As retailers’ capex budgets come under close scrutiny following very recent events, what will be the likely outcome in our towns and cities?
Brexit week two and big stores keep welcoming their first shoppers. Last week a visit to the Monsoon flagship in a west London shopping centre and to Dixon Carphone’s ‘three in one’ store in the centre of the capital took the mind, temporarily at least, away from the surreal events that were happening in the UK.
Next week a new IKEA sees the light of day, this time in Reading, and at the other end of the scale there are quite a few retailers who are wondering how they can turn big-box formats into small, convenience-style outlets that will find favour with metropolitan customers (of which more in the months to come).
All good then, but any shop that opens in the next two or three months will emerge from the new stores pipeline having entered it in the first quarter of this year, when the UK was a rather different place.
As things stand however, is it likely that new stores programmes are going to be put on hold or that strategies will shift? Well, on the basis of a straw poll that involved talking to around five big retailers last week, one view of the way things will unfold over the coming months is that nothing new will be put into the pipeline unless it’s in a high-footfall destination. Practically, this will mean fewer, better stores as retailers try to open destination stores within major shopping destinations.
“Expect a tourist boom this summer and beyond. The UK will be a cheap place to visit and stores that are located in ‘iconic’ locations are therefore likely to make much of the running”
Good times therefore if you happen to be the developer of a, say, regional mall, but not so rosy if high streets are your concern, with a few notable exceptions.
The other point about high-profile shopping destinations is that if the pundits are correct and the British pound continues to change hands for much less than it did pre-Brexit vote, then expect a tourist boom this summer and beyond. The UK will be a cheap place to visit and stores that are located in ‘iconic’ locations are therefore likely to make much of the running.
The outcome of this is that unless things change once more, retail change and renewal will not be on the agenda in the majority of towns and cities as we head towards 2017 as retailers wait to see what will happen. There will, of course, still be activity on the new store front, it’s just that opening strategies will be even more selective about location than before.