April 1985 | Designers' Journal

Trading places

Are retailers moving out of the High Street for ever?

Over the past few years, and especially in 1984, conventional High Street shopping has come to appear more and more vulnerable to other forms of retailing. The threats to the High Street come from three areas: in-town superstores, hypermarkets and shopping centres; edge-of-town and out-of-town shopping centres and warehouse developments; and – in a different kind of geographical ‘space’ altogether – home-selected, home-delivered shopping founded on mail order catalogues and Prestel. How large do these threats loom? At what kind of pace can we expect them to materialise? And what lessons should retail designers derive from study of these threats, and how are those lessons likely to be applied both on and off the High Street? To answer these questions we need to establish what has already been achieved in ‘shopping without streets’, and to examine some of the trends in consumer behaviour and the retail business that lie behind the growth of the phenomenon.

Inside the city much has already been achieved. The UK has in operation 240 superstores (25-50,000 sq ft), about 40 hypermarkets (50,000 sq ft and more), and 50 modern shopping centres. A further 50 shopping centres are planned. Interestingly, the distribution of these developments is skewed regionally. Britain’s prosperous south-east and its capital city have led the way in urban alternatives to the High Street.

Today’s superstores are giant, single-floor, self-service expanses, full of foods and ‘non-foods’ and complete with parking facilities. In numbers, Asda (more than 70) and Tesco (more than 50) dominate, though Sainsbury has had no less than 30 smaller developments approved by planners, and is pushing a further 30 in the planning pipeline. But it is precisely because retailers such as Sainsbury feel that local authorities are not moving fast enough to unclog the in-town planning pipeline that the pressure has grown to move to edge-of-town or out-of-town sites. The planning process may only be a little easier there, but the slightly less bureaucratic atmosphere that surrounds planning at the periphery has tilted the balance toward an exodus from central locations. Last year figures as various as Sir John Sainsbury, JS chair Lord Rayner and – even more vociferously – Tesco deputy chair Ian MacLaurin publicly expressed their displeasure with local authority urban planning. Not content with this, Tesco went on to tie up its expertise in edge-of-town planning applications in an epoch-making deal with Marks & Spencer, Britain’s largest general retailer and clothes retailer. The aim: to open six new edge-of-town shopping centres jointly, starting in 1988.

Though M&S has stressed that it remains committed to the High Street, the company seems bent on supplementing its in-town operations with sites on the outskirts of cities. And since most of Britain’s retailers like to pitch camp as close as possible to M&S stores, the prospect of a major migration out of town appears a real one. There is another pointer too. Published last year, the Home Office White Paper on the Shops Acts and late-night and Sunday opening suggests that, if its proposals for de-regulation were accepted, ‘out-of-town developments, where shopping could be combined with a family outing, might do particularly well’ (paragraph 256). By the same token, committee of inquiry chairman Robin Auld QC and his colleagues at the Institute of Fiscal Studies estimatesthat, as a consequence of Sunday working, weekday-trading High Street outlets – particularly in confectionery, tobacco, drink and household goods (including DIY and garden supplies) – will drop in the longer term.

Shopping for pleasure

Today’s shoppers have cars and they want to park them close to and on the same level as the stores at which they shop. This fact alone has done much to make extra-urban sites more attractive to retailers. Moreover the collapse of British manufacturing has left many edge-of-town industrial warehouses empty and therefore open for development by retailers. The same is true of football grounds and dog tracks: the British, it seems, would now prefer to buy Sainsbury’s marmalade at Haringey stadium than watch dogs chase mechanical rabbits there. Shopping is now a leisure pursuit, and a more popular one than the spectator sports that enjoyed their heyday before the war. Sainsbury has still to be granted planning permission for Haringey, but the mood among its rivals is similar. Tesco wants to take over from whippets in Slough, and Asda favours the same at Shawfields in London and White City in Manchester.

