The Economist
FOR over a year retailers have been cowering in their high-street redoubts as recession replaced the longest consumer-spending spree in recent times. Good news appeared this week, and a hint that the economy may be in less-dire shape than third-quarter GDP figures suggest. Sales recovered sharply in early October—particularly in food and footwear, but also in clothing and furniture—according to a survey released by the Confederation of British Industry. The outlook for November is even better, though with the looming uncertainties of Christmas and a return to higher VAT in January.
But the pattern is patchy. London shops have defied the recession better than those elsewhere, bolstered by tourism and the weak pound, and by the spending power of local residents. The divide between “have” and “have-not” shoppers across Britain has widened, according to the Retail Think Tank, an expert panel. The “haves” make fewer shopping trips but buy what they want; the “have-nots” are making more trips but buying less. Cash for gold is the new watchword.
At Westfield London (pictured above), a year-old giant mall, there is a throng of people but few are carrying bags. Some say Westfield has taken volume from the West End and nearby Ealing. But business is not brisk at the branch of De Beers, the diamond seller.
Sentiment is upbeat in Leeds, dubbed the Knightsbridge of the North. Leeds has just endured ten days of its annual Shopping Week, with a plethora of retail goings-on. The Victoria Quarter, the heart of smart shopping in the city, says 9,000 people came to its opening event and spent 25% more than in 2008. Land Securities, which deferred for a year the development of Trinity, a shopping and leisure space that is to cover 1m square feet, is now going ahead and hopes to complete it in the autumn of 2012. (Eastgate Quarters, a huge shopping project led by another property company, Hammerson, is on hold.)
Land Securities is bullish on retail rents in general, and has said that it will do no more of the “soft” letting deals that tenants demanded in the recession. But experts looking for shopping patterns are flummoxed, says Tim Denison at Synovate, a research firm. “It depends on the store level and the catchment area,” he says. Retailers with nationwide operations are having to make decisions at a local level.
Prime retail space in lively high streets and shopping centres—especially big inner-city ones, such as St David’s 2, which opened in Cardiff on October 22nd—is in great demand. Because these centres have a single landlord they get a good mix of tenants. High streets with many owners quickly look desolate if there are too many vacant shops, charity stores and mobile-phone outlets. The picture is mixed, though. A quarterly “health” index reflecting the views of Retail Think Tank showed its first forecast uptick, for the last three months of 2009, after ten consecutive falls. Yet visits to shops (other than those in out-of-town retail parks) are still trending lower than last year, according to Experian FootFall, a market-research firm.
Whether or not retailers are climbing out of recession, there seems to be an irreversible decline in small, independent stores in favour of branded chains—and these are migrating to bigger spaces. The shoppers at Westfield are cocooned in a retail paradise, sheltered from the weather, with a score of cafés and restaurants to choose among and—soon—a multi-screen cinema. To lure some of them back to smaller precincts and high streets, local authorities will have to revisit their policies on parking and the mix of commercial and residential properties, says Mr Denison. That is the challenge for the next decade—if they do not want shopping cocoons to go on emptying high streets and suburbs.
But the pattern is patchy. London shops have defied the recession better than those elsewhere, bolstered by tourism and the weak pound, and by the spending power of local residents. The divide between “have” and “have-not” shoppers across Britain has widened, according to the Retail Think Tank, an expert panel. The “haves” make fewer shopping trips but buy what they want; the “have-nots” are making more trips but buying less. Cash for gold is the new watchword.
At Westfield London (pictured above), a year-old giant mall, there is a throng of people but few are carrying bags. Some say Westfield has taken volume from the West End and nearby Ealing. But business is not brisk at the branch of De Beers, the diamond seller.
Sentiment is upbeat in Leeds, dubbed the Knightsbridge of the North. Leeds has just endured ten days of its annual Shopping Week, with a plethora of retail goings-on. The Victoria Quarter, the heart of smart shopping in the city, says 9,000 people came to its opening event and spent 25% more than in 2008. Land Securities, which deferred for a year the development of Trinity, a shopping and leisure space that is to cover 1m square feet, is now going ahead and hopes to complete it in the autumn of 2012. (Eastgate Quarters, a huge shopping project led by another property company, Hammerson, is on hold.)
Land Securities is bullish on retail rents in general, and has said that it will do no more of the “soft” letting deals that tenants demanded in the recession. But experts looking for shopping patterns are flummoxed, says Tim Denison at Synovate, a research firm. “It depends on the store level and the catchment area,” he says. Retailers with nationwide operations are having to make decisions at a local level.
Prime retail space in lively high streets and shopping centres—especially big inner-city ones, such as St David’s 2, which opened in Cardiff on October 22nd—is in great demand. Because these centres have a single landlord they get a good mix of tenants. High streets with many owners quickly look desolate if there are too many vacant shops, charity stores and mobile-phone outlets. The picture is mixed, though. A quarterly “health” index reflecting the views of Retail Think Tank showed its first forecast uptick, for the last three months of 2009, after ten consecutive falls. Yet visits to shops (other than those in out-of-town retail parks) are still trending lower than last year, according to Experian FootFall, a market-research firm.
Whether or not retailers are climbing out of recession, there seems to be an irreversible decline in small, independent stores in favour of branded chains—and these are migrating to bigger spaces. The shoppers at Westfield are cocooned in a retail paradise, sheltered from the weather, with a score of cafés and restaurants to choose among and—soon—a multi-screen cinema. To lure some of them back to smaller precincts and high streets, local authorities will have to revisit their policies on parking and the mix of commercial and residential properties, says Mr Denison. That is the challenge for the next decade—if they do not want shopping cocoons to go on emptying high streets and suburbs.
