If you love a good dive into data then grab a large coffee (biscuit optional) and get involved with the latest Harper Dennis Hobbs Retail Vitality Rankings report.
The events of the past few years have brought previously unimaginable challenges and opportunities to the retail sector and as we emerge from Covid wondering if the Brexit impact has or hasn't yet landed, we face growing uncertainty with global events that transcend all else.
We are likely to see:
- greater pressures on household income
- significant disruption in global supply chains
- supply / demand market effects on availability of raw materials
- ongoing staffing availability issues.
all of which may well impact upon future Vitality Reports, but for now I would encourage you to take a moment or two to review the report to see the rise of commuter towns, the shift to "shop local" and how and where, larger and more traditional retail centres are bouncing back after the cliff face of 2020.
Interesting takeaways for those favouring an expresso over a venti latte:
- Attraction-led retail destinations have benefitted from domestic tourism
- Smaller commuter towns have maintained their retail vitality to the greatest degree over the last year
- Vacancy rates are higher in areas with a higher proportion of mid-market chain stores
- The sector is becoming more resilient and streamlined to face the challenges of a post pandemic environment
- The new concept of "competitive socialising" and other leisure concepts are entering the fray - stepping into the opportunities / voids left behind by recently departed department stores
- Trading levels remain lower than historically and this will present challenges on profitability for retailers and hospitality brands.
- The business rates review (and also now the Online Sales Tax consultation) will hopefully bring improvement to an area that has been crying out for a "reset"
In conclusion the report suggests that 2023 will see "continued macroeconomic headwinds" (which I touch on above) and which sadly are likely to be exacerbated by more recent global events.
Whilst a storm may still be brewing, if occupiers / retailers have made it this far then it seems entirely reasonable to consider them resilient enough and in the right place to take the next step on a transformational journey for retail that many of us have not yet witnessed in our careers, and although we have seen the demise of a lot of traditional retail names from our spaces of late, we are also seeing innovation and flexibility from those looking to grasp opportunities with both hands.
The ranking’s top 20 is still dominated, however, by smaller commuter towns which continue to benefit from a shift in shopping habits to local high streets, and from many families relocating from larger cities due to the impact of remote working. Still, the fundamentals for traditional retail centres—which were negatively impacted as millions of people stopped commuting into city centres and instead worked from home—were improved significantly in 2021.
http://hdh.co.uk/retail/vitality-rankings-point-signs-recovery-major-retail-centres/
