An increasing consumer focus on affordability and convenience has seen value and discount goods retailers increase their UK store count by more than 5,000 since 2009, according to the Retail Revolutions: The Rise of the Community Shopping Centre report from Savills and Ellandi.
Value retail goods and services have accounted for 87% of all store growth by brands in the UK during that time, while supermarket chains have also increased their convenience offer by more than 1,600 stores.
The report found that 65% of consumers cited convenience as the primary reason for visiting a community shopping centre, with grocery purchases made on 46% of all trips. This is followed by household, fashion, discount and health & beauty products, all purchased on more than 20% of visits to such centres, while gifts and cards are purchased on 13% of trips. The range of value and discount retailers available at a community shopping centre was also a key attraction for 20% of shoppers.
Tom Whittington, retail research director at Savills, commented, “Convenience and value retail have merged and evolved to encompass much more than groceries, as highlighted by the wide range of goods purchased on trips to community shopping centres. The value fashion sector has seen particular growth and now accounts for 55% and 65% of all retail brands in secondary and community shopping centres respectively.”
Mark Garmon-Jones, head of shopping centre investment at Savills, added, “Tenant profitability is absolutely key to sustainable shopping centres. While sales densities in secondary locations do not tend to reach the levels achieved in their more premium counterparts, the favourable rents and other costs can compensate for this and lead to strong profit margins. In turn, robust occupational performance provides income security for investors and therefore makes the right shopping centres with these fundamentals very appealing.”
Many of the UK’s strongest retail brands continue to operate from several hundred stores, says the report, which highlights growth stories including Wilko, Card Factory, Sports Direct, Specsavers and Pandora. This need for larger store portfolios inevitably means a strong reliance on shopping centre locations in more local areas.
Across all age groups, 75-85% of consumers visit a community shopping centre at least weekly and 91-95% at least monthly, according to the research. This compares to just 40% who make an online purchase monthly, underlining the role local centres play in fulfilling consumers’ frequent needs with a physical retail experience that complements rather than competes with online shopping.