Fashion insight
Changes in the way
consumers shop
Super league
Competition hots up in
store for the big grocers
There’s no...
Many of the changes in customer behaviour witnessed in the past
decade have been accelerated by the hectic pace of life.An...
24
d e s k t o pd e s k t o p
6 Pho co-founder Stephen Wall on his authentic Vietnamese food offer
autumn 2012 3
Contents
4...
News
PartnershiP
retail
Fashion insight
Changes in the way
consumers shop
Super league
Competition hots up in
store for th...
Other news
second green guide launched
Retailers and store designers have
a new guide to help them achieve
energy savings ...
Interview
autumn 20126
CafePho co-founder Stephen Wall is one of a new breed of restaurant owners mixing authentic street
...
autumn 2012 7
Interview
autumn 20128
noodles by his wife, who was more than seven months
pregnant at the time.
Asian inspiration
There i...
autumn 2012 9
“We could open 15 to 20 additional sites in the next few
years, but we will be very particular in terms of s...
Sizing up the
Report
autumn 201210
F
ashion shopping will, of course, never go
out of style, but the dynamics of the way
c...
market
autumn 2012 11
Muted volumes mean changes to consumers’ spending
habits too, which is pulling fashion retail in two...
Report
autumn 201212
MULTICHANNEL
Omnichannel is the retail buzzword of the moment. As shoppers increas-
ingly use a range...
autumn 2012 13
vIbRANT SHOppING dESTINATIONS
Curtis believes that just as the fashion market is polarising so are shopping...
Connected reality
autumn 201214
A
s consumer adoption rates for
smartphones and tablets continue to
rise, so does the tren...
Partnership
autumn 2012 15
our shoppers. We should be seen to be enabling shoppers in
the physical environment and wi-fi is...
Street
Report
autumn 201216
I
n early 2009 when an old van was converted
into a travelling kitchen and it pitched
up in va...
autumn 2012 17
Hamburger restaurant Byron is another. It has created a
smart, shiny metallic van and is putting in the mil...
Report
autumn 201218
I
n a challenging market where many are
competing ferociously on price, store groups
are increasingly...
autumn 2012 19
it a point of difference in the increasingly crowded
pets market. New products include a thunder shirt,
whi...
Report
autumn 201220
W
hile online sales continue
to show strong growth,
the majority of retail sales
still involve a cust...
autumn 2012 21
2
3 4
5
HOW IT WORKS
1 Simply enter keywords such as ‘black dress’ or ‘red shoes’
into the product search b...
Partnership
autumn 201222
Newlyengaged
Y
ears of planning and research
goes in to getting the location
and design of a new...
autumn 2012 23
the right store for customers in the area, and be closely
involved with the opening too.
Reynolds says the ...
Retailers are branching out
of London to other major cities
in the UK, such as Forever 21
opening in Glasgow
autumn 2012 25
stores, depending on where the right real estate has become
available,” he says. “I think we’ll see more of...
Report
autumn 201226
Storewars
Tesco – home and away
Relying on overseas revenues, Tesco has been looking to grow its key ...
autumn 2012 27
C
ompetition has rarely been fiercer
for the hearts, minds and wallets of
supermarket shoppers. The consoli...
autumn 201228
S
ome opportunities reflect perfectly a moment
in time and edge-of-town and out-of-town
schemes are just suc...
autumn 2012 29
butes. What is important is that we work with the landowner
if they bring a suitable site to us; our convic...
A1 autumn2012[1]
A1 autumn2012[1]
A1 autumn2012[1]
A1 autumn2012[1]
A1 autumn2012[1]
A1 autumn2012[1]
A1 autumn2012[1]
Upcoming SlideShare
Loading in...5
×

A1 autumn2012[1]

337

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
337
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "A1 autumn2012[1]"

  1. 1. Fashion insight Changes in the way consumers shop Super league Competition hots up in store for the big grocers There’s no  place like home Why the UK is attracting international brands Recipe for  successPho’s Stephen Wall brings authentic cuisine to the UK autumn 2012
  2. 2. Many of the changes in customer behaviour witnessed in the past decade have been accelerated by the hectic pace of life.And this means that leisure time is particularly cherished by ever more discerning consumers. This could be perceived as a threat to retail,but there is also a clear opportunity for those who can ally themselves to the right leisure brands that generate footfall.Our interview with Stephen Wall,the co-founder of innovative restaurant concept Pho (page 6),shows why we are so keen to engage with those who are driving the growth in spend in this sector. The care and attention that is being put into our new developments, both in terms of the consumer insight we generate and retail mix we create as a result,is focused on creating a destination brand.For instance,it is the Trinity Leeds brand that will connect with the people that will be its customers. Centre operators have a responsibility to optimise the retail mix and create an attractive ambience.The next stage in the evolution of the relationship between retailers and landlords has to be increased flexibility to allow the landlord to manage the retail mix for the benefit of all in a scheme. A good piece of news is that the 2012 Olympics has reinforced London’s position as one of the world’s greatest cities.It’s helped to attract brands to the capital, and once here they are then looking at UK expansion (page 24). Retailers have a choice about where they open new stores,and whether they open new stores at all.If you imagine a world where there are no shops and everything is sold online,you would only choose to put shops in places where people congregate,where they socialise,go to dine or to the cinema or theatre.We all need to be mindful of this as we think about how the future of the sector is shaping up. All can benefit from the right mix Foreword Richard Akers, executive director, Land Securities autumn 20122 22 14 16 There is a clear opportunity for those who can ally themselves to the right leisure brands that generate footfall
  3. 3. 24 d e s k t o pd e s k t o p 6 Pho co-founder Stephen Wall on his authentic Vietnamese food offer autumn 2012 3 Contents 4 News All the latest deals, initiatives and retail developments from Land Securities’ shopping schemes 6 Interview Co-founder Stephen Wall on the unique appeal of his Vietnamese-inspired Pho 10 Fashion Insight into the dynamics of the clothing and footwear sector 14 Partnership Wi-fi is becoming a necessity for consumers when shopping in centres and stores 16 Dining The revolution of street food is bringing new dining opportunities to the UK’s retail destinations 18 Product Why own-label and private-label goods give store groups the competitive edge 20 Multichannel How Google’s Product Search can help support consumers’ shopping experience 22 Partnership Retailer engagement strategy ensures new centres fulfil their potential 24 International Why the UK is the top location for retailers looking to expand overseas 26 Grocers Supermarkets are improving their in-store design 28 Development Land Securities shows how with the right offer edge-of-town and out-of-town locations will prosper 30 Leisure The development of The Cornerhouse in Nottingham makes it a compelling leisure destination 32 Retail view A1 asks a panel of six industry figures how they feel about the prospects for the year ahead 34 Portfolio An overview of Land Securities’ shopping centres, outlets, retail parks and leisure centres 30
  4. 4. News PartnershiP retail Fashion insight Changes in the way consumers shop Super league Competition hots up in store for the big grocers There’s no  place like home Why the UK is attracting international brands Recipe for  successPho’s Stephen Wall brings authentic cuisine to the UK autumn 2012 001_A1_September 2012v3.indd 1 29/08/2012 10:19 Produced by autumn 20124 Primark is to open a 60,000 sq ft store at The Bridges in Sunderland by Christmas 2012, after Land Securities secured full planning permission for a £15m expansion of the scheme and handed over to Primark on July 31. The plans received widespread approval, following a public exhibition, with 84% of respondents providing feedback to the consultation saying the expansion would improve the local area, and 78% saying it would attract more shoppers to Sunderland. Primark joins Superdry, Caffè Nero, Lush and upsized stores for Topshop/Topman, JD Sports and Internationale. Portfolio director Gerald Jennings said: “Our ambition is to continue to strengthen The Bridges’ reputation as one of the best shopping and fashion destinations in the Northeast for the 21 million customers who visit each year.” The deal is the latest in a series that Primark has struck with Land Securities to open major new stores, including at The Centre in Livingston in 2011, its new 85,000 sq ft store on Oxford Street and the 106,500 sq ft store that is to open at Trinity Leeds next year. Department store retailer John Lewis has confirmed that the first of its flexible format department stores will open in October in Exeter. The new format at Land Securities and The Crown Estate’s Sidwell Street site has been created to allow the retailer to open stores of a size in between its current department stores and its smaller At Home format. The Exeter store will offer the full assortment including fashion, beauty, electronics and nursery. The store will create 300 jobs in the city with 65,000 sq ft of selling space across five floors. Land Securities development director Nick Davis said the new store will “significantly strengthen the city’s retail offer, improve people’s shopping experience and add vibrancy to the high street. Our strong partnership with John Lewis and Exeter City Council will benefit residents and visitors to the city and will lead to further inward investment into the city centre.” Primark expansion progresses in Sunderland October opening for John Lewis Exeter store the new John lewis store in exeter will create 300 jobs Special Projects Editor Joanna Perry Writers David Brooks, Glynn Davis, Mark Faithfull, nicola harrison, George MacDonald, John ryan Supplements Production Editor tracey Gardner Design forty6 design ltd www.forty6design.com Publisher tracey Davies For Land Securities Claire Reynolds claire.reynolds@landsecurities.com t +44 (0)20 7747 2390 Victoria Terry victoria.terry@landsecurities.com t +44 (0)20 7024 5046 © retail Week all material is strictly copyright and all rights were reserved. reproduction in whole or in part without the written permission of retail Week is strictly forbidden. the greatest care has been taken to ensure the accuracy of information in this magazine at the time of going to press, but we accept no responsibility for omissions or errors. the views expressed in the magazine are not necessarily those of retail Week or land securities. a1 is printed by headley Brothers ltd. ashford, Kent