It is, however, in the non-food sector that the threat to the High Street from peripheral areas has been most striking. While the food majors now stress fresh produce at the expense of previous expansion into electricals, textiles and other non-food items, and have tended to prefer edge-of-town projects to more far-flung ones, non-food companies have opted for greenfield sites in a big way. In DIY, out-of-town chains such as Texas Homecare have boomed, while Woolworth’s B&Q subsidiary has done much to staunch its parent’s losses. And in furniture, carpets, bedding and brown and white goods, Phil Harris’ Harris Queensway group has over the past 12 months added Richard Northcott’s Brown Bear chain, Vogue Interiors and a sizable share of Debenhams to its operations, in moves which are bound to shift British retailing further out of town.

Changing the order

In ‘non-store’ shopping the picture is different again. On the one hand, British mail order houses have been in the doldrums for the past few years. With a turnover of about £2.75 billion, mail order houses now take only about six per cent of non-food sales in Britain – one per cent less, perhaps, than they did in 1980. Their rate of sales increase is, at five per cent a year, only half what their High Street and other rivals are notching up. Yet it would be too early to write mail order offer. At 40 per cent, gross margins in the sector are well above those in conventional retailing, and overall growth is set to reach 10 per cent and a turnover of nearly £3 billion this year. Moreover the mail order business is much more concentrated than store-based retailing: there are only 38 firms in the fray, and many of them should be in a position to capitalise on their databases and move into electronic shopping with ease.

On the other hand, electronic shopping itself has made some progress.  Pioneered in the USA by Comp-U-Card and recently the subject of massive investments by a consortium composed of Sears Roebuck, CBS and IBM, electronic shopping appears poised to take advantage of the growth of video and information technology in the home – especially in Britain, where consumers have in the past few years become arguably more ‘wired’ than their counterparts anywhere else in the world. In the West Midlands, Club 403 offers groceries and mail-order type goods to several thousand Prestel subscribers. It is backed by the Birmingham press, the Department of Industry and British Telecom. Elsewhere, Tesco, Gateshead council and Newcastle university have introduced a microcomputer-based system for consumers who are housebound through disability; while the Nottinghamshire Building Society has, with British Telecom, established a home banking/mortgages system, with some mail-order type goods available.

Electronic shopping still remains a matter of experiment, confined to perhaps 50,000 households, no more. Two factors will be crucial to future success: delivery, and the interest taken by retail banks. Without reliable delivery, it is unlikely that consumers will gravitate to electronic shopping. Yet it is significant that the British mail order giant GUS has already joined forces with Lex Services to offer Homeline, a delivery service which they hope will allow their two companies to capitalise on the prospective boom in home shopping.

As for the banks, they are pivotal in the sense that it is probably through them that terminals in the home will first ‘go commercial’. The picture remains cloudy: feeling within the banking sector is that automation of retail outlets will postpone the development of home banking for some years, but at the same time Britain’s national press opened 1985 buffeted by full-page advertisements for home banking facilities offered by the Bank of Scotland.

Profit accounts

Before looking at the trends underlying the three main threats to the High Street, it is worth putting the changes outlined above in perspective. The High Street is not doomed: far from it. City centre rents have turned up in the past year. The scale of investment tied up in High Street property makes an all-out retreat from it a commercial non-starter. The good fortunes met by pedestrian precincts packed with small shops, like London’s Covent Garden, suggest that reviving the High Street is as viable an option as moving out from it. And when we start to quantify the scale of the threat, it looks modest. Marks & Spencer’s six edge-of-town sites amount to little against its 260 urban ones. What we are talking about, then, is nothing like a mass exodus, but a gradual bifurcation in shopping patterns. Even 20 years from now, we can only expect the High Street’s share of total retail business to have declined by 10 or 20 per cent.

