2019 Vitality Index March 2019 - Harper Dennis Hobbs
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2019 Vitality Index March 2019
2019 Vitality Index
Introduction
The Vitality Index is a multivariate index that scores retail centres on the ‘retail health’ of each location. The top 1,000 centres in Britain have
been assessed, ranging from neighbourhood high streets and small towns, to regional shopping malls and major city centres. Retail parks and
outlet centres have been excluded, as their remote locations mean they are usually not linked to a local population, and so their health does not
impact a community hub in the same way. The ranking highlights the ‘healthiest’ retail centres in Britain, which successful brands should target
when considering network expansion. While the major cities and strongest shopping centres are typically at the top of a retailer’s hit list, smaller
centres should also be of interest to many retailers, given rents are often more affordable in the smaller centres. A small centre with a high
vitality score – and the right shopper profile – could potentially yield strong profits for the right brands.
Vitality is measured through a combination of: the proportion of upmarket shops; the proportion of value-led shops; the vacancy rate; and the
proportion of low quality retail operators – such as pawnbrokers, money lenders, and bookmakers. In addition, the retail mix is compared to the
demographic composition of the centre’s catchment area, and a greater score is given to areas whose stores are optimally adapted to the local
community.
Key Learnings
• The top 5 retail centres remain unchanged, with Cambridge topping the list once again. London retail centres have cemented their quality,
holding 7 of the top 10 highest ranked retail centres.
• Many major retail centres, such as London’s West End, Birmingham City Centre, Glasgow City Centre and Oxford City Centre, have climbed
multiple places due to a growth in quality retailers, facilitated by new developments such as Westgate Oxford and Birmingham Grand
Central.
• Shields Road in Byker remains the lowest ranked centre in the list, although the bottom 10 ranked centres now include Scottish towns
Renfrew and Annan.
• Towards the bottom of the list, certain regions are more prevalent – Scotland, North West England, the West Midlands and Greater London
all have at least 5 centres in the bottom 50, whereas South West England and the East of England have no centres in the bottom 50.
• The weakening economy and large legacy estates that have led to a number of established retailers entering insolvency processes such as
administrations and CVAs have had a significant effect on the high street – 47 retailers have contributed to a loss of 11.9m sq ft of store
floorspace. While the strongest retail centres have been able to replace some of the closed stores with new tenants, many shopping centres
and high streets are still reeling from the impact of significant losses.
Page 2
Methodology
Vitality Index Variables
Vacancy Rate
Among the most obvious signs of an ailing retail area are disused units. Rows of empty shops indicate that retailers do not perform well relative
to the cost of trading in that location. High levels of vacant units often cause a cycle of decline; as an area begins to look abandoned, consumers
are quickly put off visiting, which dissuades new retailers from taking stores in that location.
Note that vacancy rate alone is a poor metric for retail centre health – new projects usually require existing tenants to move out before
construction can take place, so the raw vacancy rate figure can penalise a centre in the process of regeneration.
Higher vacancy rates tend to be found mostly in city centres and large towns, particularly outside of southern
England, where there is often too much retail space spread across the secondary and tertiary streets. In shopping
malls, where the entire property is owned by a single entity, vacancy rates tend to be lower as the landlord can be
more compromising on rents to better curate the retail mix.
Vacancy Rate
Retail Centre (% of Total
Floorspace)
Kirkby 46.8%
Stretford 33.5%
Stoke-on-Trent - Burslem 27.6%
Skelmersdale 26.7%
Prescot 26.4%
Page 4
Vitality Index Variables
Low Quality Retail
We have designated a class of occupiers as ‘low quality retail’; these are stores that damage the economic wellbeing of the local community by
increasing debt and feeding addition. The following categories of stores fall under this classification:
• Betting shops
• Pay-day loan shops
• Pawnbrokers
These retailers tend to cluster in areas of high deprivation and thrive in locations with low rents in which few other retailers perform well.
While northern regions of Britain tend to have the most low quality retailers – the 5 centres with the highest
proportions are all located north of the Midlands – neighbourhood high streets in London also stand out as having
large numbers of these undesirable tenants.
Low Quality
Retail Centre Retail
(% of Total Units)
Manchester - Wythenshawe 17.3%
Huyton 16.7%
Rutherglen 16.2%
Gateshead 16.1%
Rotherham 15.7%
Page 5
Vitality Index Variables
Value Retail
A high number of value-driven stores indicates relative deprivation and a retail offer geared towards the lower end of the market. This includes
nationwide chains such as Poundland, as well as charity shops.
These retailers are present in most shopping areas to some degree, alongside more mass market and high-end operators, but a high
concentration of value-orientated stores suggests that consumers in the catchment area with a larger wallet tend to shop in different centres.
Retail centres in which low-end retailers occupy a large proportion of total units tend to be found in Wales, the
West Midlands, the North West and North East of England, although the retail centre with the highest proportion
of such tenants is Grays in Essex, which is positioned to cater to the less affluent consumers within the Lakeside
catchment – a large regional shopping centre that is a 10 minute drive from the town centre.
Value Retail
Retail Centre
(% of Total Units)
Grays 47.4%
Blackwood 45.8%
Llanelli 45.5%
Birmingham - Erdington 45.2%
Chester-le-Street 43.6%
Page 6
Vitality Index Variables
Upmarket Retail
Upmarket retail attracts aspirational customers, and with more money being spent, higher sales are usually reflected by better shopping
environments.