  5. 5. Other news second green guide launched Retailers and store designers have a new guide to help them achieve energy savings in their shop fit-outs in the shape of Land Securities’ Low Carbon Fit Out Guide. The document was launched in June 2012 and updates the well-received first version that was published in 2010. Changes include a more user-friendly format and advice on the recent and future changes to relevant legislation. Business fund supports Glasgow Land Securities is one of the supporters of the ARISE Glasgow community project fund that supports local initiatives by the businesses of the Buchanan Quarter. The fund offers up to £1,000 per application and can be applied for by education, employment, environment and sporting projects. The funding will be allocated by an independent selection committee made up of local business, academic and political leaders. Victoria plans take shape Plans to redevelop Kingsgate House in the heart of Victoria with office, residential and retail space are now under way. The proposed 341,000 sq ft development will create two buildings – Kings Gate and 70 Victoria Street – as well as public space. The redevelopment of this strategic asset marks the latest step in the company’s ambitious plans to create a Victoria for the future. Other milestones include the refurbishment of 123 Victoria Street, an icon of 1960s design and part of the fabric of Victoria, due for completion in late summer 2012. The winner of the first Trinity Leeds Short Film Award is to be screened in an Everyman Cinema in London following the prize announcement. Everyman Cinema – which will open its first cinema outside London in Trinity Leeds in March 2013 – has supported the 2.8 Days Later film challenge, which was delivered by Land Securities and film production company Left Eye Blind. The challenge involved 150 filmmakers from across Leeds creating 27 three-minute short films, which were publicly screened before a prize-giving at The Carriageworks in Leeds earlier this year. The winner of the top prize, ‘Immersed’, was picked by a judging panel that included Sheffield-based Barry Ryan of studio Warp Films, Leeds-based film producer Howard Dawson and Everyman Group chief executive Andrew Myers. Filmmakers who took part said the experience had given them new skills, as well as highlighting how much work goes into different aspects of the process. Trinity Leeds chose to support the initiative – which involved the young filmmakers spending just under three days writing, shooting and finishing their shorts in November 2011 – because of the important role that cinema will play at the centre and the city’s filmmaking heritage. 2.8 Days Later film winner announced MarKetinG DeVeloPMent autumn 2012 5 US fashion chain Urban Outfitters is to create one of its largest stores in the UK at the new Trinity Leeds development. The 12,000 sq ft flagship store is laid out over three floors in an iconic building, and will have its next-generation fit-out design. Six months before the scheme’s launch date in March 2013, Trinity Leeds is making strong leasing progress, with 80% pre-let or in solicitors’ hands. Urban Outfitters joins a growing list of fashion retailers – including Hollister, Superdry, Topshop/ Topman, River Island, H&M and Mango – which will be opening in the centre in March 2013. Other retailers to take space in recent months include Footlocker, Fossil, Vodafone, Watch Station and Internacionale. They will join the many high street stalwarts already committed to the scheme, which include Marks & Spencer, Next and Primark. Urban outfitters will introduce a next-generation fit-out for its flagship store opening at trinity leeds next year Urban Outfitters signs up at Trinity Leeds
  6. 6. Interview autumn 20126 CafePho co-founder Stephen Wall is one of a new breed of restaurant owners mixing authentic street food with a premium casual dining experience. By Joanna Perry “I t’s the calm before the storm,” jokes Pho co-founder Stephen Wall, as we take in the surroundings of his Spitalfields restaurant at 10am on a Friday morning, with staff busying themselves in preparation for the lunchtime rush. Tables are already laid, the stocks for the restaurant chain’s signaturenoodlesoupsareonthestove,andawaitressisbusy preparing fruit for the fresh juices served. The buzz in the restaurant matches the Hanoi-like atmosphere of the rain storm brewing outside. The Vietnamese-inspired restaurant has been open only a couple of months, and is the latest in the expanding chain that was founded in 2005 at a site in nearby Clerkenwell. Set up by Wall and his wife and business partner Jules, the business now operates seven restaurants in total – six in London and one in Brighton – and growth plans are under way, with venture capital funding secured from ISIS Equity Partners to take the business to its next stage of development. The story of how the idea for the business came to the couple is now well-known. While on a career break from jobs in marketing, and backpacking through Asia in 2005, they were struck by the food on offer; and couldn’t believe that no one was specialising in Vietnamese food in the UK. Following in the footsteps of other established restaurants such as Wagamama, which specialises in Japanese ramen noodle dishes, the chain has brought pho – a type of noodle soup – to the masses in London and now beyond. Customers count Going through the clippings from other interviews it looks like Wall has had quite a bit of press in the past, but things had gone a little quiet in the year until the ISIS announce- ment in early August. Partly this quiet period was down to a focus on securing new investment funding. But Wall also explains that in the early days of the business it very much sought press coverage. His wife and he were keen to get the brand message across on their own terms, instead of, as he puts it “having to rely on critics coming to our new restaurants when they open”. Rather than uncovering a particular dislike of restaurant critics, what this shows (and he goes on to demonstrate time and again throughout the interview) is that Wall is obsessed with his customers. And irrespective of what the critics think, if his customers keep coming back then he is happy. Wall doesn’t just want full restaurants, but restaurants that are full of repeat customers. “We massively care whether it is the same people coming back. Our St John Street restaurant in Clerkenwell is seven years old, and that has been built on repeat custom.” In fact the first restaurant bought the couple two regular customers who later became investors in the business – gastro-pub entrepreneurs Tom and Ed Martin – who bought a 50% stake in the business in April 2007. Though neither Wall or his wife came from a restaurant trade background, they have taken their understanding of marketing and branding, combined with a desire to delight their customers, and matched it with a dogged determination to learn the hard way. So in the business’ “first phase” as Wall calls it, when they had their initial restaurant up and running, the couple worked “every single shift for 18 months to two years”. In fact Wall can remember that one of the odd nights he didn’t work was on his 37th birthday, when after signing a deal for funding with Tom and Ed Martin he went into the restaurant to celebrate and was served culture Pho: What you need to knoW the chain is named after the national dish of Vietnam, a noodle soup. Pronounced ‘fuh’, pho is described as the ultimate street food, and in its country of origin is eaten for breakfast, lunch and dinner. It’s served with a side plate of herbs and chillies to allow diners to season as they wish. Marketed as being tasty, nutritious and healthy – it’s low in fat and full of fresh ingredients – it has a subtle and distinctive taste that comes from the hours taken to prepare the stocks used.
  7. 7. autumn 2012 7
  8. 8. Interview autumn 20128 noodles by his wife, who was more than seven months pregnant at the time. Asian inspiration There is a renowned area of London close to several of Wall’s restaurants where a number of Vietnamese restau- rants have been established for years: Dalston’s Kingsland Road.ButWallisclearthathisrestaurantsoffersomething different, and with a relentless focus on the menu and ingredient quality he says his chefs are able to provide food that is beyond the standard available there. “About 40% of our total menu is pho, so we can invest moremoneyiningredients.Thefoodwedeliverisprobably even more authentic than you can get on the Kingsland Road,” he says, pointing out one of his most experienced chefs in the kitchen, who has come to oversee the new restaurant and is Vietnamese. “Traditional Vietnamese restaurants often serve Chinese food too, and you can’t ensure the quality of what you’re serving when there are more than 200 items on a menu,” he adds. In fact, rather than assessing himself against the Kingsland Road, he benchmarks the menu against the best of what’s being served on the streets of Hanoi: “The food we serve is absolutely authentic. The only compromise we’ve made is that the quality of the meat we serve is better than you get in Vietnam. We use chicken breasts, for instance, whereas they will slice up whole chickens and it’s pot luck what ends up in your bowl. “Everything in the restaurant apart from the three bottles of sauces you see on the tables is made in the restaurant,” he continues. “I imported some rice wine about six months ago. We are the first restaurant in Europe to bring this in.” The menu is evolving slowly, for instance, with a refreshed salad range that Wall jokes “even men will eat”, but he says further change in the near term will likely be no more than introducing another handful of starters over the next year or so. His wife and he still go back to Vietnam every 18 months to two years, both to get inspiration from eating on the streets for how they can improve their menu, as well as for the decor in their restaurants. This means each site has a unique look and feel, based on the latest things they have seen, making the most of the unique buildings and sites they have chosen. The individu- ality of each site is something they are keen to continue as the business grows. The new investment funding they have secured will not reduce their input into every aspect of the business. “Though the business will still be run by Jules and myself – we will be able to take things to the next stage,” explains Wall. Brand building With a strong desire to retain the customer experience in their future restaurants the couple are being extremely careful with their expansion plans. “We can really focus on the customer experience as we grow. We don’t want to become a slave to the P&L [profit and loss], as we are reputation building. We are still very young at seven sites, and if anything I want to invest more money into improving the product, not less,” he says. Wall continues: “The P&L is very important, but it is really about the customer. Are our restaurants full and what do the customers think? If we get that right, and with good management of KPIs, then that leads to a good bottom line.” This strategy has appeared to pay off so far. In 2010 the business turned over more than £6m, with a gross profit margin of 76%. So, future growth must not jeopardise the success achieved so far. Pho’s hIstory June 2005 the first Pho opens on st John street in London’s Clerkenwell. April 2007 ed and tom Martin take a 50% stake in the business. Spring 2008 second site opens in Great titchfield street in central London. October 2008 shepherd’s Bush restaurant opens. May 2010 the chain’s largest site to date opens in Brighton. September 2010 the fifth site in the chain opens in a listed building in soho. September 2011 Pho opens near the olympic site in London’s stratford. July 2012 the seventh site opens opposite spitalfields Market in London. July 2012 the business secures venture capital funding from IsIs for its next stage of expansion.
