The Retail Sector
Published: 18/11/2019 By Jeremy DayI have been observing retailing on the High Road, and Chiswick’s other fabulous retail streets, from a different angle since I joined the commercial business at Whitman & Co a couple of months ago.
I thought I would write my first blog about the retail sector, as I have found it has been a dominant focus so far, with a string of enquiries - from all sorts of directions.
You only have to turn on the morning radio to hear of the woes facing the UK High Street. This is a national, even global, issue - as a result of the rise in online shopping and changes in habit. Last week Mothercare entered Administration, having already been through a Company Voluntary Agreement (CVA) that had been intended to have given them a lifeline. This week Clintons are also back in the news. Sadly, there will be more.
Chiswick is no different to many locations. It won’t have escaped notice that there are a number of vacant shops locally, some of which have been unoccupied for quite a time. Are we watching a slow and inevitable decline in retailing? I don’t think so - but we do need to act.
The debate is the same everywhere. Costs of doing retail business are rising (staff costs, insurance, technology, regulation, logistics, etc). Meanwhile, footfall and consumer spending in shops are falling, largely because of the growth in online retailing - the switch from “bricks’ to clicks”.
Against this backdrop, property occupancy costs (rent, rates, service charges) are often now too high. The inevitable impact is shop closures, either at lease-expiry, or occasionally, sadly, through insolvency.
What needs to happen to protect local retailing and encourage it to thrive?
Without new retailers (both chains and independents) coming and succeeding, and those already here thriving (and staying), there is of course risk that we find ourselves in the same steady downward-spiral as many other places.
We have been pleased to attract Hotel Chocolat to Chiswick High Road recently, but it is important that they do well. Other retailers are watching and waiting to follow -so long as rents are set correctly, and customer-spending is there.
We are blessed with a special retailing character in Chiswick, a healthy mix of independents and multiples, which we must surely protect?
Clearly, the bottom line is to spend more money in our local shops. Chiswick Locals, and great schemes like the Chiswick Calendar loyalty card are excellent in encouraging this. As we approach Christmas we can all do our bit, by avoiding online temptations and by shopping in local outlets.
Shops need customers to come, not just once but regularly, returning again and again. They need them to dwell, and spend.
Customers need variety and choice; of products, services, styles and price-points. We need places to eat, drink, socialise, laugh, excite, rest, recuperate. We need staples and amenities. We need luxuries. We need chains and we need independents.
Retailers must consistently deliver what customers want, with good service, and at the right price.
The retail environment must be safe and compelling. Access, transport and parking should be easy, the shopping environment clean and inviting.
Neighbouring areas in Hammersmith, Acton & Ealing have introduced Business Improvement Districts (BIDs) and recruited town centre managers to coordinate activity, but to date these discussions in Chiswick have not gained traction. There is no single dominant investor, nor retail focus group in Chiswick. Perhaps we need one?
In my view the fragmented nature of the retail property market here makes it a bit more difficult to attract new, interesting and entrepreneurial retailers to Chiswick. Whitman & Co Commercial recently attended a major retailing conference in Central London to do just that, and we intend to continue to build on the promotion of Chiswick as a place to do retail business in west London.
What more can we do?
We can all play a part in ensuring that Chiswick remains a vibrant retailing location. The property owning community (and advisors like Whitman & Co Commercial) are also central to this of course.
In these times of political manifestos I therefore thought I would set down my own pledges, to ensure I do my bit. As a real estate advisor, representing both landlords and tenants in Chiswick, I will:
- Continuously promote Chiswick to the national retailer community.
- Lobby through the Royal Institution of Chartered Surveyors (RICS) and other channels to bring about much-needed changes in the Business Rates regime.
- Lobby planners to ensure planning policy (and individual planning applications) support a thriving high street.
- Protect the streetscape by urging clients to keep vacant shops clean and attractive, with windows dressed or decorated where possible.
- On a day-to-day basis, help ensure that the shopping environment is appealing, by personally reporting rubbish, litter, flooding from blocked drains, etc, that I see as I go about the area.
- Ensure that, whether advising landlords or tenants, the lease terms agreed (rent, but also other terms) are realistic, ethical, equitable, affordable, and clear. (I have for many years been a representative on the RICS panel that produces the Code for Leasing Business Premises, which I hope is shortly to become mandatory for Chartered Surveyors - more next time perhaps).
Of course this is a fine line to tread, because the lease is a commercial contract, and there is often much at stake in the financial bargain between landlord and tenant. For the landlord, the property is often a pension, or a long term investment of hard-earned capital. For the tenant, the rent commitment can ultimately be the difference between success or failure, certainly when no other levers are left to be pulled. But we must be transparent and fair.
- Finally, I have personally adopted a ‘buy local first’ policy. I will minimise online spend, and enjoy the excellent service and diverse offerings that Chiswick retail has to offer.
In these challenging times for retailing everywhere, it is surely better to see a vibrant and fully-occupied High Road, Turnham Green Terrace, Devonshire Road & Acton Lane (as well as the many smaller clusters of shops around our lovely neighbourhood). Whitman & Co Commercial aim to do our part to encourage and facilitate this.
The most important advice, whether you’re landlord or tenant, is to take professional property advice about commercial property situations, with Whitman & Co, or with other eminent local firms!
Jeremy Day FRICS
12th November 2019