Special report: Can Norfolk’s high streets survive?
14:00 23 January 2013
We may be in the middle of a big freeze, but it is the collapse of several leading high street names which might send a real shiver down the spine of the British economy. How can the high street survive and prosper? Business writer Ben Woods reports
But even the veterans of the retail world will have recoiled in recent weeks as they watched enduring high-street brands succumb to the ever rising popularity of the internet and online shopping.
The biggest casualties came in a triple whammy when more than 9,000 jobs were put in jeopardy as HMV, Blockbuster and Jessops called in the administrators this month.
All three firms directed their blame towards a shift in culture that saw them losing out as shoppers bought or downloaded online, or ordered from internet retailers like Amazon.
The announcements darken an already murky landscape for the high street, which is already struggling with tough trading conditions caused by the sluggish UK economy.
But for a bustling retail-hub such as Norwich, should these recent developments be cause for concern?
The city’s shopping districts are held in high esteem for their healthy mix of independent shops and high street chains, which have elevated it to a top ten retail destination in the country.
And in the fall-out of the festive season, some of Norwich’s leading retailers, including Jarrolds, Debenhams, John Lewis, House of Fraser and Next, have all posted strong high-street results.
But in many cases, these impressive retail performances have been coupled with a surge in online sales.
Department store John Lewis reported like-for-like growth of 13pc for the five weeks to December 29, while its online revenues were up 28pc thanks to its click and collect service, which allows customers to order a product online and collect it from their nearest shop.
But looking at the national picture as a whole, high street retailers have experienced an even worse Christmas than previously expected.
According to the Office for National Statisitcs (ONS), retail sales volumes fell 0.1pc between November and December, while online retailing volumes grew 1.6pc month on month – accounting for 10.6pc of all retail sales in December.
It begs the question: is there still a future for the bricks-and-mortar shop amid an ever-increasing world of online shopping?
Stefan Gurney, director of Norwich’s Business Improvement District, is adamant that there is.
He remains unconcerned for Norwich despite the growth of online shopping, and believes high profile stores are still eager to come to the city.
“We have a stronger retail offering then Ipswich, Cambridge and Peterborough, and people from those areas are looking to come to Norwich. That is testimony to how the city is working together in terms of its planning, businesses, retailers and landlords. It is about getting people into the retail areas such as the Lanes, Timberhill, and into the national high-end stores like Cath Kidston, which has recently come to Norwich.
“We are finding that a lot of stores do want to come to the city. After all, why would Marks and Spencer invest £50m developing their site Norwich, and John Lewis invest £7m in their store, if it wasn’t a viable offer?”
Mr Gurney’s forecast comes as Norwich experienced a dip in its footfall figures in December, with the customer count of 1,920,889 down 249,000 on 2011.
But he believes the 2012 figures provide an unfair comparison to 2011 where shoppers chose to buy presents in December because October and November were plagued by snow.
Meanwhile, John Copestake, retail analyst at the Economist Intelligence Unit (EIU), believes a transformation of the high street is inevitable.
In the EIU Retail 2022 report, he stated that shops were likely to become little more than “showrooms” as people look at a product in a high street store before buying it on the internet.
“The high street may no longer be a place where transactions are primarily made,” the EIU report states. “But it will continue to act as a channel for consumers to see, touch and try out goods – even if they make purchases using other means.
“A recent survey by Capgemini across 16 key markets saw that over half of all respondents felt that, by 2020, shops would operate as little more than showrooms.
“Shops that currently fall victim to ‘showrooming’ will need to take measures to ensure that footfall does translate into sales.”