Nicholas Carroll
Associate Director - Retail, Nicholas Carroll has a particular flare for the grocery industry but analyses and writes in-depth reports on a range of UK and European retail markets.

Associate Director of Retail Research at Mintel Nick Carroll, shares his thoughts on the retail industry in 2019 on both sides of the Channel

The story so far…

The UK High Street has faced some well-publicised challenges over the past year. There have been some high-profile failures; retailers are closing stores and much of that is due to the continued growth of online shopping. But if we look closer, the industry is still growing both in terms of volume and value. British retail sales grew by 4% in 2018, only slightly lower than the 4.3% we saw the year before. Clearly ecommerce has an impact: online sales represented 16.4% of all retail sales last year and now they account for 18%, which is particularly high in a European context. The shift to online retail is not only beneficial to pure players – ie the likes of Amazon, it is also the case for more traditional retailers with physical stores.

In France, there is still positive sales growth as well. With a lower share of the market in ecommerce (at around only 6.5%-7%), the impact of online retail hasn’t been as much of a disruption as it has been in the UK. However, there are similar trends in consumer behaviour, such as the shift in grocery buying towards more convenient retailing.

Is the High Street really dead?

The High Street is very much alive! Even in the UK where online sales are up to 18%, £8 in every £10 are still spent in shops.  Retailers need to be realistic about how many stores they need in the new ecommerce era, they also need to understand that stores are very valuable to them, not just as a point of sale. They can be a branding exercise, an experiential exercise, a way of collecting or returning products, or a way of dealing with customer issues. In the next couple of years, there will be a real need for physical stores to offer something online can’t. We already see that in the more premium stores and flagship stores – John Lewis offers workspaces, while Selfridges even has a skate park in the middle of its store! The challenge for retailers will be to understand where buying behaviour is taking place to ensure that it happens with their business and not on a third-party pure player platform.

The challenge of the tech savvy shopper

In the longer term, the continued issue for retailers is the shift to ecommerce and how they react to it. One of the biggest shifts we’ve seen since 2009 has been the adoption of the smartphone. Today, retailers must sell to a new kind of shopper, one who is constantly armed with technology, questioning everything retailers do and say. They are the most informed customers that retailers have ever had the pleasure of doing business with. Their challenge is: how best to engage with customers who are increasingly living their physical life through a digital device?

Opportunity knocks

There have always been opportunities in France since it is one of the largest retail markets within Europe and it is now more open to UK retailers than ever. It has not always been easy though, big retailers such as M&S and Tesco tried in the distant past without being very successful. But over the last 10 years, online retail has broken down these barriers.

French retailers have had much more success in the UK in certain sectors such as beauty and fashion. The online player Sézane, for example, has just opened its first concession in Selfridges. It came to the British market because there was no border to its sales and it had an organic presence in the UK. It is a good story of how even new and smaller brands can move to the UK with a true online first strategy.

Mintel Associate Director of Retail Research Nick Carroll will moderate the retail panel discussion at the UK France Retail Night on 2nd May 2019.