Of all retail centre types, city centres and out of town malls have the highest proportions of upmarket retail, at 19.8% and 17.6% respectively.
These averages are generally consistent across these centre types in most regions in Britain, however, small market towns and wealthy urban
neighbourhoods in southern England buoy the average proportion of upmarket retailers in these regions.
While more high-end retail tends to indicate higher rents, these smaller retail centres in affluent parts of the
country tend to have lower asking rents than large towns and cities, which can result in strong profit margins for
the right retailer.
Upmarket Retail
Retail Centre
(% of Total Units)
Wimbledon Village 55.6%
Knightsbridge 53.8%
Portobello Road/Westbourne Grove 48.4%
Kings Cross (London) 42.9%
Westfield London 41.9%
Page 7
Vitality Index Variables
Suitability to Local Consumer
For a retail centre to be considered a healthy community hub, it is important that the offer is suitable for the type of shoppers in the local area.
HDH has assessed the positioning of the retail supply in relation to the demands of the local customer, given their demographic make-up. A
retail centre with high vitality has a retail mix that serves the needs of its local population, whether that means lower, middle or upmarket retail.
The retail composition has been quantified by assigning hundreds of major UK retailers into value, mass and upmarket categories. We have run
a correlation between the retailer composition and the proportion of the catchment population falling into three categories of HDH Shopper
Segments – the wealthiest category (groups 1, 2 and 3), is generally attracted to upmarket retail, the middling-affluence shoppers (groups 4, 5, 6
and 7) generally shops mostly at mid-market stores, and the least affluent groups (8, 9 and 10) shop mostly at value-led shops.
Below are examples of three centres with high correlations of retail offer vs shopper type, and three centres where the retail mix is less suitable
to the catchment demographics.
0.565217 0.26087 0.173913 0.2553 0.374749 0.369952
Ilkley 0.2553 0.374749 0.369952
High Correlation
0.294118 0.647059 0.058824 0.241849 0.19012 0.568031
Motherwell 0.241849 0.19012 0.568031
0.333333 0.52381 0.142857 0.13269 0.378512 0.488798
Brighton - Queens Road 0.13269 0.378512 0.488798
0.230769 0.615385 0.153846 0.233056 0.608707 0.158237
Wokingham 0.233056 0.608707 0.158237
Low Correlation
0.689655 0.310345 0 0.652683 0.312138 0.035179
Wandsworth 0.652683 0.312138 0.035179
0.133333 0.433333 0.433333 0.197417 0.401035 0.401548
Ely 0.197417 0.401035 0.401548
Catchment demographics* % Least Affluent % Mid-Affluence % Wealthy Shoppers
Shoppers Shoppers
Retail composition % Value Retail % Mass Market Retail % Upmarket Retail
Page 8 *For detail on HDH Shopper Groups, see appendix
Vitality Index Variables
Change Over Time
The final input into our retail centre scoring is the change in quality over time.
Retail centres that have improved over the past 5 years, according to the
aforementioned variables, receive an additional boost in score, while centres
currently on a downward trajectory are penalised.
The table below gives the centres with the largest differences in the variables
we have assessed from 2014 to 2019. These include Kirkby town centre,
where over the past 5 years the vacancy rate has skyrocketed to 47% of total
floorspace, causing the already ailing shopping centre to fall 5 places in the
ranking to 998. A local regeneration project is in progress, and will eventually
extend to include the replacement of tired units with the construction of
121,000 sq ft of retail, including a large supermarket and cinema.
The proportion of upmarket retail at Hackney’s Mare Street area has been
boosted by the construction of the Hackney Walk outlet centre, completed Rendering of the new retail development planned for Kirkby
since the last iteration of our index was published. The new development
brings a mix of desirable brands, reflecting the changing face of the typical
Hackney resident.
