Interview: Co-op offers retailers some Christmas cheer

Ursula Lidbetter’s retail tenants didn’t have to pay for Christmas lights this year – the landlord covered the cost. As another year of difficult trading conditions for retailers comes to an end, Lidbetter has also been willing to forego traditional market leases and offer more flexible terms based on turnover to help traders survive what she calls “the difficult and uncertain environment”. Against a backdrop of plunging sales on the high street and landlords shedding retail assets, the chief executive of Lincolnshire Co-op, a third of whose £284m property portfolio is trading outlets, is a firm believer that landlords and tenants should be redefining their relationships. “We need to help our tenants with more than just receiving their rent and leasing them a building,” Lidbetter says, highlighting training provision as an example of the ways the Co-op can go above and beyond. “We have 2,800 colleagues and we train them all the time. Why can’t our tenants come to the courses?” She adds: “We are also thinking about things like the animation of our various retail developments. We are not charging our tenants for Christmas lights, we are just doing it. Retail landlords have to accept certain costs.” Lidbetter is an advocate of turnover rents, which see landlords take a small percentage of the turnover on top of a basic rent. “There is a changing dynamic between landlord and tenants,” she says. “It seems to me that this mechanism allows there to be a commonality of purpose. That’s an interesting and useful development that brings two parties together. We are seeing it more.” Jack of all trades In her hometown of Lincoln in the East Midlands, Lidbetter is overseeing the £70m Cornhill Quarter city centre redevelopment, which aims to provide over 150,000 sq ft of mixed-use commercial space. The first phase of the Cornhill Quarter scheme was the redevelopment of the historic Corn Exchange building, completed in 2017. The second phase of the redevelopment at Sincil Street is now reaching completion and work has begun on the third phase. This will see new units being built, including an Everyman Cinema and bar and restaurant The Botanist. Other signed tenants include Energie Fitness, stationery and lifestyle brand Neon Sheep, Cornish fashion retailer Seasalt, and Nottingham-based doughnut specialist Doughnotts. [caption id="attachment_1012204" align="aligncenter" width="847"] The first phase of the Cornhill Quarter scheme was the redevelopment of the historic Corn Exchange building, completed in 2017[/caption] It is the latest retail project for the Co-op’s chief executive after a lengthy career in the sector. Awarded with an OBE this year for her services to the local economy, Lidbetter has been in the retail business for over three decades. Since starting out on the shop floor in 1985 as a graduate at a Co-op department store in Lincoln, she worked her way up to chief executive in 2004. “I started as a jack of all trades, getting my hands dirty at the front of a retail business, moving on to retail management, buying, then research and development,” she says. “It’s been an interesting 15 years as chief executive. It’s a very diverse business: we have 88 food stores, 47 pharmacies, 22 funeral homes, as well as crematoriums and travel agencies – and we’ve got this large property portfolio and all of it is done locally, in Lincolnshire and a bit in Yorkshire and Nottinghamshire.” As well as her involvement with the local Co-op, Lidbetter previously took on a role as chair of the national Co-op Group between 2013 and 2015, leading it through a period of major reform, including one of the biggest overhauls in the way the 150-year-old British mutual is run. In 2014, Co-op Group representatives approved a motion calling for elected board directors and greater powers for individual members, while later that year they also adopted measures to prevent situations such as 2013’s surprise £1.5bn hole in its balance sheet happening again. The gap in the firm’s capital largely related to commercial property loans acquired through the Co-op’s merger with the Britannia building society in 2009. Listen and learn But it is the local community that has taken up most of Lidbetter’s focus throughout her career, and she argues that cooperatives can take more of a lead in supporting regeneration in other regions. Lincolnshire Co-op’s members have a strong influence over the organisation’s decisions, she says, including its property investment strategy. “They have a say through coming to the AGMs and member meetings and they also have a say because that’s who we listen to, that’s who we are responsible to,” she adds. “The board is made up of my members; we listen to what they want because we live here and we are very attuned to what people want.” We have had several incarnations with different development partners. But we got to 2014 and realised the world had changed and retailers want interesting, historic spaces. Doing it this way meant we could do it within our own resources This approach helped Lidbetter change tack with the Cornhill Quarter, which was originally going to be a £100m-plus shopping mall with a development partner. The Lincolnshire Co-op worked on a proposal for a covered shopping centre, anchored by a department store, firstly with Surrey property firm Wates in the 1990s and then Yorkshire property business Modus in the 2000s, before making the decision to go it alone. “We have had several incarnations with different development partners,” Lidbetter says. “But we got to 2014 and realised the world had changed and retailers want interesting, historic spaces. Doing it this way meant we could do it within our own resources and we have been able to evolve it in terms of retail demand so that it’s been fit for purpose all the way through.” In an era where high streets can feel like ghost towns and with boarded up shops becoming an increasingly common sight, Lidbetter believes co-operatives could offer retailers and local communities a viable solution. “I think co-ops are quite good at this as they take a long-term view,” she says. “They are also based in communities. Our ownership is the community, not shareholders, banks or hedge funds. This makes it a very different approach as we try to work with local people and find out what is needed and make that come about.” To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette