In difficult times, the tough get going

Apr 9 2008 by Mike Birkett for The Journal

With the focus so clearly on the economy – inflation, tighter credit and financial market uncertainty, retail trends are split between the fabric of the high street and cash in tills, says Mike Birkett.

THERE are still requirements for representation in all the region’s high streets. Yes, there is uncertainty and yes, some belts are being tightened, but despite this, requirements are still in the market place.

To what extent “requirements” translate into lettings is open to conjecture, but the newest section of Eldon Square has attracted lettings with John Lewis, Argos, Boots and Starbucks trading, to be followed by Nandos, Greggs and Waitrose.

With families having to balance budgets and prioritise on spending, one would have thought the purchase of high-value goods such as kitchens and expensive furniture could be shelved for another year.

In general the focus will be on essentials rather than luxury goods for consumers faced with escalating costs beyond their control. Items such as council tax, mortgages, utility bills and so on, often rising by 10% or an average £1,400 a year, will have reduced disposable income, which must hit retail sales. However, it is worth speculating that in tough times, the tough get going and it would be interesting to see if there are any lessons to be learned from the music sector. Of all the niche areas in retail, this has had to endure huge pressure on high street sales as a result of internet downloads.

Yet music retailing survives today on the high street, hand in hand with the internet.

One reason is accepting that retailing is constantly evolving, not just because of seasonal pressures, but because business models that worked five or 10 years ago will not work today.

There are business opportunities and marketing techniques to maximise business efficiency even if there is less money about.

Yes, uncertainty in the credit market is unsettling, but it also throws up opportunities to try new strategies, the re-invention of the retailing wheel not just by retailers but by all those responsible for the fabric of our town centres.

Mike Birkett is director of retail agency at Atisreal in Newcastle