#RetailEXPO19 No 'retailpocalypse' says bullish Justin King

By Kathy Oxtoby

Former Sainsbury’s CEO Justin King has dismissed the idea that there is a ‘retailpocalypse’ in the UK, saying he is “bullish’ about the future of the retail sector - though he thinks that the current distinction between physical stores and online channels is already ceasing to be relevant.

In his keynote speech to delegates at this year’s RetailEXPO [1-2 May] , King said it was “hard to read the press and not to come to the conclusion” that the industry was in decline, particularly following the demise of stores such as BHS, Woolworths and Maplin, and recent store closures by Debenhams.

However, he said that there is still longstanding growth for businesses such as Sainsbury’s, Marks & Spencer and John Lewis, while new retailers were replacing those that had folded. “Out of the ashes of one business phoenix another grows,” he said.

While changes in the sector are as “profound” as they were when he started working in the sector in the 1980s, he said there had been a “tipping point” in the industry in recent years, caused by such factors as austerity measures, wage rises, and inflation being ahead of growth.

Business rates are, he said, “fundamentally an unfair tax and no longer fit for purpose”, and “can’t be part of the landscape in 20 years time”.

As further evidence against the retailpocalypse, King said the “big data” – that there are currently 200,000 retailers in the UK and 300,000 shops - has changed little in recent years “so there is not an apparent crisis”. 

To help fill the gap of store closures, “massive retail developments continue to be built”, particularly in London, he said.

While the grocery sector has seen major changes since he started in retail, such as the end of chains such as Presto and Safeway, the market is driven by convenience through major players such as Tesco, Marks and Spencer and Sainsbury, he said.

And he said there was no sign of the end of the weekly shop, with the grocery market worth approximately £200bn.

Future challenges for internet retailers will be about delivering better “reach, range and transparency”. But for retailers “when you add it all up you need to accept the UK is the online playground for the world”, he said – pointing out that some playgrounds include bullies.

In the future, said King, there will be “no such thing as the idea of the high street”. And he called for recognition that “the distinction between the internet and stores is [becoming] unclear - they will all blur into one”.

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