Yet figures can always be read in different ways. For instance: M&S’s new edge-of-town stores will, at 60,000 sq ft each, be double the average size of its in-town sites. Already Tesco’s off-street stores amount to a sizable fraction of its total of 400.figure is out of 400. more generally, the state of UK retailing today allows few grounds for compacency. Take Sainsbury: in November, City observers were overjoyed that the company’s pre-tax profits were up 20 per cent to £75m. But the main increase in profits has come from volume growth based on the company’s £225m programme of capital expenditure on new stores. The ‘improvement’ in trading margins so celebrated by financial analysts was from a tight 4.36 per cent to a not-much-looser 4.49 per cent. In other words, even High Street success stories – we will leave aside the beleaguered corner shop for the moment – are poised on a profitability knife-edge. The evidence therefore implies that the current threats to the High Street, though relatively small and relatively slow-moving, could prove disastrous to conventional retailers who are unable or unwilling to strike back.

Underlying trends

The question then becomes how to strike back. And this can only be answered satisfactorily if the dynamics of off-Street retailing are understood. Here, two books are invaluable. The first is Reading university visiting lecturer Hugh Gayler’s recent study Retail innovation in Britain: the problems of out-of-town shopping centre development (Geo Books, Norwich), which, despite its relatively narrow focus on the extra-urban threat alone, is a useful source from a social geographer. The second is our old friend, the Central Statistical Office’s Social trends (1985 edition, HMSO, £19.95).

Understandably, Gayler begins his analysis with the major precedent for UK out-of-town shopping centres: that set by the USA, starting almost 50 years ago. For Gayler, suburbanisation has been one of the major propellants of out-of-town development, both in the States and here; though he notes that daytime office users, tourists and convention-goers have ensured that the American High Street is far from dead. Second, Gayler cites improved consumer mobility, based on the car, as a big impetus to peripheral retailing. Third, changed lifestyles have played a key role. Higher but more stretched consumer incomes, more sophisticated consumer tastes and the employment of married women have conspired to make convenience, family, late-night and weekend shopping – all of which can be well catered for out of town – necessities. Finally, Gayler identifies the increased monopolisation of retailing and the increased physical scale of retail outlets as critical. Particularly in food, these two tendencies supply the basic context for moves out of town.

On the surface, Gayler’s hypotheses are attractive. But when we look atSocial trends , the picture is more complex. To begin with suburbanisation: Social trends makes clear that fully 65 per cent of the population live in urban areas with more than 50,000 people in them. Between 1971 and 1981 the number of people living in areas of half a million or more dropped by a mere eight per cent at most. From this perspective ‘suburbanisation’ would seem a pretty weak phenomenon. Moreover a glance at the figures on international population densities confirms the suspicion that ‘out of town’ may make little sense to a Britain whose inhabitants nearly all live in towns. While there are 25 human beings to every American square kilometre, there are 231 to every British one. In Britain, logic suggests, retailers will stay in-town and build up, using shopping centres – rather than spreading out to the edge of town or beyond. Fitch & Co’s oft-quoted finding, that 80 per cent of the population live within a 20-minute drive of competing shopping centres, means not only that Britain is ‘overshopped’ (that is, that Britain suffers from overcapacity in shopping), but also, since the vast majority of shopping centres are in-town, that to construct out-of-town centres is to give the British consumer a wholly unnecessary breadth of choice.

But, it can be argued, it is precisely the increased use of the car as a means of ‘going shopping’ that makes flat, out-of-town developments easier to get to and park on than stacked inner-city structures. Yet Social trends shows how reality is much more complex. The use of public transport (and of two-wheeled vehicles) is down, sure enough, and the number of vehicles on the road rose by a million to 20.7 million, or 59 per cent of UK households, in the three years to 1983. But most of the doubling in private car use that occurred between 1961 and 1983 took place in the 1960s. Between 1971 and 1981, indeed, the number of cars per thousand Britons rose slowly – from 224 to 303, compared to 348 cars per thousand in France and 547 in the US. The Britain of recession is, therefore, a relatively lowly motorised Britain.. Complaints about there being ‘nowhere to park’, it may be surmised, are likely to be issued only by the most prosperous of Britain’s ever more differentiated socio-economic groupings.

