Retailers set to relocate out of major city centres as consumers plan to “shop more locally”

One-in-five retailers are planning to move stores out of major city centres and into local high streets within the next 12 months, as 63% of consumers claim they will shop more locally, according to new data from e-commerce operations provider Brightpearl.

Aside from the major shift to online shopping, one of the main changes in spending habits since Covid hit has been the switch to more local shopping and a move away from the high street.

Brightpearl’s research predicts a 67% drop in city centre retail footfall over the next year. In light of these trends, retailers told Brightpearl that they will have to drastically adapt their own models to adjust to the new normal.

While almost one-in-five retailers (18%) plan to move stores out of major city centres and into local high streets, another 40% are undecided on whether to follow suit.

Brightpearl CEO Derek O’Carroll said: “Customers have relocated online of course - but they’ve also relocated to the suburbs and the rural towns and that’s reflected in our emerging shopping habits. Retailers need to respond to these changes and our data suggests many are already making plans to move stores to high street locations with increasingly strong foot traffic."

The research by Brightpearl, a digital operations platform (DOP) for the retail and wholesale sector, also says that 24% of retailers are planning to close physical stores in 2021, while 30% of fashion brands say they expect to close stores this year. To a large extent, that’s likely to include a whole raft of stores that were underperforming even before the lockdowns forced the closure of all non-essential retail.

The main closures will also affect sports and leisure brands, with 50% planning to close stores, while 25% of home and DIY and 36% of electrical firms will also be pulling the shutters down on their stores this year, according to the research.

As consumers remain closer to home due to the coronavirus pandemic, retailers are closing stores, switching online, or planning to move their city-based bricks and mortar outlets into local high streets in the near future.

In a bright spot, 62% of retailers expect e-commerce to fare much better than the rest of their business over the next 12 months.

The survey also reveals that 6 in 10 retailers are now planning to switch their retail focus primarily online next year to take advantage of the huge shift to online shopping since the onset of Covid.

More than a third of retailers (37%) plan to launch a new website or introduce new ecommerce channels this year in a bid to attract more online shoppers.

The majority of Brits (65%) are now buying things online more than normal, according to the study, and 8 in 10 shoppers (81%) are expected to increase online purchasing over the next 12 months.

Almost half of shoppers (45%) are now buying things online that they only previously bought in-store and 38% of buyers are less likely to shop in-store than they were before Covid.

Amazon is set to be an even bigger winner over the next 12 months, with 55% of consumers saying they will use it more in 2021. However, 30% of shoppers say they do feel "guilty" about abandoning physical stores for the ease of Amazon.

O’Carroll added: “Our study shows some big shifts as our work-at-home patterns intensify. Over the next year, retailers are going to have to up their digital game to meet growing online demand, and the expectations shaped by our new buying patterns.

“Some savvy companies are already looking into adding local collection points to their online delivery offering to capitalise on customers’ increased preference for local shopping. It’s a fulfillment strategy that makes a lot of sense, but requires slick operations to pull off successfully. It’ll be those brands that are prepared to adapt to this once in a generation retail transformation that will see the most success long-term.”

The survey from Brightpearl polled 1,000 retail brands and 2,000 consumers from across the country to identify how retail is transforming in 2021 as a result of the Covid crisis.