Author: Claire di Noia, 20 December 2017

Having been at FSP 4 months now I have adjusted to working at a consultancy and the great news is I am now closer to the pulse of a wider number of retail and food markets than ever before. 

Andy Stringer

To round off a busy year for me I thought I would look back on 2017 and forward to 2018 with my view on the key themes I expect to see … are you ready ?.

Looking at 2017 for me the key has been an uncertain customer fighting a tightening economy, wage stagnation for most, allied to inflation starting to climb and of course add in a dose of Brexit Blues and an uncertain General Election for extra impact.

We saw fabulous new schemes open in Oxford, Bracknell and at Rushden Lakes, whilst Liverpool Shopping Park opened a few weeks after my first visit to Revo. Then within weeks of each other we saw Hammerson take over Intu and Westfield fall to Unibail-Rodamco, there will be fall out here in 2018

Westgate Shopping Centre Oxford
The Lexicon Bracknell
Rushden Lakes

Black Friday has come and gone for 2017 and my take is that high street sales were broadly flat – to me that’s a good performance given that the event was actually stretched for many brands over 10-14 days – Black Friday will still be the busiest retail day of the year for many high street names in 2017.

The biggest UK retail deals came from the food retailers with Co-Op taking over Nisa and Tesco buying Booker, whilst Amazon purchased Whole Foods of course further afield.

We saw excitement with Bunnings converting a raft of Homebase stores which typically look brilliant, B&Q moved onto the Holloway Road opening its first city store (not heard much about this since however), whilst a new format Debenhams was unveiled in Stevenage in the summer and IKEA finally opened in Sheffield.

Worrying news came from the likes of Next, Currys and Carpetright with share price falls, Booths the northern Waitrose put itself up for sale, whilst this week accounting issues appear to have paralysed Steinhoff and hurt its UK brands of Poundland, Bensons and Harveys.

At this point we do also need to remember that in this digital age, 85% of retail spend still touches our stores and shopping centres to some degree, so contrary to popular myth old fashioned shops remain fundamentally strong and vibrant when they get it right.  Thinking about getting it right I have seen the word experiential retail too much in 2017 and that trend will carry on into 2018 I am sure. 

My view is that too much is written about a few pop-up or gimmicky experiential stores that look great but fail on most hurdles bar grabbing the attention of the press. Getting it right is actually simple, the right format and the right stock serving the right catchment from the correct location means a happy customer who typically values convenience and speed of service over theatre and experience – there are of course some exceptions to this rule but on the whole it stands for retailers with multiple stores. FSP can help with all of these key decisions.

So what does 2018 hold for retail?

Tragically I expect a few more established names will be lost but at the same time new brands will rise. I see three key themes for UK retail in 2018:

Next
  • I think concessions will probably account for a significant number of the ‘new’ openings next year – as the likes of Specsavers, Habitat and Argos open stores in Sainsbury and Tesco looks towards Holland and Barrett, Currys and Next to take some of its excess space. However, don’t just look at the food stores for concession space; I think other larger stores will jump on the bandwagon, starting with Dunelm which has been adding Kiddicare store-in-stores in 2017 
Toys R Us
  • Looking at Retail Sectors in my view the Toy market is about to face a massive quake, with Toys R Us likely to close 26 stores in the New Year. Add to that Argos as the UK’s no 1 toy retailer continues to relocate into Sainsbury stores where they sacrifice sales for reduced costs and greater profit, whilst discounters such as B&M and The Range open stores to pick up market share … interesting times ahead.
  • My final challenge for 2018 will be the Food and Beverage sector which has benefitted from phenomenal recent growth, but now as it matures some brands are suffering with Handmade Burger Co and Byron top of that list. They appear to have jumped in feet first opening stores based on gut feel over spatial insights – I expect a few more brands will hit the rails in 2018 and look to rationalise their restaurants.

I know that FSP can help you with any Location Analysis, Catchment and Customer Insights or help Portfolio Planning that you may require in 2018, offering honest, independent and actionable recommendations retailers can use.

Contact me for more information and, in the meantime, have a very Merry Christmas. 

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