Where Next For Retail Stores
In light of the blurred boundaries between physical and virtual retail space, retailers are looking very closely at how this impacts on the role and function of existing and futures stores.
Norbury Sansom believes that there will be an on-going need for physical space albeit, for some retailers, this may well be on a smaller scale and in a differing format, such as a shift to more convenience led operations. The retail landscape is changing quickly with many retailers unable to react at the same pace, restricted by operational changes and by the market itself. It can be a difficult process to re-align an existing portfolio but one that is vital to ensure the retained stores make a positive contribution to the business. This not only involves taking out poor performing stores early, but identifying, in advance, those stores which are likely to be marginal in the future. In many cases, this could result in a drastic change in store numbers.
We can help you to future-proof and align your portfolio to meet the demands of the business going forward. The impact on reduced retail property demand has also created an opportunity for expanding retailers, reliant on physical floor space, to acquire the right stores on more flexible terms, at lower headline rents with the option of break clauses and improved payment terms.
As retail evolves across all channels, we expect retailers will need to define their store propositions and undertake a crucial assessment of the portfolio in light of this. This not only includes non-contributing stores but also the size, shape and location of the remaining units. There needs to be a focus on understanding how a growing virtual service is incorporated into an overall flexible store package such as extended collection times in shopping centres with restricted hours.
Norbury Sansom can play an important role in supporting your business through such transitions and we would be pleased to discuss any aspect with you.