RETAILERS face a major challenge to succeed in a "saturated" market
place, a top analyst has said. Mike Godliman, a director of retail
advisers Pragma Consulting, told a major conference of 300 city
centre managers in Manchester that the sector needs to accept that
"the exceptional Christmas" boom period will not last. Mr Godliman
predicted some less successful retailers would "vanish" amid tough
conditions, caused by weakening consumer demand, price deflation in
food and clothes and competition from new retailers. "It is going
to be much harder for some retailers to do well, although that is
not to say that good centres will not continue to thrive." Mr
Godliman said a change in demographics was a major factor behind
the current flat growth in the sector. "We are still in a baby boom
situation, where we have got a falling population now, but a very
large and still growing 45 to 59 age range. This key group is
spending less on shopping but much more on health and education.
"In 1979 we spent 50 per cent of our disposable income in shops,
now it is about 30 per cent." Mr Godliman said retailers'' lives
were not made easier by soaring rent costs. He predicts in the
future there will be fewer retailers operating larger stores. They
will be able to thrive on thinner margins because of a high volume
of sales. "The Wal Mart model is something we are going to see
increasingly. More global players are going to come into the UK."
An adviser to retailers such as The Bodyshop, Arcadia and Monsoon,
Mr Godliman said retailers should "dare to be different" to attract
an ever more powerful consumer. "People are increasingly cash rich,
time poor and less loyal than they were. "Our research says on one
hand people value convenience, but will also go out of their way
for experience." He told the conference that retailers should not
be afraid to be different. "Look at three very successful retailers
- Ikea, Matalan and French Connection - people either love them or
hate them, which proves that being different can work."