  9. 9. autumn 2012 9 “We could open 15 to 20 additional sites in the next few years, but we will be very particular in terms of site choice. We are looking for further high street sites and would love to open in Covent Garden among other central London locations,” says Wall. Site choice is down to exact location, including the actual building, and his business is too small to be able to afford to get a single decision wrong. “If you choose the wrong site in the restaurant trade then you know about it, it sets you back a year in the business,” he adds. One restaurant has opened at Westfield Stratford City, and the business is in talks to open at Land Securities’ Trinity Leeds development, which would be its first major foray outside London after the opening of the Brighton restaurant. “A lot of people want us [in their schemes] but we will only go into what I describe as five-star schemes, such as Trinity Leeds. “We could have opened in provin- cial schemes and we would have made a lot of money for a couple of years, and then the brand would have fallen off the cliff,” he reasons. Pho’s target demographic of 25-to-35-year-old professionals who live and work in urban surroundings fits well with the catchment for Trinity Leeds. Wall says he is also attracted to the scheme because it is a completely new concept outside of London, with cutting-edge design, a focus on the best in dining and a number of other high- quality operators. “That’s what we want to be part of, as it will draw the crowds.” While still relatively small, he says scheme owners such as Land Securities are attracted because he can offer something new, while already having a clear operating model: “For Land Securities we are an emerging brand, and outside London few people know us; but we do have seven years’ experience.” Those seven years in the business has taught the Walls to be focused on customer service, great product and great people. As a growing business they can no longer do every- thing themselves and are at the point where they need staff who can act as custodians of the brand they have so carefully nurtured. “We are trying to instil the DNA of our business into our staff. Ewan [one of his senior managers] thinks exactly like we do. I don’t ever want robotic staff who just go through the motions.” This means the couple draft in what Wall calls “the A-team” to spend a good month or so in a new restaurant when it opens, to make sure it gets off on the right footing. In particular, getting a new opening right means impressing customers who are first to try out a new site, as they are important in spreading the word, and tend to be loyal too. “It’s the early adopters who are so crucial. They are on Twitter and Facebook, and are tech-savvy in recom- mending you. They tend to have more disposable income than the average customer too.” The final question I ask is about his future aspirations. On this he is clear: “It comes back to the brand. Even if we have five times more sites it is still having the same brand values intact. Too many restaurants change when they grow, and start to cut corners on staff and the quality of the food. We’ve got to learn from the lessons seen elsewhere.” He concludes: “Whether we have one or 101 restaurants – each should be as good quality as the first.” ● “A lot of people want us [in their schemes] but we will only go into what I describe as five-star schemes, such as Trinity Leeds. cial schemes and we would have made a lot of money for a couple of years, and then the brand would have fallen off the cliff,” he reasons. 25-to-35-year-old professionals who live and work in urban surroundings fits well with the catchment for Trinity Leeds. Wall says he is also attracted to the scheme because it is a completely new concept outside of London, with cutting-edge design,
  10. 10. Sizing up the Report autumn 201210 F ashion shopping will, of course, never go out of style, but the dynamics of the way consumers shop are changing in the UK. While some fashion players continue to thrive, particularly off the back of strong multichannel propositions, and international brands remain very interested in the UK market, there is a change in the mix of what is being purchased, and a new mindset that considers value rather than just price. For example, though many are purchasing less in volume terms, this is being partly offset by consumers who are prepared to spend a little more on the pieces of clothing they do buy. Plenty of opportunity remains, but retailers must adapt to the ‘new normal’ of lower volumes and a polarised market where differentiation is crucial or they face being left on the shelf. In order to gain further insight into the challenges and changes confronting its clients, Land Securities commis- sion quarterly research, working with retail consultancy Conlumino to provide up-to-date insight into key sectors. The latest white paper focuses on the fashion industry and includes bespoke research on the market from Conlumino, insights from agent Jones Lang LaSalle, as well as trends identified in Land Securities’ own sales and footfall data. The internal research programme reveals a market increasingly polarising between value and premium, and distinct differences in spending patterns across fashion categories. This is made more complex and exciting by the growth of multichannel shopping. The changes occurring will shape the future of shopping locations as well as retailers. Big changes are under way in clothing retail as the UK’s consumption pattern changes amid recession and pressure on household income. By George MacDonald segments where Consumers intend to make finanCial CutbaCks vOLUME CHANGES Since the downturn really took hold at the turn of the decade, clothing volumes began to drop back after climbingformanyyearshelpedbydeflationandlowprices. There is little sign of change in the downbeat trend. Consumers remain concerned about their personal finan- cial situation and, when polled in May, almost 40% of them feared their circumstances will get worse. Unsurprisingly, that means many people intend to cut back on spending – almost 64% – and, as a discretionary purchase, fashion is top of the agenda for cutbacks. Land Securities head of business-to-business marketing, Retail, Sean Curtis observes: “It is very clear from the research that clothing sales is an area which all segments of consumers are considering cutting back on – even childrenswear. Following the reduced spending on big-ticket items at the beginning of the recession, consumers attention has now shifted to the lower cost but, previously, high volume purchases of clothing as an area in which to make savings.” Almost 38% of consumers who intend to make finan- cial cutbacks said they planned to reduce the amount they spend on clothing – far higher than beauty at 29%, forinstance,orelectricalsatjustlessthan33%,although footwear was also lower at 29.5%. Conlumino managing director Neil Saunders says the volume shift means some retailers will need to change their mindset to remain successful: “The old approach, ‘stick it out and it will sell’, doesn’t work. In the early 2000s people were just buying a lot of stuff. It was harder to fail. The lesson now is you have to be more focused – people may buy one top instead of five.” fashion 38% footwear 29.5% beauty 29% eleCtriCals 33% Sizing up the Since the downturn really took hold at the turn of the decade, clothing volumes began to drop back after climbingformanyyearshelpedbydeflationandlowprices. There is little sign of change in the downbeat trend. Consumers remain concerned about their personal finan- cial situation and, when polled in May, almost 40% of them feared their circumstances will get worse. Unsurprisingly, that means many people intend to cut back on spending – almost 64% – and, as a discretionary purchase, fashion is top of the agenda Land Securities head of business-to-business marketing, Retail, Sean Curtis observes: “It is very clear from the research that clothing sales is an area which all segments of consumers are considering cutting back on – even childrenswear. Following the reduced spending on big-ticket items at the beginning of the recession, consumers attention has now shifted to the lower cost but, previously, high volume purchases of clothing as an area in which to make savings.” Almost 38% of consumers who intend to make finan- cial cutbacks said they planned to reduce the amount they spend on clothing – far higher than beauty at 29%, forinstance,orelectricalsatjustlessthan33%,although footwear was also lower at 29.5%. Conlumino managing director Neil Saunders says the volume shift means some retailers will need to change their mindset to remain successful: “The old approach, ‘stick it out and it will sell’, doesn’t work. In the early 2000s people were just buying a lot of stuff. It was harder to fail. The lesson now is you have to be more focused – people may buy one top instead of five.”
  11. 11. market autumn 2012 11 Muted volumes mean changes to consumers’ spending habits too, which is pulling fashion retail in two direc- tions – value and premium. The white paper reveals that the shape of the sector is more polarised than ever before. Value retailers control 22.4% of the clothing market while ‘high street premium players’ account for 7.3%. The two can happily co-exist: shoppers’ determination to spend less keeps the value groups’ tills ringing. However, when fewer items are being purchased it means that when consumers do decide to buy a new item they will frequently go for quality. Despite the rise of bargain-hunting, low prices on their own are not enough, says Saunders. Consumers make more subtle judgements about what represents value. That dynamic explains why Primark, which success- fully combines value and fashionability, has continued to grow successfully but other low-price retailers have struggled or, in some cases, collapsed. And the volume shift in the market is likely to limit the potential of some low-price specialists in the present climate, Saunders believes. He says: “At the value end there’s only room for a few players and one is Primark. The volume is not there to support all these value players. “It was fine when there was growth in the market but there are high barriers to entry now. You need colossal volume – you can’t dabble.” While low prices were mentioned by 61.7% of consumers asked about what drives their choice of stores, high quality was the second biggest factor and cited by 47.4%. That illustrates why, even in austere economic times, retailers that can justify a premium on their apparel are still doing well. Saunders explains: “There’s an attitude of ‘buying right’. People want something that lasts. “A lot more people are reusing things. Rather than buying a lot of stuff every season they’re buying one item that complements [something they already have]. “That doesn’t mean the fast fashion fix has gone but, especially at the older end of the market, they’re taking care about buying and willing to invest in great quality.” Shoppers’ behaviour threatens to make life even more difficult for middle-market retailers. The white paper warns: “One of the key problems is that they can often appear to be neither fish nor fowl, with neither particu- larly high prices nor great quality or inspirational ranges.” There are many ways that retailers can add value to their fashion offer. From designer collaborations, as have been deployed by retailers including H&M and Topshop, to including extra detail on a product to justify trading up to the consumer. The store experience is a contributing factor too. As well as helping to create an engaging offer, multichannel in-store experiences – such as those being developed by chains such as Aurora Fashions and Republic – also help close sales. What shoppers do not want, warns Saunders, is “ubiquity” – again something that some middle-market retailers may be susceptible to: “There might be rails full of a jacket for £100 and that diminishes the sense of exclusivity. It would be better to have fewer out and keep more in the back room.” pOLARISATION what drives store ChoiCe (All numbers are percentages of consumers mentioning) LOw pRICES SpECIAL OffERS SERvICE INSpIRING pROdUCTS HIGH qUALITy AvAILAbILITy ONLINE OffER UNIqUE pROdUCTS wIdE RANGE CONvENIENCE pARkING NEAR IN-STORE SERvICES 0% 10% 20% 30% 40% 50% 60% 70% 61.7% 47.4% 45.6% 45.5% 40.9% 36.5% 25.6% 24.4% 16% 16% 12.8% 3.3% market Muted volumes mean changes to consumers’ spending habits too, which is pulling fashion retail in two direc- tions – value and premium. The white paper reveals that the shape of the sector is more polarised than ever before. Value retailers control 22.4% of the clothing market while ‘high street premium players’ account for 7.3%. The two can happily co-exist: shoppers’ determination to spend less keeps the value groups’ tills ringing. However, when fewer items are being purchased it means that when consumers do decide to buy a new item they will frequently go for quality. Despite the rise of bargain-hunting, low prices on their own are not enough, says Saunders. Consumers make more subtle judgements about what represents value. That dynamic explains why Primark, which success- fully combines value and fashionability, has continued to grow successfully but other low-price retailers have struggled or, in some cases, collapsed. And the volume shift in the market is likely to limit the potential of some low-price specialists in the present climate, Saunders believes. He says: “At the value end there’s only room for a few players and one is Primark. The volume is not there to support all these value players. “It was fine when there was growth in the market but there are high barriers to entry now. You need colossal volume – you can’t dabble.” of consumers asked about what drives their choice of stores, high quality was the second biggest factor and cited by 47.4%. That illustrates why, even in austere economic times, retailers that can justify a premium on their apparel are still doing well. Saunders explains: “There’s an attitude of ‘buying right’. People want something that lasts. than buying a lot of stuff every season they’re buying one item that complements [something they already have]. “That doesn’t mean the fast fashion fix has gone but, especially at the older end of the market, they’re taking care about buying and willing to invest in great quality.” pOLARISATION
