As if retailers didn’t have enough to worry about. Last year a not entirely welcome US import was introduced to the nation’s shopping calendar: Black Friday. The discounting bunfight – a phrase used advisedly – has been borrowed wholesale from the US, where it ties in with Thanksgiving, but in the UK shoppers managed to add their own twist with much televised footage of fighting in the aisles for the best bargains.
In search of steady trade
Despite enjoying a strong performance across Black Friday and Christmas, John Lewis boss Andy Street was moved to reflect: ‘This is the first year that the Black Friday week was the peak week for us, even bigger than the pre-Christmas week. That was a new phenomenon. My honest view is that overall it is not in the industry’s interest to focus so much trade on to one day. You want more steady trade and obviously you want more of it at full price.’
In the period immediately after Christmas and holiday sales, a number of ailing retailers usually go to the wall or get snapped up, and 2015 has been no exception, with fashion chain Bank in administration and USC bought out of administration. Department store group Beales is in the midst of a takeover, Evans Cycles is a possible target for Sports Direct and BHS may well go up for sale.
Against such a backdrop and the ongoing impact of e-commerce, retailers and shopping centres are investing in making their retail destinations more of an experience, hence the huge rise in food and beverage offers and entertainment, most notably the upcoming KidZania to be opened in a newly-created space on the roof of Westfield London. At the same time, store chains are under increasing pressure to bolt down costs.
Yet innovation is not always easy to implement in what remains a surprisingly conservative market. ‘We have started to use LEDs but we are very selective about their applications,’ says Dean Laurent, purchasing manager for utilities at fashion group Arcadia, best known for its flagship Topshop brand. ‘We have nine brands, each with its own distinct image, so it’s about getting the right look and feel for each. To introduce an all-LED store would be very difficult because we would come under a lot of pressure if customers didn’t like it. So instead we have specified them for specific areas, such as above the escalator wells.’
Laurent says this is a restrictive approach from an LED perspective, but adds: ‘Because you can’t prove the sales benefit, you have to argue your case to the directors. At Topshop we are all about being big and bright, so that’s the driving objective. We have 2,400 lx using T5 and we blanket light the store so merchandise can be moved around by the visual merchandising teams. It’s certainly hard to envisage doing an all-LED store at the moment and we wouldn’t do one for the sake of it.’
Driven by lower energy bills
Paul Nulty, practice head and founder of Paul Nulty Lighting Design, says that lower energy use remains the driving factor in retail projects, but that does not necessarily mean switching to LEDs. ‘It’s horses for courses,’ he says. ‘It tends to be about refurbishment rather than new stores and not necessarily only LEDS, although they are prevalent. What we’re really focusing on is increasing the lux per watt, rather than the super-high contrasts we’ve seen at some store chains over recent years. We’re looking at high to low contrast ratios down from 30:1 to more like 5:1.’
The other issue is payback time, which must to fit with the standard cycle of a lease. Once upon a time, UK retail leases were 25 years but that duration has plummeted over the past decade and is more typically five to 10 years today. ‘About 90 per cent of our estate is leasehold, typically for less than 10 years. We can’t talk about 20-year life cycle costs,’ affirms Andy Francis, property sustainability consultant at DIY retailer B&Q. ‘We have been steadily upgrading the estate, but perversely that creates its own barriers to new equipment, because the more modern the building and the more efficient the lighting, the bigger the savings have to be to justify the capital write-off.’
Nulty agrees and says most retailers rarely look beyond three years for a store fit-out, negating longer equipment payback periods. ‘That’s why metal halide still has its place, as sometimes the payback period is too short for LEDs,’ he says. ‘Metal halide is still a great lamp for retail and even now I feel that LEDs lack that sparkle. I’m sure that will change in time and certainly we’re seeing clients far more discerning about the quality of LEDs they want now compared with a couple of years ago.’
Environment, meet commerce
One of the biggest retail proponents of LED lighting is supermarket group Sainsbury’s, and head of sustainability Paul Crewe reiterates that environmental improvements must go hand-in-hand with commercial imperatives. ‘We have a corporate dedication to what we are doing and stretching targets,’ he says. ‘However, I make no apologies for stressing that our energy reduction andenvironmental initiatives have to be commerciallybased.’
Many of the technology-led strategies have come through Project Graphite, which Crewe presented to the board showing the potential for huge energy cost reductions as ‘the hook’ that let him implement many of his proposals. ‘I am passionate about LED lighting,’ he says. ‘Lighting accounts for 20 per cent of our energy use and through LEDs we can reduce that by 59 per cent. My plea is for innovative technology companies to come forward with ways to further reduce carbon emissions. If it’s commercially viable, then we’re happy to adopt it.’