Music News

Rough Trade MD talks market trends, new stores, and the future of indie music retail

Rough Trade managing director Lawrence Montgomery has spoken to Headliner about the state of the independent music retail sector, the potential for more UK-wide stores, and what the future holds for the market.

A recent US report indicated that vinyl record sales surpassed CD sales in 2022, with 41 million vinyl sold in the US compared to 33 million CDs. This trend has also been in evidence in the UK, with reports showing that record sales reached £116.8 million last year – 18.5 million more than from CDs.

To find out more about where the UK indie music retail market is headed, Headliner sat down with Montgomery to talk trends, the impact of streaming on physical retail, and more…

Rough Trade recently reported that it had experienced a 20% increase in footfall. What has been driving that growth?

We’re still seeing a bit of reaction to Covid, so there is a bounce back to what we might call pre-pandemic behaviour. That’s likely to be a factor. I think it’s probably the first decent period of time where there hasn’t been much media attention or concern regarding Covid, so people not only feel more comfortable to go out shopping, but are also wanting a bit more of a real connection, which fits with the increase of vinyl sales overall.

Have you seen growth in younger customer embracing vinyl?

It’s impossible to say with any accuracy in stores because it’s purely anecdotal. But people would say we are seeing a broader range of ages and we can see form visits on our website that there is growth amongst younger customers which is really good to see. We are still seeing growth in older age groups as well, but there is greater growth amongst 18-24 and 25-34, so that’s really pleasing to see. It’s a broad church and we see a broad range of customers with regard to age and gender demographic.

Another thing we are seeing amongst younger customers is that the younger the age group the more even the gender demographic is, which is really encouraging. It’s good for the market to see younger customers engage more.

We track our market share week-by-week, and in 2021 we had about 7% of the market share, and so far this year we have about 9.5% so we’re growing within the market. And what’s really good to see is that the indie sector is growing well as w whole. Indies represented about 22.5% of the market in 2020 and last year represented about 28%.

Do you plan on opening any more Rough Trade stores in the UK?

We are always keeping an eye out for markets where we think we can add something. We don’t feel we have to be a brand that has 30, 40 stores across the UK. We work really hard on ecommerce to make sure people in other locations can still have a really good experience. And we’ve been doing what we call out stores, which is where shows that are usually done in the shop are taken to external venues. We want to add to a community, so we’d feel nervous about going somewhere that already has a really strong independent record shop because we respect that community and don’t want to take demand from somewhere else. That limits a few cities.

Also, we aren’t under pressure to open more stores. We’ve had sales growth of 15% this year and that’s without opening new stores or new channels, it’s just incremental growth. But having said all of that, we think there are probably half a dozen cities that would be perfect for a Rough Trade.

We’d want to make sure that any stores we do open offer the full Rough Trade experience. We’re really proud of what we’ve done in Bristol and Nottingham because both of them are as big as our store in East London, both of them have significant venue spaces. We work really well with the local artist community, not just doing the shows we put on, but also putting on a lot of local shows and community events. Being frank, particularly off the back of the pandemic, it would have been easy to open a bunch of Rough Trades in shopping centres or relatively simple stores without the live experience, but we decided not to do. If anything, that is more important outside of London, because we want to make sure those communities aren’t getting a reduced version of what we do in London.

How crucial has that in-store experience become for the Rough Trade brand and its success today?

We work really hard on it. Events are the most obvious way of doing that – last year we did over 800 events across three and a half stores. Our West London store does some events, although it is very small. But we have three full event spaces, so the volume of events is amazing. We sell our tickets through Dice and last year we were their number one by ticket volume promoter on the app in the UK.

Beyond events, on the third lockdown during the pandemic, we took a decision to re-layout all the stores and we’ve put a huge focus on making sure availability is stronger. The way people are buying is changing, which is largely because of streaming, as it’s a lot easier for people to discover things.

We’re also a real living wage employer, so we try to do our bit for the staff, and make sure they have a good environment on the shop floor, and that they have all the support they need to give a great customer service.

In addition to that, we’ve been doing a lot of listening parties this year – we’ve done that for Lana Del Rey, Boy Genius, a couple of others, and they have been really well attended by people wanting to hear the albums before they come out.

Are you surprised at how well the indie sector has performed since streaming became the dominant mode of music consumption?

There are two things that are important. The first is that with independent stores you have really talented, passionate people who are innovating and trying to do something special for their customers. And a lot of those stores have been doing that for years and have adapted to market conditions. S, in a way that’s not surprising.

The second thing is that comparing streaming with buying a record is unfair on both, as they are completely different products. When I was growing up, I would have to buy CDs for £10 a pop, and you had to take a punt and invest quite a lot of money, whereas now you pay your £10 a month and you can check things out. That’s almost like a utility. But that is completely different to buying a record. What that purchase means is totally different to streaming, so it isn’t a fair comparison.

What does the future hold for the indie music retail sector?

Well, there are pressures on growth because of manufacturing issues. There has been a lot of investment in increasing capacity which is good, but it’s not easy to scale it up. Frankly, if someone said to me 10 years ago that the vinyl market would be where it is today, I’d have been very, very happy. It’s gone beyond what anyone could have expected. For Rough Trade we want to continue to bring the best experience for the customers, be that online or instore. We’ll continue to look at how we can do that and listen to the customers and represent that.

One thing we are noticing at the moment is that you’re getting huge markets through streaming services with artists that don’t have any physical distribution. The amount of services that are now open to artists is amazing, so they don’t have to go through the usual major label route. For example, we were speaking to a band called Men I Trust who have 7.5 million monthly listeners on Spotify, have done it all themselves without a label, they are doing a European tour, and they have sold all their LPs through Bandcamp and direct to customer. We are seeing this with loads of artists. It’s really interesting. A bit like streaming was back in the day, you initially see it as a threat because you can’t even get hold of these records. But at the same time there are lots of instances where ewe can give some value to the artists, we can bring them to the Rough Trade audience and expose their records to a bigger audience. I can only see that continuing to increase because there are more and more tools for artists to release their music outside of the usual routes.