Burgers and birdwatching? UK retail fights to make shopping a big day out | Business

When Rushden Lakes opens its doors on Friday it will be the first shopping centre to offer both a Marks & Spencer and birdwatching in wetlands that are in the same league as the Camargue or Zambezi Delta.

But welcome to 21st-century UK retail, where developers are working harder than ever to attract Britons who increasingly view a visit to a shopping centre as a family day out.

The £140m Rushden Lakes scheme, set in a 200-acre reserve in Northamptonshire that keen twitchers will know is a designated Ramsar site, is the biggest of its kind to open this year and offers a rare bright spot amid the gloom in retail sectors as experts warn shopkeepers are experiencing their worst trading conditions in five years.

“Household debt is very much on the rise, as any positive performance in the retail sector over the last 12 months has nearly entirely been funded by credit,” said James Knightley, ING chief international economist who is a member of the KPMG/Ipsos retail thinktank.

“With wage growth continuing to struggle, the uncertainty of Brexit negotiations and current unstable political climate, the spending power of the consumer and their ‘want’ to shop is diminishing and could spell trouble ahead for retailers in the UK,” he continues.

Although UK store bosses are facing challenging trading conditions, the sector’s problems are not in the same league as in America, where there is more than five times more retail square footage per person than here.

In the UK, retailers have already had to adapt to the internet age because online firms have grown rapidly to account for around 17% of sales. US retailers are belatedly waking up to that threat as their shoppers are about five years behind that spending curve.

But UK retail has its own problems, owing to the squeeze on profit margins created by the recent rise in business rates and the increase in the legal minimum wage for over-25s.

According to accountancy firm Moore Stephens, 5,538 clothing retailers – some 18% of this sector – are now at risk of going bust as they struggle with rising overheads.

The fashion industry has been hit hard by the fall in sterling, following the Brexit vote, which has pushed up the cost of importing goods, a cost that many smaller retailers have been forced to pass on to shoppers.

“Clothing retailers are being buffeted hard on many fronts,” said Jeremy Willmont, head of restructuring and insolvency at Moore Stephens. “Rising costs and intensifying competition are putting pressure on revenue and making profit margins harder to maintain.”

In the US, retail jobs are disappearing in their thousands as main street veterans like Macy’s and Sears embark on major store closures. But the same is expected to be true here with the British Retail Consortium predicting up to 900,000 job losses and thousands of store closures over the next decade as retailers cut their cloth for leaner times.

Moore Stephens says the recent high-profile insolvencies of high-street names, such as BHS, highlight the pressure the sector is under.

“Many bricks-and-mortar retailers are already being used as a showroom for customers’ online purchases,” said Gareth Jones, retail partner at Moore Stephens. “Failure to adapt to multichannel retail will mean more household names disappearing from the high street. That isn’t just a UK trend, the US and Europe have also seen long-established brands fail to make the most of their multichannel offerings and suffer as a result.”

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