Proportion of Proportion of Change
Variable Retail Centre
Retail - 2019 Retail - 2014 (2014 to 2019)
Kirkby 46.8% 22.6% 24.2%
Vacancy Rate*
Ilkeston 8.8% 21.1% -12.3%
Dunoon 6.4% 3.3% 3.1%
Low Quality Retail**
Uttoxeter 6.6% 9.1% -2.6%
Shirley 42.9% 25.0% 17.9%
Value Retail**
Twickenham 14.6% 23.3% -8.6%
Hackney - Mare Street 14.6% 0.0% 14.6%
Upmarket Retail**
Walton-on-Thames 6.8% 13.6% -6.9%
*As a proportion of total retail floorspace The Hackney Walk outlet retail development
**As a proportion of total retail units
Page 9
Vitality Ranking
Vitality Ranking
Top 50 Ranked Retail Centres
Vitality Number of Change Since
This year, the top 5 retail centres remain Rank
Centre Region
Stores
2017 Rank
2017
unchanged. Cambridge tops the list once again, and
London retail centres at the top of the ranking have 1 Cambridge City Centre East of England 587 1 0
2 Westfield London Greater London 395 2 0
grown in quality, now occupying 7 of the top 10 3 Knightsbridge Greater London 258 3 0
most vital retail centres. They also span a range of 4 Chelsea Greater London 407 4 0
different centre types – including a globally 5 Bluewater South East 340 5 0
dominant city centre, a major shopping centre, a 6 Richmond Greater London 386 7 +1
7 Wimbledon Village Greater London 118 6 -1
worker-orientated retail hub, affluent city
8 Canary Wharf Greater London 465 8 0
neighbourhoods and a small suburban high street. 9 London West End Greater London 6,830 14 +5
10 Marlborough South West 189 9 -1
Notable movers this year include London’s West 11 Westfield Stratford City Greater London 321 12 +1
End, which has risen from 14th to 9th. Since 2017, a 12 Reigate South East 215 13 +1
13 Bath City Centre South West 852 10 -3
number of retailers have chosen the West End for 14 Berkhamsted East of England 179 16 +2
their first foray into UK retail. Canada Goose opened 15 Edinburgh City Centre Scotland 710 17 +2
their store on Regent Street in late 2017, Microsoft 16 Sloane Street Greater London 185 11 -5
are due to open their flagship store on Oxford Circus 17 Cobham South East 112 19 +2
18 Cribbs Causeway South West 130 20 +2
in the coming months, and H&M chose Regent
19 St Albans City Centre East of England 429 15 -4
Street for the first ever store for their new 20 Kingston upon Thames Greater London 525 18 -2
fashion/lifestyle brand, Arket. Its global reputation 21 Brighton City Centre South East 1,143 22 +1
as a mecca for shoppers means the West End 22 Harrogate Yorkshire and The Humber 544 23 +1
23 Meadowhall Yorkshire and The Humber 299 28 +5
remains relatively insulated from the pressures
24 Chiswick Greater London 378 21 -3
facing UK high streets in recent years. Despite a fall 25 Guildford South East 546 24 -1
in UK consumer confidence after the Brexit
referendum, the West End continues to prove a lure
for shoppers, many of which come from abroad and
have benefitted from the fall in the value of the
pound. Its strength is reflected in enduringly high
levels of footfall, and sustained interest from home-
grown and international retailers seeking flagship
stores.
Page 11 Cambridge Canada Goose, Regent StreetVitality Ranking
Top 50 Ranked Retail Centres
Vitality Number of Change Since
King’s Cross is another strong performer this year. Rank
Centre Region
Stores
2017 Rank
2017
The ongoing regeneration of the 67 acre site has
transformed an industrial wasteland into a thriving 26 Sherborne South West 173 27 +1
27 Bristol - Clifton South West 180 26 -1
London neighbourhood. At the heart of a 28 Henley-on-Thames South East 247 25 -3
development filled with impressive state-of-the-art 29 Ilkley Yorkshire and The Humber 253 29 0
residential and office buildings, is the new Coal 30 Sevenoaks South East 231 30 0
Drops Yard shopping district designed by Thomas 31 Birmingham City Centre West Midlands 1,221 34 +3
32 Chichester City Centre South East 441 31 -1
Heatherwick and built around two Victorian coal
33 Glasgow City Centre Scotland 1,559 38 +5
sheds. Development is nearing completion, but the 34 Leeds City Centre Yorkshire and The Humber 1,119 35 +1
progress made so far is responsible for pushing 35 Islington - Upper Street Greater London 669 32 -3
King’s Cross up 14 places to 37. 36 Marlow South East 214 39 +3
37 Kings Cross (London) Greater London 259 51 +14
38 Muswell Hill Greater London 204 36 -2
Some major cities have climbed multiple places due 39 Tenterden South East 150 37 -2
to a growth in quality retailers, facilitated by new 40 Kensington Greater London 356 33 -7
developments such as Westgate Oxford and 41 Fulham Road Greater London 304 40 -1
Birmingham Grand Central. This indicates that 42 Oxford City Centre South East 485 48 +6
43 Hampstead Greater London 208 44 +1
consumers and retailers in the UK continue to
44 Trafford Centre North West 272 45 +1
gravitate towards the strongest retail centres, in 45 St Ives (Cornwall) South West 265 42 -3
many cases at the expense of smaller ‘satellite’ 46 Chester City Centre North West 639 43 -3
centres, such as nearby towns and local high streets. 47 York City Centre Yorkshire and The Humber 927 46 -1
48 Liverpool City Centre North West 1,015 47 -1
49 Lakeside East of England 254 49 0
Out of town shopping centres remain strong 50 Manchester City Centre North West 1,590 52 +2
performers. Since 2017, out of town malls are the
most unchanged retail centre type – the average
change in rank since the previous iteration is just 0.2
places throughout the entire ranking.
In terms of retailers, the top 50 is home to a large
proportion of upmarket stores, including 48% of
total Hugo Boss’ UK stores, as well as a large number
of cafes – including 151 Costa Coffees.
Page 12 Westgate Oxford Coal Drops Yard, Kings CrossVitality Ranking
Bottom 50 Ranked Retail Centres
Vitality Number of Change Since
Rank
Centre Region
Stores
2017 Rank
2017
At the bottom of the ranking, Shields Road in Byker
is again the lowest scoring retail centre in Britain,
1000 Newcastle upon Tyne - Byker Shields North East 177 1,000 0 with little change since the previous iteration.
999 Stretford North West 90 998 -1
998 Kirkby North West 94 993 -5
Stretford has fallen to 2nd from bottom, as despite
997 Harrow Road Greater London 180 999 +2 some development to the entrance of the scheme,
996 Tonypandy Wales 143 997 +1 the retail offer continues to stagnate.
995 Liverpool - Walton Road North West 235 996 +1
994 Gateshead North East 132 994 0
Towards the bottom of the list, certain regions are
993 Renfrew Scotland 128 990 -3
992 Burnt Oak Greater London 244 995 +3
more prevalent – Scotland, North West England, the
991 Annan Scotland 125 989 -2 West Midlands and Greater London all have at least
990 Cowdenbeath Scotland 115 986 -4 5 centres in the bottom 50, whereas South West
989 Brownhills West Midlands 110 988 -1 England and the East of England have no centres in
988 Forest Gate Greater London 247 983 -5
987 Glasgow - Shettleston Road Scotland 164 991 +4
the bottom 50.
