Date 14 February 2011
Eamonn Sonner is the principal of Langleybury Properties and advises a number of high street retailers. Jacqui Button talked to him about the current state of the retail market, its prospects and its success stories.
Where do you see the retail market going in 2011?
An obvious answer but some retailers will do well, others will struggle and some will stagnate. Successful companies are those who add value in the eyes of the customer. Essentially they are selling what customers want and are doing it better than the competition. Overall though, in terms of the retail market’s share of UK GDP, I think it will stagnate.
What are the current issues and challenges facing retailers?
The biggest issue is supply side inflation. Transports and energy costs are rising and the cost of commodities such as cotton and certain foodstuffs are higher. Retailers are seeing their costs going up and so their margins are affected. There are obvious risks in trying to pass these costs on to the customer but some increases are inevitable.
Who do you think are the current retail success stories?
The first is Tesco’s. I think they’re a fantastic retailer. They deliver what the customer wants and they’re imaginative. They have expanded abroad successfully and they’ve changed their offering and formats to make themselves even more attractive to the customer. Sainsbury’s appear to have turned a corner also. Waitrose are also doing well by widening their geographical spread and broadening their market appeal with the introduction of their Essentials range.
On the high street retailers such as Fat Face, White Stuff and Steamer Trading seem to be expanding as well as the coffee shops. On a smaller scale and away from the multiples I think localism is making a slow comeback, especially for delicatessens and specialist and/or top end retailers but only in very selected locations.
If you could act for or do a deal with any retailer who would it be?
On a personal level Apple Stores because I like the notion that you can go in and try out all the gadgets. Their shops are bright and lively and serve as a showcase for their products. On a broader note I think that outdoor retailers such as Cotswold and Mountain Warehouse are success stories waiting to happen. Just as sportswear became fashion back in the 80s outdoor wear is becoming fashionable now and appeals to people as casual clothing
What do you think about the retailers we have blogged about namely John Lewis and JJB/JD Sports?
The JJB/JD situation is interesting. JJB in recent years has been eclipsed somewhat by Sports Direct. If JD do takeover JJB do they could reposition the JJB brand to the higher level of JD or lower the JD brand to take on Sports Direct? Do they rebrand the enlarged group or retain both brands? It will be interesting to see.
John Lewis is a benchmark retailer. Their reputation and service is excellent. Their business model of being partner owned is different but seems to work. Having said that, it’s easy to pigeonhole the whole retail sector and say all retailers should strive to reach John Lewis’s standard of service. I think that’s an easy statement to make but can be patronising to the customer. Generally people know what to expect – they don’t expect a John Lewis level of shopping experience at a value retailer. That is not meant to excuse poor service by the way but just to put some balance into a topical debate.
Eamonn can be contacted at Langleybury Properties 60 London Road, St Albans AL1 1NG www.langleybury.co.uk es@langleybury.co.uk Tel 01727 798150 or 07976 265396 (mobile)