#RetailEXPO19: Justin King rejects talk of ‘retailpocalypse’

M&S non-exec director and former boss of Sainsbury’s Justin King says he does not think the industry is in the midst of a “retailpocalypse” and takes a “much more bullish” view.

Speaking at the RetailEXPO in London, he said: “I’m a great believer the numbers should speak for themselves and you should at least focus on the reality rather than hype around it.”

King believed that e-commerce has not been as much of a disrupting force on the industry as it is often made out to be.

He said: “If you look at total retail market it is £360bn, about £60bn of that is online, and that is the thing we hear the story about, but that means £300bn is still in shops, and that is almost exactly the same it was ten years ago.

“The retail environment we grew up in has been an up escalator. When an escalator stops it is quite disorientating and that is broadly what has happened in retail.”

King argued too much media attention is devoted to the amount of empty retail space because more retail space is being created in large developments such as Westfield, while redundant retail space is almost impossible to take out of the system because of planning regulations.

“In four of the last ten years there has been net increase in retail space in the UK and in the last two years, one saw an increase and the other a decrease,” added King. “It is certainly not the apparent crisis of closures all over the place.”

King pointed out that online sales only make up about 6%-7% of the total food market in the UK, and while this is twice as high a percentage share as other markets, the press make it out to be much more important than it is.

King argued that perceptions have been skewed because online-only retailers are subsidised by shareholders giving them “risk capital with no return,” while e-commerce businesses also benefit from an “unfair” business rates system and are using the so-called gig economy to avoid National Insurance and other associated employment costs.