  12. 12. Report autumn 201212 MULTICHANNEL Omnichannel is the retail buzzword of the moment. As shoppers increas- ingly use a range of routes to browse and purchase, from store to computer to mobile device, retailers must engage on consumers’ terms. The research sets out a challenging scenario in light of online growth. While the clothing market overall is expected to increase by 15.3% by 2015, that figure falls to just 5% if online growth and inflation are stripped out. However, multichannel retail complicates this model as an increasing number of retailers begin to leverage their store chains to offer click-and- collect and order online in-store services, and so many more sales cannot simply be categorised as online or offline. The right locations and the right mix of retailers will be ever more key to a trading location’s success. Curtis says: “Online is going to continue to be a factor and [from a landlord’s perspective] creating centres that embrace technology to deliver profitable stores is going to be key.” CATEGORIES There are issues affecting the constituent categories of fashion. Trading up has been especially noticeable in womenswear, a category that has been fairly sluggish during the downturn because of women’s decision to cut back; and the extent to which they could do that, given the keen buying in the years before the downturn. The research identifies an opportunity among women aged 45 and over, who are under-served at present. In comparison, menswear volumes have been more stable as more purchases are needs-based. The premium parts of the menswear market have also seen strong growth as branding and brands are more important to male shoppers. The improvement in the quality of kidswear by supermarkets and value retailers, matched with a consumer willingness to cut back, has seen a big shift to value in the kidswear market. “The focus on price and, to a degree, convenience has created ideal conditions for the grocers and value players, which have continued to extend their share of the kids market, often at the expense of the middle market, which has both lost share and responded by reducing price points,” the study concludes. Clothing inCrease (inCluding online growth and inflation) 15.3% Clothing inCrease (exCluding online growth and inflation) 5% the growth of the Clothing market by 2015 TRAdING Up TRENd THE ExpERIENCE IS CRITICAL TO Add vALUE key issues in womenswear dESIGNER COLLAbORATIONS CREATE URGENCy ANd INTEREST MIddLE ANd OLdER AGE SEGMENT IS AN OppORTUNITy MORE INTEREST IN HIGH STREET pREMIUM INTERNET bENEfITING fROM STRONG GROwTH key issues in menswear MIddLE MARkET MOST SqUEEzEd fROM CUTTING bACk fORMAL fASHION TRENdS AIdING GROwTH where Consumers have shopped (All numbers are percentages for last six months) 70% 60% 50% 40% 30% 20% 10% 0% Physical HIGH STREET Online dESkTOp Physical SHOppING MALL Physical GROCERS catalOgue Online MObILE 60.9% 47.6% 41.5% 34.5% 8.6% 7.2%
  13. 13. autumn 2012 13 vIbRANT SHOppING dESTINATIONS Curtis believes that just as the fashion market is polarising so are shopping locations – with consumers showing a strong preference for those that really support shopping as a social activity and offer good value for the time visitors ‘invest’ in spending there. Consumers – particularly those with disposable income – tend to be time- poor, and it is as crucial to attract them to spend time in stores as it is their money. This requires destinations to have a retail and leisure mix closely targeted to the needs and wants of their consumers. And in order to maintain appeal and encourage loyalty to a destination there is an expectation that this mix will be kept fresh and the centre will work to optimise the experience, rather than relying purely on the ambience within individual stores. Saunders says it is vital now that consumers feel they are being given “value for time” as well as for money. There are many ways that can be done, whether it is good in-store cafes, an appealing environment or a leisure offer that complements traditional retail. “In some older shopping centres, and some secondary and tertiary locations, that’s not quite so good,” he observes. “For women, shopping is still very much a social activity,” he reminds retailers. Cafes, bars and places to eat are now core components. He says town centre managers must also be alert to the need to build a compelling retail offer, and believes that can be done – in fact retailers frequently do it themselves by grouping together when it is to their mutual benefit. “What you see in some market towns is a cluster of premium retailers, which on their own might be relatively one-dimensional,” says Saunders. NEw ENTRANTS Despite the changes currently under way in the UK fashion market, it continues to be one of the strongest in the world and remains attractive to foreign entrants. The spotlight thrown on the UK, and London in particular, by the 2012 Olympic Games has attracted many international brands (see page 24). That is good news and shows the vibrancy of the UK fashion retail scene, says Curtis. However, these premium brands are often picky about where they locate. Shopping centres and their host towns and cities must stand out on a new level. “In the current climate, many new entrants are considering European locations against each other, so we’re not necessarily competing with other cities in the UK, but places in Europe. We have to work harder to attract those retailers with information that lets them appraise the cities accord- ingly,” Curtis says. International brands entering and expanding in the UK are often premium, and they demand exciting locations, which can attract a demographic that reflects their positioning. They are also prepared to invest heavily in the fit-out of their stores as they position their brand in the new market. There is also something of a critical mass effect, where the opening of stores by international brands attracts others as it clearly marks out the destination as somewhere that UK consumers can get something different from the average high street. Considerations for shopping plaCes CHOICE Of STORES bRANd pRESENCE LEISURE INTEGRATION vALUE vERSUS pREMIUM INNOvATION ANd NEwNESS MARkETING ANd pROMOTION International brands entering and expanding in the UK are often US-based forever 21 (above) and Hollister (left) are two examples of international retailers expanding in select locations in the Uk
  14. 14. Connected reality autumn 201214 A s consumer adoption rates for smartphones and tablets continue to rise, so does the trend for customers to use them to supplement their shopping experience. Retailers, including John Lewis, Tesco, O2, Maplin and Mamas & Papas, are reacting to this change by offering free wi-fi connectivity in their stores. They believe there is benefit to be had by making it simple for customers to access the internet while shopping. Atfirsttheindustrymayhavebeenalittlewaryofconsumers having instant access to information on their competitors’ products and prices, however, there is now a much clearer realisation of the benefits of offering fast internet connections for customers. Mamas & Papas, for instance, has made a commitment to wi-fi because it wants shoppers to be able to easily access the customer reviews of products on its website. Meanwhile, Tesco is rolling out wi-fi across its store estate – from the current 250 Extra outlets into its superstores. By the end of the year it will be available in 700 of its stores across the UK. Mark Cody, senior marketing manager for mobile at Tesco.com, says: “It enables customers to do things in store rather than having to go home. The volume of customers signing up is really encouraging.” Engaging in one-to-one communication is a key part of Tesco’s strategy, according to Cody: “You could push an offer to customers when they are in store and maybe remind them of a click-and-collect order that is ready for them to collect.” DanielLucht,researchdirectoratResearchFarm,suggests the grocer is in a strong position as it is linking wi-fi access to itsClubcardloyaltyprogramme.Itcanpotentiallyconnectthe historicalshoppingpatternsofanindividualwiththeircurrent behaviour in store and personalise the interaction. Electronics retailer Maplin also plans to promote a tailored range of products via the branded wi-fi landing page that will be based on shoppers’ browsing histories. Land Securities is among the converted and is involved in pioneering work with The Cloud to install wi-fi in all its UK www.cabotcircus.com Just check your WiFi is on, then select ‘WiFi Zone - The Cloud’ from the available network list, open the browser and follow the on-screen instructions to register or log on. WiFi Free Get free WiFi throughout Cabot Circus and browse the net and our stores. 15993 CV CC A1 Posters - WiFi poster.indd 1 03/01/2012 15:48 www.cabotcircus.com Just check your WiFi is on, then select ‘WiFi Zone - The Cloud’ from the available network list, open the browser and follow the on-screen instructions to register or log on. WiFi Free Get free WiFi throughout Cabot Circus and browse the net and our stores. 15993 CV CC A1 Posters - WiFi poster.indd 1 03/01/2012 15:48 Wi-fi connectivity in centres and stores is quickly moving from a nice-to-have to a necessity, learns Glynn Davis
  15. 15. Partnership autumn 2012 15 our shoppers. We should be seen to be enabling shoppers in the physical environment and wi-fi is critical to us doing this as it bridges the gap between online and in store.” The situation has been accentuated as shopping centres improve their food and beverage offer. The upside has been to increase dwell time, which has further driven the desire of shoppers to check their emails and engage in social media activities when sat in the centres’ cafes and restaurants. Free wi-fi is the obvious solution and early evidence at Cabot Circus shows it is proving beneficial. Rosie Collins, store manager at The Body Shop, has certainly been enjoying its advantages: “It is positive news that Cabot Circus was the first shopping centre in the region to provide free wi-fi for shoppers. It means our customers can easily surf the web, use social media, and even carry on working while in the centre – thereby enhancing their overall experience.” Russell suggests it is early movers such as Land Securities and Tesco that will reap the benefits of implementing wi-fi: “There is an increasing expectation that people will have access to good data connections and it is, therefore, those retailers and shopping centres that embrace this bringing together both offline and online that will benefit.” Having wi-fi in stores and shopping centres also provides operational benefits. Russell cites the possibility of using the connectivity for implementing mobile tills and taking EPoS data back from the stores to head office for analysing. This has been part of the strategy at Aurora Fashions, which is gaining operational benefit ahead of a likely launch of wi-fi for customer use. Wi-fi has provided Aurora with the infrastructure to roll out iPads, which are used as an alterna- tive to fixed tills and as a device from which customers can undertake staff-assisted orders for out-of-stock goods that can be delivered to the store or to customers’ homes. By the end of the year these devices will be in a third of the group’s stores – this encompasses the Oasis, Coast, and Warehouse brands. Ish Patel, group omnichannel director at Aurora Fashions, states: “Store employees have got [internet] access in the back office but they also now need it in the front of store because we need teams equipped to give the [best] levels of service.” What will also benefit retailers using wi-fi in store will be the emergence of mobile payments. Lucht suggests that providing payment solutions via wi-fi connectivity will help negate the need for costly near field communication payment implementations and disruptive till re-fitting. It is clear that wi-fi connectivity can offer real tangible benefits for consumers, retailers and shopping centre operators.Kingconcludes:“Weseeaninterestingbehavioural changeplayingoutinthedigitalspacerightnow.Theinternet is changing the way we live; it’s reshaping the way we communicate, how we interact, the services we use and, of course, how and where we shop. And the game-changer here is the smartphone. “Bringing wi-fi to our centres will align in-centre and out-of- centre experiences, creating an enhanced user experience for our shoppers, regardless of whether in the centre, in the car, or at home – that’s the point, to provide a consistent service offering across all channels.” ● It’s about creating a great environment for people to spend time and shop Vince Russell, The Cloud properties. It was rolled out to Bristol’s Cabot Circus in January and will be in all Land Securities’ centres by the end of 2012 in what is a first for a UK landlord. Land Securities digital marketing manager Todd King explains that this is one of many projects being explored, which aim to provide an omnichannel platform for retailers in its schemes: “Our digital strategy is delivering a number of market leading initatives; from mobile-optimised websites and Google Product Search to wi-fi roll-out. We’re creating the platforms on which more innovations can be built.” There is a growing realisation that mobile connectivity needs to be embraced and used as a tool to enhance the customers’ experience in shopping centres. This enables consumers to search for retailers, look for specific product details, compare prices, buy goods for home delivery or click- and-collect, and share shopping experiences with friends via social platforms. Sky’s the limit The Cloud managing director Vince Russell says: “It’s about creating a great environment for people to spend time and shop. Today if you are sitting there [in a shopping centre] and you can’t get decent internet access then you’ll probably wander off.” King says: “It’s an absolute given for our digital strategy to endeavourtoprovideacompletelyseamlessserviceoffering.It makes sense for us as landlords, the retailers and, of course, d e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o pd e s k t o p www.cabotcircus.com Just check your WiFi is on, then select ‘WiFi Zone - The Cloud’ from the available network list, open the browser and follow the on-screen instructions to register or log on. WiFi Free Get free WiFi throughout Cabot Circus and browse the net and our stores. 15993 CV CC A1 Posters - WiFi poster.indd 1 03/01/2012 15:48
