Retailers will cut the size of their stores as internet shopping gains ground, predicted Dixons boss John Clare. Speaking at a Property in Business Conference last week, he said: “All of the increase in retail sales in the past three years in the UK has been online. Retail store sales have gone down. More physical space is not what many retailers will want.”
Indeed, he warned landlords that demand for retail space was likely to “reduce significantly” as internet retailing continued to explode.
He asked, “I wonder who will develop the first internet pick-up point park ““ as opposed to retail park.” Mr Clare ““ who is chief executive of DSG international (DSGi), the parent company of Currys, Dixons.co.uk and PC World ““ added: “My message for you in the retail property sector today is that life is going to get more difficult from now on.”
Three years ago, he had said internet sales would account for 10 per cent of his group’s UK electrical sales “˜eventually’, “Over 60 per cent of our customers to stores today have visited our websites first. The threatened revolution of the internet bubble of 10 years ago, is now here.”
He warned the conference, which was organised by the Confederation of British Industry and the Investment Property Databank, that UK landlords should back shorter leases, index-linked rent reviews, transparency in service charges and monthly payment schedules if they wanted to foster growth.
He added that upward-only rent reviews and a lack of flexibility were among developments that had made it increasingly unattractive for UK retailers to stay in prominent retail sites.
Press release from ERT Weekly