If Britain is a nation of shopkeepers, we may have every right to claim to be runner ups in this league. In our heavily built conurbations, shops seem to be everywhere. More shopping malls are planned for the future as our obsession with investment in brick and mortar shows no sign of abating.
The retail industry in western economies is undergoing dramatic changes in a relatively short period of time and those retailers who do not understand the dynamics that are behind these changes risk being hurt badly.
The UK market is perhaps the best example of changing trends in retail business. Over the last year the UK high streets have seen the demise of famous retailers like Austin Reed and BHS – two retail heavyweights that employed thousands of people.
There are some evolving trends in people’s spending habits that are almost universal. Online shopping is becoming the preferred choice for procuring goods for many who do not have the time or patience to go to physical retail shops – especially if it means an hour or more of driving in heavy traffic and an equally long time trying to find a parking place.
Delivery services have improved immensely in the last few years with both the post office and courier services becoming much more efficient.
But there are other factors that are affecting the turnover of physical retail stores. Social observers argue that today’s consumers are more inclined to spend their money on ‘experiences’ rather than on buying clothes or foods.
There was a time when drops in sales were mainly attributed to a slowdown in the economy. All retailers had to do was to wait for the next upswing when consumers would hopefully spend more of their income in buying goods.
Experiences can range from spending money on exotic holidays, subscribing to a heath resort, or eating out regularly as opposed to buying the latest fashionable clothes or buying more food.
Over the last year the UK high streets have seen the demise of famous retailers like Austin Reed and BHS – two retail heavyweights that employed thousands of people
I believe that this trend has still not established itself so emphatically in Malta as it has done in other EU countries.
We still seem to want our larders and refrigerators full of food and do not mind spending time, including on Sundays, to procure our list of goodies. Looking at the waist lines of most of us is enough proof that spending money on gym memberships is still a low priority for most people. Local retailers often complain about heavy traffic and lack of parking facilities as the main cause behind their declining sales. This is undoubtedly an important factor. But there are other factors that are affecting the bottom lines of our retail businesses. One such factor is over capacity of retail outlets. With so much money sloshing around, most business people first investment choice is to open a new shop in a posh area that is usually not well served with parking facilities.
Brick-and-mortar retailers that have been successful seem to have understood the magic formula of still attracting customers to visit their physical stores. The German food chain Lidl often locates its stores away from the high streets, but in an area that can be easily reached by car and where parking is guaranteed for most of the time.
They also believe in offering good value for money especially for staple goods that are in demand by practically all households.
Other retailers have a mixed strategy that combines the convenience of online shopping with the traditional experience of physical outlets. Very few local retailers have invested enough in e-commerce as is evidenced by the often boring websites on which they promote their goods and services.
No wonder an increasing number of consumers prefer to buy their TV, furniture, and other household goods from eBay or Amazon at any time of the day or night rather than drive to Valletta, Sliema or Mosta risking an attack of road rage only to find a limited choice of whatever one needs. There was a time when an outing to Valletta could be enough to buy most of the things one would normally need from food to clothes or furniture.
Today Valletta’s high street outlets are more involved in providing culinary experiences and selling souvenirs to tourists. Admittedly many find this change as a welcome one. But traditional retailers still fret about their future.
With the proposed building of new residential towers and accompanying retail outlets the risk of a bubble building in the property market is a very real one.
johncassarwhite@yahoo.com