High Street vs Out of Town Shopping - UK - December 2010

The report considers the importance of store location in retail strategies by assessing trends in out of town, in-town, and home shopping patterns and analysing the attributes of different shopping locations that motivate and attract shoppers.

Table of contents

Issues in the Market
Key issues
Abbreviations
Market in Brief
Local centres are experiencing a revival
Local shopping needs driven by everyday convenience
Bigger in-town locations favoured for choice and comparison goods shopping
Parking charges
Clone town Britain is a myth
Some out of town locations experiencing weaker footfall….
… while others are increasing share of spend
Retail mix shake up
Little new space under development
Too much poor quality space
Expansion of very large grocery superstores not affecting in-town footfall
Multi-channel retailers critically assessing future space needs
Internal Market Environment
Key points
Planning regime unchanged
Planning Obligations Tariff to replace Section 106 agreements
Too much unwanted space…
… but strong demand for prime pitch space
Weak retail property market has stimulated temporary letting
Continued growth in online shopping
Figure 1: Broadband penetration, by demographics, 2004-09
Future space cutbacks
Grocers facing competition test
Use of cars under pressure from rising fuel costs
Increased parking charges could drive shoppers out of town
More in-town Sunday trading in future
Broader Market Environment
Key points
Waning consumer confidence
Figure 2: Value of all retail sales (excluding automotive fuel) at current prices, non-seasonally adjusted – percentage increase on a year earlier, 2007-10
No sign of any improvement
Figure 3: Value of all retail sales (excluding automotive fuel), non-seasonally adjusted – percentage change on same month a year ago, 2010
Government’s deficit management strategy keeping confidence low
Rising input prices another cause for pessimism among retailers
Cheaper mortgages increases disposable income
Figure 4: GDP, PDI and consumer expenditure, at current prices, 2005-15
Population growing but ageing
Figure 5: Trends in the age structure of the UK population, 2005-15
Grey market
Figure 6: Forecast adult population trends, by lifestage, 2005-15
Growing numbers of households
Figure 7: Forecast household numbers and size trends, 1981-2021
Consumers becoming more aspirational
Figure 8: Forecast adult population trends, by socio-economic group, 2005-15
Competitive Context
Key points
Retailers benefiting from changing patterns of expenditure…
Figure 9: Consumer expenditure (current prices), by major category, 2005-09
… but few retail categories are high priority items of expenditure
Figure 10: Expenditure priorities, 2007-10
Figure 11: Consumer spending priorities, November 2009-June 2010
Increased numbers of smaller stores for major grocers
Figure 12: Major grocers’ expansion of small stores, 2005-10
Superstore expansion creating more space for non-foods
Figure 13: Expansion of Tesco Extra, 2005-10
Expansion of dedicated non-food stores by major grocers
Expansion of non-foods online by major grocers
Company instability freeing up space
Implications for the future
Strengths and Weaknesses in the Market
Strengths
Weaknesses
Who’s Innovating?
Key points
Temporary leases here to stay
Digital delivering an enhanced shopper experience
Making digital way-finding more affordable
Social media and micro-blogging
Get on the phone
Parking opportunities
Pay by phone parking will increase dwell time
Reductions systems attractive to retailers and shoppers
Managed locations responding to changing needs
Retail parks improve their appeal
Examples include
Factory outlets encourage high churn rates
Shopping centres making it easier for short term lets
Phase 2 loyalty schemes
Sector Size and Forecasts
Key points
More space and higher sales productivity
Figure 14: Retail space, outlets and sales productivity, 2005-13
Grocers have the fastest growth rate for space
Figure 15: Retail space, by sector, 2005-13
Managed shopping space continues to increase
Shopping centres the main focus of development
Limited amount of new space being started
Retail park completions at an all time low
Outlet centres market is mature
Implications for the future
Trends in Usage
Key points
Trends in usage frequency
Figure 16: Average frequency usage of shopping locations, by type of location 1997-2010
Key trends
In-town – key trends and implications
Figure 17: Average frequency usage of in-town shopping locations, by type of location, 2008-10
Out of town – key trends and implications
Figure 18: Average frequency usage of out of town shopping locations, by type of location, 2008-10
Home shopping
Figure 19: Average frequency usage of home shopping locations, 2008-10
Narrowing trend in repertoire usage
Figure 20: Number of shopping locations used, 2006-10
ABC1 adults have the widest repertoires
Men, older people and the less affluent have narrower repertoires
Future implications
In-Town/City Centre Locations – Usage and Appeal
Key points
High interest in in-town locations
Figure 21: Use of in-town locations, by frequency, October 2010
Nearest high street
Figure 22: Trends in frequency of usage of nearest high street for non-grocery shopping, 1997-2010
Key trends
Core user groups
Development opportunities
Local parade
Figure 23: Trends in frequency of usage of local parades for non-grocery shopping, 1997-2010
Key trends
Core user groups
Development opportunities
Nearest city centre
Figure 24: Trends in frequency of usage of nearest city centre for non-grocery shopping, 1997-2010
Core user groups
Development opportunities
Covered shopping centres
