Retail Property Insights

Slow refunds denting consumer spending

22nd February 2023

Delays in refunds are causing customers to cut their spending, according to research from a European open banking platform. Data from Tink found that almost a third (30%) of UK consumers are choosing to spend less online because refunds are taking too long, while over a half (52%) of those surveyed said they were less likely to shop with a retailer again if a refund takes too long to be transferred. The research also found that over half (54%) of online retailers said they are or expect to be forced to no longer offer free refunds due to financial pressures, with four in ten focused on cutting costs as a result of the current financial climate. Particular issues raised by retailers include the cost of processing returns (43%) as well as the length of time taken for customers to get their money back (40%), however Tink say that online retailers risk damaging relationships with customers should they start charging for returns. The research also found that over a third (36%) of those surveyed felt that instant refunds would improve customer experiences, while 32% feel that these would reduce costs to their businesses in the long term. Tom Pope, head of […]

Nearly 15,000 jobs lost in retail in 2023

20th February 2023

Almost 15,000 retail workers have lost their jobs so far in 2023, after a spate of closures amongst a number of retailers. The collapses of both M&Co and Paperchase have seen all stores belonging to the retailers close down, while Tile Giant has also been sold in a pre-pack deal leading to further closures. Tesco is another retailer that has seen a number of its staff lose out, with a management shake-up putting 1,750 jobs at risk. Data from the Centre for Retail Research (CRR) revealed that 14,874 retail workers have been made redundant in 2023, with a total of 675 stores closing. The majority of these job losses (11,689) came from regular aspects of business or cost-cutting programmes, as opposed to jobs lost to administration. This comes after it was revealed that 2022 was the worst year in five for store closures, according to the CRR. High rents, a change in consumer habits, increased spending on leisure and online retailing, and the effects of the Pandemic are all reasons cited by the CRR as to why the numbers of store closures and job losses are so high. Retail is not the only industry struggling however, with research recently revealing...

How dreams can become reality

17th February 2023

Rob Barnes of Bruce Gillingham Pollard looks at how to assess approaches from people who want to turn a new retailing or hospitality concept into a physical trading space. Immediately after every summer or Christmas holiday period agents get a steady flow of calls from people who, whilst away from work, have had ideas about a new retail or hospitality concept, whose success could liberate them from their day job. It can be easy to be cynical, but there can be some great ideas which will eventually translate into a successful independent business. To sift the fanciful from the thought-out, we first look for a well-considered business plan. No matter how original an idea is, it must be backed up by financial projections and an achievable timeline. Most landlords are keen to nurture new independent occupiers if they can demonstrate that they have thought through their idea and even market-tested it. If a landlord is going to provide a rent-free period, they want to see that the business is going to be able to pay the rent when the time comes. This needs to be covered in a business plan, detailing the businesses revenue forecasts throughout the lease term, its […]

Pub and bar closures nearly double in past year

16th February 2023

The UK’s pub and bar industry saw a near record-breaking amount of bankruptcies last year with more than 500 businesses collapsing. Around 512 licensed venues went out of business, reflecting a jump of 83% on the previous year, according to the latest Insolvency Service research by accountancy firm UHY Hacker Young. Insolvencies of pub and bar companies increased from 280 in 2021 to 512 in 2022, as rail strikes, and the cost-of-living crisis hit consumer footfall. This latest figure was close to the peak of 551 recorded in 2013. Pub and bar companies have faced increasing costs and concerns over falling sales. Energy prices have soared and hit pub companies’ wallets hard throughout the winter after the government removed support for businesses’ energy bills. At the same time, inflation has pushed up the prices that pubs need to pay for beer and food. Peter Kubik, head of turnaround and recovery at UHY Hacker Young, said: “It’s deeply concerning that so many pubs and bars are closing their doors. In addition to the financial consequences for owners and employees, the loss of a pub can be felt quite keenly by the community.” “Perhaps the government should consider what it can do […]

