Retail Vacancy and Structural Change in Scotland’s Towns and Cities

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For the last four years, mid December has seen the release of the latest edition of the Local Data Company/University of Stirling Retail report on the situation of retailing in the major towns and cities across Scotland. Last Tuesday saw the fourth edition formally launched at a breakfast event at KPMG in Edinburgh, with coverage across various media – though with various slants, ranging from wanting to see the news as positive to wanting to turn it into the negative.

So what does the report actually show? As one might imagine with the wealth of data that the Local Data Company collects on a regular and consistent basis, one benefit comes in looking at the data at the local level and seeking to work with place managers to understand and direct change. Our annual report does not deal with that level, leaving that to the relationships between the LDC and local authorities, but rather takes an aggregate picture of the data to consider national trends and place these in the context of the country and its neighbours.

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The headlines for us therefore were:

  • the retail vacancy rate for towns across Scotland continues to fall and is well below Wales, though above England as a whole (where London and the South East exerts a huge influence)
  • retail vacancy rates for retail parks and shopping centers also fell but remain the highest in GB countries
  • vacancy rates in towns and cities in Scotland are the same on average
  • persistent vacancy fell in many towns, though some towns continue to see rates of over 15%
  • there was some evidence for towns beginning to adjust their unit population, though both increases and decreases are seen
  • convenience retailing was on the increase
  • there was a large increase in the leisure component, especially of the cities and larger towns
  • the Booze, Money and Gambling index fell in many places, with reductions in off-licences and cash converter type units
  • charity shop numbers fell slightly

With over 130 towns and cities in the report there is of course much to digest and variability of results, dependent on local circumstances, is to be both expected and encouraged. Overall, though it would seem like the story is one of change coming to Scotland’s towns, albeit slowly. Again, this might be expected given the 50 years of decentralisation that has been occurring and that we are now trying to counteract.

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Following presentations on the report by Matthew Hopkinson and Leigh Sparks, the panel (details above) got stuck in to the issues raised and what they saw happening on the ground in their businesses, places and contacts across the country.  A number of themes emerged in the course of the discussion, including some directly raised from the engaged audience:

  • towns and places are in a state of flux and change and adaptation to the new consumer and business realities is essential for successful places
  • this in many cases may mean a reduction in space – “the 5 streets in Elgin are now 3 too many” – both generally and at unit level
  • there is an urgent need to diversity use in centres and to focus on people living in towns and above ground floor units – this needs to be a focus to bring life back to the town
  • some of the decline in the BMG index may be due to the rise of alternative affordable credit systems which have grown strongly in Scotland
  • how do we focus on reducing the impacts on retailers of costs increases and on ensuring small businesses compete on an equal footing?
  • will the rates revaluation in Scotland actually be used to promote a fairer and less bureaucratic system?

The discussion was lively and thought provoking and suggested a real engagement in finding solutions to the problems of our towns. It is important to recall that the evidence is showing that many towns and places are “getting it” and making strides in improving their situations.

Will vacancy rates continue to fall in Scotland’s towns? Stay tuned for next December!

Further Reading:

Full details of the report and the services the Local Data Company offer can be found by contacting them

The introduction to the report (by myself and Lorraine Ferguson) can be found here

The Press Release from the Local Data Company about the report which provides some specific results for selected towns can be found here

 

Posted in Academics, Christmas, Convenience stores, Independents, Places, Rates, Retail Policy, Retailers, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Scottish Retailing, Services, Shop Numbers, Small Towns, Town Centre Action Plan, Town Centre Living, Town Centre Review, Town Centres, Towns, University of Stirling, Vacancies | Tagged , , , , , , , , , , , | 1 Comment

BrickMeetsClick: The Lidl Social Price Drop

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Lidl Social Price Drop (note video not operational above, see below for source)

A few years ago I was invited to became a “Black Belt” on the retail and retail technology site Brick Meets Click. This involves some occasional retail debate and commentary and some interaction with various retail stories and news. I am not sure I am really worthy of the accolade, but I do tend to learn a lot about trends and issues and have some fun with it. Profiles of all the Black Belts can be found here.

If you are interested in retail but have not visited the BMC site, then it is well worth a look.

I was pondering over the weekend whether to write something about the Lidl Social Price Drop which has been in the news. This involves prices for products being set in the run-up to Christmas by consumers in relation to the level of tweet activity. It is a bit of fun and an interesting oddity perhaps, but maybe there are some lessons to be learned. Full details of the Lidl Social Price Drop as explained by Lidl (including an explanatory Video) is here

Anyhow BrickMeetsClick has done the job for me. They recently blogged on the matter and have allowed me to reblog their post below. The original is at the BrickMeets Click site, and I do encourage you if you like what they did with this story, to go over to their website and have a rummage around. There’s lots of good stuff there.

