Store Locator | Contact Us:+44 207 730 4000
Free UK Shipping on all orders over £100 until 31/10/14

Retailers, Landlords, Government...Sharing risk in a post Covid world

Posted on August 20, 2021 by Justin Rhodes | 0 Comments

Elliot Rhodes Store

Let me start by being saying I am an eternal optimist when it comes to retail.

In spite of the increasing shift to online shopping I remain a firm believer that there is still a place for traditional bricks & mortar stores.

This is not to say that Retail does not need to evolve, but so long as it does it will  offer something that online shopping cannot...notably a personal, consultative, immersive experience that is fun, engaging and memorable.

Does this mean that retailers can justify operating as many outlets as previously? Unlikely -  some retail traffic has been lost forever to the Internet so we have to accept that the landscape has changed. Consumption patterns have changed too...what people spend money on today is not what they spent it on 20 years ago, much more is spent on experiences (food, concerts, entertainment) and there is also increased awareness of our responsibility to consume more consciously and sustainably, this means quality over quantity.

That being said the stores that exist will be even better than before - they have to epitomise all that is great about an in-person experience.

Where the landscape has to change to make retail viable is in the pricing structure of traditional retail property and the relationship between landlord, tenant and the government too. Covid has accelerated the need for a rapid reassessment of how in particular city centre property is valued and a new model needs to emerge that spreads the risk fairly between all parties.

In the case of London, there is an enormous disconnect between property  value and potential revenue. Ever rising rents do not correlate with reduced footfall and expenditure. Rates, the bain of a retailer's existence, is an arbitrary tax on each and every location irrespective of sales or profitability.

A new model where the risk is shared between all interested parties has to be the way forward. Seeing the swathes of empty retail locations across London is a sad sight. Covid bears some of the blame but not all, the old model was broken long before Covid arrived.

There are retailers both existing and new who would love to open stores and start the process of creating Retail 2.0 - bringing life back to our cities as well as employment.

All of this is particularly poignant for us at the moment - we are about to close  one of our London stores. After 10 years our lease has ended and without a restructuring of the rental cost, review of the rates payable as well as greater flexibility in the lease, the risk of continuing is simply too great. The deck is stacked one way only at the moment.

It's a shame as we would like to have another store and we know we have a viable retail business - but we just need a fair chance of being successful to make it worth our while to take the risk. I know we are not alone.

At least we have our store in Covent Garden...for now onwards and upwards!

Posted in 2021, business rates, government, landlord, lease, property, retail, shopping


Previous

Leave a Reply

Comments will be approved before showing up.

JOIN TO RECEIVE EXCLUSIVE OFFERS BY EMAIL Why should you sign up? - You’ll be the first to know about our new product launches - You’ll receive first priority access to our seasonal sale events - We’ll send you exclusive discount codes to spend online and in-store - We’ll regularly update you on the latest trends and how to wear them