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‘Commodity retailers’ hit most by rise of online

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Childrenswear and commodity product retailers have seen the biggest decline in store numbers over the last five years, according to new research by property company CB Richard Ellis (CBRE).

The research also shows that since 2004 commodity retailers (sellers of books, music, games and DVDs) have seen the biggest migration of trade from bricks and mortar stores to online, as the strength of the high street declines.

Between 2007 and 2010 childrenswear store numbers fell fastest of any retail sector, down by 43.4 per cent, whilst music and video shops dropped by 38 per cent and photographic goods outlets declined by 29.2 per cent.

According to CBRE, 45.5 per cent of music & video sales and 18.9 per cent of book sales were made online in 2009 compared to 9.1 per cent and ten per cent respectively in 2004.

Jonathan De Mello, Head of Retail Consultancy for CBRE in the UK, said: “Online sales have risen dramatically in recent years, to an estimated 10.5 per cent of total retail sales in the UK, according to the Office for National Statistics figures.

“The rise, alongside supermarkets’ increasing provision of non-food items, has been the key driver of the decline in store numbers of retailers selling commodity items.

“Over the last five years, online has grown its market share of these retail categories, showing that there is a clear correlation between the growth of online sales and the store decline in particular retail categories.”

Retailers which were late to offer online services and have heavy store portfolios in these most affected sectors have faced the most difficulty, with recent results from Game, HMV and Comet demonstrating this.

Greengrocers, butchers and off-licences have also seen a large decrease in store numbers during the study period, 21 per cent, 20.7 per cent and 14.9 per cent respectively, as supermarkets have expanded and dominated local trade.

Some sectors have thrived in the new marketplace however, with emerging technologies and value for money becoming a major draw for customers.

De Mello continued: “Some retail sectors have actually increased store numbers over the last three years as online retailing has risen; namely mobile phone shops which have grown their store footprint by 27.5 per cent, and charity shops with a 17.9 per cent increase.

“Retailers trading in these categories have capitalised on the high vacancy rates seen in secondary centres, in order to increase their coverage of the UK market.”

Published on Thursday 20 January by Editorial Assistant

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