I have been a little distracted and ‘off message’ for the last few posts – apologies.
I am keen to get us back onto the Nottingham Business Plan. We have explored the SWOT analysis and I have tried to identify some of the great things we have. I still have a few more (If you know of some, let me know!)
But in the last week I have had reason to dig out my work file on the City of Cork. You might recall that I was in Cork last May – I blogged about them here. In fact the thing that struck me most was that Cork is home to nearly 600 independent shops – they are wary of corporates.The Costa was pushed to the back of town.
I have noticed a trend in Nottingham in the last few years that the number of independent shops seems to be on the rise. Although it is fact that we have too many shops (evidenced by the vacancy rate) – the fact that there is an emerging independent scene is really good news for the City in my view.
Independents can bring something different – they help us differentiate by their very being. What we need to do is glue them all together to create a cohesive city-wide offer. There are some ideas to do this – which we are hoping to bring forward with the Creative Quarter.
To some small extent there has been a start made by Pi Street – which has targeted the independents. You can read about the project here. This is a great start! We need to build on it…
Bill Grimsey – the lunch!
As I hinted at last week I had a very interesting and inspiring lunch on Thursday in London. I met Bill Grimsey, author of Sold Out – the story of the High Street. I blogged about him first here a few weeks ago.
Our lunch was in central London and I had nearly two hours of his wisdom and view on the retail world.
I had a view about Portas (see here) and he shares a similar view. Others have said that if you ask a window-dresser to write a report on the state of retailing, what you will get is … window dressing. Harsh perhaps, but Portas is a sticky plaster on a structural fault.
Bill is a proper retailer – he cut his teeth running real shops. He has a forensic knowledge of retailer and retailers.
After the critical acclaim of his book he isn’t just leaving it there – he is running a Grimsey Commission – which is going to present to Government in the Autumn. I had an isight into the sort of story the Government are going to hear.
There is a look back and there is analysis of where we are now. The history is important. That looks at how convenience and price have become the driving force for consumers. Shops have had to respond – hence you can’t simply blame the supermarkets, they have only done what we demanded!
We are a society which is time-poor.
But the really interesting part of the report will be where we need to go next. What we need to do to ensure that our High Streets don’t become row upon row of boarded up shops.
Tomorrow I’ll look at some of the ideas and concepts that have already been identified. But until then the question we need to think about is,
“Are we ready for change“.
Clicks and bricks
We are being told that the new way of retailing is for us to browse on-line and then collect from a shop. It’s lovingly known as clicks and bricks. I blogged last week about the new way in which you can collect your Amazon purchases – you can read that here.
On the last few occasions I have been into Nottingham shopping a pattern has emerged. In John Lewis particularly it seems to me that they have very little stock. A few weeks ago it was electrical goods. This is frustrating after you spend time analysing the things on the shelves.
On Sunday I wanted a pair of shoes – they didn’t have the precise colour (I was told not to worry about that – ‘just try the size’). They fit – perfectly. But I wanted blue – not brown … there is a subtle difference.
So then we next ‘check the computer’ – and it turns out that I can have the precise colour and size – ‘tomorrow‘. Because the shop can order them on-line for me. All I have to do is pop back to the shop in 24 hours and I can get what I have come into town for.
Doesn’t this rather miss the point? If I want to order something on-line I can do so. If I want to try something on (shoes) I want to take them when and if they fit?
Bricks, clicks and bricks is not what this is about!
Retail Administration
There has been a lot in the press about retailers and the tough time they are having. I blogged about it here.
But I saw in the week a great quote – which perfectly fits the bill (forgive the pun in a moment)…
Lord Blackadder to Baldrick, “Oh God – bills, bills, bills …honestly Baldrick, sometimes I feel like a Pelican – whichever way I turn I’ve still got an enormous bill in front of me…“.
A sad but true reflection of a modern retailers life?
Whilst on that subject I can’t quite let Sir Terry Leahy’s comments on Desert Island Discs go. When asked whether the sight of boarded-up shops made him sad, he said: “It does but it is part of progress. People are not made to shop in supermarkets, they choose to shop there. High streets – some of them are medieval and the way that we live our lives now is very different, so what you have to do is make sure the benefits do outweigh the costs, and I think that they do.“
The progress he describes might be the progress that Tesco, Sainsburys, Morrisons and the like make each day as they simply crush the opposition. The benefits are mostly to their shareholders?
He is right in one respect. People are fickle. They will say they object to the rise and rise of the supermarkets – but the reality is that those very same people will shop there – for convenience and price. No matter that the suppliers are beaten up and the big boys can afford to put an independent out of business? They sometimes behave like the school bully?
