5 minute read
Retail Opinion - John Ryan explores the concept of ‘clustering’ retail brands
The benefits of buddying up
With prime retail locations demanding a premium, there’s a case for toy shops to buddy up with a larger retailer and take advantage of their floorspace and readymade footfall, says John Ryan
It’s something of a truism that it’s been a tough couple of years. We’ve seen large businesses go to the wall, a sharp drop in GDP (and now, apparently, a pretty steep rise of the same) and a lot superstores. Now take a moment to consider Next, which is gradually morphing from being a clothing retailer to a quasidepartment store in which everything from Paperchase of people fearful about what the future holds. cards to a cup of Costa coffee are available.
And among all this turmoil there have been the retailers. This is On the face of it, you might struggle to understand why the group that has been worried from the moment they were told anybody on an Asda food shopping mission would take a to shut their doors. As a shop, selling toys or anything else, how do moment to buy some paint brushes and a few tins of paint. you make money if you’ve been told you can’t open your doors? But they do, and there are benefits for both parties. For the Well, now you can open them, but the point about the intervening host retailer, excess space is quickly (and profitably) used up period is that people have got used to remote shopping and when and where they might have had to spread themselves thinly, they do head into stores, they expect more. such retail husbandry becomes a little less urgent.
This might seem to point towards better, but fewer, stores - as For the tenant (because that is what the shop-in-shop owner there will be those for whom home shopping is now the everyday is) there is the benefit of being part of an organisation that has norm and the idea of stepping across the threshold of a physical reliable footfall and is in a winning location. store is in some ways rather strange… dangerous even. The real point, however, is that the whole All of which means there are fewer stores overall and landlords may well be looking to capitalise on their best locations. In a somewhat counter-intuitive moment, the closure of a large number of shops across the country may even mean that the best sites “ By putting several retail brands under is a lot bigger than the sum of the parts. By putting several retail brands under one roof, a destination is created of the kind that will attract shoppers who might not normally frequent the players, were they to trade on their own. are more in demand than ever. ‘Prime is prime’ is the one roof, a So what about toy shops? Could they be mantra chanted by those in the retail property world, and practically this tends to point to getting the destination is part of this form of clustering - and would host stores welcome them? Probably, for no most out of places that are in demand. created of the better reason than that keeping a big space For retailers this means that while they may wish to be in a particular shopping centre or in the middle kind that will filled and making it meaningful for the shopper is a challenge, and hope does tend to spring of an in-demand high street, they may struggle to attract eternal when it comes to new ideas in retail. afford the rent. Yet having to settle for second best might seem a poor move. So what is to be done? One answer is clustering. If shoppers who might not A toy shop in a hypermarket then? Of course, there is precedent for this, as evidenced by Sainsbury’s store in Selly Oak, Birmingham, rents in prime locations are on an upward trajectory, normally which boasted a Chad Valley (owned by the the chances are good that those already in such favoured places may opt to take smaller units when frequent the grocer) toy space when it opened in 2018. Now transfer this line of thinking to your toy store the time comes for rents to be reviewed (which does players, were and imagine whether it might flourish in an seem to happen with ever-increasing regularity). There is also the question of how much space they to trade environment of this kind. Or perhaps it might work in Next. The fashion retailer has a large you actually need to make some kind of retail on their own kids’ clothing department and on this reckoning,
statement that will chime with shoppers. ” a toy shop might fit in as part of the mix. The answer is: probably less than you In truth, there is almost nothing that currently trade from, and this being the case, there is a wouldn’t sit comfortably alongside something certain amount of shop-in-shop action to be had. else, and the only caveat is don’t try to gain entry to a big At this point it’s perhaps worth noting that store that already covers what you do, to some extent. nothing is fixed in stores. Three examples suffice to Clustering makes sense in the current climate. Do it well show what’s happening. Decathlon, the purveyor of and you could find yourself with an arm of your business sportswear and equipment from large edge-of-town in a location that it might not have crossed your mind to sheds, has recently opted to open in small spaces consider. In theory at least, everybody’s happy. And what’s within branches of Tesco; while over the past year DIY the worst that could happen? You pull out again. Surely this giant B&Q has been opening shop-in-shops within Asda must be worth a second glance, at least?
