Retail isn’t ready to shut up shop yet

There might not be much call for new shops to be built nowadays but there are still opportunities for architects in the sector

Every weakness is a source of strength. Every threat is a potential opportunity. We’ve all heard that cliché a few too many times for comfort, at business and strategy meetings. But, however much it grinds on the tenth time of hearing, however much it sounds like a line from a trashy martial-arts film, the cliché holds some truth.

Take retail construction. How rubbish must that be right now? Everyone seems increasingly to be buying delivered-to-your-door goods at the click of a mouse. Austerity lingers like a persistent bad smell. 

Added to all this, we’ve slipped down the rabbit hole of Brexit. Who knows if the bottle marked ‘Drink me’ will expand or shrink the retail sector?

Ghost towns

On the face of it there’s plenty to suggest retail is a grim place for construction. A cursory look at the data, both for the retail sector itself and for the construction it generates, provides at best a mixed picture with few reassurances.

Put to one side non-store sales and petrol stations, after the recession hit in 2008 it was the summer of 2013 before any consistent growth returned to mainstream retailing. And, don’t forget, the population was expanding – a good reason normally, you might think, to build more shops. 

But even as growth returned, established traders felt pressure from expanding discounters such as Lidl and Aldi. Sure they opened new shops, but the construction work associated was far less than the industry would previously have seen.

For most retailers, the idea of splashing out on new floor-space was naturally shoved well to the back of the shelf. 

As for existing shops, the Specials must have enjoyed surging royalty payments – given the numerous times their hit Ghost Town provided a pertinent refrain supporting TV images of empty shops and downcast high streets.

The carnage is clear in the figures provided by Local Data Company. They show retail vacancies in Britain swelled from below 6% in 2008 to exceed 14% during the depths of recession. Even today the vacancy figure sits above 12%. There are estimated to be more than 47,000 empty shops in Britain, despite increasing demolitions and conversions. 

Importantly, behind this average and aggregate data are very unsettling figures for some towns. Wigan, Walsall and Newport, for instance, suffer vacancy rates above 25%, according to Local Data Company.

In-store retail sales may be growing again and have been for a while, according to the Office for National Statistics, and there was no instant collapse in the wake of the EU referendum. But spending on construction in the retail sector remains shaky and falling if we look at the construction output figures. In March 2008 annual output from construction of private sector shops in current prices was closing on £7.7 billion. This summer that figure dropped below £4.7 billion. 

What’s more, the level of new orders is low historically. On an annualised basis, orders for private commercial shops, according to ONS figures, is below half what it was before the recession. And since late 2014, after a very subdued recovery, orders have fallen.

SWOT spotting

We can clearly see plenty of weakness and threats. So, where might we find strengths and opportunities?

Have a look at the graph. It’s taken from industry data-provider Barbour ABI figures. It shows both the value of new work let and the number of new contracts for commercial retail work.

Interestingly, while the value of new work does seem to be falling, the number of contacts has been gently rising over the past five years. This tells us at least two things. One is that the scale of projects in the sector is on average falling. It also tells us that there are probably more opportunities for work, especially for smaller architects and consultants.

So there’s the growth in opportunity. And here lies the strength when looked at through the eyes of architects and consultants. The game today is not about whacking up large supermarkets to a corporate spec with a few green whistles and a peal of eco bells.

The job is to make what we have work better. To rebuild the high streets. To rejuvenate and repurpose. And, yes, add in new stores where appropriate. Retailers are having to work harder to get people into their shops and keep them there. It’s not just about shifting stuff, it’s all about the experience. At least, that’s the view in the retail world.

And local councils seeing their high streets deserted are all too keen for this to happen and eager to work with and support those who can turn the tide and bring back vitality to the heart of their towns.

It’s far less than it was about pouring concrete and erecting steel. It’s much more about smart ideas. If you like, more brain, less brawn. That’s where more of the money will go. It’s about creating places that people enjoy, want to visit and are drawn towards.

Now what is it that architects do again?