Majority of UK shops saw rental decline in December

13th February 2023

The majority of UK shops saw a decline in rental growth of 1.7% in December 2022 compared to the same period a year prior, according to data from Avison Young. Retail parks were the only type of retail property to see any kind growth as a whole, although at low levels of only 1%. In 2023, Avison Young predicts that UK retail rents will decline compared to 2022, however only by a small margin before returning to growth in 2024. The data also revealed that retail investment volumes totalled £6.2bn in 2022, 19% lower than 2021 but almost on par with the five year average. Vacancy rates sat at 18.2% in shopping centres, 13.8% in high streets, and 4.35% in retail parks. The data said that retail sales values did rise in December by 3.3% compared to 2021, however when considering current rates of inflation, the volumes of sales saw a decrease of 6.1%, with online retailers seeing the biggest drop. Miles Marten, principal and managing director of retail at Avison Young, said: “2022 was another difficult year for the retail sector due to increasing costs and declining consumer confidence. However, towards the end of the year, there was some […]

Three million sq ft of space in Oxford Street pipeline

13th February 2023

Around three million square feet of retail and office space is either in the pipeline or under construction at London’s Oxford Street, according to research from CBRE. Ten core developments will deliver a collective one million sq ft of repurposed retail, food and beverage, and leisure space on the iconic London street, the real estate advisor said. Following the recent rating revaluation announcement, Oxford Street’s retailers will benefit from lower occupational costs, with CBRE identifying a base rate fall of 40% for Oxford Street. CBRE says that the improved outlook has led to an increase in appetite from investors for Oxford Street as well as the wider London retail market. Recently, the sales of Selfridges Department Store on Oxford Street, Fenwick on New Bond Street, The Royal Exchange in the City, and Foyles Bookstore on Charing Cross Road, all to international investors, represents an increase in confidence, CBRE said. The injection of capital means that total London retail investment volumes reached £2.7bn in 2022, according to the research. Phil Cann, Head of London Retail at CBRE said: “The transformation of Oxford Street is well underway, and the scale of the development pipeline is a clear indicator of landlords’ commitments to...

Hospitality spending increases as UK avoids recession

10th February 2023

Spending in UK pubs and restaurants rose in early February, as data reveals that the UK avoided recession in 2022. Office for National Statistics Figures revealed that spending in pubs and restaurants increased above levels recorded before the Pandemic in the week to February 5 2023. This was the first increase above the pre-COVID baseline (the February 2020 average) recorded since early December 2022. The figures also revealed that, despite a year marred by rail strikes and deflated consumer confidence, the UK narrowly avoided a recession in 2022. Gross domestic product (GDP) fell by 0.5% in December 2022, following growth of 0.1% in November. UK GDP remained broadly flat in the three months to December. A recession is defined as when an economy records a shrink in economic output for three consecutive months. However, the report highlighted a number of other concerns: Energy prices remain the biggest worry for a fifth of businesses, followed by inflation of goods and services prices, and falling demand. In late January, nearly two-fifths of businesses said they had taken some form of action to reduce their energy costs in the three months prior. It was also revealed that a fifth of adults were affected […]

A guide to renting a shop in Coventry

8th February 2023

Looking for shops to rent in Coventry? Here’s what you need to know. Coventry is the UK’s twelfth largest city and the second biggest in the West Midlands behind Birmingham. Historically, Coventry has a history rooted in industrialism, home to bicycle and car manufacturers, as well as watchmakers. In recent years, like much of the country, the city’s economy has shifted towards the service industry with a focus on business services and finance, research and design, and creative industries. Coventry is home to a number of shopping centres and leisure spaces, making it a great place to look for shops to rent. Attractions Awarded City of Culture in 2021, Coventry is host to many museums, reflecting the rich history of the city. Visitors may take a trip to Coventry Transport Museum, which has the largest collection of British-manufactured vehicles in the world. The Coventry Music Museum, and the Herbert Art Gallery & Museum are good options for those who enjoy taking in the culture of the city, while Midlands Air Museum is a great choice for aviation and history fans. The 14th century St. Michael’s Cathedral was mostly destroyed during The Blitz, leaving only the spire and the outer walls, […]

