Despite empty shops...
Edinburgh and Glasgow ‘ most resilient’ retail cities
Scotland’s two largest cities are among the most resilient retail centres in the UK, according to new data, despite having high levels of empty shop units.
Edinburgh had the most productive retail space of any major UK city outside of London, achieving a ‘sales density’ of £665 per sq ft prior to the opening of the St James Quarter, according to Knight Frank.
Glasgow was close behind, with £611 per sq ft, against an average of £329 per sq ft. across 39 UK cities analysed. A higher sales density figure indicates strong levels of productivity, while a low number suggests under-performance and/or an oversupply of retail space.
The findings suggest that, although the Covid-19 pandemic has resulted in fundamental changes to the way people shop, Edinburgh and Glasgow’s retail offerings have proven resilient and the cities look set to remain among the UK’s top shopping destinations.
However, the data contrasts with recent figures from the Scottish Retail Consortium showing Scotland’s shops missed out on £5.8 billion of lost retail sales during the past two years and that one in six shops are lying vacant.
Commenting on the latest research, Alasdair Steele, head of Scotland commercial at Knight Frank, said: “There has been a lot of talk about retail re-purposing, but the level of activity has thus far been fairly limited. It can be a complicated and costly process and often the numbers do not stack up from an investor’s perspective.
“The launch of the St. James Quarter in Edinburgh will undoubtedly have an effect on other retail pitches in the city – with the data capturing that still to come through.
“However, as the plans at Jenners demonstrate, there are opportunities to convert retail space that may be surplus to requirements and some of this could be used to address Edinburgh’s perennial lack of new office space under development.”
Stephen Springham, head of retail research at Knight Frank, added: “The proposed plans for Edinburgh’s Jenners department store and Buchanan Galleries are two of the highest profile examples of retail space being re-purposed in city centres in the UK.
“Yet, perhaps ironically, they are two of the least over-supplied city centre markets. The devil in the detail is that, in Scotland, our research suggests it is out-of-town where retail space is most over-supplied, rather than in city centres, and this is where change of use is most likely to follow. The question is whether this out-of-town floorspace is viable for alternative use.”
Retailers in Scotland saw tentative signs of recovery last month with the best sales figures for six months, though they remain well below pre-pandemic trends.
The Scottish Retail Consortium (SRC) reports that total sales in Scotland fell by 7.9% compared with January 2020, when they had increased by 1.3%. This was above the 3m average decrease of 11.6% and the 12-month average decrease of 10.8%.
The January performance is an improvement of 5.1 percentage points from December 2021 and is the lowest Yo2Y decline recorded since July last year.
On a like-for-like basis sales were down 3% compared with January 2020, when they had fell by 0.1%. This is above the 3-month average decrease of 10.1% and the 12-month average decrease of 8.1%.
Ewan MacDonald-Russell, head of policy at the SRC, said: “January saw the best Scottish sales figures in six months as shops kicked off 2022 with tentative signs of a recovery.
“Whilst these figures are littered with caveats – the value of sales remain nearly eight percent below pre-pandemic figures and are bolstered by inflation – it’s nonetheless welcome to see an improving performance after a dreadful end to 2021.”