Investors seeking leisure destinations
Edinburgh nudges Glasgow off retail perch
Edinburgh is now challenging Glasgow’s reign as Scotland’s shopping destination. New research reveals that top retail brands moving to Scotland prefer the capital over its west coast rival.
International retailers expanding into the UK beyond London look for new property developments, affluent areas and tourist destinations that provide extra global visibility for their brand, according to the Colliers’ National Retail Barometer.
It tracked the openings of ten international brands, including Michael Kors, Nespresso, Victoria’s Secret and Zara Home, to see where they chose to target their initial phases of expansion beyond London.
Leeds was the surprise top choice with six openings, beating a number of locations in the Midlands and South of England.
The map showed that Scotland and the North of England were lagging the field. Edinburgh attracted three such stores and Newcastle two, with none choosing Glasgow as the home for one of their first three regional outlets.
John Duffy, a director with Colliers International in Scotland, said that the result was somewhat surprising, as Glasgow remained the second strongest retail hub in the UK, behind London.
However, it may have suffered due to a lack of new developments to attract top retailers.
He said: “These are aspirational or luxury brands and they generally want the newest, highest quality developments – in Scotland, there has been very little premium retail development in recent years.
“Edinburgh has provided new space at St Andrew Square and there is already a buzz around the St James Centre redevelopment, but Glasgow’s Buchanan Galleries extension has been put on ice in the last nine months.
“Nevertheless, this should not distract from the fact that Glasgow remains a very strong retail centre – rents are growing and in terms of sales density it remains well ahead of Edinburgh.”
Ross Wilkie, also a director with Colliers in Scotland, said that Edinburgh looked set to regain more ground on Glasgow as a shopping destination in the years ahead.
He said: “The St James Centre probably won’t be completed until 2020 at the earliest, but it has captured the attention of all the top international retailers, such as the ten used to compile the Barometer.
“As a short term effect, Princes Street will continue to thrive, as shops are displaced while the work takes place. Soon, pre-lets will be in full swing and we predict this development will take Edinburgh back into the top ten of UK shopping destinations.
“That’s quite an achievement considering its size – it certainly punches above its weight.”
The National Retail Barometer also showed that prime city centres and top shopping centres continued to enjoy a recovery in rents and vacancy rates, but largely at the expense of smaller towns.
Mr Duffy said: “This has been the theme for a few years now and it shows no sign of reversing.
“Whereas ten years ago a national retailer would have used 200 stores for full UK coverage, now they are doing it with 50 and filling the gaps with multi-channel offerings. People will travel to shop where they have the best choice and, increasingly, where they can combine it with other leisure activities.
“However, it is a mixed picture as some smaller destinations are managing to thrive, whereas some towns mostly where there is an over-supply of units are really struggling.”
> Retailers reported the strongest pace of growth since September 2015 over the year to October, with sales expected to expand at similar pace next month, according to the latest CBI monthly Distributive Trades Survey.
The survey of 126 firms, of which 60 were retailers, showed that sales for the time of year were considered to be above average and are expected to be in line with seasonal norms in November.
Growth in internet sales volumes picked up slightly over the year to October, but remains below the survey long-run average. Internet sales growth is set to increase at a broadly similar pace over the year to November.
> The British Retail Consortium has published data for the UK showing:
- Employment in the UK’s retail industry fell in the most recent quarter and by 3% over the past year, this is the sharpest rate of decline since 2010
- The number of retail stores declined over the past quarter and for the 6th quarter in a row, and by 1.2% over the past year
It comes after new official figures released on 6 October (in response to a written parliamentary question at Holyrood) revealed that the number of retail jobs in Scotland fell by 9,200 to 244,400 in 2015 (a decline of 3.6%).
David Lonsdale, director of the Scottish Retail Consortium said: “These latest figures demonstrate the impact that profound structural, economic and regulatory changes are having on the retail industry.
“The past year alone has seen over 9,000 jobs go in Scottish retail according to official figures, as retailers employ fewer people as they alter their business models to reflect mediocre sales growth, rising costs, and the continuing shift in purchasing habits.
“Whilst overall there are and will be fewer jobs, retailers are focusing on investing in a smaller number of workers who are working more productively.
“That’s good news for those workers, as these jobs will be better paid, with more options for progression, and with a greater emphasis on higher skills in future.”