Given all the challenges it has faced in recent years you would be forgiven for assuming that the High Street is in terminal decline. The long-term shift to online shopping, the trauma of the lockdown years, the inexorable rise in rents and energy bills make it seem that the days of bricks and mortar shopping are numbered.
And yet... perhaps it is too soon to bury what is sometimes described as Britain’s favourite pastime.
New figures compiled by the Evening Standard show that major retailers quoted in the FTSE 100 or the FTSE 250 actually opened far more stores than they shut last year. The companies that provided data collectively added just over 300 more UK branches to their estates in 2022 and exited just 79.
Bosses of these firms, which represent various sectors such as fashion (ABF’s Primark), luxury goods (Watches of Switzerland Group), pasties (Greggs) and more, also say they expect to invest in further sites this year.
The moves come as shopping-centre owners are seeing visitor numbers bounce back from pandemic lows. At Angel Central in Islington, footfall is up 13.5% and sales by 35.4% year-to-date over 2022. Meanwhile Westfield’s White City and Stratford sites experienced annual footfall growth of almost 10% and 5% respectively in March.
Kate Orwin, leasing director at Unibail-Rodamco-Westfield, the owner of the Westfield centres, said: “Brands are choosing to upsize in the best locations where shoppers are spending and footfall figures are increasing.
Richard Scott, executive director of property consultancy Nash Bond, says: “We witnessed an uptick in retailer interest [in new sites] in the second half of last year and this has continued into 2023.”
He adds: “This demand is largely across the board, from major brands to independents, national to international.”
So other than improved footfall, why are retailers, many of which saw sales hammered during lockdowns, confident to go bigger, even as they battle numerous challenges?
For Brian Duffy who leads Watches of Switzerland, spending on plush showrooms is integral to offering a luxury experience to high-spending clients who want to buy products in person. He says the company has an “exciting pipeline of openings ahead, including a new 7200sq ft flagship Rolex Boutique on Old Bond Street”.
Homewares chain Dunelm, which is committed to more London openings and unveiled a store in Feltham in December, boasts a “strong performance” at its larger and smaller formats. Chief executive Nick Wilkinson thinks physical branches give customers “the choice to shop how they want to and the ability to touch, feel and discover the breadth of homewares ranges, while also benefiting from specialist services such as made-to-measure curtains”.
Primark’s Paul Marchant has a similar view: “There’s nothing quite like being able to see, touch and try on items in-store.” He adds: “In the UK we have 191 stores and we’ve plans to open at least four more new stores over the next two years, as well as invest in bigger and better locations and refresh existing stores too. It’s been a challenging few years for our High Streets but we believe in the importance of our stores now more than ever.”
And it is not just London-listed firms looking to spend on bricks and mortar in 2023. Health and beauty company Superdrug this week announced plans to invest in 25 new stores, including a Brent Cross branch.
In the food-to-go retail sector, Greggs is targeting 150 net openings in 2023 — including around 50 with franchise partners. Boss Roisin Currie says: “The versatility of our shop format allows us to service numerous customer channels and is one of our greatest strengths, as we can operate in anything from a kiosk to a full-service drive-thru unit.”
Retail commentators point to a few factors that make now a particularly attractive time to expand, including this month’s business rates revaluation, which will reduce bills in some locations.
Richard Hyman, partner at TPC Retail Consulting, thinks the large number of High Street casualities and the troubled economy have made some landlords willing to offer better lease terms.
However, Hyman points out that spending on real estate is not without risk: “Following lockdown consumers have almost rediscovered physical shopping, and the pendulum has swung a little away from online, to stores. But pendulums always swing back.”
