Mapping the future high street

January 24, 2011
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If you plan to gamble on the survival of the high street in the year ahead, you should have no problem to find someone to take your money. Ordnance Survey has just released data that compares retail addresses in October 2008 with those still around in December 2010. In just more than two years, the number of bookies on the British high street has risen by 5% and it is likely that number will continue to increase.

In almost every other retail sector the number of outlets fell. Building society branches in the North West dropped by 30.1%, in Scotland by 33.7% and in London there was the sharpest reduction, down by 46.9%. Even the number of supermarkets dropped by 3.9%, although there were 3% more department stores around at the end of 2010 than there were in 2008.

Ordnance Survey Land and Property Sector Manager Dan Hughes says that after the turbulence of the past two years it is no surprise that the mapping data shows some high street firms have been hit harder than others. He says, “Location-based data often plays an essential part in the decision making of retailers and property companies. Their key priorities are to reduce both risk and costs.”

Figures supplied by the Local Data Company (LDC) shows there are currently 2,741 home entertainment retailers on the 750 UK high streets it tracks. When national multiples are added, that takes the figure to 3,235 outlets at the end of 2010. LDC research shows that independent retailers that trade in secondary and tertiary locations suffer as footfall drops in reaction to lower occupancy.

Fuel costs have risen out of proportion to incomes and parking charges and restrictions have put many city centre sites out of bounds for the impulse shopper, so local high streets could benefit. But the Ordnance Survey report reveals that pound shops and bakers that sell sticky buns are among the few areas of growth. When it comes to the more tangible task of purchasing packaged media however, to find an outlet on the high street in 2011 could prove more of a challenge.

LDC Director Matthew Hopkinson says that the departure of anchor tenants can have a disproportionate effect on other local businesses. For example, more than 300 Woolworths stores remain empty, around 40% of the original total. He says: “Where once they created a prime location for other traders, now there is a 10%-20% vacancy in the area. There’s also a trend for companies such as HMV to move to ‘shop-within-a-shop’ locations in retail parks and bigger stores, leaving the specialist high street outlets unable to follow and struggling in their wake.”

HMV already has begun its planned closure of 60 stores with the announcement that, subject to planning permission, the Peterborough branch will become a restaurant, selling piri-piri chicken to the hordes of hungry shoppers who set out to buy the latest “Harry Potter” on Blu-ray. With their appetites satisfied they might find the title they seek on a trip to a supermarket in an out-of-town retail park. More likely, they will make their future purchases online, and save both fuel and VAT.

Since ITV arrived in the UK in 1957, television commercials have urged viewers to leave their homes in order to buy whatever new and improved product was on sale. From toothpaste to Xbox Kinect, TV advertising has urged viewers to get up from armchairs and go to town. Not, it seems, for much longer.

When the buying impulse is satisfied by a single click on a remote control, will the attractions of a trip to the high street seem so enticing? Hopkinson does not think so: “Customer loyalty has always attracted shoppers to their favourite store. Without good service, the price becomes the major factor. I’d rather pay to listen to the music I want on Spotify or catch-up with BBC iPlayer than suffer surly service from a shop assistant.” He does, however, view loyalty schemes, particularly the Tesco Clubcard, as a method to unify retail and e-tail transactions.

A report from Arizona-based market research organisation In-Stat claims that the availability of online entertainment in Europe and North America will grow substantially over the next five years. This increased access to online content will raise public awareness of connected TV, currently at 42% in the UK, and finally give the long-predicted boost to interactive advertising.

The day of the separate set top box will pass as many visitors to the 2011 International Consumer Electronics Show in Las Vegas reported. A new generation of integrated web-connected flat-screen TVs, often with an Intel Atom microprocessor inside, will end the need for add-on boxes. These hi-tech sets do not need a tangle of cables in order to deliver broadcast television, streamed entertainment and online shopping into the home.

This week, we learned that YouView has decided to delay delivery of its set top box, reportedly because of technical problems and not as the result of another legal move from the competition. The product of the Arqiva, BBC, BT, Channel 4, Channel 5, ITV and Talk Talk consortium, YouView might not reach consumers until the second half of 2011, which could cause a serious dent in its sales projections.

By the time the YouView box reaches the shelves, it will confront the competition without any obvious advantages. Although it offers access to Freeview, which many viewers have already, it does so at a premium, expected to be around £200. It is a lot to pay for the benefit of subscription-free viewing, especially as there is still the option of premium (paid-for) programming. Unless the YouView consortium can persuade some high-profile content owners to jump on board, the future of the erstwhile “Project Kangaroo” must now be in doubt.

The cold winds of change blow not only down the high street. On Tuesday, the BBC announced the departure of Future Media and Technology Director Erik Huggers. He has shepherded the corporation’s high-tech ambitions through turbulent times and deserves a lot of the credit for the evolution of the iPlayer.

Huggers is off to Intel to take up the role of Digital Home Group General Manager, which should ring warning bells in the offices of digital box makers around the world. His appointment means that the odds are better than 10-to-1 that tumbleweed could roll through the dreams of several European online entrepreneurs.

Any takers?