Dean Murray, retail specialist with Secantor, the network of finance directors, examines the prospects for Nottingham's retail landscape. What can retailers expect to get on Christmas Eve this Year? Unfortunately it could be a call on their cash and assets by their banks and investors.
With a quarter's rent payment due on December 25 and the tills full, many banks will be considering whether it is time to pull the plug on retail businesses before all that cash goes out the door.
I think the new year could bring a flurry of activity, with more retailers facing the same fate as Woolworths. Already, news is coming through of businesses negotiating monthly rental payments, restructuring of loans, and slimming down their workforce, but this is potentially just the tip of the iceberg.
The retail landscape is set to change for ever, as retail businesses fail or slim down and shops fall empty. Are shopping malls destined to be like the ghost towns of old Western films, with the tumbleweed drifting down the empty malls of shopping centres like Broadmarsh?
I don't think it is all bad news, though. Yes, the established retail businesses and especially those with large chains of stores, face the challenge of restructuring and refocusing their business to accommodate the fast-changing economic climate and this is inevitably going to mean shops closing and job losses, but, these changes are also creating opportunity.
There has never been a better time for small and emerging retail businesses.
There is better access to retail space, at a sensible cost, as landlords, who in the past would not have given these businesses the time of day, are suddenly more accommodating when faced with unlet units and falling rentals.
As established retail businesses are shedding jobs, there is no shortage of available retail talent and by the spring the consumer is going to be bored of promotions, clearance and closing down sales and looking for something new, different and relevant.
Also, these businesses can be built around a commercial framework and cost structure which is right for now.
This could potentially mean a whole different look to our high streets and shopping centres, with the space created by retail failures and contracting retail chains being taken up by new and emerging retail formats.
I think both new and old retailers alike will need to be more customer focused and tailor their retail proposition to the needs of the local community in this new age of tighter purse strings, and retail venues will take on a more regional feel.
I don't believe anyone expects us to come charging out of this recession on the back of a debt-fuelled retail boom and recovery is likely to be slow and measured.
Therefore town planners and developers need to consider the impact on future city developments. I expect it will become harder to commercially justify new grand retail developments and be more a case of making better use of what we already have.
What does this mean, therefore, for the future of the 1.3m sq ft extension proposed by Westfield for the Broadmarsh Centre in Nottingham. How much extra shopping space does Nottingham really need?
So what will Santa bring for retailers this Christmas? Well unfortunately a lot of short-term pain and misery as businesses face the fact that they can no longer afford to operate in the way they have in the past, and in some cases cannot afford to operate at all. However, the optimist in me says that out of the ashes will rise the phoenix of a new era of retailing, one full of opportunity and choice for the customer.
