COMMERCIAL
SectorS The latest official data on sales volumes shows large retailers doing significantly better than convenience stores, so it’s ironic that it is the convenience sector taking the lead on openings of new stores. Iceland will continue to expand with
plans to open up to 30 more stores. The company enjoyed double digit growth in sales after opening 74 outlets in the year to end-March – 51 on Woolworth sites. Asda’s ongoing purchase of 193 Netto
stores will expand its smaller store formats. Currently, the deal is under scrutiny by the Office of Fair Trading, but the plan is to convert as many of Netto’s stores as possible to the small format. 2010 has seen high profile closures.
GAME is reducing its stores from 677 to 550 by the end of 2013. This follows the earlier closure of a number of stores, along with 25 Debenhams concessions. Not quite game over, but a poor result. Mark Bowles, Property Director, HMV
Group said, “The continuing trend of increasing vacancy rates is a cause for considerable concern and will have a significant effect on the vitality of town centres across the UK. While some retailers consolidate their
operations to a smaller number of larger stores which are more cost effective to run, the majority of high street retailers are not in the position to do this. There are positive signs that some
regions are bucking the trend, but as retailers now face an impending increase in VAT and cuts to the public sector, the outlook for many towns and cities across the country will remain challenging to say the least.”
Summary The positive sales volume figures exceeded expectations in the retail markets, giving succour to the view that the recession is well and truly over. However, much as one might wish otherwise, that optimism is not born out on the ground. This data shows vacancy increasing in a majority of centres and, more worryingly, particularly in those centres where the budget and job cuts proposed for the Public Sector will begin to bite. Combined with the increase in VAT in January, this will likely be a double blow for the big retail centres in the North and Midlands particularly.
36 OCTOBER 2010 PROPERTYdrum
Waitrose continues its elegant march across the UK... as does Poundland So far this year we have avoided the big
retail casualties such as Woolworth and First Quench, but it is clear that some continue to struggle - often in the face of increasing online sales. It is interesting to note that the GAME closures are in reaction to strong online competition and retailers such as Confetti plan to move online entirely. Notwithstanding an overall gloomy prognosis for the retail sector, there are some shafts of light. In the South, vacancy rates, while significantly above those seen at the peak of the market, are less problematic with centres such as Bath, Guildford and Henley on Thames all continuing to improve.
Central London continues to be strong and Wales too has seen
falling vacancy in Cardiff and Swansea. The big convenience retailers like
Iceland and Asda continue to make opportunities out of the weak market and value retailers like Poundland are also making hay. Meanwhile, Waitrose continues its
elegant march across the UK with new stores opening in Storrington, Anglesey,
Ashbourne, Melksham, Meanwood (Leeds) and East Cowes on the Isle Of Wight, to name but a few. The key to a healthy market will be in
the maintenance of this good news throughout the whole of 2010 and 2011. Matthew Hopkinson, Business
Development Director at The Local Data Company commented, “Our latest report shows the reality of a slowed but still rising increase in shop vacancy rates across the country. Whilst some centres, particularly Central London and the South East are showing stabilisation or improvement, others in the provinces are not. “The impact of the VAT increase, public
sector cuts and fierce competition within the ‘multi channel’ retail environment make it increasingly hard for shops on our high streets. In light of these new and fast growing ‘off the high street’ channels, will we ever need these vacant shops again? For those that survive, service, quality of offer and price need to be their values in order to ensure they can thrive.”
For further information visit:
www.localdatacompany.com
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Asda has bought 193 Netto stores to expand its small store formats – OFT permitting.
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