The rich get richer

Perhaps because it is more up-to-date than Gayler, Social trends makes much of socio-economic differentiation, which tends to qualify Gayler’s simple scenario of higher disposable incomes all round. There can be no doubt that the public has more sophisticated tastes, though: in 1971, for example, only 36 per cent of adults in Britain had been abroad for a holiday, whereas in 1983 the figures was 62 per cent. Just how far the public expects to have those tastes gratified is another matter. ‘The more affluent and those in jobs (particularly service sector jobs) seemed to feel relatively secure, even optimistic’, notes Social trends . ‘The less affluent, including the unemployed, the poor, and pensioners, were relatively insecure and pessimistic. They felt not only that their economic condition had deteriorated but also that it would probably continue to do so”. Translated into the retail market, such statements amount to this: the remarkable thing about the down-market Co-op is not that it should have declined while its rivals have done well by ‘trading up’, but that it has survived at all. The growing ranks of Britain’s unemployed, lowly paid and old expect little of the future and keep going to the Co-op. ‘Higher disposable incomes’ are meaningless to them.

As for exactly how consumer incomes have been ‘stretched’, Social trends is revealing. In the past 10 years housing, tv and video, post and telecommunications have emerged as priorities, while food and personal transport have become less important. We live, thus, in an increasingly atomised society, where consumer spending goes on home activities before anything else. Moral for retailers: sell more DIY equipment out of town and more tvs and videos in town… even though the consequence might be that people stay at home painting walls and watching television all the time.

This last may sound cynical, but it has a kernel of truth in it. For Gayler is only partly right to say that married women going out to work means convenience shopping and therefore out-of-town sites. A wider canvas would take in the slowdown in the growth of female participation in the civilian labour force (only one per cent up, to 47.6 per cent, in the 12 years up to 1983), and the rise in female part-time and home work. Once again, home is where people are winding up.

The centrality of the home has implications. It makes the prospects for mail order and Prestel shopping more auspicious. Social trends may over-estimate the extent to which leisure time has increased for the British, particularly given the recent expansion of the black economy; but even if it is correct, the evidence is that people prefer to spend their leisure time at home. The statistics chronicling the decline of spectator sports and of cinema are all too familiar. For in-store shopping to face up to the challenge of non-store shopping, it will really have to stop being a chore and start being entertaining. At the moment, ‘shopping’ doesn’t even figure in theSocial trends chapter on leisure.

Gayler’s final premise, that out-of-town centres are consonant with the increased monopolisation of the retail industry, is undeniable. But we should note that multiples do not rule the roost, even if we allow the term to describe chains with as few as 10 outlets. It was only about 10 years ago that such ‘multiples’ began to take more than half of Britain’s retail trade. Even in 1982 they only took 56 per cent of it. 

Entertainment value

The immediate conclusions which flow from all this, which relate to the pace of development
of off-street alternatives, are simple. The High Street, and the threat with which it has most affinity, the shopping centre, are a lot more alive than the current furore about out-of-town sites would lead us to believe. But the decentralised information society of the future is already a fact. Teleshopping may be with us sooner than we think, and a comeback for mail order is possible.

The less immediate conclusions, which relate to the way forward for retail designers, are equally simple. To pull people in, shops – especially, perhaps, edge- or out-of-town shops – must excite and amuse: there may even come a time when Sainsbury re-introduces dog racing at Haringey. Second, like the Ridings shopping centre in Wakefield, shops must be inexpensive to run, so that they are inexpensive to purchase at and are thus attractive to even those social groups most beleaguered by the recession (saving energy and other running costs is obviously critical here). At the same time, facilities to support shoppers (especially the disadvantaged) will be at a premium. Last but not least: don’t forget the small, personally owned shop as a client. The big clear-out by the multiples may be over, and the age of the design-conscious individual shopkeeper may yet dawn.

