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UK Town Centre Retailing | Verdict Channel Report

  • February 2014
  • -
  • Verdict Retail
  • -
  • 108 pages

Summary
Town centre returned to growth in 2013, the first time it grew since 2007, with growth set to strengthen in 2014 at +1.0%. This improved performance will be driven by the more needs based sectors, such as food and grocery, and the growth of fixed price retailers. Food has been especially buoyant as retailers have developed their convenience offer more and customer do more smaller, top-up shops.

Key Findings
- Gain a greater understanding of the major issues set to impact town centre over the next five years. How can you capitalise on these changes?

- Use our winners and losers and sector analysis sections to benchmark performance against the market and your main competitors. How do you stack up?

- Shape future expansion strategies by comparing town centre against neighbourhood and out of town across a number of metrics.

Synopsis
The momentum that begun in 2013 will continue up to 2019 and we forecast that growth through town centre will overtake out of town in 2018. Again, the needs based sectors will drive this robust performance. However, growth will be muted by home entertainment such as music and video and books as these sectors shift irreversibly towards digital.

Two areas which shopping centre should use to drive footfall is leisure and offering free Wi-Fi. With a robust leisure offer, centres can attract shoppers during weak periods like the summer. Free Wi-Fi is increasingly becoming an expectation among shoppers and can be used to collect data.

Central London has retained the top spot in Verdict's Top 100 Town Centres despite recording a lower score. As well as its significant catchment area, it is also supported by a below average vacancy rate, and more affluent shopper, it is supported by tourist spend and its iconic shopping locations such as Oxford Street, Covent Garden, and Harrods.

Reasons To Buy
- How does town centre compare to other physical channels in terms of sales and space growth and sales densities over the next five years?

- One of retail's major winners during the downturn, how do we forecast pound stores will perform over the next five years?

- Which town centres are in this year's Verdict Top 100 Town Centres and Malls?

