Retailers look to facilities managers and property directors to make operational cost savings across their estates. What tools are available to help in this tough economic climate.
With The British Retail Consortium describing the latest UK retail sales figures as ‘miserable’, there seems little reason for festive cheer on the high street. Despite widespread discounting the High Street failed to stop retail sales falling by 0.4% in November from the month before
And with well-known brands such as Barratts Priceless Group going in to administration, placing the jobs of nearly 4,000 individuals at risk and outdoor specialist Blacks Leisure looking less and less likely to attract a suitable buyer for its retail and wholesale portfolio, retailers are inevitably looking to other ways of combatting the downward spiral.
Whilst the Mary Portass Review may help to kick start small and independent retailers, there seems little support for large scale operators who shape the high streets of our towns and cities and employ hundreds of thousands of people UK wide.
Cash strapped consumers continue to be nervous and the chancellor’s recent gloomy economic forecast won’t help to boost confidence levels.
Whilst retailers, even stalwarts like John Lewis who are bucking the trend reporting increased sales, are increasingly turning to discounts and promotions to get the tills ringing, they are telling us that to ensure their long term success, they need to focus more heavily on cost and efficiency savings.
With the UK’s annual retail refurbishment and maintenance budget said to stand at £3.2 billion, property costs remain one of the industry’s largest overheads which means that FM and property directors are increasingly under fire to look at ways of reducing spend without impacting on brand.
They are being asked to make savings on key spend areas such as lighting and power but without damaging sales; a real challenge without thinking about the costs and benefits in a structured way.
Retailers with a hunger to expand their square footage to increase sales have an even bigger dilemma – how to roll out new stores for less capex and less carbon at the same time? This balancing of lifecycle costs and impacts during the operation of a property asset requires a bit more innovative thought and a tool set to match.
The obvious areas of cost savings in retail are; energy, facilities management and capital replacement costs. With many retailers refitting every 5 to 7 years during the boom years, during these leaner times there is a need to maximise the life of assets which were previously ripped out.
The focus has shifted to parts of the store such as lighting, air conditioning and lifts, which have a direct impact on sales and footfall but also drive up energy bills.
A facilities manager needs to be able to demonstrate, for example, that investing in LED lighting over fluorescent tubes may have a higher up front cost but the savings both financially and in carbon terms will pay dividends within an attractive payback period .
But we are increasingly being told by FM managers across the country that very few of you have up to date visibility of your entire property estates and maintenance programmes making whole life costing a bit of a guessing game. This forces decisions to be made on capital costs alone and the opportunity to make sustainable life cycle cost savings is lost.
How much money could you save over the whole life cost of one store alone if you had greater visibility over costs and therefore could design, purchase and maintain your stores based on accurate data?
kykloud addresses your issues; you can collate and access data and receive real-time reports on the condition and costs of your entire portfolio or by store by a range of criteria including specification, value, condition and budgets 5, 10, 15 or even 30 years in the future.