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Independents are to the future of high streets, says analyst

01 March
10:59 2012

The openings and closures of all retail and leisure outlets in the top 500 town centres in 2011 shows that independents opened three times more stores (15,233) than the chain stores (5,094), according to a recent report by The Local Data Company.

2011 was also a turbulent year in these town centres where 12,669 independents ‘shut up shop’ and the chains closed 5,268 units resulting in total closures of 17,937.

The net change (openings less closures) was positive as independent occupied units grew by 2,564 (+2.4%) whilst multiple units declined by 174 units (-0.25%).

These changes mean that independents now account for 66% (+1%) of all retail and leisure units in Great Britain.

Comparison goods retailers were hardest hit with the sector as a whole showing minimal growth of 0.45%. This growth was solely as a result of the independents growing by 1.2% whilst the multiples shrank by 0.2%. Key growth areas for the independents included auto and accessories, charity, pet shops and pound shops, and fashion and general clothing. However florists and garden, menswear and sports, toys, cycle shops and hobbies showed a decline.

The strongest sectors were within convenience and service retail where the independents led the way with a 2.9% increase in the convenience sector and their largest increase of 5% in the service sector. In the hotly contested convenience sector it was off-licences that showed a massive increase of nearly 12% whilst the multiples shrunk by a whopping 28%, primarily off the back of Oddbins closures.

The service sector has seen independents grow within the credit union/pay day loan sector but most significantly in the hairdressing, health and beauty sector. Nail bars of which 95% are independents have grown alone by 16.5%. One interesting difference between the independents and multiples, in light of the depressed housing market, is that independent estate agents grew by 3.2% whilst the multiples shrank by 1.6%.

After the comparison goods retailers, it is the leisure sector that has been the second weakest performer with a small increase of 1.3%. Yet again though the growth is being led by the independents at +1.7% whilst the multiples show a tiny improvement of 0.1%! Within this sector it has been bars, pubs and clubs who have been hardest hit be it the independents or the multiples. Restaurants, café and fast food are where the independents have really made their mark with an increase of 2.2% whilst the multiples showed no change. In part this could as a result of the multiples having already saturated these top 500 town centres along with McDonalds, KFC and others look to expand to edge or out of town where they can pick up vehicular trade.

Matthew Hopkinson, director at the Local Data Company, said: “This report shows how significant independents are to the future of our high streets particularly now as chain stores reduce their numbers. It also challenges the common view that independents are an endangered species being killed off by supermarkets and the internet. In many towns they are the mainstay and are at the forefront of the move for communities to keep spend local in their economy by supporting the local independent businesses.

“Given the right conditions, support and opportunity independents have the greatest potential to reinvigorate many of our failing high streets. The choice lies with us as shoppers to physically visit and spend our money in these outlets and the independents who own them to work harder than ever before to deliver the personal service and unique offer that the internet and large multiples struggle to achieve.”

Richard Hayhoe, marketing director at wholesaler Palmer and Harvey, said: “On high streets across the UK, new convenience stores, newsagents and independent supermarkets are all setting up shop. The bigger high street chains have been pulling out of high-streets, creating a vacuum. Entrepreneurs – often operating as a franchise or symbol retailer – are moving in to service consumer needs, offering not only the usual corner shop fare but bakery, deli and butchery – taking their place on a high street they’d traditionally been priced out of.

“The independent convenience sector is performing well due to a number of factors; people are shopping little and often as they eke out funds until pay day. As fuel goes up people shop much closer to home, not wanting to use their car when they could nip around the corner.

“Changing demographics have meant that there are rising numbers of single households and working parents and these, coupled with the UK’s long hours culture, all fuel the convenience sector.“

Source: The Local Data Company/Palmer and Harvey

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