Next week sees the closure of all Blockbuster shops. From having had 528 shops it will disappear completely. Woolworths was the same but had over 820 shops and that disappeared five years ago – yes five years have passed since the real issues on the high street came home to roost. Since then thousands of shops have come and gone – on average there are 50,000 openings and closures across Great Britain every year.
Beyond the human impact of jobs and livelihoods one has to look at this as the natural evolution of the high street. Darwinian no less where only the fittest survive and this who are able to adapt. Businesses such as Blockbuster, as with Kodak, HMV, Oddbins and Jessops failed to see the changes coming their way. It is not just about the internet, supermarkets and retail parks being the cause of death but a much wider issue – the ability to connect with and deliver value to your customers. Due to the UK property lease structure this requires great foresight as if you have 500 shops and you have no financially viable way of exiting any of them in the next five years then ultimately, whatever the business, these immovable costs will take you down. Business rates are another nail in many retailers coffin as they increasingly become disconnected from their original aim and only go upwards like many lease terms. Whilst this is happening I have 10% fewer footfall on my high street, I am expected to open longer than I would like and my customers know more about my products and pricing than I do! The only way out of this in my view is to have a ‘relationship’ with your customers and ‘showroomers’ who grace your shop. Too many retailers sit behind their tills (a great barrier to relationship building as any psychologist will tell you) and expect to earn a living based on the supply of goods and limited or no knowledge on demand or service.
‘Change is inevitable, change is constant’ Benjamin Disraeli once said. How right he was and what we see today is evolution but going at a revolutionary pace. Gone are the coaching inns of the 19th century as horses are for pleasure not for business, going are the petrol stations in every village as car fuel efficiency and range increase and in thirty years time will we still have petrol stations or will it be plug in laybys?
This change is disconcerting for many be they consumers, investors, occupiers or our politicians. In many places we have created the conditions for the revolutionary change through out of town developments and superstores along with extensive green belt residential development. In many towns the councils themselves have moved out of town. What kind of message is that to the businesses who remain in the town and they are meant to serve? Leadership by example is a phrase that comes to mind. Some towns are struggling to survive due to loss of employment and low incomes so it is hardly surprising that retailers, with their rising costs, can afford to remain in these locations especially when those with the money will find them online or be prepared to travel. Unlike many countries in the world Great Britain is small with a concentrated population and an extensive transport network so the reality is that, in most cases, you are no more than an hour from the more thriving locations. Think Stockport, Blackburn, Rochdale and then think Manchester.
Contrary to popular belief in some cases the death of a retailer such as Blockbuster presents a great opportunity for expanding retailers and landlords alike. Morrisons paid a hefty price for the ex Blockbuster stores they picked up to enable them to get serious in the convenience market with their M Local fascia. This occurs with other fascia too where a new retailer to an Eat Midlands town will be paying a rent considerably in excess of what Blockbuster was paying – they are happy and the landlord is delighted!
This month is the big ‘watch’ month for retail and the wider economy. Don’t be fooled though as the consumer based on their ‘needs and wants’ will play a waiting game to get what they want at the price they will pay for it. The one thing that you cannot quantify is service and customer loyalty built on another often misused word – COMMUNITY! Knowledge is power so make sure you have the knowledge as it is out there and LDC is just one company who can help.