Retail sales below inflation but leisure showing resilience

7th February 2023

Consumer spending continued to remain below inflation in January, although the leisure sector proved resilient with better-than-expected results. The data from the British Retail Consortium (BRC) and KPMG showed spending rose by 4.2% in January, compared to an increase of 9.7% in an Omicron-marred 2022. Both these numbers were below the rate of inflation, however, which was as high as 10.5% in December. The BRC’s retail sales monitor warned that increasing cost of living is likely to lead to lower rates of discretionary spending. Helen Dickenson OBE, chief executive of the BRC, said: “As Christmas cheer subsided, retailers felt the January blues as sales growth slowed. Many retailers discounted heavily to entice consumer spend, and while there were bargains to be had in the January sales, retailers continue to be hit by lower margins and falling volumes.” “The coming months will continue to be challenging for retailers and their customers. Consumer confidence remains stubbornly low and looming rises in household bills and mortgages mean discretionary spending will remain weak”, she continued. However, the leisure sector remained buoyant. Further data from Barclays revealed that pubs, clubs and bars saw an increase in sales of 18%, their best increase since May 2022, […]

BRC: Inflation leaves shop prices at all-time high

2nd February 2023

The British Retail Consortium has has found that shop price annual inflation reached 8% in January, higher than the three-month average of 7.5%, leaving shop prices at an all time high. Food inflation also rose to 13.8% in January, a 0.5% increase from December and higher than the three-month average of 13.2%, now the highest on record. Non-food inflation increased to 5.1%, in line with the three-month average of 4.7% and a new high in this category. Fresh food and ambient food also saw an increase in inflation, with increases of 0.7% and 0.3% to 15.7% and 11.3% respectively, both are new records. Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “Retail prices rose in January as discounting slowed and retailers continued to face high input costs.” “With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing. However, as retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result”, she added. Mike Watkins, head of retailer and business insight at NielsenIQ, added: “Consumer demand...

Vacancy rates continue to improve but remain above pre-Pandemic levels

27th January 2023

The end of 2022 saw a fifth consecutive quarter in which retail vacancy rates fell, however occupancy has not yet returned to levels seen before COVID-19. In the fourth quarter of 2022, the overall vacancy rate in Great Britain improved to 13.8%, 0.1 percentage points better than in the third quarter and 0.6 percentage points lower than the same period in 2021. The data from the British Retail Consortium and Local Data Company revealed that all sectors of the retail industry continued to improve. Shopping centre vacancies fell to 18.2%, down from 18.8% in the third quarter, while high street vacancies improved by 0.1% to 13.8%. Retail parks also saw an increase in occupancy, with vacancies falling 0.7% in the fourth quarter to 9.0%. Greater London, the South East, and East of England had the lowest vacancy rates, while the North East, Wales, and The Midlands saw the highest. Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “While the number of empty stores reduced in the final quarter of 2022, vacancy rates have not recovered to pre-pandemic levels. Retail occupancy was boosted by the return of international tourists visiting UK towns and cities and more frequent visits […]

Karl Hodson: Flexible in-store payments will revolutionise spending

27th January 2023

Flexible instore payment options are currently an up-and-coming feature, much anticipated by stores around the UK. While buy now pay later (BNPL) options are offered as standard when shopping online, this option is rare when shopping instore, until now. The likes of Klarna instore services mean that shoppers can now access flexible payment options instore, through the multipurpose Klarna app. Karl Hodson of UK Business Finance, a commercial finance expert, explains how the BNPL market is changing the retail landscape and transforming shopping habits. The introduction of instore BNPL services The payment capabilities offered by online retailers have now been extended into physical stores, as seen with Klarna instore services. Customers can use a one-time digital card through the Klarna app to make payment, or use a QR code which initiates payment instructions through the app. This revolutionises the buy now pay later market and the way customers judge purchasing decisions thanks to newfound instore payment flexibility. Businesses can benefit from Klarna instore as it provides seamless, app-driven BNPL services, as opposed to having to open a traditional credit account which is often the next best solution retailers can offer instore. Here are some of the benefits of using Klarna...