Both Edinburgh and Glasgow are displaying remarkable signs of resilience in the face of the ‘perfect storm’ of turbulent conditions battering retail across the UK, according to a new report from property firm CBRE .
Retail Resilience: Sheltering from the Perfect Storm says cities marked out by their appeal to international visitors, university presence and affluent populations prove the most resilient in the retail sector.
While London leads the way, with substantial rental and capital value growth during the last five years, other pockets of resilience are represented by Edinburgh and Glasgow, the historic university cities of Oxford and Cambridge, tourist favourite Brighton and London satellite Watford.
Kevin Sims, senior director of CBRE’s Retail Scotland Division, said: “While online shopping is touted as a big threat to bricks and mortar, everyday retailers are improving their online capabilities to create a more integrated omnichannel offering for the consumer. Retailers can survive and thrive by adapting quickly to changing tastes, offering new experiences instore and by reviewing their respective property portfolios.”
In analysis undertaken by CBRE, examining cities with at least 10 stores which have been through the Company Voluntary Arrangement (CVA) process in the last two years. Oxford, Brighton, Edinburgh and Glasgow recorded low levels of rent reductions, a measure which is reflective of their relative resilience in the retail sector.
In terms of asset classes, shopping parks are outperforming the competition. Regional city high streets and shopping centres have remained resilient but secondary locations have seen consistently falling footfall numbers.
Visitor numbers have been supported by the increasing popularity of click and collect services and the growth of outlet centres, which are being boosted by investment in amenities.
While prime assets in affluent cities are proving resilient, as they benefit from expansive catchment areas, secondary properties require substantial investment and repositioning. As the consumer market continues to be driven by health-conscious lifestyle trends, health and beauty retailers have experienced strong growth, implementing new store openings.
Tactile in-store experiences such as virtual makeup mirrors and beauty counters have encouraged customers instore, providing an experience that online cannot compete with. With consumers still stating convenience as the most important factor for shopping, food and beverage retailers are proving equally resilient.