  16. 16. Street Report autumn 201216 I n early 2009 when an old van was converted into a travelling kitchen and it pitched up in various London car parks selling high-quality burgers under the name of ‘Meatwagon’, it lit the touchpaper for the UK’s street food revolution. Today there are a growing number of chefs and amateur cooks – along with some well-recognised restaurant brands – who have followed in its wake and are using their trucks to sell an ever-broader range of innovative and exciting foods for a young and hungry clientele to eat on the hoof. This appetite for converting trucks and vans into kitchens and appearing in different locations throughouttheweekfollowsthetrendfirstseenin the US where street food has become a feature in many cities. Trinity Leeds, Land Securities’ next big retail destination, demonstrates the importance of this growing trend and the resilience of the food and beverage sector. Oneofthescheme’sbrandpillars is around food, and the development team have been keen to explore ideas for food that are more about creating talkability and a social scene than just buying products. Looking at the revolution of street food, and forging a partnership with the British Street Food Awards has allowed the team to gain a greater insight into how this vibrant street scene is affecting the way consumers are buying and spending time with food. This insight combined with his own experience of the high-octane flavours delivered from the mobile kitchens on the west coast of the US led Andrew Turf, food and beverage leasing manager at Land Securities, to seize on the opportunity to bring some of this excitement into its shopping centres. “I’m from Chicago and had previously worked in Los Angeles where I experienced the street food culture and vibe. It started there with the likes of Kobe beef burgers. I wanted to bring it to our [shopping centre] sites in the UK where we’ve seen street food grow like crazy in recent years,” he says. Marrying street food vendors with large shopping centre sites certainly moves the food experience in many centres a significant step further on. To help Turf realise his objective of hosting a street food festival, Richard Johnson, organiser of the British Street Food Awards, worked with him to bring 11 street food trucks to the Quakers Friars outdoor space at Bristol’s Cabot Circus shopping centre from May 18 to 20, 2012. Johnson suggests that street food makes exciting dining affordable and Turf agrees wholeheartedly, saying it creates a buzz wherever it goes: “It’s not just different, it is also affordable, interesting, eclectic, and is more vibrant – attracting 18-to-34-year-olds who bring more energy with them.” The potential to bring in different food trucks to specific centres on a Friday and Saturday to provide a differing proposition to that available from the regular in-centre restaurants can enhance the overall offer. And the more success the street food operators have then the more exposure the retailers and other tenants will ultimately enjoy. The food on offer from the trucks that pitched up at Quakers Friars in May were a broad mix of operators, including The Hungry Gecko – vegetarian Asian street food from MasterChef 2011 finalist Jackie Kearney; Big Apple Hot Dogs – autumn 2012 cooks – along with some well-recognised restaurant brands – who have followed in its wake and are using their trucks to sell an ever-broader range of innovative and exciting foods for a young and hungry This appetite for converting trucks and vans into kitchens and appearing in different locations throughouttheweekfollowsthetrendfirstseenin the US where street food has become a feature Trinity Leeds, Land Securities’ next big retail destination, demonstrates the importance of this growing trend and the resilience of the food and beverage sector. Oneofthescheme’sbrandpillars is around food, and the development team have been keen to explore ideas for food that are more about creating talkability and a social scene than just buying products. Looking at the revolution of street food, and forging a partnership with the British Street Food Awards has allowed the team to gain a greater insight into how this vibrant street scene is affecting the way consumers are buying and spending time with food. This insight combined with his own experience of the high-octane flavours delivered from the mobile kitchens on the west coast of the US led Andrew Turf, food and beverage leasing manager at Land Securities, to seize on the opportunity to bring some of this excitement into “I’m from Chicago and had previously worked in Los Angeles where I experienced the street food culture and vibe. It started there with the likes of Kobe beef burgers. I wanted to bring it to our [shopping centre] sites in the UK where we’ve seen street food grow like crazy in recent years,” he says. Marrying street food vendors with large shopping centre sites certainly moves the food experience in many centres a significant step further on. To help Turf realise his objective of hosting a street food festival, Richard Johnson, organiser of the British Street Food Awards, worked with him to bring 11 street food trucks to the Quakers Friars outdoor space at Bristol’s Cabot Circus shopping centre from May 18 to 20, 2012. Johnson suggests that street food makes exciting dining affordable and Turf agrees wholeheartedly, saying it creates a buzz wherever it goes: “It’s not just different, it is also affordable, interesting, eclectic, and is more vibrant – attracting 18-to-34-year-olds who bring more energy with them.” The potential to bring in different food trucks to specific centres on a Friday and Saturday to provide a differing proposition to that available from the regular in-centre restaurants can enhance the overall offer. And the more success the street food operators have then the more exposure the retailers and other tenants will ultimately enjoy. The food on offer from the trucks that pitched up at Quakers Friars in May were a broad mix of operators, including The Hungry Gecko – vegetarian Asian street food from finalist Jackie Kearney; Big Apple Hot Dogs – Street food has taken the UK by storm over the past couple of years. Glynn Davis discovers how it is bringing new energy to the UK’s largest retail destinations style likes of Kobe beef burgers. I wanted to bring it to our [shopping centre] sites in the UK where we’ve seen street food grow like crazy in recent years,” he says. Marrying street food vendors with large shopping centre sites certainly moves the food experience in many centres a significant step further on. To help Turf realise his objective of hosting a street food festival, Richard Johnson, organiser of the British Street Food Awards, worked with him to bring 11 street food trucks to the Quakers Friars outdoor space at Bristol’s Cabot Circus shopping centre from Johnson suggests that street food makes exciting dining affordable and Turf agrees wholeheartedly, saying it creates a buzz wherever it goes: “It’s not just different, it is also affordable, interesting, eclectic, and is more vibrant – attracting 18-to-34-year-olds who The potential to bring in different food trucks to specific centres on a Friday and Saturday to provide a differing proposition to that available from the regular in-centre restaurants can enhance the overall offer. And the more success the street food operators have then the more exposure the retailers and other The food on offer from the trucks that pitched up at Quakers Friars in May were a broad mix of operators, including The Hungry Gecko – vegetarian Asian street food from MasterChef 2011MasterChef 2011MasterChef finalist Jackie Kearney; Big Apple Hot Dogs –
  17. 17. autumn 2012 17 Hamburger restaurant Byron is another. It has created a smart, shiny metallic van and is putting in the miles to attend various music festivals around the country, as well as setting up shop in numerous locations around London, and was also among the posse at the Quakers Friars street food festival. Although the festival was a first for Land Securities, Turf says it undoubtedly points the way towards the future for foodwithindestinationshoppingcentres:“Itcanhelpprovide the soul for a shopping centre. The more different compo- nents you have with relevance for your consumers the more soulful the centres can become and it turns them into a desti- nation. Street food has required a different mentality from Land Securities, but Quakers Friars shows the willingness to embrace a modern culture.” Expansion on the street food theme will put the company in a good position to sate the growing appetite of people to try something different, according to Turf: “Street food brings differentiation as well as a whole level of creativity that draws attention to the centre. It enhances Cabot Circus’s reputation as a foodie heaven, whether it’s here today, gone tomorrow moments or well-loved restaurants.” While Land Securities and others continue to re-jig their exposure to food within their develop- ments, Johnson says it is inevitable that street food will also evolve. There are already some operators who have moved on from food trucks and into high street premises including the trail-blazing Meatwagon. It initially added a pop-up Meateasy and now operates the hugely successful Meat Liquor and Meat Market restaurants in central London. But street food operators will not all metamor- phose into bricks and mortar, says Johnson: “Some will get into bricks and mortar but they are being replaced by 10 more [new trucks] when they go. There is no reason why street food will die. It’s not faddy. It’s not about liquid nitrogen or edible flowers. It is about eating outside and is a sensible solution to dining in new and different ways.” ● It is about eating outside and is a sensible solution to dining in new and different ways Richard Johnson, British Street Food Awards smart, shiny metallic van and is putting in the miles to attend various music festivals around the country, as well as setting up shop in numerous locations around London, and was also among the posse at the Quakers Friars street food festival. Although the festival was a first for Land Securities, Turf says it undoubtedly points the way towards the future for foodwithindestinationshoppingcentres:“Itcanhelpprovide the soul for a shopping centre. The more different compo- nents you have with relevance for your consumers the more soulful the centres can become and it turns them into a desti- nation. Street food has required a different mentality from Land Securities, but Quakers Friars shows the willingness to embrace a modern culture.” Expansion on the street food theme will put the company in a good position to sate the growing appetite of people to try something different, according to Turf: “Street food brings differentiation as well as a whole level of creativity that draws attention to the centre. It enhances Cabot Circus’s reputation as a foodie heaven, whether it’s here today, gone tomorrow moments or well-loved restaurants.” While Land Securities and others continue to re-jig their exposure to food within their develop- ments, Johnson says it is inevitable that street food will also evolve. There are already some operators who have moved on from food trucks and into high street premises including the trail-blazing Meatwagon. It initially added a pop-up Meateasy and now operates the hugely successful Meat Liquor and Meat Market restaurants in central London. But street food operators will not all metamor- phose into bricks and mortar, says Johnson: “Some will get into bricks and mortar but they are being replaced by 10 more [new trucks] when they go. There is no reason why street food will die. It’s not faddy. It’s not about liquid nitrogen or edible flowers. It is about eating outside and is a sensible solution to dining in new and different ways.” which is at the forefront of the revolution that could see hot dogs go down the route of burgers and become the country’s next food craze; Daisy Green’s frozen yoghurts; and Jalopy Pizza – wood-fired pizzas sold from a classic Peugeot J7 van. They all bring a sense of theatre, for example, What The Dickens serves British dishes and revived vintage recipes, such as kedgeree, dressed as gentlemen wearing top hats and sometimes playing ukuleles. There is great excitement in the wayCafeMôrdeliversitsseafoodmenu:“Theyarewinnersof a street food award last year and sell what’s not expected as a street food – including seashore wraps – from a convertible beach hut,” says Johnson. Such imaginative cuisine goes with the territory and your customers will tell you if they like it or not. Johnson says: “People can afford to take risks as they have low overheads so you can see if a Chinese hot dog works. You can simply throw together various ideas. I’ve recently eaten an Indian burrito, for instance.” However, it is not just newcomers who are customising vans and hitting the roads. Street food is also an opportu- nity for established specialist food brands to showcase their products to a broader audience. Hence, the likes of Wahaca, with its cyan and magenta-coloured Mexican food truck, are joining the growing throng and hitting the road.
