The Retailer Autumn Edition 2021

THE RE TA I L ER

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RETAIL UNLOCKED: STRATEGIES FOR A NEW FUTURE

Karen Johnson Head of Retail & Wholesale Barclays Corporate Banking

O ur latest Barclays Corporate Banking thought leadership report, Retail Unlocked, has revealed major changes in consumer habits in the period since the easing of lockdown restrictions – and the innovative ways in which UK retailers are responding.

As 42% of respondents overall – and 55% of over-55s – say that in-store is their favourite way to shop, clearly a role remains for the physical store. However, only 25% of 18-24s favour the physical. Generation Z’s digital preference will surely dictate channel strategy in future. It is already influencing the strategies that retailers adopt to entice this generation into stores. The preference for the physical shop looks set to endure for some time, with 40% of our respondents predicting that they’ll be shopping more in-store a year from now – potentially when they are fully vaccinated and feel safe to do so. Perhaps the sharp generational divide –with 47% of over-55s planning to step up their in-store shopping but only 32% of 16-24s – again reflects Generation Z’s loyalty to digital. Physical stores remain an important part of the plans for 37% of retailers. In fact, against the backdrop of well-publicised high-street store closures and brand collapses, 33% of businesses with 50-249 employees that we surveyed said they plan to open new stores. Since reopening, 52% of retailers report an increase in average spend, by an average of 9% on two years ago. This could be due to impulse shopping, such as people purchasing new furniture forwelcoming guests back into the home or high-value items such as jewellery to wear for special occasions. It could equally be indicative of the additional sur - plus income that consumers have to spend on items they have been considering during the lockdown. Shoppers also showed an appetite for a bargain, with reduced or on-offer items proving the most popular product type. Retailers report a similar story, with increased demand for on-offer items and value/own label items – with some responding by launching new affordable own-brand ranges.

Through a survey of 306 senior retail managers and over 2,000 consumers, our study shows how innovative UK retail businesses are building back better to meet the challenges – and opportunities – of a reshaped, and revitalised, retail landscape.

The return to the high street is spurring retailer confidence

Following the reopening of non-essential retail in April 2021, and as restrictions continued to ease across the UK, consumers embraced, to some extent at least, the physical shopping experience. Just over half (51%) of retailers in our survey reported an increase in footfall over the survey period following reopening, by an average of 4%. Thanks to vaccination rates, and redoubled retailer efforts, the solid majority (69%) of shoppers said they felt either safe or very safe to shop in-store. The over-55s – possibly due to being fully vaccinated – felt marginally more comfortable than other age groups, yet 60% of 16-24s still felt safe or very safe. Retailers have reassured shoppers with high hygiene standards and rigorous health and safety protocols, increased cleaning and mask requirements.

Our research shows that UK retailers could fuel demand for nearly 17,000 local high-street premises over the coming 12 months.