986 Mexborough Yorkshire and The Humber 152 987 +1
985 Leyton Greater London 226 985 0 Centres classified as small towns and
984 Prescot North West 146 973 -11 neighbourhoods also dominate the bottom end of
983 Skelmersdale North West 124 980 -3
the list – only 4 of the bottom 50 retail centres have
982 Ellesmere Port North West 174 981 -1
981 Portslade South East 161 984 +3 greater than 300 units, whereas over half of the top
980 Gants Hill Greater London 159 982 +2 50 do. This demonstrates the fact that the primary
979 Aldershot South East 278 979 0 shopping destinations are, in general, growing in
978 Birmingham - Selly Oak West Midlands 150 992 +14
strength, whereas the number of small but healthy
977 Wednesbury West Midlands 173 977 0
976 Huyton North West 114 969 -7
retail centres is waning.
Centre Type as a Centre Type as a
Proportion of the Top 50 Proportion of Bottom 50
City Centre
London District Town - Small
Town - Small London District
Out of Town Mall Neighbourhood
Town - Large Town - Large
The Concourse Centre, Skelmersdale Neighbourhood
Page 13Vitality Ranking
Bottom 50 Ranked Retail Centres
Vitality Number of Change Since
Rank
Centre Region
Stores
2017 Rank
2017
The biggest climber in the bottom 50 is Selly Oak in
Birmingham, which has benefitted from the opening
975 Watney Market Greater London 255 978 +3 of the Selly Oak shopping park in late 2018, bringing
974 Birmingham - Cotteridge West Midlands 105 974 0
973 Norbury Greater London 169 976 +3
a number of new retailers to the area, including
972 Edinburgh - Leith Scotland 467 975 +3 Next, JD Sports and M&S Foodhall.
971 Walkden North West 111 972 +1
970 Liverpool - Prescot Road North West 125 966 -4 A number of relatively large town centres towards
969 Chelmsley Wood West Midlands 73 970 +1
the bottom of the list have been damaged by the
968 Archway Greater London 156 967 -1
967 Swinton North West 99 956 -11
opening of retail developments nearby. Many retail
966 Harlesden Greater London 297 968 +2 parks are attracting high street retailers to compete
965 Rotherham Yorkshire and The Humber 309 962 -3 directly with town centres, and retail parks are
964 Wigston East Midlands 150 960 -4 typically favoured by shoppers who own cars due to
963 Girvan Scotland 127 964 +1
962 Fleetwood North West 199 951 -11
greater accessibility and free parking provisions.
961 Wishaw Scotland 219 953 -8
960 Acton Greater London 255 965 +5 For example, Rotherham has been harmed by the
959 Larkhall Scotland 139 952 -7 development of such retail parks, but also by
958 Cardiff - Cowbridge Road East Wales 209 963 +5
Meadowhall, a large out of town regional shopping
957 Fraserburgh Scotland 187 971 +14
956 Walworth Road Greater London 274 959 +3 centre that moved 5 places to #23 in the Index this
955 Mitcham Greater London 156 955 0 year, and is set for an additional £300m extension.
954 Rhyl Wales 316 958 +4
953 Evesham West Midlands 307 954 +1
Renfrew is another example of a high street
952 Ebbw Vale Wales 141 946 -6
951 Goodmayes Greater London 133 950 -1
damaged by out of town retail developments –
situated less than one mile from intu Braehead, one
of the top shopping centres in Scotland, Renfrew
languishes in the bottom 10 retail centres in our
ranking.
The bottom 50 is dominated by value-led and low
quality retailers. William Hill has a presence in 38 of
the 50 worst centres, while centres in the bottom 50
are home to 7.8% of the total Heron Foods stores in
Rotherham Town Centre Meadowhall Centre the UK and 10% of all Pound Bakery outlets.
Page 14Vitality Ranking
Regional Analysis
Analysis at a regional level shows that retail centres in some parts of Britain tend to
perform better than others. The chart below shows the number of retail centres in
the top and bottom 100 for each region, highlighting the strength of the south of
England compared with the rest of the country.
The South West is notable for having 15 centres in the top 100 and none in the
bottom 100 of the ranking, this is compared with Wales, which despite the
proximity has just one retail centre in the top 100, and 9 of the 100 lowest scoring
centres.
Retail Centre Performance by Region
30
25
20
15
10
5
0
South South East of Yorkshire Greater East North Scotland West North Wales
East West England and The London Midlands East Midlands West
Humber
No of Centres in Vitality Rank Top 100 No of Centres in Vitality Rank Bottom 100
Page 15Vitality Ranking
County/Urban Area Analysis
The tables below give regional performance at a more granular level, and sorted by average rank of the retail centres in each. This perspective
highlights the retail health of the more affluent and rural counties, particularly in southern England. The presence of small but prosperous
market towns across these areas, and lack of formerly industrial cities and declining suburban high streets, results in a strong average rank.
