High Street evolution will boost warehouse demand

Amid the angst about rows of empty shops and the demise of much-loved retail brands, it is easy to forget that the High Street has been through changes as fundamental, if not quite so rapid, many times before. For many decades now, family-owned shops have struggled to compete with the slicker supply chains of new national brands. Department stores threatened to suck trade from small towns to the big city. Self-service would deskill and depersonalise the retail experience, while edge-of-town hypermarkets and malls would draw in the affluent car-owning middle classes, leaving town centre retailers the privilege of paying ever-higher business rates to serve a low footfall of low spenders.

However, the High Street continually adapted and survived. Now there are new challenges: the inexorable rise of e-retail, with goods ordered from and delivered to the comfort of the customer’s home; and the drive to reduce carbon and other emissions and congestion in town centres making it increasingly difficult for retailers to receive deliveries, or for customers to get their shopping home.

Many town centres have, paradoxically, seen an increase in the number of small, independent, specialist or ‘artisan’ retailers, but there is no denying that the large ‘flagship’ or ‘anchor’ stores, fundamental to the thinking of town planners and property developers alike, have been hard hit. But the survivors are fighting back, developing new ways of becoming a ‘destination’ and rewiring the retail ‘experience’.

In the process, they could be said to be re-inventing the department store – indeed Next, which is expanding from fashion into home and beauty through both own-label and third-party brands, has actually taken over a former Debenhams store in Watford. On Oxford Street, Next is creating a ‘shop-in-shop’ for Gap as well as concessions ranging from Sockshop to 02, Lipsy, and Paperchase. Some Next stores are also offering garden products through Homebase concessions.

Sports Direct, part of Fraser Group, is similarly bringing together the group’s fashion, cycling, games, sports and other labels, and potentially other premium brands, in a single megastore in central Birmingham.

In Bristol, Harrods is taking the former BHS premises with an ‘H Beauty’ format selling ‘make-up, skincare and fragrance from a host of brands’. M&S, which famously used only to sell its own label products, now features external brands on its website and is introducing them to its physical estate, starting with Early Learning Centre and potentially also including Joules, Hobbs, Phase Eight, White Stuff, and Nobody’s Child.

Asda has upped its fashion offer both online and in store, beyond its in-house George brand, by carrying other brands such as Missguided and New Look. The supermarket is also introducing B&Q concessions in some of its stores and developing partnerships with the like of The Entertainer, Decathlon, and Claire’s Accessories.

Besides merchandise, retailers are also extending the ‘experience’ through hosting food and drink outlets – a commonplace in traditional department stores like John Lewis, but now often involving external brands, such as Costa Coffee at Next and Pret a Manger in Tesco.