When the going’s tough, the City goes shopping
SIR Stuart Rose has recently waived more than £1m worth of Marks & Spencers share options, and could come under more pressure at this week’s annual meeting. Discount retailers like Aldi and Lidl have just announced a slowdown in growth, while on TV Mary Portas has moved from advising high street stores to charity shops.
Retailers are clearly having a tough time of it but despite the downturn, the City is still going shopping. Shops are busy and there are queues at the tills despite (or possibly because of) the onset of the holiday season. Figures from the British Retail Consortium show London outperforming the rest of the UK in retail sales and they are also higher than a year ago, on a like-for-like basis.
The City’s weekday influx of 300,000 people is a uniquely high geographic concentration for retailers and 87 per cent of these consumers shop close to their offices and not always just for a quick coffee or sandwich. The convenience of having quality shopping on the doorstep is a huge benefit for the City as well as an opportunity for retailers. The City Corporation’s own Leadenhall Market is proof that City workers require a diverse retail offer.
Even in a declining market the retailers that fall by the wayside create an increase in capacity to be chased by those that remain. Just because we are in a downturn and some household names are closing does not mean new ones with more agile and adaptable offerings should not try to take their place.
Although some are not forecasting the full retail recovery to begin until mid 2010, now is the time to prepare the groundwork. Work is already underway to reinvent Cheapside and return it to its historic focus as a shopping destination. It is not returning to its cheap market roots and the offshoot thoroughfares of Wood Street, Milk Street, Bread Street are not aiming to attract their namesake specialist retailers, but the spirit is there for it to emerge as a premier shopping street to compete with some of those in the West End. One New Change, the anchor for the project, is set to unveil its secured tenants later this year to encourage other retailers to sign up. By the end of 2010 Cheapside is planned to have a boulevard ambience with wide tree-lined pavements and a new shopping centre.
For those with the right offering it is arguably a tenant’s market. Landlords find an occupied shop paying some rent preferable to an empty one so more flexible lease agreements are starting to be offered covering shorter periods and with more favourable payment terms for the tenant.
Purse strings may have tightened but in the right retail sectors they have not completely closed. As with any cycles the more planning and strategy put in place, the quicker we can climb back up to the top.
Stuart Fraser, Chairman of Policy, Canada Corporation