While the Greater London area has been noted as a strong performer throughout this research, the table shows that some parts of the capital –
particularly East London – are on par with the worst performing areas in the country, in contrast to the inner London boroughs and suburban
South London. However, such is the nature of the retail landscape in the capital that even in the more deprived corners, quality retail centres
still thrive.
Similarly, while the northernmost regions of England have been noted for the lack of quality retail centres as a whole, the rural areas of North
Yorkshire and Cumbria, whose natural beauty attracts large volumes of tourists and retirees, perform far better than surrounding areas.
Average Rank Count of Retail Average Rank Count of Retail
No of Centres No of Centres No of Centres No of Centres
County/Urban Area of Retail Centres in Top County/Urban Area of Retail Centres in Top
in Top 100 in Bottom 100 in Top 100 in Bottom 100
Centres 1,000 Centres 1,000
Berkshire, Buckinghamshire and Oxfordshire 307 30 7 0 West Yorkshire 509 27 3 1
Dorset and Somerset 341 28 2 0 Eastern Scotland 513 36 3 3
Surrey, East and West Sussex 354 50 7 3 Northumberland and Tyne and Wear 540 19 2 3
North Yorkshire 360 13 2 0 North London 555 22 2 5
Inner London 385 37 13 5 South Yorkshire 556 12 1 3
Bedfordshire and Hertfordshire 390 27 3 1 North Eastern Scotland 568 4 1 2
Devon 395 23 2 0 Derbyshire and Nottinghamshire 578 27 1 1
Cornwall and Isles of Scilly 395 15 2 0 Lancashire 582 23 0 2
South London 396 37 7 2 Tees Valley and Durham 583 18 1 1
Gloucestershire, Wiltshire and Bath/Bristol area 399 35 9 0 West London 586 28 2 6
Herefordshire, Worcestershire and Warwickshire 424 21 2 1 East Yorkshire and Northern Lincolnshire 594 15 1 1
Lincolnshire 429 12 1 0 East Wales 599 14 1 2
Kent 436 29 5 0 West Midlands 614 37 2 8
Hampshire and Isle of Wight 441 32 5 3 Southern Scotland 618 20 0 3
Cumbria 444 13 0 2 West Central Scotland 622 23 2 5
East Anglia 469 35 1 1 Shropshire and Staffordshire 627 25 1 4
Highlands and Islands 473 8 0 0 West Wales 628 39 0 7
Essex 478 23 1 1 Greater Manchester 640 39 2 7
Cheshire 482 14 2 1 East London 643 44 3 9
Leicestershire, Rutland and Northamptonshire 499 20 0 1 Merseyside 650 26 1 6
Page 16Retail CVAs & Administrations
Retail CVAs and Administrations
Retail Centres Worst Hit by Insolvency-Related Store Closures
HDH have tracked the recent spate of retail insolvencies and identified store closures due to administrations and company voluntary
arrangements (CVAs). Across the 1,000 centres surveyed for this study, a total of 11.9m sq ft of retail and restaurant floorspace has closed since
2016. The table gives the 25 centres that have lost the largest proportion of floorspace to administrations and CVAs. In many cases, tenants
have come in to replace the failed retailers or the properties have been repurposed into office or residential spaces, but a significant proportion
of these units remain vacant, particularly in the less desirable retail centres.
While we have counted the store closures by 47 retailers since 2016, Retailers Lost to Store Floorspace lost to
Lost Floorspace as
the loss of major anchor stores such as Bhs and Marks & Spencer, and Retail Centre Administrations/ Administrations/CVAs
a % of Total
CVAs (Sq Ft)
large space users such as Homebase, Staples and Multiyork, have had
the biggest impact on vacancy rates in the retail centres surveyed. Basildon 8 156,300 8.5%
Warrington 8 134,930 8.3%
White Rose 3 65,300 8.2%
By total volume of floorspace, Birmingham city centre has had the most
Hull City Centre 10 286,390 8.0%
store closures – a loss of 442,900 sq ft from 12 stores due to retail Northampton 6 183,130 7.5%
administrations or CVAs, including closures of Bhs and House of Fraser. Cambridge - The Grafton 3 56,300 7.5%
However, with 25 retailers and restaurants shuttered, London’s West Ocean Terminal 3 39,700 7.5%
End has lost the most individual stores, although this adds up to just Woking 4 117,300 7.4%
0.8% of total retail space in the area. Merry Hill 5 130,100 6.8%
Durham 4 49,350 6.6%
Fareham 4 64,800 6.5%
The Grafton in Cambridge provides an interesting contrast to the Grand
West Ealing 4 43,000 6.5%
Arcade and Cambridge’s primary shopping district. While the historic Liverpool - Belle Vale 3 18,200 6.4%
heart of the Cambridge has ranked number 1 in our Vitality Index for Lincoln City Centre 7 139,260 6.2%
the second year in the row, situated roughly 1km to the east, The Chichester City Centre 3 80,620 6.2%
Grafton has slipped down 33 places to 423. The largely mass market Horsham 4 75,400 6.0%
centre has suffered multiple blows from store closures in recent years, Stevenage 2 62,140 6.0%
including Bhs, HMV and Mothercare, that have contributed to the Birmingham City Centre 12 442,900 5.9%
Watford 8 112,800 5.8%
overall vacancy rate of the area doubling over the past 5 years.
