Re-shaping of high streets inevitable but opportunities abound
THERE is no doubt the retail sector is under significant pressure at present due to major shifts in how consumers shop and their expectations from the industry.
Online retailers have grown at an exceptional rate over the past two decades and although that growth is beginning to tail off, the trend, coupled with increased demands from consumers to source products quickly, means the face of retail has changed forever.
For some retailers, the developing demands have played a significant part in their decline or ultimate failure and there has been no shortage in the number of headlines over recent years pointing to the demise of household name retailers.
In recent months, Toys R Us, has closed its four outlets in Northern Ireland as it shut down its entire 106 store network across the UK. Meanwhile, electrical retailer Maplin has admitted it plans to reduce its number of shops after it fell into administration. Most recently, Poundworld has gone into administration with 335 stores across the UK now facing closure.
The findings of the most recent Royal Institution of Chartered Surveyors and Ulster Bank Commercial Market Survey confirmed that the number of store closures in Northern Ireland is increasing.
Considering the UK as a whole, 5,855 UK high street shops have closed over the past year, with fashion and footwear outlets being the hardest hit according to statistics compiled by The Local Data Company.
It is not a new trend and illustrates that the re-shaping of our high streets is now an inevitability.
However, the challenge presents huge opportunities for retailers and the owners of commercial property in cities and town centres across Northern Ireland.
Innovative retailers are now embracing a range of omni-channel methods to provide customers with a seamless shopping experience, whether they're in a physical store or shopping online or via a mobile app. This has placed bricks and mortar stores at the heart of the omni-channel experience and reaffirmed the longevity of physical retail units.
Meanwhile, units traditionally used exclusively for retail are increasingly being let to alternative occupiers with Northern Ireland's coffee culture in particular helping to reduce local vacancy rates.
In the last month alone, Bob and Berts and Tim Hortons have taken up space on Belfast's Fountain Street in units formerly occupied by retailers.
The changes are not just being seen on the high street however. We are also experiencing increased demand in the industrial sectors as a direct result of consumers' evolving shopping habits.
The rise in e-commerce means that demand for warehouses, particularly below 50,000 sq ft, has increased as online retailers seek sites to store their products at a place where it can be conveniently couriered to the customer with minimal delay.
Activity in the industrial sector is expected to intensify this year while it is also anticipated that shop vacancy rates in prime pitches will be largely unaffected, despite the headlines, proving the high street, although changing, is here to stay.
:: Declan Flynn is managing director of Belfast-based commercial property agency Lisney, which works on behalf of many of Northern Ireland's most significant investors and developers as well as major retailers and businesses.