The rise of the convenience store as supermarkets extensively expand their small store portfolios around the UK is well documented.

But the trend isn’t isolated to supermarkets. More and more retailers are looking into smaller format stores, too. The phenomenon is being driven by changing customer requirements and a shrinking supply of retail space in the prime locations. Competition to be in the best spots is high and retailers are adjusting their traditional requirements to enter key markets.

For example, Wilko took 10,000 sq ft of space in Fulham Broadway Shopping Centre, with 3,500 sq ft at ground-floor level. Historically, this retailer would typically look for stores between 15,000 and 25,000 sq ft, but in this case it adapted its format to be in a location where available space is limited.

Retailers are also responding to consumer demand. Having witnessed ‘click and collect’ grow at double the rate of home delivery, retailers are looking to operate stores as service points. These can typically be between 1,500 and 3,000 sq ft. For a retailer such as Argos this is significantly smaller than its usual 15,000 sq ft.

Is this a positive change for the retail industry? Naturally, smaller stores often means smaller rents and if the stores can be serviced and run efficiently, it can drive significant cumulative turnover while providing a presence for the retailer in the most sought-after locations.

For landlords and the health of the UK high street, the fact that retailers are now considering smaller units, which in recent times have been harder to let, can only be a good thing.

Further information

Contact Savills Retail for more information.