Retailing has always evolved in response to social change. From market stalls to shopping centres to retail parks to catalogue shopping to omnichannel, the landscape for retail has always been in flux.
The rise of the internet and online shopping has been another step in that evolution. It offers unparalleled choice, competitive pricing together with the convenience of not having to leave your home. Today almost £1 in every £5 is spent online.
This raises a question – with all these different avenues to shop, why hasn’t town centre retailing become utterly irrelevant? Why, given the convenience of out of town and online retail do people still chose to go shopping in our towns and cities? This is particularly relevant when we consider how many of our town and city centres have lacked investment and coordinated management, are burdened with expensive car parking and often don’t present a particularly desirable environment to be in.
"At KLM Retail, we believe it is because our town centres offer something which all other retailing channels lack. They offer a sense of social belonging and community, fulfilling a basic human need for social interaction."
Town centre retailing can now rarely win through price competition and convenience. It can however compete, and win, by providing a social environment that the other retailing channels cannot. If the stakeholders who control our town centres acknowledge and embrace this, our town centres will not only retain their place at the heart of the community but also thrive. We believe our town centres need the following key traits:
Accessibility
- Shopping in a town centre has to be accessible. Already at the heart of our public transport systems, they also need to encourage car bound visitors with easy access, free parking and better integration with the local environment to encourage pedestrians.
- Being at the centre of these transport networks, higher residential densities in our town centres should be encouraged. Residents will use town centres more than visitors and create sustainable vitality.
Aesthetics
- The public realm must be attractive and offer an environment that people genuinely want to be in. This includes creating public spaces such as parks, landscaped areas and town squares.
- This means more than just a few benches on the High Street however. The public realm has to be an attraction in its own right - something cathedral cities and market towns have been able to manage better through interesting architecture and a sense of place.
- This will hasten the demise of bland, characterless shopping centres.
Individuality
- Technology has created well informed and discerning customers who are constantly on the lookout for new experiences and who would choose to avoid corporate blandness.
- Local operators and specialists should be embraced and encouraged to provide character, individuality and uniqueness.
Social Interaction
- Town centres need to re-establish themselves as the community hub and a social epicentre.
- They must provide a wider range of complementary uses beyond A1 retail like medical centres, chiropractors, dentists, elective education establishments, showrooms and youth centres to name but a few if we are to ensure communities have what they need on their doorstep, without having to regularly go elsewhere. In places where these traits have been considered we have witnessed the positive effects.
In Cwmbran for example, the scheme has always offered a wide range of uses with independent retailers sitting alongside the mainstream retail offer. It is easily accessible with ample free parking and as such it has not suffered at all from the recent new development in nearby Newport.
Where regeneration is required, developers urgently need to re-imagine the tired formula of a department store supported by large stores and unit shops occupied by a predictable line up of retailers. We need bespoke designs, tailored to the demographic, the cultural heritage and the local identity which also delivers a wide range of uses beyond retail.
In Lincoln (see image), the Lincolnshire Co-op have pieced together an ownership based around the historic Corn Exchange and are regenerating the site, reducing the retail footprint to create a space for social interaction in a new public square. They are retaining and enhancing the historic fascias to preserve the character and history of the area. The development remains resilient with strong demand in a difficult market.
We also need an urgent and honest debate around ‘value’ as the move away from identikit tenant mix gathers pace and the market dictates shorter leases with turnover rents. Investors in our town centres must adapt to these more complex assets as covenant and lease length are likely to become less relevant when assessing worth. Their valuers need to change their methodologies.
"A holistic approach to town centre management/development is essential and Councils are of course uniquely placed to demand cooperation between owners. The well coordinated approach to Woking town is a testament to this."
Councils must use their unique position to mastermind and facilitate the restructuring of town centres. This goes some way beyond writing a master plan however. Creating a centre that delivers for the people requires committed, hands on leadership with input from retail specialists, developers and of course occupiers. Insular investors, less willing to engage and work with adjoining stakeholders will struggle to deliver the optimum solution for their holdings and ultimately, best long-term returns for their investors.
In summary, the issues across the secondary retail property market are here to stay unless urgent action is taken to halt the decline and stop the traditional focal point for many communities going into terminal freefall. As a minimum, town centre stakeholders need to consider:
- Cooperation is essential. A collective approach that can deliver collective gains.
- Setting realistic goals for the town that deliver for the local residents.
- Being honest about valuations is a different approach needed?
- Judging success against a wider range of metrics such as community impact and both environmental and economical sustainability.It is these benchmarks that will also deliver long term investment performance.
At KLM Retail we have a genuinely positive outlook for our town centres. But we need this honest debate about what they are there for, whom they are for and what their role should be going forward. It needs a move away from them being simply a location to sell and compare goods, returning them to being the heart of the community. We need to start judging their success in terms of footfall and sustainability rather than Zone A rents.
"When we consider town centres as community hubs, rather than pure retail centres, solid foundations from which we can reinvigorate our town centres can be found."