WILKO COLLAPSE DOES NOT SPELL THE END FOR THE HIGH STREET
Published 16 August 2023
Administrators have given potential bidders until today (Wednesday) to put forward a serious offer for the homewares store chain Wilko, and if nobody comes forward, the company will go into liquidation and disappear from our High Streets, taking out some 400 stores and 12,500 retail jobs, writes Nick Williams.
It is not the first chain to get into difficulties, and it won’t be the last, so is this another nail in the coffin for bricks and mortar retail?
To answer that question, you have to consider why such enterprises fail. Whilst we don’t know the reason for the fall of Wilko, in general terms retail businesses suffer for one or more of several reasons: failure to adapt to changing retail trends; the ongoing cost-of-living crisis eating away at their customer’s spending power; challenges from disruptive new competitors; and excess exposure to debt, especially in an era of rapidly-rising interest rates.
Despite all this, there are plenty of retail businesses which are thriving. These are the ones which really understand their customers and their changing needs, and above all which have grasped that retail is no longer about simply selling goods, but more about providing experiences.
It is notable that most of the high-profile failures have been big chains, while many of the success stories have been smaller, more agile businesses.
Value retail – the market where Wilko operates – is performing well in the current economic climate. But even here, prospering is all about adding in that experience which gives customers a reason to go in-store, such as Aldi’s famous ever-changing centre aisle.
In Norwich, despite some obvious large-scale voids such as the former Debenhams and Top Shop buildings, occupancy levels remain relatively strong, and footfall has recovered well. In The Lanes area of the city, there are few voids, and these tend to let well as individual, niche operators step in to offer something which cannot be found so easily online.
It is very tempting to view yet another high-profile retail chain collapsing as evidence that physical retail is doomed. This is simply not true; Britons still love shopping, and still seek interesting and different retail experiences, away from the convenient but ultimately stale world of online shopping.
There will be further casualties among operators who have failed to adapt, or who have taken on debt and are finding it difficult to service at a time when interest rates are rising and margins are being squeezed. But overall High Street retail is certainly here to stay.
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