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UK High Street takes a hit

News, 27 April 2016

LONDON: The failure of two iconic British retail names in the space of two days has left observers concerned for the future of other "High Street brands".

The collapse into administration of department store BHS and menswear chain Austin Reed highlights the difficulties bricks-and-mortar retailers face in a fast-moving retail environment.

BHS has particular problems with its pension scheme but more generally it has failed to move with the times. The internet revolution has passed it by and it has a dated image.

Amid a host of vox pops, one response typified the view of younger consumers: "It was that sort of shop that you go to with your nan and your parents."

As one observer commented: "It sort of smartened itself up a bit and thought that would be enough – and it wasn't."

Mary Portas, a British retail expert and TV personality, pointed out that the store, which once boasted of being a leader in lighting, couldn't now claim to be the best at anything – fashion, product, price or experience – and "looked like the sad relation to [rival retailer] Marks & Spencer".

But Marks & Spencer has its own problems, with sales of clothing and homewares continuing to fall in the quarter to March – clothing sales have grown in only one quarter over the past five years – and food sales flat.

"We've not been as stylish as we need to be," said new chief executive Steve Rowe earlier this month. "We've not had the right products in the right place."

Accordingly, the store is reviewing its main fashion labels, some of which, critics say, are not distinct enough so that it is not clear who they are aimed at.

Greater clarity in branding may help to some extent but the High Street faces bigger problems as shopper traffic declines. Latest data from researcher Springboard shows a 3.9% year on year fall in numbers in March 2016.

That drop, according to Helen Dickinson, chief executive of industry lobby group the British Retail Consortium, is a "continuation of a longer-term trend caused by on-going structural change within the retail industry.

"Customers don't differentiate between buying online, on a mobile device or in-store," she added.

Data sourced from Guardian, Financial Times, Bloomberg; additional content by Warc staff