Table Of Contents

UK Town Centre Retailing | Verdict Channel Report
Table of Contents
1 Overview
2 Key Findings
2.1 Town centre achieves strongest growth rate since 2007
2.2 Will become second strongest channel by 2018
2.3 Shift toward digital set to impact certain high street sectors severely
2.4 Central London continues to reign supreme in top 100
2.5 Fixed price retailers set to support the channel
2.6 Wi-Fi set to become more important to shopping centres
3 Sector Trends
3.1 Fixed price retailers - the saviour of the high street?
3.2 Fixed price retailers are winners on the high street
3.3 Fixed price retailers capitalise on higher vacancy rates
3.4 Shifting perceptions of pound stores sees customer base widen
3.5 Changing perceptions will help growth to continue, even as the economy improves
3.6 Fixed price retailers continue to have aggressive expansion plans
3.7 Fixed price retailers partially sheltered from online
3.8 However, town centre planners must ensure a strong overall retail mix
3.9 Government intervention
3.9.1 Impact of changes to rates and parking policy remains to be seen
3.9.2 Capped increases are still happening on a high base year
3.9.3 Proposed savings from small businesses will not help weak retailers
3.9.4 Relief on long-term vacant units only a marginal positive
3.9.5 Relaxing car parking rules alone will do little to help
3.9.6 Town centre policy should focus on improving offer and service mix
3.9.7 Making it easier to change the use class of vacant units will help the high street
3.9.8 Councils should take the lead in supporting the high street
3.9.9 Retailers need to add value to their stores to encourage repeat visits
3.1 Shopping centres offer leisure activities to drive footfall
3.10.1 Leisure activities are important in driving footfall
3.10.2 Leisure can support an offer during historically weak periods
3.10.3 Hosting community events can boost footfall too
3.10.4 Creating retailer tie-ins with events supports both the centre and retailers
3.10.5 Exhibition centres can also be used to support retailers
3.10.6 Retailers still need to encourage shoppers to spend
3.11 The use of mobile phones is a greater consideration for shopping centres
3.11.1 More centres are introducing free Wi-Fi
3.11.2 Free Wi-Fi is becoming more important to shoppers
3.11.3 Free Wi-Fi offers a number of advantages to centres
3.11.4 The collection of data offers a greater insight into customers
3.11.5 Data gathered from the centre via mobile must be protected
3.11.6 Free Wi-Fi increases the chances of showrooming
3.11.7 Easy access and robust security are other considerations
4 Strategies for Success
4.1 Driving footfall into town centres is pivotal
5 Top 100 Town Centres and Malls
5.1 Methodology
5.2 Top 10
5.2.1 Central London
5.2.2 Glasgow
5.2.3 Manchester
5.2.4 Birmingham
5.2.5 Liverpool
5.2.6 Nottingham
5.2.7 Leeds
5.2.8 Kingston-upon-Thames
5.2.9 Cardiff
5.2.10 Edinburgh
6 Location Comparison
6.1 Physical retailers set to return to growth yet underperform non-store retail
6.2 Retail sales by location
6.2.1 An improved housing market drives sales through out of town
6.3 Retail spend by location
6.3.1 Food has supported out of town throughout the downturn
6.4 Space by location
6.4.1 Out of town space grows at the expense of town centres
6.4.2 Space growth occurs in neighbourhood for the first time in Verdict's history
6.5 Sales densities by location
6.5.1 Improvement by all channels driven by neighbourhood
6.6 Store numbers by location
6.6.1 Store numbers overall continue to fall, but neighbourhood suffers most casualties
6.7 Channel forecast up to 2019
6.7.1 Momentum within neighbourhood set to continue
6.8 Retail spend by location
6.8.1 Non-store set to drive overall retail growth
6.9 Space by location
6.9.1 Out of town space growth will be strong due to IKEA and grocers
6.1 Sales densities by location
6.10.1 Town centres will achieve the greatest uplift in sales densities
6.11 Store numbers by location
6.11.1 Food and grocery through neighbourhood and out of town drive store growth
7 Sector Summaries
7.1 Books, news and stationery
7.1.1 Shift toward digital will continue to impact the sector
7.1.2 The continued shift toward digital content will cause sales declines to become more severe
7.1.3 The expansion of stationery specialists will counterbalance the decline in books and newsagents
7.2 Clothing and footwear
7.2.1 Specialists slow space expansion and action store closures, benefiting densities
7.2.2 Economic pressures and poor weather keep recovery muted
7.2.3 Space growth remains fairly muted as purchases shift online…
7.2.4 …though click and collect ensures retailers are still investing in physical space
7.3 DIY and gardening
7.3.1 While easing, declines set to remain within sector
7.3.2 Town centre struggles as spend shifts toward other channels
7.3.3 This decline is forecast to continue, though it will ease up
7.3.4 As with sales, space will continue to decline, but will level out as the more resilient retailers remain
7.4 Electricals
7.4.1 Shift to online spend damages town centre electricals sales
7.4.2 Electricals retailers shed stores due to administrations
7.4.3 Space declining faster than sales
7.4.4 Stabilised by 2019 as stores become showcasing medium
7.5 Food and grocery
7.5.1 Town centre grocery sales buoyed by inflation
7.5.2 Steady growth for forecast period
7.5.3 Less than 1 million sq ft added in the next five years
7.5.4 Discounters and value players will expand
7.6 Furniture and floorcoverings
7.6.1 Initial uplift in housing market will not help furniture and floorcoverings
7.6.2 Furniture and floorcoverings has been one of the hardest hit town centre sectors
7.6.3 A recovery in the housing market offers little solace for town centre retailers
7.6.4 Space growth is likely to remain weak over the next five years
7.6.5 Independents should aim to integrate with the community more to aid survival
7.7 General merchandisers
7.7.1 The sector is still feeling the ramifications of Woolworths' collapse
7.7.2 The sector is still reeling from the collapse of Woolworths in 2008
7.7.3 Set to achieve its strongest growth in the past five years in 2013
7.7.4 Sector supported by housing market but muted due to online
7.7.5 General merchandisers must continue to remain relevant to customers in order to survive
7.8 Health and beauty
7.8.1 Positive performance but below total sector
7.8.2 HandB spend through town centre remains resilient
7.8.3 Space growth minimal over next five years
7.9 Music and video
7.9.1 Pre-pack administration of HMV and shift toward online continues to impact sector
7.9.2 A shift away from physical to digital has decimated music and video on the high street
7.9.3 Double-digit declines set to continue until 2017
7.1 Pound stores
7.10.1 Change in customer sentiment and rapid expansion drive exceptional growth
7.10.2 Pound stores have been the success story of town centre retailing during the downturn
7.10.3 The high vacancy rates on the high street have also enabled pound stores to expand aggressively
7.10.4 A slow return to normality should ensure that pound stores remain buoyant over the next five years
8 Winners and Losers
8.1 Summary
8.2 Total sales
8.2.1 Administrations impact Game and HMV greatly
8.3 Operating profit
8.3.1 Robust own brand offer helps Alliance Boots stay top
8.4 Operating margin
8.4.1 WH Smith continues to develop operating margin
8.5 Space
8.5.1 Store openings widens gap between Marks and Spencer and second place
8.6 Sales densities
8.6.1 Growth in electricals keeps Argos at the top
8.7 Store numbers
8.7.1 Wilkinson expands aggressively in the past five years
8.8 Advertising media expenditure
8.8.1 Overall advertising spend falls, despite growth in online promotion
9 New Retail Developments
9.1 Major retail developments
9.2 New openings
9.2.1 Trinity Leeds
9.2.2 New Square, West Bromwich
9.3 Developments in the pipeline
9.3.1 Grand Central, Birmingham
9.3.2 Whitgift Centre and Centrale redevelopment, Croydon
9.4 Stalled projects
9.4.1 Westfield Bradford
9.4.2 Central Village, Liverpool
10 Methodology
10.1 Top 100 town centres and malls
11 Appendix
11.1 Abbreviations
12 Appendix
12.1 About Verdict Retail
12.2 Disclaimer