Cribbs Causeway 4 37,800 5.7%
Cambridge’s catchment area is generally affluent, and so retailers
Stockport 8 137,700 5.6%
present in The Grafton are less well placed to serve the needs of the Slough 5 78,000 5.5%
average Cambridge resident, while tourists and day visitors rarely Weston-super-Mare 3 71,340 5.4%
venture beyond the primary retail areas. Luton 6 106,200 5.3%
Ashford 3 52,500 5.2%
Page 18Retail CVAs and Administrations
Store Closures by Retail Centre Type
Shopping centres have been disproportionately affected by store
closures, due to the loss of anchor stores that make up a large
proportion of the total retail space in a mall – on average, out of town
malls lost 3.6% of space, compared to the average of 2.6% for all
centre types. Landlords of the best malls are typically quick to fill the
space – Cribbs Causeway, for example, lost 5.7% of total floorspace as
retailers like Coast and HMV left the scheme, yet the vacancy rate
remains similar to 5 years ago. However, some centres have not been
able to react quickly; Merry Hill, the dominant out-of-town shopping
centre in the West Midlands, suffered extensively from retail
insolvencies since 2016, as Bhs, Maplin, HMV and Poundworld have all
closed, but the centre still has a number of units of various sizes
currently vacant.
Average % of Floorspace
Centre Type Lost to CVAs and
Administrations
City Centre 2.8%
London District 2.2%
Neighbourhood 2.3%
Out of Town Mall 3.6%
Town - Large 2.8%
Town - Small 1.9%
Average 2.6%
The 10 centres worst hit by store closures are not geographically
clustered in any particular region, but almost all are located close to a
far stronger shopping destination. This is likely a result of the growing
strength of the primary retail centres at the expense of smaller cities,
towns and shopping centres.
Page 19Appendices
Wealthy
HDH Shopper Segment 1: Wealthy Urbanites Shoppers
Wealthy Urbanites include singles and couples that live in exclusive urban Wealthy Urbanites
neighbourhoods, such as fashionable city centres or expensive suburban areas.
Residences are rented or mortgaged – occasionally wholly-owned – and high Annual Salary Per Capita £70,000
prices are not a barrier to occupation. Car ownership is low due to their city living. Adult Age 20-59 yrs
Child Age Few Children
Education levels are very high, and people are either employed in well-paid House Price Very High
professional jobs or do not need to work due to family or accumulated wealth. Geographical Area Inner City / Suburbs
They are ambitious and career-driven, meaning children are rare and levels of
Social Group AB
disposable income are very high. The number of company directors is also high –
Qualifications Very High
even amongst the younger members of the segment. Investment is another way
that they increase their wealth. Employment Type Professional
Newspaper Readership Financial / Quality
Wealthy Urbanites are early adopters of technology and fashion trends, as they Car Ownership Low
are interested in new ideas and have the money to afford being at the cutting Internet Usage Very High
edge. They are also happy to pay for high quality service and products, with Kensington, Chelsea,
clothing tastes being modern and on-trend, whilst branding is also important. Example Locations
Knightsbridge, Notting Hill Gate
Money and international travel gives these consumers a global perspective.
Page 21Wealthy
HDH Shopper Segment 2: Maturing Affluence Shoppers
Mature couples, often with grown-up children who have moved out, are Maturing Affluence
dominant in the Maturing Affluence Shopper Segment. High ranking roles in large
organisations, or their own companies, provide large incomes that allow Annual Salary Per Capita £60,000
ownership of large detached properties in the countryside or the outer-suburbs. Adult Age 40+ yrs
Rich retirees are also found in the Maturing Affluence category. Rural living is Child Age 15+ yrs
likely to have been motivated by a search for peace and quiet, after living in House Price Very High
expensive city areas that are classified in the Wealthy Urbanites Segment. Geographical Area Suburbs / Rural
Social Group AB
Savings built up over long careers add to their high income levels, and, without
Qualifications High
the burden of mortgages, many have significant discretionary wealth. This is
spent on the finer things in life, from foreign holidays and large technology Employment Type Professional
products, to wine and clothing. Newspaper Readership Financial / Quality
Car Ownership High
Whilst keen for new experiences and quality products, tastes are relatively Internet Usage Above Average
conservative due to age. Their financial investments are lower risk for the same Guildford, Tunbridge Wells,
reason. However technological literacy is high as they embrace developments Example Locations
Epsom, Bath, Berkhamsted
that will make their life more comfortable and enjoyable.
