Published on May 29th, 2018 | by The GC Team0
Retail Think Tank looks at UK retail future
The KPGM/Ipsos Retail Think Tank has published a “white paper” examining the future of retail in the UK in 2018, and has concluded that, with “higher costs, lower demand and over capacity as the prevailing trends highlighted alongside the ongoing structural changes the industry, difficulties in the sector were only likely to continue for the foreseeable, and therefore retailers needed to take an ‘adapt or perish’ mentality.”
Jonathan De Mello, Head of Retail Consultancy, Harper Dennis Hobbs, said: “Only three months into the year, many commentators are already dubbing it the Year of the CVA [Company Voluntary Arrangement]”, adding that “over 12 retailers have already failed this year”.
Dr Tim Denison, Retail Think Tank Co-Chair and Director of Retail Intelligence at Ipsos Retail Performance, added that the first quarter had been one of the worst for non-food retail that he could remember, “as bad as 2008 and 2009 but for different reasons.” Martin Newman, Chairman of Practicology, stated that the main difference between then and now is that: “…pressure on retailers from the migration of consumers online has massively increased. Long leases on stores that can’t maintain footfall and the fierce price and proposition competitiveness online are combining with Brexit and consumer uncertainty to make a perfect storm”.
The conclusions of the report include the assertion that “many of the drivers of change have been longstanding – it’s only the pace of change that has been accelerated by recent economic and geopolitical events. Those [retailers] that persist in swimming in the seas of sameness and legacy will risk drowning. The boring, the undifferentiated, the unremarkable, the irrelevant stores, disconnected from the needs of today’s shoppers, will perish.”
RTT member Martin Newman said that “cost cutting in this environment is inevitable, but it’s not enough to save a business that is struggling with fundamental structural changes in its market, as well as weaker consumer demand.” While Jonathan De Mello highlighted that “there are always winners as well as losers when a retailer fails. From the ashes of retailers failing in 2018, new brands will rise – likely with leaner business models and seamless integration with online and mobile commerce”.