Uncovering the UK’s most resilient retail spots

The retail sector has suffered a tumultuous start to 2018. The year of the CVA has been compiled by multiple store closures up and down the country and many of the high street’s best-loved stores plunged into administration. The death of the high street has been talked up for the past few years, but there are survivors out there. EG has analysed take-up data from Radius Data Exchange to plot the most resilient, cyclical and best-performing cites and sectors over the past decade. Resilient cities Liverpool has been the most consistent major regional city since the start of 2008. Among the six cities that have averaged an annual take-up of at least 400,000 sq ft, Liverpool has recorded the smallest percentage difference between its least active year (379,716 sq ft in 2016) and its 10-year average (498,696 sq ft) with a 31% dip. In contrast, the difference between Birmingham’s least active year in 2009 and its average of 541,747 sq ft was 139%. In Bristol the difference was 89%. Those changes in performance appear to have been caused by the development of the Bullring (2005) and Grand Central (2015) schemes, which led to relative pauses and spikes in retail activity across the two cities.     The biggest fluctuations in take-up occurred in Leeds and Cardiff. Both cities showed extremely healthy levels of take-up in 2008, rising to their peaks during the 10-year period at 757,309 sq ft and 758,048 sq ft respectively, against an average of 427,000 sq ft (Leeds) and 381,000 sq ft (Cardiff). Those spikes were aided by Costco taking 134,000 sq ft in Cardiff at Capital Shopping Park and Marks & Spencer taking 154,000 sq ft at Trinity Leeds. Winners and losers Radius Data Exchange analysis shows that Belfast has grown the most out of the UK’s 15 regional cities. Within a decade, the Northern Irish capital has grown from around 170,000 sq ft of take-up to more than 600,000 sq ft at the end of last year. Northern Ireland has been a champion of redevelopment and investment over the past decade, moving away from inertia to forward thinking, benefiting from increased tourist footfall from overseas as well as the Republic of Ireland. The creation and opening of the Victoria Square scheme in 2008 in the city centre, alongside its plethora of independent food and beverage markets, has enabled to city to create a diverse offer. Other successes include Sheffield and Edinburgh, which lead the way in terms of percentage increases, up by some 73% and 47% respectively between 2008 and 2017. Five cities in the list of 15 have seen retail take-up head in the wrong direction – again Cardiff and Leeds appear here (-58% and -62%). They may have benefited from those halcyon days in the late 2000s only to suffer continuous slumps in fortunes in terms of retail take-up since. Previous regeneration projects appear to have spurred on take-up during the early stages of the decade only to later be stifled by retailer and consumer malaise. Regional cities v London Retail take-up in the top 15 regional cities and London was supressed during the financial crisis from 2009-2011, with London bouncing back harder and stronger through to 2013. This was helped in no small part by the opening of Westfield Stratford and the London 2012 Olympic Games. Since that period, London has been the most sensitive to economic change, seeing a slow and gradual downturn in take up levels from 2013-2017, most likely because of a lack of available space to create premium schemes. Glasgow is the most active of the regional cities, with 5.7m sq ft of take-up against the overall average of 3.6m sq ft. However, several cities sit well below the average, including Reading, in Berkshire, which is down by 54% on that long-term average, Aberdeen, down by 56% and Cambridge, down by 65%. The poor performance from Cambridge was caused by just one major retail development coming out of the ground during the 10 years under review, the 450,000 sq ft Grand Arcade, which opened in 2008. Where and who?  Using Radius Data Exchange figures, EG has also dissected retail take-up across the UK into three distinct use types – high street, shopping centres and retail parks – to uncover trends in the physical landscape of shopping. Perhaps somewhat unsurprisingly, given the success of the sector over the past few years, retail park completions have remained the least volatile in terms of peaks and troughs. The sector has just a five percentage point difference between the highest (18%) and lowest (13%) years of development. The story is different on the high street and in shopping centres with both recording 11 percentage point swings over the past decade. So what has been driving retail take-up over the past decade? Radius Data Exchange analysis shows growth in the market is led by fashion, food & beverage, homewares, supermarkets and value retailing. We do see some interesting sub-plots emerging when we look at the graph below, however. Peaks in 2012 from value, homewares and fashion brands seemed to react to the various political and economic uncertainties of the time. Moving through to 2014, we see a surge of food & beverage operators signing for space, followed by a fall-away of space through to last year. The supermarket boom and the introduction of the Lidl and Aldi can be seen moving through from 2008-2012, where the market has gradually slowed and realigned. Finally, looking at what retail space looks like today, we find the average retail store is becoming smaller year-on-year. At present it is 22% smaller than the 10-year average. This data accurately reflects the downsizing and rightsizing programmes that retailers have undertaken over the past few years as they seek to minimise their physical footprints in search of the sweet spot in terms of having the right amount of stores against the right amount of logistics space. To send feedback e-mail james.child@egi.co.uk or tweet @jamesChildEG or @estatesgazette