List of Tables
Table 1: Weighting of factors determining top 100 centres in 2013
Table 2: One to 10 of Verdict's top 100 UK shopping centres, 2013
Table 3: 11-30 of Verdict's top 100 UK shopping centres, 2013
Table 4: 31-50 of Verdict's top 100 UK shopping centres, 2013
Table 5: 51-75 of Verdict's top 100 UK shopping centres, 2013
Table 6: 76-100 of Verdict's top 100 UK shopping centres, 2013
Table 7: Retail location definitions, 2014
Table 8: Retail spending by location at current prices (£m), 2004-14e
Table 9: Floor space in all physical channels (m sq ft), 2004-14e
Table 10: 10 Rows, 5 Columns
Table 11: Store numbers by location, 2004-14e
Table 12: Retail spending by location at current prices (£m), 2014e-19e
Table 13: Floor space in all physical channels (m sq ft), 2014e-19e
Table 14: Sales densities by location (£/sq ft), 2014e-19e
Table 15: Store numbers by location, 2014e-19e
Table 16: Books, news and stationery in the town centre, 2009, 2013 and 2014e
Table 17: Clothing and footwear in the town centre, 2009, 2013 and 2014e
Table 18: DIY and gardening in the town centre, 2009, 2013 and 2014e
Table 19: Electricals in the town centre, 2009, 2013 and 2014e
Table 20: Food and grocery in the town centre, 2009, 2013 and 2014e
Table 21: Furniture and floorcoverings in the town centre, 2009, 2013 and 2014e
Table 22: General merchandisers in the town centre, 2009, 2013 and 2014e
Table 23: Health and beauty in the town centre, 2009, 2013 and 2014e
Table 24: Music and video in the town centre, 2009, 2013 and 2014e
Table 25: Pound stores in the town centre, 2009, 2013 and 2014e
Table 26: Key town centre retailers' UK turnover record (£m), 2009-14e
Table 27: Key town centre retailers' operating profits (£m), 2008-13
Table 28: Key town centre retailers' operating margins (%), 2008-13
Table 29: Key town centre retailers' total selling space (000 sq ft), 2009-14e
Table 30: Key town centre retailers' densities (£/sq ft), 2009-14e
Table 31: Key town centre retailers' total store numbers, 2009-14e
Table 32: Top 12 town centre retailers by advertising expenditure (£m), 2012
Table 33: Major retail developments in 2013
Table 34: Weighting of factors determining top 100 centres in 2013

