BCSC 2015: The message during the recession that the physical shop would lose out to online was a myth, says Savills.
In a new report, Retail Myths Exploded released today at BCSC, Savills explores predicted trends from the recession, which five years on have been revealed as myths now that the economy is in recovery.
Retailers are becoming increasingly aware of the role physical stores can play showcasing product and the brand, even though the transaction may take place online.
This is observed in sales performance data with multi-channel retailers reporting stronger online sales than their pure play counterparts; 21% year-on-year as of June 2015 as opposed to 13% for the latter.
Another myth is that new international entrants are not interested in regional centres. Last year five international brands opened their first stores outside London including Michael Kors and Calzedonia; in 2013 it was only one.
By the end of this year Savills anticipates that at least another seven international brands open their first regional stores. The top regional centres for these new openings have been Brighton and Manchester with three apiece since 2011.
During the height of the recession it was often stated that to be a national player a retailer needed between 50 to 80 stores, as the growth in online suggested reduced store portfolios.
Now, a store portfolio in excess of this is increasingly being considered as the optimum in order to deliver adequate returns and to ensure a ‘true’ national coverage.
The value and mass retail sectors, which tend to operate with average portfolios in excess of 100 stores, have reported average portfolio increases of 88 and 49 respectively.
It was also predicted that value retailers would be the only ones to expand. Mass convenience retailing has seen the largest increase in average portfolio count, increasing by 33 to 315 stores.
Value retailing stands out with robust expansion across all subsectors with total store expansion of 15.1%. This increase in total store count, however, has been outpaced by the 16.8% growth reported for the Aspirational retail sector albeit from smaller average portfolios.
