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Economic worries replace online retail as the number one concern among UK retailers
According to a new survey, the three issues that retailers believe will have the most impact on their business over the next twelve months are macroeconomic factors such as the credit crunch (chosen by 65% of retailers), the growth of online retail (chosen by 59%) and additional retail space coming onto the market (chosen by 42%).
This compares to twelve months ago, when economic concerns were a source of worry to only 31% of retailers and 85% saw online retail as a major issue. However, despite the tightening credit market, nearly eight out of ten (77%) still feel confident about the retail market generally for 2008.The research was carried out by reta
il property consultancy Hartnell Taylor Cook LLP among senior managers at many of the UK's top retail brands, following a similar survey carried out last year.It found that property portfolios are a key concern, with seven out of ten (70%) of those surveyed believing that there is too much retail floor space coming onto the market over the next five to eight years. Again, this compares with 54% who thought that way last year.
In fact, almost nine out of ten retailers (88%) said that they would like, in an ideal world, to dispose of as much as 75% of their current property portfolio. Last year, around three-quarters of those surveyed said they would ideally like to dispose of some of their units, with none wanting to get rid of more than 25% of their total portfolio.
Andrew Bradley, retail agency partner at Hartnell Taylor Cook, comments: “It comes as little surprise that the well-documented credit squeeze is the number one concern for UK retailers. Although the full impact has yet to become clear, it could put a lot of extra pressure on some businesses.”
Last year, only one in twelve retailers (8%) said they could see their business moving to an online-only model. This has now risen to 12% of those surveyed.
Andrew Bradley continues: “Online retail remains a key issue as well. Although some areas of the market will probably always require stores where the physical product can be examined, such as fashion, firms in other sectors such as books and DVDs are already feeling the pinch of internet competition.”
The research went on to show retailers' views on rents over the coming year, highlighting some sharply divided views. Over half (59%) think they will decline but a quarter (23%) actually think they will rise significantly.
Andrew Bradley adds: “The market is much less clear than it was this time last year, so there is a lot of confusion over how it will play out - particularly with regard to rents. The question is whether the credit squeeze will hit landlords or retailers hardest.” Finally, the survey found that some retailers have actually put their expansion plans on hold. In 2007, 100% of those surveyed said that they were planning to acquire additional units over the next year - a figure that has dropped to 94% in the latest research.
Tagged as: property | hartnell
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