So, over to BrickMeetsClick:

“Lidl is letting shoppers lower the price of one specific product each week leading up to Christmas – simply by tweeting about them. We think this is significant because it shows a retailer acting on the insight that some customers want to be more actively involved in defining what they get from that retailer.

Two things seem to be at work in this promotion:

  • The fun of the experience is probably part of the motivation for participating – how low will the price go? (Note: Lidl currently caps the price reduction to 50%.)
  • Lack of consumer confidence in published prices may also play a part. This confidence is restored when customers see a price drop as a result of their actions. (In the British market, this loss of confidence is more prevalent due to the devaluation of the pound and price increases by some suppliers.)

Any way you look at it, this is a clever tactic to increase customer engagement and enlist help in promoting a dynamic price offer.

On a more conceptual level, it’s an example of empowering the customer – and a reminder to retailers that “getting consumers to feel more in control” can make them “want to buy,” which is a very different dynamic from just selling them something.

Lidl’s use of Twitter to draw attention to their low prices on key products for the Christmas holidays is also is noteworthy because it:

  • Creates a buzz that amplifies the message.
  • Expands communications without adding advertising expense beyond the final markdown.
  • Is repeatable – Lidl will repeat the same two-day event every week between now and Christmas.

BMC POV

Here are two lessons that can be taken from this innovation in price promotion:

  • Retailers can transform many different items into Known Value Items (KVI) to build traffic to their stores. Now it’s no longer necessary to depend only on popular products that carry low margins – it’s possible to use higher margin items as KVIs and still be able to sell them at a profit.
  • Social media can be an effective customer engagement vehicle that helps increase communications reach with little or no added expense. Consumers become more willing to interact when they’re offered what they see as a worthwhile experience.

The bottom line is that grocery retailers can increase promotional effectiveness while reducing promotional costs using these methods.  What do you think?”

With thanks to Bill and Cindy for allowing me to re-post

 

Posted in BrickMeetsClick, Christmas, Competition, Customer engagement, Food Retailing, Lidl, Pricing, Retail brands, Social media, Twitter | Tagged , , , , , , | Leave a comment

Fight Time? The Boxing Day Petition

The issue of opening hours for shops is something that has been an ever-present during my time as an academic.  The product-based absurdities of the late 1970s and early 1980s were eventually swept away as opening hours were modernised and Sunday trading permitted.  Living in Scotland of course we had our own non-rules.

The divergent and different patterns can cause some issues.  Restrictions on alcohol sales in Scotland operate within a more widespread laissez-faire general opening for all stores.  More restrictive opening in shops (especially large ones) in England and Wales are combined with more laissez-faire alcohol purchasing hours.  So in Scotland at 10.00 on a Sunday, the store is open but alcohol sales are banned.  In England and Wales, the store may or may not be open (10-4 or 11-5) but alcohol sales are permitted.

Now other tensions are coming to the fore.  The never ending retail Christmas and its pre-cursors of Black Friday (which is anything but one day), Cyber Monday, Traumatic Thursday or whatever, point to the pressures on retailers, consumers and workers.  And whilst Christmas Day has some degree of protection, Boxing Day has become another sales bonanza or furore.  Having retail sales on Boxing Day has become a ‘tradition’, switching from its previous focus on the New Year, but at what cost, and to whom?

That is why the petition to ban opening on Boxing Day has gathered some momentum.  Currently, standing at over 225,000 signatures at the time of writing, the petition calls on stores (especially supermarkets) to be stopped from opening on Boxing Day.  Quite why supermarkets have been singled out rather beats me, given where the sales focus of Boxing Day sales generally is; I would have thought that other sectors and chains would have been more the target? And the group that can most benefit from having time off is probably the family owned small shop; but of course they can least afford to take it.

We shall see if this petition gets more traction than others. The government response to questions has been to say that it does not interfere in trading strategies of retailers. This is of course utter garbage and as much post-truth as anything the President-Elect has uttered, though thankfully less dangerous. Trading hours are the subject of legislation, so that response to this petition is a reflection of will and desire not anything else.

The thrust of the petition is to have another day of rest, especially for workers.  With the Boxing Day sales frenzy, workers are under pressure both to prepare (on Christmas Eve or Christmas Day perhaps) the store for sales and to deal with the hordes (on Boxing Day and often from very early on in the day).  It is stressful and is an interruption to their Christmases as well; though they do get paid (which depending on how any restrictions were drawn up they might not do).