  18. 18. Report autumn 201218 I n a challenging market where many are competing ferociously on price, store groups are increasingly looking to their product offer to give them a point of difference. Own-label and private-label ranges enable them to offer exclusive products as well as being more profitable than selling branded goods. In fact, as well as making economic sense due to more attractive margins, the strategy allows retailers to target a different shopper base, says Kantar Retail director of retail insights Bryan Roberts. But which ranges are working well? Roberts cites Asda as an example of a retailer that has “shiftedtheneedleonquality”throughownbrandtowidenits customer base. The grocer has partnered with Leiths Cookery School to produce a range of quality food products, for instance. Conversely, upmarket grocer Waitrose’s launch of its value line has proved a hit with cash-strapped shoppers still seeking affordable quality. Another trailblazer in the field is DIY giant Kingfisher. In a sector that tends to lack product innovation from the big brands, the B&Q owner opted to take the initiative by developing its own range of products. The retailer was so keen on pushing unique and useful DIY solutions that it set up a dedicated innovation centre last year. Located at its French headquarters in Lille, the retailer works with suppliers, universities and other specialists to develop a pipeline of exclusive products to drive newness and margin in stores. Kingfisher own-brand products, many of which are sold across the group, include a ready-to-install tile without the need for glue as well as a shower that can be installed in two hours. Another innovation, a toilet with a sink in the top, re-uses the water used to wash hands to flush the toilet. One retailer at the forefront of innovation with exclusive private-label products is Debenhams through its Designers at Debenhams ranges. Collaborating with designers such as name?UK retailers are positioning themselves at the heart of product innovation with their own-label and private-label ranges, finds Nicola Harrison What’s in a Henry Holland, it continues to prove a hit with shoppers. Debenhams chief executive Michael Sharp said at the retailer’s interim results this year that two-thirds of its customers cite Designers at Debenhams as the reason they shop at the department store. “We have to offer more differentiated product by growing our own brand,” he said. Debenhams aims to increase revenue from Designers at Debenhams to £750m in the next three years, and is considering expanding it from fashion and homewares into other categories such as accessories and footwear. It accounted for £524m in its last financial year. Now more than ever Rival John Lewis has also been working hard to offer exclusive product. In March this year, John Lewis Partnership chairman Charlie Mayfield identified own brand as a key strength of the group, which also operates Waitrose, and said the business had upped the pace of product innovation. “Developing products you cannot buy anywhere else has never been more important,” he said. John Lewis is partnering with designer Alice Temperley to create her first high street range. Hitting shops in September, theretailerexpectsqueuesaroundtheblockwhenitlaunches. Additionally, the department store has just launched its biggest ever own brand, House by John Lewis. The furniture and homewares range will initially comprise 600 SKUs and will be showcased within branded shop-in- shops in stores as well as having a dedicated section on Johnlewis.com. Pets at Home has put product innovation at the heart of its growth strategy. It runs regular Dragons’ Den-type Innovation Open Days where customers, colleagues and suppliers can pitch ideas to the business. The retailer created the position of innovation buyer last year to search the globe for unusual products to give
  19. 19. autumn 2012 19 it a point of difference in the increasingly crowded pets market. New products include a thunder shirt, which is a tightly wrapped jersey that helps reduce anxiety in dogs. Boots has had huge success with its own brand, in partic- ular its No7 beauty products. “Its own brand is one of the key reasons why shoppers go there,” says Roberts. “It’s well regarded and engenders loyalty.” Boots won plaudits when it launched the first ever clini- callyprovenanti-ageingskinproduct,No7Protect&Perfect. This year it launched its next instalment, Lift & Luminate Day & Night Serum. Boots UK chief operating officer Ken Murphy says No7, 17 and sun protection range Soltan “have strong identities and equity in their own right”. He adds: “We believe that the development of trusted own-label products makes Boots a key destination on the high street in the UK. Our own-brand products play a major role in the lives of our consumers. We offer high quality at affordable prices. Our own brands provide a complementary breadth to our offering.” The grocers have also long been at the forefront of own-brand innovation. Tesco this year made the dramatic move of rebranding its £1bn Tesco Value opening price point range, replacing it with Everyday Value – a more contempo- raryversionintendedtorepresentimprovedqualitycompared with its predecessor. Tesco rebranded its own-label range earlier this year to Everyday Value (above, right); John Lewis launched own brand House by John Lewis (above, left); Products from Boots’ No7 range (below) Tesco has also launched venture brands including the Chokablok range. The stronger emphasis on own brand forms a key plank in Tesco chief executive Philip Clarke’s ambition to return Tesco to form. Roberts says the merchandising of such ranges is impor- tant so they stand out on the shelves. He says Tesco has “pushed very hard with display and marketing” of its Everyday Value range, for instance. Roberts adds that on the supermarket shelves, the best place to position products is between eyeline and chest level. “We’ve seen retailers beef it up in that hot spot,” he says. However, he cautions that “overdoing” the merchandising could alienate those customers who prefer branded products. Murphy also believes merchandising own brand is important. As such, Boots has begun “a comprehensive programme” to upgrade the look and feel of the pharmacy area across stores and online, according to Murphy. The revamp aims to make it easier for customers to find products, while giving them access to information, support, and services. Marks & Spencer has worked hard at merchandising its beauty offer in its new M&S Your Beauty: The Best of Nature & Science department in its High Street Kensington store. The 1,150 sq ft space aims to be more premium and high tech, giving department stores such as John Lewis a run for their money. The retailer has used cutting edge techniques, including using declassified US military technology, in the department to showcase branded products alongside M&S’s own brand. A virtual makeover counter lets shoppers digitally select different shades of cosmetics to determine the most suitable colours for their skin tone. It also features on the retailer’s website, allowing customers to upload their images to virtu- ally try out different shades. Own brand has become a key battleground in the fight for share and margin, and retailers that do not innovate run the risk of getting left behind. l
  20. 20. Report autumn 201220 W hile online sales continue to show strong growth, the majority of retail sales still involve a customer going into store. Research online, purchase offline (ROPO) is a consumer behaviour trend that’s driving a significant proportion of retail sales – four out of 10 European consumers prefer to ROPO, according to a Google study. Having already invested in initiatives to support multi- channel shopping – such as free wi-fi in its centres and the mobile optimisation of its websites – Land Securities has started testing Google Product Search functionality on the website of Leeds’ White Rose shopping centre. It’s part of the company’s strategy to ensure it continues to support its retailers in an environment where online is an increasingly important strategy. Google Product Search provides a function to search for retailers’ goods on the centre’s website, as it pulls together all the relevant products for participating stores that operate in that centre. Using Google’s comprehensive search capability to locate products, the service displays the results on the White Rose site. These results can then be filtered by relevancy, latest products and price. The search function covers goods from Warehouse, Oasis, Debenhams, Topshop, Schuh, Disney Store and, the most recent addition, Miss Selfridge. More retailers will be added as the service continues to gain traction in the marketplace. Consumers have the opportunity to continue browsing, comparing products, or transact online on the retailer’s website to click-and-collect or complete the purchase – it’s up to the consumer. Sean Curtis, head of business-to- business marketing, Retail at Land Securities, explains: “The marketing landscape has changed, the consumer wants access to information anywhere they go, anytime they want, and to be able to transact however they wish – digital enables this.” In this way Land Securities is keeping consumers happy, but also supporting retailers too, acting as a conduit driving traffic directly to the websites of participating retailers. If the trial is successful, the product search service will be rolled out to the websites of each centre in Land Securities’ portfolio. It may seem slightly counterintuitive for a shopping centre to be encouraging consumers to look at products online, but the ROPO trend shows that the web supports offline transactions as well as being an alternative channel to market. Curtis says: “The key is using online to push customers back into our centres, as part of a true multichannel focus and becoming part of a revolving loop – engage online, push in-centre, create value, push back offline.” ● Searchand selection IN NUMBERS 9 out of 10 purchases take place offline 4 out of 10 consumers prefer to research online, purchase offline (ROPO) Source: Forrester and Consumer Commerce Barometer (TNS / Google / IAB) £28.2bn Estimate of annual value of ROPO to the UK retail, technology, consumer packaged goods, entertainment and finance sectors Source: Boston Consulting Group 54% of consumers do not buy online because they want to see the product before they purchase Source: Google study 16% of consumers don’t buy online because they want to take away purchases immediately Source: Google study Search 1 Land Securities has begun trialling Google’s Product Search to explore how it can support multichannel shopping journeys, hears David Brooks
  21. 21. autumn 2012 21 2 3 4 5 HOW IT WORKS 1 Simply enter keywords such as ‘black dress’ or ‘red shoes’ into the product search box on the home page of the centre’s website. 2 The search engine returns relevant products available from retailers at the White Rose centre, which provide their product information to Google. 3 The results – which show images and prices – can be filtered by retailer, release date, relevancy and price. 4 The listing for each item includes more information on the store at White Rose, and links directly to the retailer’s website. 5 Consumers can choose whether to purchase the product online, click-and-collect or go to the store in the centre to look for it.