And if you wonder about the balance of power, according to the British Independent Retailers Association, 98% of the UK’s £150bn grocery sector is controlled by only nine chains…
The retail car crash
Comet didn’t see Christmas, Jessops did, but not much of the New year. This week HMV appointed Receivers. Our High Street is changing at an alarming rate. These three shops alone accounted for nearly 650 shops.
These shops are in an increasingly competitive marketplace and their demise has been blamed on ‘the property market’ and ‘the internet’.
The latter is perhaps the simplest to reconcile. Online shops for music and technology goods is fiercely fought. Often the overheads of these operators is minimal – perhaps some storage. Many shops could almost be run from a laptop. I know of a firm locally that does just that. The owner has a website, the stock is held in a warehouse and the orders are processed remotely. It’s a very streamlined operation. The costs are low and so the margin can be low too. The result – lower prices.
The property market is less easy to deal with though. I wasn’t sure that our industry came in for an easy ride. But is the criticism fair. Mary Portas said upward only rent reviews were a major problem. But the latest evidence says that the average lease length is now under 5 years. Rent reviews are fast disappearing with the shorter length of lease. Then there is the suggestion that landlords are holding out for uncompetitive rents. The imposition of Business Rates tends to bring letting at competitive rents! Further where a tenant is in place and can’t afford the rent, my experience is that most of our landlord clients will always talk to them. We have lots of arrangements in place for rent holidays, reductions and the like.
The harsh reality is that we have too many shops. We must find alternative uses. The property industry has, in my view, already adopted a flexible approach to lettings – it has had little choice!
But also consider Apple – who have an incredible on-line business – but also have shops in some of the most expensive places in the world – and yet sell more per square foot than almost any other retailer…
UPDATE
Who was to know that as this blog went to press there would be another announcement? Blockbuster imploded – with the potential loss of another 528 stores and 4,000 jobs….
Beeston gets its chance – at last
Henry Boot – owners of The Square in Beeston have put on show their proposals for The Square Shopping Centre in Beeston, Nottingham. They have owned this part of Nottingham for nearly 10 years – having paid nearly £6m for the scheme back in 2003. That was a very different world!
Since then there have been several false-starts. The ownership isn’t a clean one – Henry Boot own a long lease from the Council. The tram running through part of the scheme has, no doubt, added to the complexities of the project.
But it can’t be denied that the scheme is currently looking rather sorry for itself. Vacant units soon multiply and it doesn’t take long for these secondary locations to hit rock bottom. The Sainsbury’s and Tesco superstores don’t generally help in s a small town.
But hat’s off to Henry Boot who have unveiled a new scheme. It is on public display in Beeston Library – and is said to allow for a two-phase development. Works will start in the Autumn and should be complete in the summer of 2014. This will tie in with the tram – which should bring a much needed boost to this part of Beeston.
It is a tough market out there and Henry Boot should be applauded on bringing the scheme forward in such challenging times.
Beeston, like many other places which has something of a mess going on due to the tram works, really needs something to look forward to on the other side of the works. It has the potential to become a really popular cosmopolitan suburb…
Nottingham – future good news?
I had my newsletter last week from the Chief Executives office at the City. It made for some positive reading. Here are some extracts…
Since July the City Council, together with public and private sectors partners, has started to put the Growth Plan into action; making good progress on some of the key projects:
· Work on Nottingham’s Enterprise Zone is set to get underway, with the announcement last week of a £25m funding package for the redevelopment of the Boots campus.
· The City are close to finalising the finance package for the £37.5m Nottingham Investment Fund. It is expected to be finalised around Christmastime, and the Fund to be opened to applicants early in the New Year.
· The City has also been successful in their £10m Regional Growth Fund bid for the Nottingham Technology Grant Fund, which will provide grant funding for technology-based business.
· The Government has confirmed £1m City Deal funding for the Generation Y programme, which will provide a range of support to young entrepreneurs (aged between 16 and 35).
· The Apprenticeship Hub was launched this month, aiming to create 1,000 high quality apprenticeships that meet the needs of employers.
There is still much to do though. The City is still slipping behind – particularly in shopping terms. The Broadmarsh situation doesn’t help. In fact, at the weekend, I was really uninspired by the Victoria Centre too. If it weren’t for John Lewis (Jessops!) I can’t really think of a reason to be there. House of Fraser is like a jumble sale – and at the other end of the place. I don’t mind the walk if there is something to look at a long the way – but there isn’t. Bridlesmith Gate seems, on the other hand, to be improving – with some new shops – including Hugo Boss. I am convinced that a better retail offer will make the city feel a whole lot better!