***********

Mark Landini, senior designer in Fitch & Co’s retail division, worked with Harris Queensway on its edge-of-town sheds.

‘It had storeys up to 10 metres high, but had put low ceilings on them. Harris Queensway was using them well: its focus was on aggressive price tagging. But the overall image was tacky - even among C1s and C2s who hadn’t been to the stores.

‘Our task was to add value and a sense of quality to the interiors, to display £200 suites of furniture the same way one would show off one that cost £1000. We went for a big entrance hall, with a high ceiling and larger-than-life, drop-shadow graphics. The graphics are still price-led, but that’s to be expected with a company like Harris Queensway. In the hall we’ve mounted different types of product - dining suites, bedding suites - on different plinths, to make it clear what Harris Queensway sells. We’ve lit each kind of product carefully, going for a subdued, domestic feel throughout, with bedrooms particularly cosy, kitchens pretty bright, and dining rooms somewhere in between. The client had originally wanted uniform fluorescent lights everywhere…

‘You must remember that our budget for design was about £5 per square foot. For Buron that budget would be more like £55 per square foot. So instead of room sets we’ve dropped in fabric blinds to establish context.

‘At Christchurch, near Bournemouth, the company has built play areas for children, and customer loos are also under construction. We’ve proposed coffee and eating areas, to give Harris’s sheds a general shopping feel. This is not impossible: thousands of shoppers turned out to Harris when it stayed open on Boxing Day last year. We think Harris can now match Debenhams in terms of quality and customer service, put offer lower prices and easier parking too.”

Kate Manasian is director of AID’s retail design division, which has just won a major retail design contract for Jaeger, a company which, like AID’s principal retail client House of Fraser, is likely to remain on the High Street for many years to come.

‘On and off the High Street, North America has long sorted out its retail services for the convenience and benefit of consumers. Shopping centres are often open till 10pm, and on Sunday afternoons too.

‘In Britain it seems that sheds, not High Streets, are the main force for progress in opening up at times which to suit the market. I myself go to Do It All on Sundays. Do It All has a coffeeshop at its Brentford store: this must be a pointer to the future.

‘My feeling is that electronic shopping will be slow to develop. Our own clients in retail find it hard enough to sort out their own information technology requirements, let alone bringing information technology to the customer via Prestel and then backing up the information with a delivery system. One of our clients, the travel agents Lunn Poly, are interested in making interactive video programs on the holidays they offer. But they’ve found interactive video very expensive, and difficult to update with new price information.

‘On the other hand I wouldn’t discount some big changes happening in mail order. In the States, mail order houses such as Nieman Marcus, William Sanoma and Horchows sell very expensive goods with great success. Their catalogues are free but beautifully printed: they’re full of very expensive gifts, clothes, home accessories, linen sheets and cookware.  Sooner or later, British High Streets may find themselves facing this kind of threat.’

Rob Davie is director of Michael Peters & Partners’ retail division. He has been asked by a yet-to-be-named High Street retailer to look at the possibility of making warehouses entertaining for shoppers.

‘It’s no fun for a father to have to announce that he’s going out on his own to buy 64 tins of paint. He should be able to bring his family with him. For the right kind of High Street retailer, a family-orientated out-of-town site could be a useful weapon. Out of town – next to DIY suppliers, most likely - he can hold big inventories of bulky items, and use his position to attack market rivals whom he can’t hope take on back on the High Street because of their proximity.

‘For this particular retailer, “out of town” is an extra, not a threat. And the wider High Street will be able to respond to out-of-town threats. We’ve been asked to design a chain of convenience stores which will stay open from seven in the morning to eleven at night: that’s a step forward. And we think that department stores such as the Army & Navy at Victoria are showing the way by refurbishing in order to move toward a shopping centre concept - with the added advantage that they’re right in the centre of town. Not all department stores have such a “developer consciousness”, but it’s growing.’