When Tesco chief executive Philip Clarke gave the opening address to the World Retail Congress last year, he declared an end to the retail Space Race.
When Tesco chief executive Philip Clarke gave the opening address to the World Retail Congress last year, he declared an end to the retail Space Race. The future, he said, was clearly going to be multichannel.
Last month we saw what his pronouncement meant in practice, with an £804m property write-down on Tesco’s land bank. Quite what this means for the future landscape of our towns and cities is less clear.
Food retailers continue to see that consumers like convenience. There is no sign of a let-up in smaller stores opening on high streets and in town centres.
But for retailing more generally, the big debate continues to be around what happens to the increasing amount of empty space around the country.
Many retailers across most sectors are scaling back their portfolios where they can, which will make secondary locations even worse. Or is this pessimism overplayed?
Having just seen the latest figures from the Local Data Company, reporting a 2% increase in the number of independent retailers over the last three years, maybe the market is beginning to respond to an opportunity. With landlords under pressure and rent deals available, perhaps the independents are now being encouraged to launch or expand.
Maybe consumers are behind this small but significant green shoot, because the sense from smaller retailers is that shoppers are more drawn to variety, diversity and excitement.
Take Record Store Day last month, when big crowds supported smaller retailers and bought specially created product. Much has also been written on the rise of the indie coffee shop. A recent YouGov poll asked people which of the big chains they would prefer to go to: the biggest fall from favour, after its tax controversy, was Starbucks. All this is adding to the search for alternatives - particularly independents.
One independent coffee store owner describes the reason why. For him, it’s down to getting staff passionate about the product. “It’s not just about training people. It’s about exciting them,” he says. “That passion is missing in the chains.” In this multichannel world, the old rules still count.
- Ian McGarrigle, Director, World Retail Congress