A new report from the KPMG/Ipsos Retail Think Tank discusses this shift, and trade bodies and retailers are often referring to the trend, but is there evidence that supports this theory?
Using data from the Office of National Statistics (ONS) and GlobalData we can see that over the past decade (2008-2018) consumers have spent an extra £150 billion on leisure activities, but only £50 billion more in retail. And in retail, the majority of this increased spending has gone on food, which is an unavoidable spend as it is a necessity to live.
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It is in the discretionary non-food sectors that retail is losing out. Over the decade just £11.6 billion extra was spent on non-food products, and with only marginal price inflation, it is the increase in population that is driving growth while spend per head growth is negative.
Therefore, there is good reason for retailers to be introducing leisure experiences into their stores as they seek to drive footfall and give consumers a reason to visit a physical store rather than resorting to the convenience of online shopping. But this does require retailers developing new skills – or outsourcing to specialists in order to introduce these complementary services. And they still have to invest in their stores and staff, and produce compelling products and propositions in order to benefit from the cross-selling opportunities they hope to create in this scenario.
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