UK retailers are beginning to prefer urban locations to large out-of-town superstores.
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At a conference with town planning authorities, the UK deputy prime minister John Prescott made it abundantly clear that the trend for large out-of-town superstores is set to reverse. In opting for urban locations, leading retailers can attract a new demographic; urban convenience-oriented consumers.
Recent UK government figures have revealed that retail space in urban areas has increased by almost 30% over the past eight years. The trend is a result of stringent restrictions imposed on out-of-town superstores during the Conservative leadership more than 10 years ago, only now discernable because many big out-of-town projects already in the pipeline when the law was introduced have been completed.
The manner in which ‘big box’ retailers such as Ikea are changing course and considering smaller town centre outlets is indicative of how the retail landscape, led in part by the stringent controls on town planning, is shifting away from out-of-town superstores. Commenting on this trend, the UK deputy prime minister asserted that British town planning is “leading the world”, and in particular is becoming the “envy” of the US.
Yet planning restrictions are not the only driving factor for retail relocation. A number of UK retailers are already wise to the fact that convenience-oriented consumers are increasingly relying on top-up shopping rather than making the journey out of town for the traditional weekly shop. Leading UK supermarket Tesco has been opening small food stores in town and city centres since 1992 and now has 160 nationwide. Ikea is another retailer hoping to profit from a central location, along with the John Lewis Partnership, which reportedly has 10 new town centre stores planned.
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By GlobalDataOne group not sharing the enthusiasm about the urban relocation strategy will be independent retailers. If more big retailers start trading downtown, they could significantly undermine smaller businesses and the diversity of stores in urban areas. Nevertheless, criticism regarding homogenization is one that will always be levelled at the major retail players no matter where they are located.
As Prescott indicated in his speech, the presence of big retailers in city centres will bring more investment and generate employment and is therefore preferable to them leaving town and cities altogether. Similarly, the big retailers look set to gain, as opting for a city centre location will allow them to tap into a new market of urban convenience-oriented consumers.
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