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What is in store for the High Street this Christmas?

Published on Wednesday, 26 September 2018

As autumn falls and winter draws closer inevitably thoughts turn to the festive season and the dreaded Christmas shopping which, once again, prompts questions around the future of retail.

 

With British stalwart John Lewis announcing a profit drop of 99% for the first half of this year to just £1.2m John Lewis are experiencing challenging times the heat is undoubtedly being felt across the entire retail sector.  It follows a year of bad news for retail in the UK with chains like Toys R Us going bust and giants such as Marks and Spencer, New Look and House of Fraser announcing store closures nationwide, although in the case of the latter, some stores have been saved following rent negotiations with landlords.

 

Last year we saw more cautious shopping and a trend towards more practical gifts like clothes and home accessories rather than more indulgent presents like jewellery and cosmetics, according to a report from PwC Christmas 2018 naughty and nice learnings from 2017 for 2018 and whether that trend continues remains to be seen.

 

Online retailer Amazon has revealed what it expects will be its toy best sellers this year Amazon reveal top 10 toys with some old favourites given a new twist such as (Lego’s Hogwarts Express and Barbie pink ambulance) and some less predictable (Strictly Ballroom board game) gifts making the list, as consumers begin thinking and preparing for Christmas.

 

Whilst we’re asking what’s in store this Christmas, retailers could well be wondering how many customers they will actually see in their stores.

 

The demand for retail units is significantly less than it was even five years ago with the dominant reason being the rise of internet shopping.  The most recent RICS UK Commercial Property Market Survey punishing time for retail continues confirms that the punishing time for retail continues and that tenant demand and investment enquiries continue to fall back across the retail sector.

 

Meanwhile, the recent business rates review has seen many small businesses’ bills increase following property re-evaluations which had not been revised since 2010.

 

We’ve experienced it for ourselves.  When a former retail unit at Coombe Road came onto our books, with no prospects of a retail tenant, we changed the use to D1 (medical) to find a tenant.


Whilst the evidence may suggest the High Street will become confined to our history books, we don’t think that will happen, but our High Streets will look different than they did in their heyday.

 

Current developments, apparent around Kingston, indicate a move back to town centre living with walking distance to town centres being a key selling point.  These residents will want shops, restaurants, bars and leisure facilities. 
In Kingston alone there are a number of such developments:-

 

Eden Walk - 385 homes from studio flats to three-bed apartments and retail units.

Royal Exchange - more than 300 one, two and three-bedroom apartments and penthouses plus retail and offices, a prime spot, town centre location.


Surrey House - town centre location with 25,000 sq ft of retail space and 317 studio, one, two and three-bed apartments, which will be professionally managed and only available to rent, not buy.


Whilst this mixed picture of retail units closing down, lack of new tenants and downward pressure on rent versus new developments with retail and leisure units, is somewhat confusing, other retailers are coming up with some ingenious ways of utilising their space.

 

At one of its stores, Sainsbury’s has given over some of its space to a gym and in other locations it has partnered with Argos which has set up shop in-store.  Low-cost operator The Gym Group has opened in part of a former BHS in Walthamstow, north London and has also rented excess space from Sainsbury's at its store at Murrayfield in Edinburgh.

 

Admittedly, these are big names which are coming together rather than smaller independents having a slice of the action, but it shows a new retail trend emerging.


We are also seeing more leisure pursuits finding a place in traditional shopping malls, for example, crazy golf operator Swingers moved into the first floor of the former BHS flagship store on London's Oxford Street.


All sorts of activity providers are looking to literally set up shop - ping-pong bars, trampoline parks, social darts, escape rooms and virtual reality games, to name a few as shopping centres are transforming into mini-resorts where families can spend the entire day.


It even has a name - ‘social shopping’, retail centres are becoming ‘destinations’.  At Next in Manchester’s Arndale shopping centre, shoppers can visit its prosecco bar, get a trim at the barber, and ensure their children are entertained at its activity centre.  Motorists can order their next car after Next partnered automotive tech company Rockar and Ford.  At some Debenhams stores, you can recharge your batteries by visiting Patisserie Valerie and Nandos in store.  

 

The High Street is definitely changing, but we don’t think it is dying.  In fact, the indications are that it could well be rising from the ashes anew.  We just hope there’s a good mix of independent shops, bars and restaurants alongside the big names which if rents and rates are maintained at the current rate could well be a major sticking point for small businesses.

 

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Bonsors are Chartered Surveyors and commercial property agents dealing with all aspects of commercial property in South West and West London, Surrey and Middlesex

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