  22. 22. Partnership autumn 201222 Newlyengaged Y ears of planning and research goes in to getting the location and design of a new shopping centre just right. And closer to the launch, the marketing campaign will ramp up and be tailored to appropriate messages for the consumer segments the scheme will serve. After all, it’s beneficial to consumers, retailers and the scheme’s operator for a new shopping centre to hit the mark with the local shopper catchment. With its new retailer engagement strategy, Land Securities is sharing its insight with retailers that have exchanged on new developments, and is providing early guidance to ensure their store openings and fit outs maximise their potential. Trinity Leeds, opening in March 2013, has been the first opportunity for Land Securities to use this approach. The scheme’s marketing manager, Claire Reynolds, first conceived the strategy two years ago. Land Securities always invests in consumer insight around its developments, and the retailer engagement strategy is allowing Reynolds to introduce this to retailers at the point where it can shape their own plans, and also understand the rationale behind the details of the scheme. “It is introducing the scheme, allowing them to get under the skin of consumers in Leeds and then understanding how and why we have developed the proposition,” she says. Trinity Leeds consumer insight has shaped everything from the architecture of the scheme, through to the leisure mix and the marketing activity taking place to warm-up consumers in the area. Innovative brand marketing for Trinity Leeds has included social media activity and content co-creation – such as a film competition, 2.8 Days Later, created with independent cinema chain Everyman and independent film company Left Eye Blind – so Land Securities is able to show the consumer relationships it is building in the run-up to launch. Until the development of the Trinity Leeds scheme, Land Securities mainly worked alongside retailers’ property and store opening and design teams. But mindful of the valuable insight it generates to finalise the development plans and execute its own marketing activity, the company decided to widen the scope of its early engagement activity. Two kick-off breakfast briefing presentations took place for Trinity Leeds’ retailers, both of which attracted more than 20 retailers keen to hear from Land Securities and to understand each other’s plans for the scheme. Heads of marketing, merchandising, store design executives and even chief executives were in attendance, as well as store opening and project management executives. Brands to have benefited include Warehouse, Office, Mango, H&M, Fraser Hart, Marks & Spencer, O2 and Everyman Cinema. These will be followed up with individual meetings and, in October, a second round of presentations will introduce Early sharing of customer insight and the vision for a new scheme with the retailers taking stores there is proving a huge success for Land Securities The new model for engagemenT Retailers sign up for a store in a new Land Securities’ development or centre 1 A year before opening land Securities identifies and makes contact with retailers’ brand and marketing teams, as well as their store design and store opening teams 2 Nine months before opening retailers’ brand and marketing executives are invited to a kick-off presentation, where land Securities shares its consumer insight to help inform their marketing activity and designs for their new stores 3 Seven months before opening retailers are invited to a launch presentation for the scheme where more information is shared, and further networking between retailers takes place 4 Six months before opening The recruitment drive for stores in the centre begins, supported by land Securities. retailers also start to be introduced to the centre’s operational teams 5 The new scheme is launched
  23. 23. autumn 2012 23 the right store for customers in the area, and be closely involved with the opening too. Reynolds says the new way of working has already meant significant changes to a number of retailers’ plans for the scheme: “M&S began in Leeds in the penny bazaar market. We’ve been working with their team to deliver the next generation flagship of M&S destinations, which reflects their heritage and looks to the future, providing customers with a compelling offer, in this impor- tant store for them.” Now that Land Securities has forged strong relation- ships with a broader range of executives it will be able to refine the strategy when work begins to engage retailers who are signed up for two further schemes in its pipeline – Oxford and Buchanan Quarter in Glasgow. Reynolds concludes that the approach to developing the proposition for Trinity Leeds has been best-in-class, something Land Securities is determined to build on with retailer engagement in its subsequent schemes. l the launch creative to retailers, plans for the recruitment campaign will be shared, and retailers can meet the opera- tional teams who will run the centre. Reynolds says as well as getting retailers excited about the potential of the scheme, there’s also been a chance for them to network with one another. Judith Kelly, head of retail delivery for Trinity Leeds, is seeing a cumulative effect, as once retailers begin to talk about ideas for new formats and concepts for stores it helps support the changes other retailers can make to their own design; which raises the overall profile and potential of the centre as well as being great news for the shoppers it will serve. Feedback from the kick-off events has been positive. One head of marketing says they have never had such involvement at this stage of a new opening, and will use the customer insight to shape the brands stocked in the store. Another merchandising and marketing manager comments that the feedback would help his team create It is introducing the scheme and then understanding how and why we have developed the proposition Claire Reynolds, Land Securities
  24. 24. Retailers are branching out of London to other major cities in the UK, such as Forever 21 opening in Glasgow
  25. 25. autumn 2012 25 stores, depending on where the right real estate has become available,” he says. “I think we’ll see more of that as retailers and brands prioritise the major European cities for growth.” North American retailers are the most global with 73% present in all three regions (Europe, Middle East and Africa; Asia Pacific; The Americas) and the UK is especially targeted. The reasons are often strategic. Language and cultural charac- teristics are less daunting for US retailers than mainland Europe, the market is transparent and the fiercely competitive nature of the market makes it a robust testing ground. If a US retailer can create a successful model in the UK, they have confidence they can succeed more widely in Europe. International brands also bring fresh stimulus to a retail destination and consumer excitement, with awareness of global brands such as Forever 21 far higher. Taylor says: “It adds a point of differentiation to the tenant mix and with the strength of brands such as Apple, Hollister and Urban Outfitters attracts additional footfall and spend.” As a result London’s West End – the most international of all Europe’s major retail locations – expects to see turnover from shops on and around Oxford Street, Regent Street and BondStreetsurpass£10bnby2020,upfromabout£7.5bnthis year, according to the New West End Company. That has also been evidenced by the excitement that preceded the opening of the new Forever 21 stores, the Victoria’s Secret store in London and the much anticipated J Crew, which is still looking for a London flagship. Despite their eagerness to enter new markets, retailers have also become more patient about waiting to find the right location –hence,forexample,thelongwaitbybothUniqloandForever 21 to open stores after announcing their UK intentions. With little new development for international retailers targeting the UK, Trinity Leeds is in a unique position six months ahead of opening with the scheme more than 80% pre-let and in solicitors’ hands and welcoming international brands such as Fossil and Swarovski – both new to Leeds – plus more global names such as Mango, Hollister and H&M. John Grimes, Land Securities’ leasing director for Trinity Leeds, reflects: “There is an ongoing demand for quality space from UK and international retailers who want to be located in top cities like Leeds. Trinity Leeds is a stunning project, which people can now see and experience as the building is really taking shape. It’s becoming a real pull for international brands like Fossil and Pandora as it will be a retail beacon for the North.” l New Names to watch out for the uK has welcomed a host of new retailers recently, with Victoria’s secret the latest to arrive. whole foods market has also confirmed expansion of its portfolio, while hollister will open at trinity Leeds and J crew continues to scout for a London flagship despite a re-focus towards asia. crate & Barrel continues to weigh up options for the uK. french fashion retailer the Kooples has opened stores in the uK, coach opened a flagship on Bond street and forever 21 continues to expand, having established in London and Birmingham, with a new store planned for Glasgow. Designer tom ford is to open in Knightsbridge, urban outfitters is to open a store at trinity Leeds and chanel has opened its first standalone beauty store in covent Garden. Newspaper, books and convenience retailer relay opened at the new wing of King’s cross earlier this year and hopes to announce a second opening in 2012, while German footwear retailer Deichmann continues to expand in the uK. Japanese running and sportswear brand asics has opened its largest store to date at the west end of oxford street. InternationalThe UK remains the top lure for international brands looking to expand beyond their borders. By Mark Faithfullappeal Report T he many international retailers testing and expanding their formats intheUKdemonstratesthevibrancy and strength of the retail market here. London, of course, tends to be the top location for those looking to get maximum marketing leverage out of a flagship store, but in thepastfewyearscitiesandbigretailcentresoutsidethecapital have been added to the road map for a national presence. As a result the likes of Gilly Hicks at St David’s in Cardiff, plus Hollister at the upcoming Trinity Leeds are just two examples of iconic US retailers confident of branching out beyond London, although the UK capital – which according to a recent survey by CBRE attracted 55.6% of all internation- ally active retail brands last year – remains the destination of choice. The property agent’s survey put London as number one for global retail appeal. While London benefited from a mini-boom in 2011 as tourist spending boosted a relatively robust local economy, the UK alsoretainedtoppositionasthemostpenetratedglobalcountry with 56.7% of retailers in the survey present. For instance in Glasgow, Land Securities’ 155,000 sq ft, £70m investment in the redevelopment of 185-221 Buchanan Street will include US fashion powerhouses Forever 21 and Skechers. “Retailers are seeking to de-risk their expansion activities, generally choosing markets like the UK that are regarded as safe havens,” says Peter Gold, head of EMEA cross border retail at CBRE. “London is generally the first port of call for global retailers, but once they have established a presence in the capital, they are willing to extend their reach into other major UK cities, as well as major regional shopping centres.” London, Manchester and Birmingham are all in CBRE’s list of European cities attracting most international retailers. UK consumers are often already familiar with international brands; which particularly aids expansion beyond London. Justin Taylor, chief executive, retail and leisure at Cushman & Wakefield, adds: “London offers a springboard to expand into other large markets in the UK such as Cardiff, Birmingham and Leeds as well as other key European capital cities.” Right place, right time Andrew Bathurst, director at agency Harper Dennis Hobbs, notes that the push to prime locations in prime cities is even more apparent. “Forever 21 has looked at Europe as a single market and has been opportunistic about where it locates
  26. 26. Report autumn 201226 Storewars Tesco – home and away Relying on overseas revenues, Tesco has been looking to grow its key eastern European markets. The result is a new standalone format for its F&F clothing brand. Opening last year in Prague, it has now been refined in a larger form in Brno, the second city of the Czech Republic. It also opened in Warsaw, Poland and is poised to roll out a network of F&F standalones in the region. The stores do not feel like supermarkets – appearing to have more in common with H&M. In the UK, Tesco’s Hertford store demonstrates what was just a few months ago perceived to be the retailer’s interior future. At the time, much was made of the wood cladding on the fixtures and around the perimeter, as well as the amicable sign stating ‘Hello’ at the store entrance. Now things have moved on and the Thetford and Bishop’s Stortford stores show the retailer’s latest thinking. Lower fresh food equipment heights allow better views across the interior and graphics reflect product provenance. Beauty departments in both locations are part of a move towards capturing a bigger share of the health and beauty market. morrisons’ convenienT move As a latecomer to the convenience market, Morrisons has needed to hit the ground running. Making this a reality has meant in-depth design work with consultancy Fitch and the creation of, in effect, three different takes on the convenience format, in order to be able to customise the offer as required at local level. Dubbed M Local, what all three store types have in common is a refreshed colour palette, greater amounts of natural daylight, exposed brickwork and wood where it is deemed appropriate (in areas such as the bakery). Lucy Unger, managing director at Fitch, says M Local has also been designed to move away from the “canyon-like aisles” that characterise most c-stores with lower equipment heights in the middle of the shop that rise towards the perimeter. In practice, this means that shoppers of the stores in Ilkley, Manchester and Wilmslow, among others, are able to see through the space and navigate the store more effectively.