Page 22Wealthy
HDH Shopper Segment 3: Prosperous Families Shoppers
These families tend to have relatively young children, and have been attracted to Prosperous Families
affluent rural and suburban areas by well-performing schools and spacious
houses & gardens. Household income is well above the national average, even Annual Salary Per Capita £50,000
though one parent is sometimes at home, caring for children. This segment is Adult Age 30-64 yrs
reaching the pinnacle of their careers in a range of capacities: senior positions in Child Age 5-19 yrs
both white and blue collar firms; taking responsibility for the running of House Price Above Average
important corporate functions; and becoming key decision makers. Geographical Area Rural
Social Group AB
Whilst their careers may have a global aspect, their focus will also be local when it
comes to personal considerations. They are likely to be active in their Qualifications Above Average
communities, from school boards to local councillors, reflecting their desire to Employment Type Professional, White Collar
influence their offspring’s environment and have a positive impact generally. Newspaper Readership Regional / Quality
Car Ownership Very High
Good quality is important to these shoppers, in terms of food, clothing and Internet Usage High
consumer products. The children will have a strong impact on their purchasing Salisbury, Thame, Bury St
decisions, creating demand for technology, large cars and new retail trends. Example Locations
Edmunds, Grantham, Harrogate
Page 23Mid-Affluence
HDH Shopper Segment 4: Settled in Suburbia Shoppers
Consumers classified as Settled in Suburbia tend to live in medium-sized to large Settled in Suburbia
detached or semi-detached homes in pleasant suburban neighbourhoods. House
prices are not especially high as these suburbs are in towns across the UK, rather Annual Salary Per Capita £42,000
than London or a major city. Owner-occupation is common due to the Adult Age 30-74 yrs
affordability of the housing relative to the reasonable incomes. Car ownership is Child Age 0-15 yrs
high due to weak public transport links. House Price Average
Geographical Area Towns / Suburbs
People will have settled in the area, with no immediate plans to move, creating
Social Group ABC1
strong community ties. Professional and white collar occupations dominate, with
blue collar roles also present and consumers are often working in the same town Qualifications Above Average
in which they live. It makes local news more significant to them and there is less Employment Type White & Blue Collar
interest in worldwide trends. Conservatism (often with both a big and a small ‘C’) Newspaper Readership Regional / Mid Market
is common, and the Daily Mail will tend to reflect their views and aspirations. Car Ownership High
Internet Usage High
Reliable, conventional retail brands are popular, with few people straying to Ruislip, Clacton-on-Sea,
either end of the market. Affordability is important but these consumers will pay Example Locations
Maidstone, Potters Bar
more to ensure higher quality.
Page 24Mid-Affluence
HDH Shopper Segment 5: Mixed Neighbourhoods Shoppers
The consumers in the Mixed Neighbourhoods Shopper Segment are united by a Mixed Neighbourhoods
comfortable level of affluence. They tend to be relatively securely employed, in
mid-range white collar and blue collar jobs, and levels of wealth are just above Annual Salary Per Capita £34,000
the average allowing people to live in relative ease. Adult Age 30-74 yrs
Child Age 5-15 yrs
Diversity is common in these areas. Their lifestage can include younger couples, House Price Below Average
couples with young children, people living alone and older couples. The Geographical Area Towns / Suburbs
neighbourhoods can be found in suburban, rural or coastal areas, containing a
Social Group BC1C2
range of ethnicities. They are found in greater numbers at the extremes of the
country - further away from London and the South East. Qualifications Average
Employment Type White & Blue Collar
Education levels are lower than the more affluent segments, and whilst they Newspaper Readership Regional / Mid Market
maintain steady jobs in local businesses, career is less of a driving force in their Car Ownership Average
lives. In the same way, these consumers are not as interested in new trends in Internet Usage Average
fashion or technology. Comfortable and well-made clothing is the priority, but Glasgow, Plymouth,
they are not willing to pay for expensive brands. A slight suspicion of the Example Locations
Birmingham, Leicester
unknown creates a local bias to their thinking, strengthening community ties.
Page 25Mid-Affluence
HDH Shopper Segment 6: Average Families Shoppers
These consumers are generally families with children of varying ages, although Average Families
some live on their own. They can be found in less affluent suburban areas, often
in functional semi-detached or terraced properties, located in the suburbs of Annual Salary Per Capita £26,000
cities, towns and coastal areas. As they reflect an average British household, Adult Age 30-64 yrs
people classified as this Shopper Segment can be found in regions across the UK. Child Age 5-19 yrs
House Price Below Average
Affluence levels are moderate, and allow people enough money to meet essential Geographical Area Towns / Suburbs
needs, such as utility bills and groceries, as well as make reasonably regular
Social Group C1C2D
discretionary purchases. High spending is not common, however.
Qualifications Below Average
Firmly mid-market brands are popular with these shoppers. Function and value Employment Type White & Blue Collar
are desired equally, with people happy as long as their needs are met with little Newspaper Readership Mid Market
fuss. Educational attainment is slightly lower than some but incomes achieved are Car Ownership Average
average, as are indicators such as internet usage, car usage and credit risk. Their Internet Usage Average
children will be the main motivation for a significant number of household Coventry, Swansea, Torquay,
purchases. As Average Families play a less active role in the community, regional Example Locations
Swindon, Hastings
news is of less interest, and mid-market papers will direct many of their views.
Page 26Mid-Affluence
HDH Shopper Segment 7: Students and Graduates Shoppers
With a young age profile, these people tend to be students or recent graduates. Students and Graduates
They largely live in inner-city areas, near universities or in districts of cheaper
housing. Singles dominate in what are usually privately-rented or university- Annual Salary Per Capita £22,000
provided flats or small, terraced houses. Population densities are generally quite Adult Age 20-44 yrs
high although some nicer suburbs are included. The presence of these youthful Child Age 0-19 yrs
consumers can lead to gentrification as independent but stylish retailers and House Price Low
restaurants locate nearby to provide a convenient quality offer. Geographical Area Inner City / Suburbs
Social Group BC1
Levels of affluence are relatively low: students are usually not in employment,
and the recent graduates are just starting out in their career - often with a large Qualifications Above Average
debt to pay. However they spend well beyond their means: there is pressure to Employment Type Professional, White Collar
wear the latest fashions, and funds are easier to access from parents or bank Newspaper Readership Quality / Mid Market
loans. As a consequence, relatively expensive retailers are popular in combination Car Ownership Below Average
with better value options. These consumers are at the forefront of trends through Internet Usage Very High
a high level of interest and engagement, even if the products are not always Bristol: Clifton, Leeds:
affordable. They will both follow the new trends as well as creating them, finding Example Locations
Headingley, Oxford: Headington
inspiration from home and abroad due to very high levels of internet usage.
