Don't Write Off The High Street

Published in Investing on 14 February 2012

New research suggests youngsters love going shopping.

In 10 years' time, real bricks-and-mortar shops will have ceased to exist, our once-great shopping centres will be boarded-up empty shells inhabited only by rats and pigeons, and we'll be buying everything by pushing magic buttons on our computer keyboards.

The high street, you see, is out of fashion, going the way of flares and tank tops. And the young people of today, with their magic phones and iPads, want nothing to do with it.

There's plenty of evidence to back up that scenario as well, with our stores enjoying 10% less footfall than three years ago, and a few old favourites struggling badly -- HMV (LSE: HMV) came so close to bust, Game Group (LSE: GMG) is having a torrid time and sales are struggling at Argos, owned by Home Retail (LSE: HOME), just to mention three of those that are still standing.

Wrong!

But if you believe all that, you could be badly wrong. At least, that's what a recent study by Saatchi & Saatchi suggests.

The advertising agency asked 1,500 young people about their attitude to shopping, and found quite the opposite, with 78% of the respondents having been out shopping on the high street in the week before the survey.

The same kind of loyalty is perhaps not in abundance these days, with 63% saying they just go to buy stuff, and 46% reckon they don't have any emotional attachment to the shops they visit. But that's perhaps what we should expect youngsters -- who will mostly want to appear independent and free-thinking -- to say.

Another theme that came from the survey is that many young people would be interested in starting a high-street business of their own, with social venues being a popular choice. Again, their choice is perhaps not surprising, but it does suggest there may be a gulf between shopping and socialising that needs to be bridged.

New prospects?

Is there a new generation to come that will be better at integrating commerce with fun, and getting the best combination of online facilities, in-the-flesh social interaction and the actual selling of real stuff?

Well, I'm too old to understand what young people want, but whenever I venture warily into my local shopping hot spots, the great majority of people milling around look to be under 25.

So this survey might just be on to something, and it may well be too early to write off the future of the high street.

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Comments

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blackwhite 14 Feb 2012 , 3:55pm

Window shopping or 'hanging out' is what most of them do. In an age when unemployment in that age bracket is the highest ever and their parents aren't exactly raking it in and providing it through the Bank of Mum and Dad, they don't have lots to spend.

As is the case most of the times, statistics lie in this case.

Theirs is not the 'spending demographic' sadly.

vinchainsaw 14 Feb 2012 , 4:18pm

I dont necessarily believe we are witnessing the end of the High Street. That would be silly. Things like clothes will always need bricks and mortar because you need to try it on!

What I do think we are witnessing is the end if the business model whereby a generic product can be sold at a premium simply because you're selling it from a bricks and mortar establishment.

As for the study; I take anythign published by an adveritsing company with a pinch of salt...

Vikingdon1 15 Feb 2012 , 5:28pm

Many of the younger element are not just window shopping.

They often go to the high street to examine and try items they are thinking of buying.

THEN THEY GO ON THE INTERNET TO BUY THEM !!!!

jaizan 15 Feb 2012 , 10:29pm

People shopping do not generate profits, people BUYING do.
The earlier comments summarize the problem nicely.

Actually, it's not a problem, considering the only retailers I own are ebay & Sainsbury. My holding in Greggs does require footfall on the high street, but all the window shoppers are hardly going to order their pasties on line, so there is hope.

BrnzDrgn 16 Feb 2012 , 9:46am

So with high unemployment for young people where are they getting the cash to do this shopping from? And Students are not so flush since Universities started chanrging silly amounts of money to study. The online retailers willl be raking it in as previously mentioned, and they might not be the mainstream brands you would expect.

Jade1670 16 Feb 2012 , 4:38pm

Please note there is a spelling mistake on the 6th line of this article it states
'Game Group (LSE: GMG) is having a torrid time and sales are struggling at Argos' I believe this should be horrid time?

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