High street boost: 17k new local stores could open in 12 months - report
In a major boost to UK physical retail that has been devastated by widespread closures during the pandemic, we could expect 17,000 local high street stores to open in the next 12 months, according to new research from Barclays Corporate Banking.
Consumers are keen for retailers to open stores in their neighbourhoods and also expect them to be sustainability-focused, the report says.
Meanwhile, retailers are “overwhelmingly optimistic” about future growth, with 80% confident of growth over the next 12 months, including 41% who are “very confident”. Meanwhile, since reopening, 52% of retailers are seeing an increase in the average spend of customers, with average purchases up 9% on pre-pandemic levels.
The report, entitled Retail Unlocked, reveals that as British shoppers adapt to a post-lockdown world, they’re going to be “looking local”.
Barclays’ data also shows that UK consumers have returned to physical stores “with confidence since restrictions began to ease”. Some 68% say they have ‘felt safe, or very safe’, to return to the high street, 40% are planning on stepping up their in-store shopping over the coming year and 41% say that it’s their favourite way to shop.
However, the benefits are most likely to be seen in local high streets rather than in big cities, the research claims. That’s because home and hybrid working patterns will persist into 2022 for 44% of workers, with 16% expecting to work entirely from home and 28% anticipating a part-home, part-office model. A quarter of consumers (25%) now say that the best way a retailer can appeal to them is to open stores in their local area.
As a result, many retailers are reviewing their location strategies, the report also claims, revealing that 18% of retail businesses with 10 or more employees are eyeing community store openings, with each of them looking at five new premises on average. Cumulatively, there is therefore potential for up to 17,000 new local stores across the UK, it highlights.
Other key findings include: 29% of retailers are looking to entice more people back to physical stores by laying on experiences such as concerts and exhibitions; the most in-demand items, according to 45% of retailers, are products that promote a healthy lifestyle with younger people more motivated such products (23% among 25-34s compared to just 13% of over-55s); some 38% of retailers also report an increase in demand for sustainable products with a reduced environmental impact; 40% of retailers now employ data-led marketing to acquire more customers.
Karen Johnson, head of Retail and Wholesale for Barclays Corporate Banking, said: “E-commerce has been the undisputed winner of the pandemic but not far behind are community high streets, as shoppers seek to ‘look local’ and support the stores on their doorstep. With the continuation of home working, this shows no sign of slowing down, and retailers are now looking at evaluating their store estates to meet local deman”.
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