Yet Mr Geddes points out that retailers will not necessarily be driven out of town, as the click and collect trend continues to evolve in response to consumer demand.
He says; “One of the issues facing retailers with click and collect, however, is the additional in-store space it requires, particularly in high footfall areas.
“I think we will continue to see new models being developed by retailers to meet that demand.”
Hopefully, this evolution of omni-channel will be able to incorporate traditional retailing and ensure that the future of the nation’s high streets.
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