Changes in the public’s retailing habits since the financial ‘crash’ have been significant and that momentum continues; as retailers constantly look for new ways of building their identity, offer and relationship with their customer base.
From the ‘boom years’ up to 2008 and the emergence of multi-channel shopping, to the financial ‘crash’ of 2009 and the following recession, the retail industry is only now beginning to show signs of recovery, having learned some lessons in the meantime. On-line shopping continues to develop and the physical space that the retailers have retained has had to be optimised to ensure that stores deliver the best returns possible.
Changes in the public’s retailing habits since the financial ‘crash’ have been significant and that momentum continues...
The recession caused shoppers to ‘tighten their belts’ and adopt a more prudent approach to food shopping. The ‘big four’ food retailers - Tesco, Asda, Sainsbury’s and Morrisons - were being squeezed by Aldi and Lidl, together with other emerging value brands such as B+M and Poundland and as a result, have seen their market share fall. However, these recession-induced changes in shopping behaviour look here to stay, with consumers now spending their money across several shopping trips - to the supermarket, the local convenience store, a discounter and the internet.
Those four major players still have the largest market share, however, their challenge is to find ways of retaining it, including aligning their estates with the multi-channel shoppers’ new behaviours, and their willingness to invest more personal time to get the most for their money.
This steady decline of the one ‘big weekly shop’ could render out-of-town-hypermarkets, a significant part of retailers’ estate, obsolete as customers flex their multi- channel ‘muscle’. These four are therefore reassessing their new store model footprints (smaller), rationalising their portfolios by shutting poorly performing stores, and looking for innovative ways to get best value from their remaining space.
There’s a move away from building new big stores, with new-build investment now predominantly in smaller-sized units in the region of 20,000 – 30,000sq.ft net sales. However, new-build programmes have been slashed, even the convenience programmes, as it seems the ‘space race’ is finally over. The new focus for retailers is in store refreshes and intervention/remodelling projects being carried out to existing stores of all of the different format sizes to attract customers back through the doors and increase sales return on built square footage.
The changes being trialled are numerous with restaurants and coffee shops added, and branded offers or franchises increasingly seen. Some stores will have other franchises such as specialist bakeries or phone shops. Space may be sub-let to other retailers, for example, Sainsbury’s has let space to Argos thus increasing shopping appeal to customers and potentially increasing foot-fall.
These initiatives often call for reconfiguration or refresh of existing stores, typically on a nationwide scale, as retailers roll out these change programmes. However, stores must continue to trade while the works are carried out, bringing challenges to maintain the customer service and to ensure health & safety is maintained for both customers and staff.
Our involvement in the retail sector throughout the last 30 years has allowed us to experience at first hand all of these recent changes, and we too have adapted the services we provide to match the change in nature of the projects that retailers are now undertaking.
Faithful+Gould is delivering services with a range of retail clients on:
Refresh/remodel programmes to existing stores,
Initiative roll-out programmes,
Most recently, a ‘drive- thru’ click and collect programme
At the same time, we continue to work with clients on new stores (both shell and fit out).
Faithful+Gould leads a wide variety of retail programmes providing integrated project and programme management services. In addition to the customer-facing concerns, we find that these projects are typically fast-paced, have site-specific issues and different store layouts, which benefit from our expertise in strategic procurement planning.
We work collaboratively with our retail clients, ensuring that our service is tailored to their needs. Often each store in the programme is at a different stage in the intervention process, and a flexible, agile approach ensures progressive and smooth workflow through to completion. Our years of experience and speed of responsiveness to the ever changing retail environment ensures we deliver best value for a multitude of work streams and programmes.