Page last updated at 00:09 GMT, Thursday, 26 November 2009

The UK's High Streets after Woolworths


Life after Woolies: Wellworths revisited

By Edwin Lane
Business Reporter, BBC News

After nearly a century at the heart of Britain's High Street, Woolworths finally admitted it was bust and called in the administrators a year ago.

For many it was a defining event of the credit crisis and a clear sign of the impact the recession was having on the real economy.

"Woolworths' demise sent some real shockwaves through the retail industry," says Greg Hodge, a retail analyst at Planet Retail.

"First, the nostalgia that the general public have towards Woolworths is huge, and secondly, if we're honest, there were a lot of worse retailers out there that were still in business."

But a year on, the lasting impact of Woolworths' demise is more difficult to determine.

Competitors benefit

There is no doubt it has been a tough year for retailers. Woolworths might be the best known High Street casualty of the recession, but since January more than 10% of retailers have gone bust.

Names such as Zavvi and MFI are among those that have ceased trading in recent months.

For the former competitors of Woolworths, however, the demise of the country's former eighth-biggest retailer has proved to be good news.

Losing Woolworths was the single biggest change the toy industry had ever experienced
Gary Grant, Toy Retailers Association chairman

Despite racking up debts of £385m last year, Woolies also cleared annual sales worth £2bn, which other retailers are now scrapping over.

HMV in particular has seen its fortunes improve significantly, registering an 18% rise in profits earlier this year.

They have been working hard to target former Woolworths customers with cheaper and more family-oriented products, and have even set up temporary "pop-up shops" in former Woolworth stores in order to shift more stock in the run-up to Christmas.

In the toys market, where Woolies held 14% of the market share, competitors are also feeling the benefit.

"Losing Woolworths was the single biggest change the toy industry had ever experienced," says Gary Grant, chairman of the Toy Retailers Association, and managing director of The Entertainer chain of toy shops.

"Within five weeks there was no Woolworths.

"The toy market as a whole might be down 10%, but those who are left in business are doing better. My business for example is up 25%."

Discount stores move in

Retailers have also been able to take advantage of the sudden access to prime High Street floor spaces at lower prices.

Pound shop sign
Discount stores have moved in to former Woolworths stores

That has helped discount stores gain valuable footholds in prime retail locations left empty by Woolworths.

This year Poundland, B&M Bargains and 99p Stores are set to occupy more than 120 former Woolies sites.

Iceland, Waitrose and New Look are among the other retailers moving in, with more than 60% of the 800 old Woolworths stores now occupied, according to the property consultants CBRE.

"Overall I think it's very sad that Woolworths has gone, but from a business perspective it's been a great opportunity," says Jim McCarthy, chief executive of Poundland.

"Its demise has released a lot of good pitches to other retailers who can expand their businesses. It's given us the opportunity to grow in good locations with larger stores. That's good for our customers."

High Streets suffering

But for many communities in smaller towns and cities the closure of their local Woolworths has been a blow.

Of the 27,000 employees made redundant when the Woolworth shops finally closed their doors in January, some have found employment with Woolworths' replacements.

Poundland alone says it has hired more than 250 former Woolworth employees to date, taking advantage of their experience and knowledge of local markets.

Others are still searching for employment in one of the toughest jobs markets in a decade.

Their High Streets are also suffering thanks to Woolworth's role as a driver of trade.

"Woolworths' absence has dragged some High Streets down," says Mr Hodge.

"I can think of a few towns where Woolworths was the main footfall driver.

"Now that it's gone other shops aren't seeing that footfall because people don't have the reason to go to the high street any more."

'Love affair'

Mr Hodge also adds that other retailers are not seeing the rise in sales you would expect from the demise of a competitor because the majority of Woolworths' sales were "impulse purchases" not catered for by competitors.

The British public had a bit of a love affair with Woolworths for all its faults
Andy Latham, Alworths managing director

That is a view shared by Andy Latham, former head of Stores and Concessions Development at Woolworths.

This month he opened the first of a new chain of stores called Alworths, recreating the Woolworths experience.

In total five Alworths stores are expected to be open before the end of the year.

"In years gone by, Woolworths was the centre of the local High Street," Mr Latham says.

"I believe there's still a customer demand for that sort of local High Street retail."

That follows the reopening of the Dorchester branch of Woolworths under the name Wellworths earlier this year.

The Woolworths name itself, meanwhile, lives on in the form of

Mr Latham is optimistic about the success of these enterprises.

"The British public had a bit of a love affair with Woolworths for all its faults," adds Mr Latham

"Many people didn't realise how often they used it until it was gone."

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Woolworths stores across the UK
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