Figure 25: Trends in frequency of usage of covered shopping centres for non-grocery shopping, 1997-2010
Key trends
Core user groups
Development opportunities
Another town/city centre
Figure 26: Trends in frequency of usage of another town/city centre for non-grocery shopping, 1997-2010
Key trends
Development opportunities
Future implications for in-town locations
Out-of-Town Shopping Locations – Usage and Appeal
Key points
Out of town reliant on occasional use
Figure 27: Use of out-of-town locations, by frequency, October 2010
Retail parks
Figure 28: Trends in frequency of usage of retail parks for non-grocery shopping, 1997-2010
Key trends
Core user groups
Development opportunities
Non-food section of major grocery superstore
Figure 29: Trends in frequency of usage of non-food sections of major grocery superstores, 2006-10
Key trends
Core user groups
Development opportunities
Out of town regional shopping centres
Figure 30: Trends in frequency of usage of out-of-town regional shopping centres for non-grocery shopping, 1997-2010
Key trends
Development opportunities
Factory outlet/designer outlet centres
Figure 31: Trends in frequency of usage of factory outlet/designer outlet centres for non-grocery shopping, 2006-10
Key trends
Core user groups
Development opportunities
Future implications for out of town locations
Home Shopping – Usage and Appeal
Key points
Online is a widely adopted form of shopping
Figure 32: Use of home shopping, by frequency, October 2010
Shop online
Figure 33: Trends in frequency of usage of shopping via internet for non-grocery shopping, 2006-10
Key trends
Development opportunities
Other forms of home shopping
Figure 34: Trends in frequency of usage of other forms of home shopping for non-grocery shopping, 2006-10
Key trends
Core user groups
Development opportunities
Future implications for home shopping
Expenditure by Location
Key points
Relative spend favours in-town locations
Figure 35: Comparison of relative spend, by location, 2008 and 2010
Key trends
Who spends what in-town?
Key spenders
Development opportunities
Who spends what out of town?
Key spenders
Development opportunities
Implications for the future
Choice and Retail Appeal – Comparison by Location
Key points
Wide choice gives in-town an edge
Figure 36: Key elements of choice and retail appeal motivating shopping locations decisions, by type of location, October 2010
Leveraging in-town appeal
Leveraging out of town appeal
Implications for the future
Convenience, Parking and Social Attributes – Comparison by Location
Key points
Out of town use based on easy and free parking
Figure 37: Key elements of convenience and access motivating shopping locations decisions, by type of location, October 2010
Leveraging in-town appeal
Leveraging out of town appeal
Implications for the future
Attitudes Towards Retail Offer at Shopping Locations
Key points
Independents valued for variety but multiples reassure
Figure 38: Attitudes towards retail offer at shopping locations, October 2010
Muted support for independents
Clone town claims are over stated
Multiples provide focus and benchmarks
Implications for the future
Appendix – Internal Market Environment
Figure 39: Broadband penetration, by demographics, 2004-09
Appendix – In-Town/City Centre Locations – Usage and Appeal
Figure 40: Frequency of use of local parade, by demographics, September 2010
Figure 41: Frequency of use of nearest high street, by demographics, September 2010
Figure 42: Frequency of use of nearest city centre, by demographics, September 2010
Figure 43: Frequency of use of another town/city centre, by demographics, September 2010
Appendix – Out of Town Shopping Locations – Usage and Appeal
Figure 44: Frequency of use of covered shopping centre, by demographics, September 2010
Figure 45: Frequency of use of regional shopping centre, by demographics, September 2010
Figure 46: Frequency of use of retail park, by demographics, September 2010
Figure 47: Frequency of use of non-food section of major grocery superstores, by demographics, September 2010
Figure 48: Frequency of use of factory outlet/designer outlet centre, by demographics, September 2010
Appendix – Home Shopping – Usage and Appeal
Figure 49: Frequency of use of shop via internet outlet centre, by demographics, September 2010
Figure 50: Frequency of use of shop via other type of home shopping, by demographics, September 2010
Appendix – Expenditure by Location
Figure 51: Overall expenditure in local high street shopping, by demographics, September 2010
Figure 52: Overall expenditure in out-of-town shopping, by demographics, September 2010
Appendix – Choice and Retail Appeal Comparison by Location
Figure 53: Most popular reasons for shopping in a town or city centre, by demographics, September 2010
Figure 54: Next most popular reasons for shopping in a town or city centre, by demographics, September 2010
Figure 55: Most popular reasons for shopping in out-of-town shopping centres and large edge of town retail parks, by demographics, September 2010
Figure 56: Next most popular reasons for shopping in out-of-town shopping centres and large edge of town retail parks, by demographics, September 2010
Figure 57: Repertoire of places visited for regular/occasional non-grocery shopping, September 2010
Figure 58: Repertoire of places visited for regular/occasional non-grocery shopping, by demographics, September 2010
Figure 59: Places visited for regular/occasional non-grocery shopping, by repertoire of places visited for regular/occasional non-grocery shopping, September 2010
Figure 60: Places visited for regular/occasional non-grocery shopping, by repertoire of places visited for regular/occasional non-grocery shopping, September 2010

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