Closing stores and increasing online activities may sound attractive, but is it realistic or possible?

So Argos reported last week that it would downsize further in order to grow? In days gone by, this might have sounded uncomfortably close to being oxymoronic. But the way Argos sees it, more online means fewer stores means bigger profits. That’s the plan and the retailer is not alone in thinking along these lines.

And the year so far has been a story of closing shops and increasing internet sales - or so the received wisdom goes - the thinking apparently being that it matters little how good your stores are, the big beasts of the web will sweep all before them. This does rather call into question the matter of why design consultancies in London and elsewhere have had such a plethora of work from UK retailers since January? If things on the high street really are going to the dogs, then why bother and why, for instance, has Argos parent Home Retail Group’s other arm, Homebase, decided to invest in new interiors, as exemplified by its refurbished store in Ruislip?

The short answer is probably because ‘old world’ retailers have to. Rents and rates may be spiralling out of control (another pearl of received wisdom…and both do seem to be detached from economic reality), but disposing of bricks and mortar assets is an unrealistic ambition as, with a few exceptions, who’s going to buy?

If this is the case, then high street rivalry is likely to be hotter than ever and giving shoppers reasons to enter a store has to be at the top of any retail outfit’s agenda, however much this may impact on margins.

There is, of course, a segment of retail that defies this anaylsis and gravity: luxury. Much luxury noise has been made over the last four or five weeks since Burberry issued its “profit warning”. What this meant, was that it was still going to show an increase in profit, just less than originally anticipated. It is also progressing a store opening programme, albeit in very select locations, as are most other luxury operators.

Practically, all of which may mean that the best high streets will get even better and that most of these will be found in the middle of rich metropolitan areas. The struggle for survival elsewhere will continue, unless retailers can follow the M&S Cheshire Oaks example perhaps and head towards making stores true digital destinations. This may be what Argos will manage to do over the next few years, but on the evidence of the average branch it, and others like it, have a long way to go.