  27. 27. autumn 2012 27 C ompetition has rarely been fiercer for the hearts, minds and wallets of supermarket shoppers. The consoli- dation that has seen retailers such as Somerfield and Kwik Save disappear from high streets has only served to reinforce the UK’s grocery super league. And although the pace of new space opening has slowed generally, the major players continue to hone their estates, updating existing formats and examining new ways in which shoppers can be attracted through their doors. At the heart of this has been a move towards making store environments more experiential. There has been a sense that the interiors of many supermarkets have become little more than processing plants in which goods enter a store at one end and With competition hotter than ever, grocery retailers are creating ‘warmer’ store environments and testing new in-store strategies as they bid to ensure they remain in demand. John Ryan reports sainsbury’s sTays relevanT One of the holy grails of supermarket retailing is making stores, of whatever size, appropriate to their locality. This process is evident in Sainsbury’s stores in Earls- field in southwest London, Hertford and Pontypridd in South Wales. Each store takeselementsofthetownitissituatedin.Sainsbury’sheadofstoredesignDamien Culkin says: “What we’ve probably done [in the three stores] is told a better context story. In Hertford, for example, we commissioned some illustrations that tell the story of what went before, as much as being site specific.” The Hertford store, located in the former McMullens brewery, references the building’s history and shoppers can visit the heritage centre that links with it. The Pontypridd store has created graphics and in-store features to demonstrate the building’s history as a former manufacturer of industrial chains. In contrast, Earlsfield is a convenience store and has large white tiled areas as the display backdrop for fresh foods, while wicker baskets, fruit box-style crates and wooden perimeter cladding, which all create a more homely ambience. GeorGe opTs for shop-in-shop Asda clothing brand George has been established since 1990 and in that time it has tried standalone shops, which were unsuccessful, and in-store spaces, which have tended to use standard supermarket presentation. Now things are changing and in Bolton earlier this year, the grocer revealed a revamped shop-in-shop George that moves the collection, effectively, out of the supermarket and into the realms of the high street fashion consumer. Whether it’s light boxes and video screens, wood vinyl floors or a cash desk that features modish pendant lighting and a white, stippled back wall, this is a world away from the normal modus operandi employed by those selling clothing in supermarkets. The new look has also been trialled at the retailer’s Fosse Park store in Leicester and both stores are showing increases against branches with similarly- sized George departments. shoppers emerge at the other clutching merchandise- filled bags. This would be fine if there were only a couple of operators in the market, but UK consumers have real choice. The outcome of recent moves has been the evolu- tion of what is generally referred to as ‘warmer’ in-store landscapes, with Tesco performing a volte-face on its previously hyper-efficient, but almost factory-like interiors. Hand-in-hand with this trend has gone the continuing headlong rush into convenience and, in a number of locations in the UK and abroad, spin-off fascias that take elements of a supermarket’s offer and turn them into standalones. Better interiors, sharper pricing and a renewed concen- tration on the shopper experience all stand as evidence of the scramble to retain market share. For consumers, the outlook seems positive. l
  28. 28. autumn 201228 S ome opportunities reflect perfectly a moment in time and edge-of-town and out-of-town schemes are just such an example. Aside from its shopping centres, Land Securities previously focused on developing town and city centre locations. However, as the impact of the global downturn was felt there were increasing viability issues in terms of the costs and potential income from such schemes. Costs were going up but the likely income from potential projects was not keeping pace. Land Securities was one of the first investors in out-of- town retailing and built up a large portfolio over 20 years, which demonstrated attractive returns for shareholders. In the credit crunch, the schemes proved more liquid due to the average lot size, which was important for the company balance sheet. It made sense to focus on refreshing the portfolio with new prime assets. With increasing polarisation between desirable locations and those that Land Securities no longer felt would be viable for development, it looked at the opportunities for projects off-centre. The decision coincided with the broader range of anchor retailers, which had begun to look afresh at edge-of-town and out-of-town locations. More fashion and homewares retailers developed formats for such sites, rather than the traditional bulky goods retailers that had previously dominated these parks. Land Securities assembled a team to start looking at the opportunities strategically and to reach out to key retailers in order to fast-track the filtering process of opportunities, only concentrating on the strongest retail propositions. Strong partnership Land Securities development director Chris Ward says: “About two years ago we started building a development pipeline; we identified where we believed the demand would be in a rapidly changing world and which retailers we could develop deep relationships with. “We first created the Harvest Partnership with Sainsbury’s but we also identified that there were other retailers such as Next, Marks & Spencer and Debenhams where this sort of partnership approach would work well for both parties.” Sainsbury’s and Land Securities placed three assets with development potential into a joint venture holding, which has now increased to seven sites across the UK. In Wandsworth, southwest London, Harvest secured planning consent to enlarge the existing Sainsbury’s store to the biggestincentralLondonwitha120-bedhotelandadditional retail. The scheme is now on site and has been pre-sold to PRUPIM, acting on behalf of the M&G Secured Property Income Fund. The Harvest Partnership was retained by the Living on Prospects for Land Securities’ out-of-town and edge-of-town developments have thrived after bringing a new partnership strategy into play. By Mark Faithfull Development purchaser to manage the future development of the property. TheenlargedSainsbury’sandthenewretailunitareexpected to open in March 2013 and the hotel in August 2013. “At its heart is the idea of pooling the advantages of having a strong occupier commitment coupled with the property resource, expertise and balance sheet to deliver,” says Ward. “We still see the quality of the building and environment as critical in the long-term durability of a trading destination.” He adds: “Trying to buy prime stock at the right price remains difficult and so we have become opportunity-led, working with those who bring us opportunities to create compelling retail buildings with strong investment attri- Selly Oak, Birmingham Crawley
  29. 29. autumn 2012 29 butes. What is important is that we work with the landowner if they bring a suitable site to us; our conviction is that we should all share in the opportunities, as that is the best way to become the sort of partner that people want to work with. We agree up-front the rewards for each party, which vary depending on investment to date and future risk and we stick by those agreements.” Ward says the important element of any scheme is its potential to be dominant in its catchment: “We will either invest in assets with an end value of £40m to £60m, which are liquid in nature or alternatively those of £60m plus with potential to be regionally dominant destinations. The target opportunities must be in locations where we believe, or the local authority demonstrates, there is a strong case to achieve the necessary planning accreditations. “From a development and a competition for capital perspective, we have to be flexible and be in a position to bring forward product that can be kept within our portfolio balance or sold to fit other property owners’ investment criteria,” says Ward, citing Crawley as another example. Land Securities is delivering a 75,000 sq ft superstore for Morrisons and a 110-bed hotel for Travelodge together with four restaurants, for a total of 120,000 sq ft. Work is expected to start in September 2012 and completion 14 months later. Time for leisure Land Securities and Sainsbury’s also unveiled plans in October last year to take forward a big regeneration scheme in Selly Oak to transform a brownfield site in southwest Birmingham into a mixed-use development anchored by a 100,000 sq ft Sainsbury’s store. Two 150-room, mid-range hotels are also planned, both of which would be close to the UniversityofBirminghamandtheQueenElizabethHospital, plus400studentroomsand100,000sqftofofficesonthesite. Ward points to the need to continue innovating and the introduction of higher levels of leisure is one example of how the landscape of these schemes is changing dramatically. This is demonstrated at Thanet where there is not only an extensiveretailofferincludingDebenhams,M&S,Topshop, Boots, Next, New Look, TK Maxx and River Island, but leisure operators including a Vue multiplex cinema, a 20,000 sq ft casino and a Travelodge hotel, plus dining options including Nando’s and Ask. “Bringingapartnerwithyouinaschemeprovidesanumber of advantages,” says Ward. “The first advantage is the up-front capital and the reduced risk from having a strong covenant from the partner retailer. In terms of planning consents, bringing in a strong retailer helps from the perspective of presenting the employment benefit for the local area and also it is vital to undertake proper stakeholder consultation. That doesn’t mean paying lip service to the process but doing it properly and in good time. It really makes a difference.” With the continuing pressures on the high street, Ward foresees a bright future for edge-of-town and out-of-town locations providing the right offer is brought to the table. “We’ve only scratched the surface on leisure as an opportu- nity, increasing dwell time will give these schemes a sense of place,” he says. “I can only see the sector getting stronger.” l the edge Garratt Lane, Wandsworth

×