Nottingham – Broad Marsh Centre – don’t hold your breath
You will know if you drop by here often that the fate of the Broad Marsh Centre exercises me frequently. The commercial world is a different one we saw back in 2006. The Westfield £400m scheme is nothing now more than a set of dust covered plans. And the harsh reality is that those days aren’t about to return anytime soon.
What Broadmarsh won’t look like
But last week the new owners made an announcement. We had been waiting with baited breath – this is important stuff for us.
And the good news? Well, CSC, the owners ‘hopes to‘ make a Planning Application in 2013. Then, ‘Work could start on site in 2014, dependent on planning permission, and the centre could potentially reopen in 2016.’. So hope and potential. And opening in 2016 – hopefully. In four years time. With luck.
This is not an announcement. The rest of the PR is about how the current centre doesn’t work. How the big shops of old are no longer there, how it needs to change it’s look and feel. This I agree with. We know there is no major scheme in the pipeline here.
The good news is that they will try to create a mall of smaller independent shops and restaurants.
But am I the only person who thinks the centre will be dead and buried in four years time? It is already dire. Unless it changes soon (2012 soon) then it will just become more of a ‘value centre’ i.e Poundland, Everythings-a-pound, 99p stores, Wilkinsons, Heron Foods and other such aspirational retailers…
Nottingham deserves better than this, until you spot that the announcement drops out that Victoria Centre will get extended in… 2013. No sign of hope and potential…
Retail – where next in 2012?
I have touched upon the state of retail on the High Street before – notably just before Christmas when Portas issued her queen of shopping report. The blog was here.
As the retailers start t announce their Christmas trading stories, it looks like we are going to see some big changes in the next 12 months,. Some of the retailers we have become used to seeing as part of the street scene may be on the move – in some cases it may already be too late.
We may have to come to terms with a different feel to where we shop. In the next 12 months we could see a number of big names depart – La Sensa, Thorntons, Blacks, HMV, Argos, Mothercare, New Look, Peacocks and Superdrug are all under the cosh. Some of these guys have big box shops – the departure of which will make our Cities seem different places. And not in a good way!
The general view seems to be that felt sales will be good. Of course the retailers are facing an attack from the internet. Sales in some online stores have seen big increases – John Lewis shifted £600m of stock – with a 27% increase on sale in December. Their Christmas trading statement is here.
It only seems like yesterday when I was involved in the letting to Waterstones on Bridlesmith Gate in Nottingham – that was in 1998 – six years before Amazon even existed. It was a fantastic concept based around ‘dwell time’ – in other words if you keep people in your store – they will spend money. 20 minutes was the tipping point. I still like the store – but guess that I buy four books on Amazon (three of those on Kindle!) for every one I buy in Waterstones.
At the same time though the major supermarkets just seem to be growing – they are bidding for land considerably in excess of where residential ever were – even at the peak of the market.
It will be an interesting 12 months – I wonder what Nottingham will look like this time next year?
Mary Portas – predictable and fluffy…
I blogged before that we knew the self-styled Queen of Shops was going to publish her answer to the doom and gloom on Britain’s High Street. Her advice to the Prime Minister was apparently free. It was published this week – by way of a list of 28 groovy ideas to get us all spending our hard-earned wonga at the shops again.
Much of it looks to me to be a bit blindingly obvious. Some is naive – allowing shifts between Use Classes more easily is a recipe for Planning disaster.
But the one that made me smile was number 18, “Encourage a contract of care between landlords and their commercial tenants by promoting the leasing code and supporting the use of lease structures other than upward only rent reviews, especially for small businesses”.
A contact of care? With a pink bow? And chocolates?
There is a serious aspect to what she says – she regurgitates the ‘leasing code’ – which has existed for some time. The Code sets out some basic ‘rules’ and tries, admirably, to suggest best practice. If you are so minded you can download it here.
I mentioned the final interviews I carry out for the RICS here – one of the questions we often ask candidates is their knowledge of ‘the Code’. But the supplementary question is to ask where they have used it. Almost without exception they haven’t (although the ‘correct’ answer is to say you have had regard to it!)
What, in essence, we are supposed to do is offer ‘menu pricing’ – in other words (as an example) you can have upwards and downwards rent reviews if you pay more rent at the start… Not many (none?) go for that one.
There was a time when upwards only rent reviews were seen as a bad thing – but that was in the days of 25 year leases – with reviews every five years. Today the average lease length is currently 7.6 years and even then we often see break clauses. The argument has therefore ‘gone away’.
To that end I would suggest that Ms Portas is somewhat out of touch with what is actually happening in the market. And that is worrying if the PM is listening to her?