Helping Retailers Navigate Turbulent Times

It’s no secret that times are turbulent for retailers as we are see well-established, high street names shutting their doors on an almost weekly basis.

The ongoing weakness of the pound, business rates increases, inflationary pressures, the National Living Wage and other staff costs are challenging the bottom line. In addition, the new General Data Protection Regulation (GDPR) will impact how retailers use and retain customer data.

Retailers with oversized estates or cripplingly unsustainable rents will be seeking closures on mass via a CVA, or conversely retailers in stronger positions may seek piecemeal closure of underperforming sites to bolster their bottom line.

“Closures are sensitive and despite retailers often having large, sophisticated procurement operations, estate closure programmes can often require additional capacity and pace” says Danny Reddock, Procure4 Property Specialist. “Conversely, as some fall on hard times, others may see opportunity. Sites may become available in locations which have been on the location planning target list for some time. Retailers may now focus on their core estate in terms of refresh and refurb as oppose to expansion. Regardless of the overall estate or brand strategy, structured and strategic procurement can support and deliver real value”.  

Procure4 outline five considerations for retailers seeking store closures:

Exiting the Lease

Whichever exit route is chosen by a retailer, costs for professional fees and advice can increase rapidly.  Managing legals, conveyancing, estate management specialists and various other consultants can become daunting.


Dependent upon the route taken and the lease, retailers may be liable for dilapidations. In most instances selecting the right consultant team is the most critical decision. Following dilapidations protocol while commercially validating and challenging the dilaps’ schedules is highly recommended.  

‘Making Good’

Once reinstatement of alterations has been assessed, the requirements to ‘make good’ either the removal of fixtures, chattels or an integral part of the building can drive substantial costs into a closure project. These are likely to include demolition and removal of all partitions, ceilings, fixtures, equipment joinery, signage and installations. Plus, the disconnection and removal of all redundant power, data and lighting.

Cost Recuperation

With the removal of equipment there may be an opportunity to recoup some costs. Without a recycling plan in place retailers could be walking away from a potential cost offset. Scrap metals and catering equipment can be sold on, while newer, high cost equipment can be swapped for like across a retailer’s estate to reduce the planned capital burden.

Stock Management

Stock will need to be de-merchandised and removed from site to be returned into the distribution network or moved to other sites. For larger sites this can be a large logistical operation, especially when closures span large estates.

“Retailers are likely to have well established property supply chains” says Danny “the question is, are they set to deliver a closure in a cost-effective way? Pre-existing agreements, schedule of rates and processes are unlikely to be aligned to closures. Taking the time to review existing arrangements can take time but can deliver significant benefits and reduce the overall cost burden significantly. Through clearly defined scopes, structured rate cards and the implementation of governance and controls these costs can be managed effectively”.

You will be surprised at how quickly we can create real value for your organisation through People Powered Procurement. Click here to contact us today.