However a simple ban on physical shops opening faces a problem in the form of internet shopping.  With the recent Black Friday we saw heavy internet sales (some say more online sales than in stores but this seems unlikely unless a tight definition of what sales to include is used) and the same has been true of Christmas’ past, including sales on Christmas Day.  If the petition succeeds and stores are banned from selling and opening on Boxing Day, does this also apply to internet stores and sales and if so, how? Currently it would seem unlikely, this creating another anomaly. I doubt we can shut the internet for a day or two, as tempting for some as this may be.

So one side-effect of the petition (if it succeeded) could be to strengthen the hand of internet sites still further, adding to the pressures on physical stores and the drivers already struggling to deal with delivery of these online orders (and there has been a lot on this in the press recently – an Amazon example here).

We can perhaps sympathise with some of the underlying aims of the petition, but making it work across the UK (whatever that is in retail hours terms) is rather more complicated.  Which has sort of been the story of all regulation on shop opening hours over the last hundred years or so.

Posted in Alcohol, Black Friday, Boxing Day, Campaigns, Christmas, Consumer Lifestyle, Cyber Monday, Employees, Employment, Employment practices, Government, Internet shopping, Legislation, Online Retailing, Opening Hours, Petitions, Regulation, Small Shops, Supermarket | Tagged , , , , , , , , , | 6 Comments

Vending Machines and the Internet

I first encountered John Dawson when I was working in the City Council in Townsville, Northern Queensland.  I was on a four-month exchange as a student and had been asked to do some research on shopping centres.  As a consequence I read some of John’s research as preparation for my report and dissertation.  It is at this point I got interested in retailing (Cambridge did not teach it, or even recognise it in geography at that time)  In turn this led to my joining him in Wales as a PhD student and then to the foundation of the Institute for Retail Studies at Stirling in 1983.

During the time I worked directly with John (c1979-1991), and sometimes in our academic work and engagements subsequently, I got used to phone calls or later emails, which on the surface posed an innocuous question, but in reality made you think hard, dig deep and often reassess what you actually knew.

And so it was that reading my emails on my recent trip to Singapore I noticed one from John – “which has higher global market store, vending machines or the internet?”  As it happened it coincided with another email, this from an ex-student Eric Doherty, asking if I had seen the hot food vending café in Singapore?  This apparently had opened last August.

Now John had recently been in Japan and so vending machines must have been on the agenda.  In Singapore and later in Hong Kong there was little evidence of anything out of the ordinary.  But, I am aware of the increase in their use in a variety of settings and for lots of different products from high end technology to hot pies and sacks of potatoes.

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Fisher & Donaldson in St Andrews (Photo STV)

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Grewar Farm Vending in Dundee (Photo STV)

I don’t have an answer to John’s question, but from the fact he posed it I suspect he does and that it challenges what he may see as my obsession with internet sales.  In both cases I do wonder about how accurate we can be in our data collection on a national let alone a global basis.  And definitions might matter as well, given the over 50% click and collect being reported in some British retailers.  Are these internet or shop sales or an unruly combination of both?  And does it vary by person or trip?

As ever though with John’s questions it became insidious and I began thinking about modern vending machines.  Done properly they provide instant gratification of a demand (and sometimes a demand you had forgotten you had). But the supply to meet that demand is increasingly technologically enabled. The technology behind (and in front) of vending machines is becoming increasingly sophisticated. Again, there might be combinations that blur the issue.  If I buy rail tickets online but collect them at the station via a ticketing machine, is that the internet or vending or neither/both?  (And yes I know I really can have a ticketless mobile download version now).

I also failed to answer Eric’s question as I ran out of time to see the vending café.  It sounds pretty horrible to me and may be the latest Singapore trend to fly but then crash and burn.  It all seems a little Star Trek, but we do now have the technology to provide hot food vending wherever and whenever we want.  Despite the claims of those behind this, shouldn’t food be more than this?  I suspect in Singapore the drive is both their technological obsession (interest) but also a reaction to the shortage of labour problems the sector is facing in the country.  Against that the Singaporean obsession with food and food quality may mitigate their expansion.

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Queuing up to use the VendCafe in Singapore (Photo: The Straits Times)

Vending machines or the internet?  Both have their place and both are probably growing, but at varying paces in different societies.  One does hope however there remains a place for a real shop to provide some real difference and interest and helps to spark imagination and exploration.

