From now to Christmas, pop-up shops will start to appear in towns and cities across the UK. Here, Clive Lewis, head of enterprise at ICAEW, looks at the phenomenon and how businesses of all sizes can take advantage
What are the main financial advantages of pop-up stores?
Pop-up stores are a low-cost way of testing a product or service in the marketplace whilst still keeping costs and commitments low. They can also test if a location delivers sufficient numbers of customers into the shop.
How much easier will it be for businesses to explore these opportunities following the government’s removal of the restrictions on setting up in vacant premises?
In future, landlords will be able to temporarily change the shop use for up to two years before having to apply for permission. Previously, landlords had to apply straight away for change of use causing delays to the shop being made available and significant costs.
Do you think that pop-up stores are a viable solution to reinvigorate the UK’s faltering high streets?
There is no one solution to the reinvigoration of the UKs high streets which have been under increasing threat from online and out-of-town shopping. It has resulted in increased numbers of empty units – UK shop vacancy rates are around 15%, according to The Local Data Company’s monthly barometer. However vacancy rates in many town centers in the North and Midlands are now approaching 30%.
The ideal is for high streets to offer a good mix of different types of business but for that to happen, town centres have to be affordable and attractive places to trade. The Department for Communities and Local Government has a project to ‘re-imagine urban spaces to help re-vitalise our high streets’.
And the private sector is contributing too. StartUp Britain has an initiative called ‘PopUp Britain’, which has a temporary shop in Richmond which will be occupied by promising small enterprises for two weeks on a rolling basis. All of these start-up retailers already run online businesses, but none of them have the financial clout to take on a shop single-handed.
What advice would you give to businesses looking to explore these opportunities?
If you want to try a retail outlet in a new location, pop-up shops can provide the means of doing this at a lower cost and with less commitment than signing a lease from day one. The novelty value of pop-up shops can help sales, but you still need to do the basic business preparation. This includes the following:
• Research the footfall of the proposed location. Decide whether the area has potential to attract new customers
• Check what other businesses operate in the area and whether they are potential competition. If there is competition, ask how to differentiate your business.
• Check the proximity of the premises to customer parking and how customers can collect items purchased.
• Think about deliveries of goods into the premises.
• Negotiate with the landlord about the terms
and conditions of the tenancy – the term, the rent, etc
• Consider how much you need to spend on refurbishing the shop to appeal to customers.
• Get quotations for expenses such as insurance, rates, etc
• Prepare an advertising campaign – local media opportunities, leaflet drops, local newspaper inserts, etc. Consider developing a website and use of social media to drive traffic to the website and the shop.
• If you need to raise finance, prepare a business plan using the research and preparation to demonstrate to finance providers that you are maximising the potential of the business.
Getting ready to start a business always takes longer than the owner thinks possible. So when planning, start from the scheduled opening date and allow sufficient time for each of the above activities with a contingency for the unexpected.