List of Figures
Figure 1: Fixed retailers' share of town centre sales and growth for fixed price retailers and overall town centre (%), 2009-19e
Figure 2: How the rates will affect the high street, autumn 2013
Figure 3: Use classes that units can be changed to for a two-year period
Figure 4: Events being run over the summer at Bluewater Glow, July 2013
Figure 5: Posters promoting free Wi-Fi at Bluewater, 2014
Figure 6: Screenshots of the Intu Metrocentre app, 2014
Figure 7: One to 10 of Verdict's top 100 UK shopping centres, 2013
Figure 8: Oxford Circus, London, 2013
Figure 9: Artist's impression of new Buchanan Street, Glasgow development, 2013
Figure 10: Trafford Centre, Manchester, 2011
Figure 11: Proposed development of Birmingham New Street Station, 2013
Figure 12: Trinity Leeds, 2013
Figure 13: St David's Centre, Cardiff, 2013
Figure 14: Growth of retail sales by location (excluding non-store), 2004-14e
Figure 15: Share of total retail expenditure by location (%), 2004-14e
Figure 16: L-f-l growth by location (%), 2004-14e
Figure 17: Deflation/inflation by location (%), 2004-14e
Figure 18: Y-o-y change in retail space by location (%), 2004-14e
Figure 19: Y-o-y change in retail store numbers by location (%), 2004-14e
Figure 20: Growth of retail sales by location, excluding non-store (%), 2014e-19e
Figure 21: Share of total retail expenditure by location (%), 2014e-19e
Figure 22: L-f-l growth by location (%), 2014-19e
Figure 23: Y-o-y change in retail space by location (%), 2014e-19e
Figure 24: Y-o-y change in retail store numbers by location (%), 2014e-19e
Figure 25: Books town centre sales (£bn), 2009-19e
Figure 26: Books town centre space (m sq ft), 2009-19e
Figure 27: Clothing and footwear town centre sales (£bn), 2009-19e
Figure 28: Clothing and footwear town centre space (m sq ft), 2009-19e
Figure 29: DIY and gardening town centre sales (£bn), 2009-19e
Figure 30: DIY and gardening town centre space (m sq ft), 2009-19e
Figure 31: Electricals town centre sales (£bn), 2009-19e
Figure 32: Electricals town centre space (m sq ft), 2009-19e
Figure 33: Food and grocery town centre sales (£bn), 2009-19e
Figure 34: Food and grocery town centre space (m sq ft), 2009-19e
Figure 35: Furniture and floorcoverings town centre sales (£bn), 2009-19e
Figure 36: Furniture and floorcoverings town centre space (m sq ft), 2009-19e
Figure 37: General merchandisers town centre sales (£bn), 2009-19e
Figure 38: Health and beauty town centre sales (£bn), 2009-19e
Figure 39: Health and beauty town centre space (m sq ft), 2009-19e
Figure 40: Music and video town centre sales (£bn), 2009-19e
Figure 41: Music and video town centre space (m sq ft), 2009-19e
Figure 42: Pound stores town centre sales (£bn), 2009-19e
Figure 43: Key town centre retailers' sales change (%), 2014e on 2009 (adjusted to calendar years)
Figure 44: Calendar y-o-y change in key town centre retailers' sales (%), 2014e on 2013
Figure 45: Key town centre retailers' space growth (%), 2014e on 2009 (adjusted to calendar years)
Figure 46: Calendar y-o-y change in space of key town centre retailers (%), 2014e on 2013
Figure 47: Key town centre retailers' sales densities change (%), 2014e on 2009 (calendar years)
Figure 48: Calendar y-o-y change in sales densities of town centre retailers (%), 2014e on 2013
Figure 49: Key town centre retailers' store number change (%), 2014e on 2009 (calendar years)
Figure 50: Calendar y-o-y change in key town centre retailers' store numbers (%), 2014e on 2013
Figure 51: Trinity Leeds, 2013
Figure 52: New Square, West Bromwich, 2013
Figure 53: Artist's impression of Grand Central, Birmingham
Figure 54: Artist's impression of Croydon redevelopment, 2013
Figure 55: Artist's impression of Westfield Bradford, 2013
Figure 56: Artist's impression of Central Village, Liverpool, 2013

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