Posted in Academics, Automation, Consumer Lifestyle, Farm Shops, Online Retailing, Opening Hours, Restaurants, Singapore, Technology, Uncategorized, Vending Machines | Tagged , , , , , , | Leave a comment

Turning Around another Supertanker; Marks and Spencer

It has been a while since I have written about Tesco, Marmite excepting, and the last few times I did, I used the analogy of a supertanker and the relative slowness at which lumbering retail giants see their strategies take effect.  In Tesco’s case the Dave Lewis era has seen a turnaround in the approach focusing on a smarter, sharper, but also smaller business.  It seems to be beginning to have an effect but shaking off the bad bits of the past is tough.

These descriptions came to mind in the recent news about Marks and Spencer; a substantial cut in international activity, a pruning of sub-brands, reduced product lines and more focus, an axe to 30-60 UK stores and a refocusing on food stores and food sales.  The markets seemed initially impressed, but then fell back as they digested the relatively limited scale of the store changes and the time this was meant to take.  A supertanker being slowly turned seems an apt analogy again.

The M&S announcements should not really come as any great surprise.  They have been quietly closing and moving some stores.  Simply Food has been rolled out rapidly, so 200 more planned is no shock.  Food has been a comparative success, but clothing and home has been in freefall for some time.  With a new team in charge, the expectation was for change.

So what has been going wrong?  Clothing and home has been underperforming for years.  The offer does not clearly stand out as fashion and other competitors have eaten in to this market.  JLP is now the darling not M&S.  As the same time M&S were late into the internet and have experienced severe website redesign issues.  The latest half-year figures for the internet sales were flat, which is not good enough and pales by comparison.

Most fundamentally however M&S are now burdened by a store estate that in the past would have been seen as an asset.  Too many unprofitable large stores have been maintained and too little has been spent on remodelling, relocating and repurposing the best of the store estate.  The market has changed but the store estate has adapted too slowly.  And despite the pain that will be felt by the announced store closures – for high streets generally but especially for those who work in the stores affected – it is hard not to conclude that more will have to be done and faster.

But some of the comments were overdone.  Some of the media – and I did two radio shows on the subject – seemed to think M&S was now another Woolworths or BHS.  It is not (yet), and the process underway is setting out to make sure it is not.  Yes, profits were down, but exceptional pension items made some figures look worse than the underlying performance.  M&S is still a major, large retailer; one caller on a phone in bet me they would be dead in 5-7 years.  I don’t see that at all.

M&S remains one of Britain’s good retailers; it just needs a faster, more certain course adjustment.  Don’t be surprised if these recent announcements are only the beginning.

Posted in Consumer Change, Digital, Food Retailing, Internet shopping, Marks and Spencer, Property, Retailers, Shop Numbers, Simply Food, Store Closures, Turnaround | Tagged , , , , , | 2 Comments

Unlocking the Potential of Scotland’s Towns

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For most in Scotland, November 9th will probably be recalled as the day President Trump became a reality.  The irony that that day was the 27th anniversary of the fall of the Berlin Wall will not be lost on some either.  But for many of those interested in Scotland’s Towns, the 9th November was their annual conference, this year in the splendid Galleries and Adam Smith Theatre in Kirkcaldy and on the theme of ‘unlocking the potential of Scotland’s Towns’.

Readers need to be aware of my role as Chair of Scotland’s Towns Partnership, the ‘go-to body’ for Scotland’s Towns and the organisers of the conference; though in reality I had little to do with the actual organising, leaving that to the well-oiled team.

Chaired by Lesley Riddoch (@LesleyRiddoch), we kicked off with local and national welcomes from Fife Council (Lesley Laird (@LesleyLaird)) and STP (myself).  My comments trod well worn ground for readers of this blog, but can be downloaded here.  They could be read in tandem with our newly published Town and Country Planning Trading Places column which expands on the themes.

The main act for the first session was the Minister for Local Government and Housing, Kevin Stewart MSP (@KevinStewartMSP) , who after a brief set of remarks allowed himself to be grilled by ‘bad cop’ Lesley Riddoch.  It is hard to say who won the tussle, but if nothing else, the key role of towns was reinforced.

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The second session comprised Steve Millington from Manchester Metropolitan University and the Institute of Place Management and Andy Milne from SURF.  Steve focused on change and footfall in high streets drawing on a range of research.  Andy in a strong presentation focused on the need for creative collaborations across Scotland’s towns and in horizontal and vertical dimensions.  He saw too many gaps in the landscape of support for comfort.

