Retail Trends - Spring 2011

Report Summary:

Given the Government’s stated policy objective for sustainable economic growth and its commitment to town centres first, this research examines the prospects for town centres and the challenges they face based on recent and ongoing trends.

Expenditure growth:

Over the last 15- 20 years (up to the recession) retail expenditure growth, especially non-food expenditure growth, was exceptionally strong, driven largely by high rates of borrowing, low inflation/interest rates and strong house price inflation. The recession corrected such unsustainable growth and the next 10 years will see much weaker expenditure growth.

Development activity:

The last decade saw an exceptional amount of retail development, particularly town centre development. This stopped dramatically with the recent recession with a much lower level of new construction than during the previous recession.

Changing customer and retailer demands:

The retail sector is constantly evolving due to changing customer demands. Notable trends have been the consolidation of retail businesses, the diversification of retailers into new areas and the demand for larger modern units – a potential problem for smaller or more historic town centres which will intensify.

Population changes:

The last four decades have seen the UK’s population grow at an accelerating rate. Strong growth is expected over the next 20 years, with a particular focus on the eastern and southern parts of the country.

The trends discussed have helped shape our town centres and will continue to have implications for town centre retailing in the future. The outlook for town centres will depend on how some of these trends ‘pan out’ and possible combinations of different trends. In the short-medium term development viability is likely to remain constrained and major new town centre schemes will be limited. In the longer term, the trends mentioned will shape the amount, type and location of new space required.

About the Author:

GVA's award winning Research team provides high quality research and analysis to the business and its clients. Our market commentaries, thought leadership pieces and consultancy advice drive industry debate, distinguish GVA from its competitors, and add value for our clients.

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