An increasing consumer focus on affordability and convenience has seen value and discount goods retailers increase their UK store count by more than 5,000 since 2009. In fact, value retail goods and services have accounted for 87 per cent of all store growth by brands in the UK during that time, while supermarket chains have also increased their convenience offer by more than 1,600 stores.

New research carried out by Savills found that two thirds of consumers cited convenience as the primary reason for visiting a community shopping centre, with grocery purchases made on 46 per cent of all trips. This is followed by household, fashion, discount and health & beauty products, all purchased on more than 20 per cent of visits to such centres, while gifts and cards are purchased on 13 per cent of trips. The range of value and discount retailers available at a community shopping centre was also a key attraction for 20 per cent of shoppers.

It is clear from the wide range of goods purchased on trips to community shopping centres today that the concepts of convenience and value retail have merged and evolved to encompass much more than simply groceries. The value fashion sector has seen particular growth in both secondary and community shopping centres over recent years.

Despite these changes, tenant profitability remains absolutely key to creating sustainable shopping centres. Though sales densities in secondary locations do not tend to reach the levels achieved in their more premium counterparts, the favourable rents and other costs can compensate for this and lead to strong profit margins. In turn, robust occupational performance provides income security for investors and therefore makes the right shopping centres with these fundamentals very appealing.

While much has been made of the negative impacts of online shopping on physical retail, our research found that, across all age groups, 75-85 per cent of consumers visit a community shopping centre at least weekly and 91-95 per cent at least monthly. By comparison, just 40 per cent make an online purchase monthly.

This goes some way to explaining why many of the UK’s strongest retail brands continue to operate from several hundred stores, with particular growth stories including Wilko, Card Factory, Sports Direct, Specsavers and Pandora. This need for larger store portfolios inevitably means a strong reliance on shopping centre locations in more local areas.

As a result, these centres and the value and convenience retailers within them continue to play an important role in fulfilling consumers’ frequent needs with a physical retail experience that complements rather than competes with online shopping.

Further information

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