Four workshops bracketed lunch on themes of digital towns, town centre living, creative places and proactive planning and place-making; themes recognisable from the National Review.  Case studies and examples provided detailed illustrations of how potential is being unlocked across Scotland.

The final session comprised Jarmo Suominen and Kelvin Campbell.  They approached the topic of urban transformation in very different but complementary and engaging ways.  Jarmo drew on his international and Finnish experiences to critique public service delivery and to showcase his work on liveable places.  The message was about using what is there already and to stop building walls (real or virtual) and clusters but instead to open up and join up sites of practice, whether schools, offices or whatever.

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Kelvin Campbell (@massivesmall) – a radical incrementalist – in a brilliant and enthused closing talk focused on the need to begin to do things and to start in small ways.  Placing people at the heart of places he focused on what we can do and how planners and planning has failed us.  In a broad-ranging presentation, he argued for building a new engaged and enabled way of joining bottom-up (of which we need more) and top-down (of which we need less).  Echoing Andy Milne’s earlier speech he gave us a blueprint for unlocking the potential we have in Scotland’s towns.

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Full reports and details of the conference will be provided in due course on STP’s website.    There were a number of active tweeters on the day (for which many thanks) and you can follow what they thought via the hashtag #stc16.

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Posted in Architecture, Creative Places, Digital, Fife, Government, High Streets, Places, Planning, Proactive Planning, Regeneration, Retail Change, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Small Towns, Town Centre Action Plan, town centre first, Town Centre Living, Town Centre Review, Town Centres, Towns, WTLS16 | Tagged , , , , , , , , , , , , | Leave a comment

Singapore Swing

My current dose of warm weather in Singapore and soon in Hong Kong is mainly about meeting and talking to partners of the University of Stirling in my capacity as Deputy Principal for Internationalisation and Graduate Studies. It is good to be meeting up with old friends and new possible partners.

But in the time honored tradition of academic multi tasking (or spinning plates more accurately) I am also combining my trip with a little retail work. Some of that will be about looking at shops and talking with retailers, most notably at the Awards Ceremony for the Retail Asia Top 500 Awards where I have been involved this year as a judge for the “Best of the Best” award. This should be interesting and informative.

Howver I am not being allowed to get away quietly and am having to sing for my supper a little. One of Stirling’s long term collaborators and also one of my PhD students from last century (sorry, Lynda), Dr Lynda Wee, is hosting a roundtable at the NYCU Media seminar on Retail Revolution: rethink, reinvent, which takes place in Singapore on the 29th October. She asked me to do 5 minutes on three trends to kick off the discussion, before others chip in with their thoughts.

So, what are my three trends for this 5 minute slot? Besides caveating this with the obvious that I am from the UK and thus local Asia trends may be slightly different in emphases, and that despite my travels my knowledge is UK centric, I think these trends have wide resonance.

First, convenience and ease. We are all well used to the notion of convenience and of convenience stores, but I really mean more than that. This is about convenience in people’s lives, whether digital or physical, in time or space terms and about how retailers have to make their offer not only convenient but also easy to use. The store or the offer can not be difficult or it destroys the point for many consumers. But how often is the shop difficult? It is not also only about speed, but these ideas are related and slowness is often a customer killer.

Secondly, compelling and authentic. Retailers need to make ‘statements’ about their position and offer and do this through the way they put together their operations. These stores and offers make the consumer respond and retailers back up this by their actions with consumers. Retail stores need to shout their message and proposition through all that the store or website does and says. But again how often is the offer or store confused and cluttered? Retailers need to be much clearer in their ‘statements’ at store, website, brand and all levels. When this is done properly this translates into a compelling and authentic position of retailers clearly demonstrating that they know what they are doing, operationally and in terms of customer’s needs. Too often this is not the case.

Thirdly and finally, engaged and entertained. Shoppers want to be engaged with the store, website or company, but not for engagement’s sake, but rather because the retailers gets what the consumer wants in their visit. Engagement has many forms covering brand, experience, product, price, creation, market amongst others and not all consumers want the same thing or level or type of engagement. That is why the best retailers are focusing on customer creation of the experience and the level of engagement or in some cases entertainment. Consumers often want this, but on their terms, and to be entertained not by others, by through their own or their group’s activities. This of course is as important in the digital as in the physical space.

So, that’s my starter for three for this Friday. Let’s see how it goes.

Posted in Academics, Consumer Change, Consumer Lifestyle, Consumers, Convenience stores, Experiential, Multichannel, Retail brands, Retailers, Singapore | Tagged , , , , , , , , , , , | Leave a comment