The fact that life is online now, and that almost all household
expenditure goes through the web, is now cast in stone, for time
being anyway. The change in consumer spending can be summed
up by the following reports>
“It’s a trend that’s moving very quickly. You don’t necessarily want
to be in the business of owning shopping centres at the moment.”
No kidding Mr Blackley…….
The BBC News website and the Retail Gazette recently extensive
articles and reports on the dramatic demise of shopping centres
and malls. Dead or dying High Streets, zombie retailing – the clichés
were wonderfully employed.
Retail Gazette quoted some very heavyweight financiers – APAM
Asset Management. They reckoned that there were as many as 200
– yes, two hundred - shopping centres that were financially on the
edge of business existence. A prominent and nationally operating installer friend of mine
put it this way in nicely earthy language, “I am not that old, but
I remember Woolworths going out of business in the late 90s
and look recently at BHS and the House of Fraser going down the
plughole - massive names in retailing. As an installer I am so alive to
the change in my customers buying habits. You don’t a PhD in ‘The
Blindingly Obvious’ to realise the game has changed. I think it is a
matter of concentrating on the ‘new’ and not wasting time on the
old ways. They are gone.”
Asset management firm APAM estimates that hundreds of shopping
centres worth around £7 billion are in danger of breaching debt
covenants. This number has reportedly increased by 75 per cent
since last year, as falling market values and increasing numbers of
CVAs butcher the sector. We made our own decisions several years ago. Then, about 30%
of our total sales were through the distribution route to market.
That is now around 15% and that is with distributors which are
geographically and strategically placed to deliver - direct to the
installer.
Retail Gazette reported that APAM’s executive director Simon
Cooke said this was in part due to lack of reinvestment by private
equity owners, with the average shopping centre in the UK having
changed hands or been refinanced three-and-a-half years ago. The
BBC News report quoted Retail Gazette and also added in its own
experts. It is not difficult to envisage that with just a few years that the
big brand names will be aiming everything they’ve got direct to
the end-user/consumer. But it may well be at the expense of the
installer, who may well have to work on an iron-clad fixed price
basis which may not be the true value of the job.
Mr Nelson Blackley, from the National Retail Research Knowledge
Exchange Centre, said the growth of online retail in the UK - on
sites such as Amazon - had been faster than in almost any other
retail market in the world. The demise of “major anchor stores” like
BHS and Toys R Us and the rise of online shopping has caused a
“downward spiral”, said Mr Nelson Blackley.
“If the major anchor store moves out, that has a halo effect on
other stores in that centre. It’s a downward spiral and you can’t
fill shopping centres with nail bars and vape shops.” Mr Blackley,
who is based at Nottingham Trent University’s Nottingham Business
School, pointed to research in the Financial Times that suggested
about £2.5bn worth of shopping centres and retail parks are up for
sale in towns and cities across the UK.
Some of this marketing is unofficial and not in the public domain,”
he said.
We have chosen our route many years ago and have continued
during all those years to fully and total commit to the installer as
our partner – we have stayed connected. Others may try to ‘re-
connect.’
But it is the installer that is our future and we see nothing on
the horizon likely to change that – after all, all gas fired products
must, by law, be installed by a fully qualified Gas Safe person.
And that means that the individual must have a high level of
expertise and ‘Yes’, we deal with specification and consultants, but
that is inevitable on commercial sites which require design and
engineering services. engineering savvy…. which is what installers
have….
And one final thought - maybe there are even more changes on
their way, this time in the manufacturing arena?
For more details on RINNAI products visit www.rinnaiuk.com