19 February 2019
Managing director for ISG’s retail business, Kevin Dengate, has provided insight for a Construction News piece into the shift of the retail landscape, as well as how the industry can take advantage of both online shopping trends and the space race.
“I’ve never been busier this time of year, my order book is very positive,” he says.
“There’s a lot of good news out there and that’s what I get frustrated about.”
ISG remains focused on its customers evolving requirements and adapting to retail’s shifting dynamics, as online sales continue to surge while physical sales decline.
Around a fifth of all UK retail sales are now online, according to latest ONS figures.
As consumers become increasingly savvy, helped by technology, retailers are having to reinvent their model.
The physical store remains important, but many types of shops are becoming quasi-showrooms, as shoppers scan their smart phones for a cheaper deal online.
As a result, the race for warehouse and logistics space is ramping up.
According to the latest figures from construction data provider, Glenigan, the value of starts in this area jumped 21% in 2018, to £1.7 billion.
“After the EU referendum, everything got disrupted but logistics was the first area to come back,” says Glenigan economics director and head of business market intelligence, Allan Wilén.
‘Click and collect’ and home deliveries are also fuelling demand for warehousing and distribution space, he says.
A perfect storm of factors – soaring business rates, subdued consumer spending from Brexit uncertainty and the rise of Amazon and online spending – have resulted in some of the toughest trading conditions for bricks and mortar retailers in a quarter of a century.
But sifting through the gloom, there are bright spots.
Disruption in the grocery sector by discounters Aldi and Lidl has forced the established major players to re-evaluate.
The race for space is well and truly over, at least among the Big Four, but each is tackling the discounter threat in different ways.
And unlike other retailers, grocers have been less impacted by online growth – although they are watching over their shoulder as Amazon muscles in on this space.
ISG has first-hand experience in this area, having worked on developing Tesco’s challenge to the discounters in the form of its new budget chain, Jack’s.
Kevin comments: “It [Jack’s] has been seen as successful by them and they are investing in that area.”
Follow the link to read the full article, ‘Retail reimagined: How construction can benefit in the online era’, which can be found at constructionnews.co.uk. Please note the article may only be available for registered users.