Architecture practices may win conversion work as Deloitte report suggests major retailers should downsize portfolio to survive high street doldrums
Major retailers will need to reduce the size of their retail property portfolio by up to 40 per cent in the next five years due to higher operating costs, reduced consumer spending and the rise of online shopping, according to a report by Deloitte.
The financial expert’s findings come as the government accepted ‘virtually all’ of the 28 official recommendations made by retail guru Mary Portas (left) to save Britain’s high streets. Minister Grant Shapps also revealed new ‘rescue’ measures including a £10 million innovation fund to bring empty shops back into use.
Yet Silvia Rindone, director in retail consulting at Deloitte, maintained that more shops would close. She said: ‘The majority of UK retailers have simply got too many stores. Some 22 per cent of people did not buy their last item of clothing in store, and only nine per cent want to see the full product range in store.’
Schemes may be generated by local authorities and smaller architectural practices should benefit
Ashley Blake at Land Securities agreed: ‘Many retailers will condense their store portfolios into fewer locations. In smaller centres and high streets there will need to be conversions of retail space into alternative uses such as community, residential, offices and leisure. These schemes may be led or generated by local authorities, and smaller architectural practices should benefit.’
With experience of large retail projects, Adrian Griffiths, UK director at Chapman Taylor said: ‘For retail to be successful, it has to continue to evolve. The bigger picture is about complementing retail with other uses to offer a more rounded town-centre experience.’
Other comments on the report:
Simon Bowden, director of Aedas
‘It is unlikely that retail properties as a type will be reduced by 40 percent. We are currently completing studies on the design of the New High Street and have found that what will change is how these shops will be used. It will change radically and very quickly. We’re already seeing signs of this change in stores like John Lewis where you visit the store and later buy online.
Whenever there is a big change such as this, architects ought to be looking for the opportunities it generates. You cannot fight development of how people’s lives change and if individual stores are becoming about the brand experience then the high street becomes the “total experience”. The effect won’t be negative but it will be different. The high street will offer a new experience, offering more opportunities in addition to shopping.
I am sceptical about what governments can do. At a local level, towns and cities should develop their high streets to build upon what they have. We need diversity, not everything the same.’
John Robertson of John Robertson Architects
‘This report highlights the power of the growth of internet shopping. A 40% reduction in retail floor space in 5 years will have a dramatic effect on Britain’s high streets and shopping centres. This could lead to some interesting opportunities for architects—particularly in providing ideas for the re-use and regeneration of some of 1970’s and 80’s shopping centres, however dealing with empty high streets will require much more strategic thinking in the longer term.’
Hugo Clark, director, corporate finance real estate, Deloitte
‘The role of stores is changing but that does not mean they will be less important. The store of the future will be less about driving product sales and more about a holistic brand experience. Stores will need to redefine themselves as destinations, as spaces to interact with customers. However, the physical and the digital must not exist in isolation. A consequence of the fluidity between the virtual and actual store is that less physical retail space will be needed.’