Retailers with an online presence will require only 60 to 70 shops in order to gain national coverage by 2020, John Lewis boss Andy Street said today.
Speaking at the British Retail Consortium’s annual symposium, Street warned: “The days of needing 200 stores to cover the UK are clearly history.”
His view echoes a CBRE report that found that store groups can access 50% of the UK population with just 90 shops, compared with 200 stores in the 1970s.
Whilst conceding that not all retailers operate in the same way as John Lewis does, Street said that the retailer had arrived at the number through catchment analysis of its customers.
He said shoppers were willing to drive about 20 minutes to a John Lewis store “not the hour we used to think 10 years ago”.
He added that the retailer had analysed where there are concentrations of the archetypal John Lewis customer to then determine “how many locations are sufficient for us to serve roughly 80% of the total population in that drive time”.
Street sounded an optimistic note for the retailer, claiming: “We think we have worked out what is happening in the online/offline dynamic. We have three formats, each of which plays a different role, which means we have a way of addressing all the key catchments in the UK.”
John Lewis operates its full line department stores as well as its at home shops and its yet to open ‘flexible’ format – a slimmed down version of its larger department stores.
Street added that the retailer would continue to open regional flagship stores, although he said this particular format would be the least significant for the Partnership in terms of new openings.
“There will be many less of them than we might have thought five to six years ago,” said Street. “Having scanned the country and looked at the economic downturn it is clear there are relatively few locations that can sustain them. To be honest the recession has been kind to John Lewis - if we hadn’t had it we would probably have built more of these shops in locations that cannot sustain them.”
Street went on to caution that he felt there were only 50 retail locations in the UK with an optimistic future and a further 50 which were “fighting for that same optimism. The future is much grimmer for the locations below that top one hundred”, he said.