44 DATA
FOOTFALL INDEX June reported a year-on-year growth of 0.2 per cent
in the Experian Retail FootFall Index, the first positive year –on- year performance for a month since January. This year’s increase is largely due to suppressed numbers from last year, when shoppers were staying away from the high street in favour of watching the World Cup matches, so in reality the growth is merely catching up with levels of footfall in 2009. June normally sees increased footfall compared to May as a result of half term week, summer sales and Father’s Day. The pattern continues this year with month-on-month index growth of 2.4 per cent. The start of the month saw record breaking
temperatures, resulting in parts of the UK being officially declared drought zones and despite above average rainfall across parts of the country, towards the end of June drought conditions in the eastern area of England remain. Soaring summer temperatures generally encourage people to spend more time in their gardens or pursuing outdoor leisure activities. The great summer weather generates a feel good factor for consumers but inevitably leaves retailers feeling less good about revenue declines and any rainfall this month would have come as a welcome relief. June saw a wave of store closures after retailers
announced profit warnings with some going into administration. The timing of this coincides with retailers’ quarterly rent payments, which were due at the end of the month. The unfortunate knock-on effect of store closures means job losses and retail landlords losing rent payments. Meanwhile, retailer margins continue to be hit by high promotional trading. The inflationary squeeze on consumers’ disposable income
may be contributing to the lack of spending on the high street. Whilst the latest figures show that inflation has remained at 4.5 per cent, it may well increase further after announcements of new energy price hikes. The Bank of England is said to be likely to continue to hold interest rates at a record low of 0.5 per cent until late 2011 or 2012, fearing that raising the rate will not help the weak economy.
Regionally, South West and Wales and London reported the
highest growth year-on-year, up 1.8 per cent and 1.3 per cent respectively compared to the same month last year. The Retail Park Index saw a year-on-year growth for June of 1.5 per cent and year-to-date results show the sector’s growth is 0.7 per cent. This is in contrast to the UK Index which shows year- to- date decline of 1.0 per cent. The significant growth of retail parks and expansion of supermarkets could well be stealing trade from high streets, as convenience, accessibility and free parking will all be factors attracting consumers, and figures show that the vacancy rates in retail parks is less than on the high street.
RETAILERS’ EXPANSION PLANS STYMIED BY SLUMP IN NEW MALL DEVELOPMENT A shortage of new shopping
The 2009 total was also
centres being built in Europe restricted the expansion plans of retailers in 2010, but an increase in the amount of space available in emerging markets next year is expected to put retailer growth back on track, according to new research by CBRE. CBRE’s Shopping Centre Stock in Europe research found that 1.9m sq m of shopping centre space was completed in 2010 - a fall of 36 per cent from the previous year.
30 per cent lower than 2008, which represented the peak in shopping centre development. However, if all of the new
shopping centres due in 2011 are completed on time, there will be an increase of 53 per cent in new space available to retailers next year, totalling 2.9m sq m. Although the development
pipeline is considerably smaller than it was in the period from 2007 to 2008, renewed confidence in markets such
SHOPPING CENTRE July 2011
www.shopping-centre.co.uk
as Turkey, Russia, and Poland has resulted in an upturn in construction starts and completions are forecast to rise again in 2011. There are currently 146
centres under construction in Europe, with the highest levels of activity in the emerging markets of Turkey, Russia and Poland. In Western Europe, Italy,
Germany and Spain recorded the largest amount of new space currently under construction. The United Kingdom currently
has three shopping centres under development, with Westfield Stratford City being the largest at 177,000 sq m (1.9m sq ft) and due to open in September 2011. Neville Moss, CBRE’s head
of EMEA retail research, said: “The resurgence in activity is due to increased confidence among retailers, developers and investors on the back of the strong economic growth seen in 2010, and the forecast of equally strong growth in 2011.”
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