Page 27Least Affluent
HDH Shopper Segment 8: Struggling Workers Shoppers
This Shopper Segment is found in poorer city suburbs and towns. Their homes are Struggling Workers
smaller terraced or semi-detached units, often ex-council houses, and are
predominantly mortgaged or rented. Car ownership is low as the extra cost can Annual Salary Per Capita £18,000
not be afforded and credit is hard to find, and consequently they are reliant on Adult Age 35-59 yrs
public transportation. Child Age 0-15 yrs
House Price Low
Due to weaker qualifications than found on average across the UK, Struggling Geographical Area Small Towns / Suburbs
Workers are restricted to low-paying white and blue collar jobs. Rising above this
Social Group C1C2D
level is difficult given the competition for jobs from better trained citizens and
new employees entering the workforce each year. Levels of disposable income Qualifications Below Average
are low, as earnings tend to be swallowed up by essentials, such as groceries and Employment Type White & Blue Collar
household bills. Value retail is the focus for these consumers, making their Newspaper Readership Regional / Popular
income go as far as possible. Function dominates their purchases with little Car Ownership Low
consideration of new trends. Branded sportswear is popular, but is used for both Internet Usage Average
sports and home wear. Internet shopping allows bargain hunting for this group, Tottenham, Leyton, Burnley,
but regional concerns are more relevant to them than international interests – Example Locations
Stratford, Mansfield, Corby
the latter being guided by the tabloid press.
Page 28Least Affluent
HDH Shopper Segment 9: Poorer Families Shoppers
These families live in poor quality housing in some of the cheapest parts of cities Poorer Families
and their suburbs, as well as small towns. Economically-challenged parts of
northern England and Scotland are their most likely location. Socially rented Annual Salary Per Capita £12,000
properties are common and home ownership is often out of reach – council and Adult Age 20-59 yrs
housing association tenants dominate. Child Age 0-19 yrs
House Price Low
Qualification levels are low and employment tends to be relatively menial and Geographical Area Small Towns / Suburbs
low-paid. With large families being common, there are many stay-at-home
Social Group C1C2D
mothers, meaning total household income is low. In turn, car ownership is also
low, meaning that this consumer group does not travel far from their homes – Qualifications Low
trips to large retail centres are rare and shopping is a local, day-by-day pursuit. Employment Type Blue Collar / Unskilled
Newspaper Readership Popular
Value is the dominating motivation when buying groceries and consumer Car Ownership Low
products to enable their money to go as far as possible, especially when their Internet Usage Low
families are generally quite large. Multi-line retailers are popular because they Colne, Bradford, Luton,
meet the needs of the whole family, while not requiring much in the way of Example Locations
Blackburn, Braehead
disposable income, and often allow cost-comparison within the same store.
Page 29Least Affluent
HDH Shopper Segment 10: Borderline Poverty Shoppers
These people tend to be ‘on the breadline’, struggling to meet bill payments and Borderline Poverty
pay for essentials such as food. Qualification levels are very low and, largely as a
result, unemployment rates are significant. Any employment that does take place Annual Salary Per Capita £9,500
is usually insecure and poorly paid. Single parents are more common in this Adult Age 20-59 yrs
Shopper Segment, which compounds their poverty and reliance on the state. Child Age 0-19 yrs
House Price Very Low
The majority of people will be claiming some form of means-tested benefit, and Geographical Area Small Towns / Suburbs
socially rented housing is very common. Poverty has taken hold, with residents
Social Group C2DE
often taking solace in fast food, gambling and alcohol. Pawnbrokers and loan
companies are also widespread in these areas and used to deal with cash flow Qualifications Very Low
problems. Credit worthiness will be low however, resulting in unfavourable Employment Type Blue Collar / Unskilled
offers. Newspaper Readership Popular
Car Ownership Very Low
Value-led occupiers are the only retail option for these consumers, and charity Internet Usage Low
shops help them stretch their money further. Day to day survival means that they Jarrow, Sheffield, East Kilbride,
will be less engaged with the wider world, and opinions will be guided by lower- Example Locations
Rhyl, Toxteth
end newspapers and media.
Page 30Gravity Modelling Overview
Gravity modelling underpins all projects undertaken by Harper Dennis Hobbs’ Retail Consultancy team
Harper Dennis Hobbs’ Retail Consultancy team make use of gravity modelling techniques to create realistic trade areas for retail destinations.
We have done this in many countries around the world, from Brazil to Russia. We use as many retail centre variables as possible to calibrate the
gravity model, such as accessibility/travel times, anchor and key retailer presence, and centre turnover data where available.
The principal gravity model output is the amount of ‘gravitated’ shopper spend attracted to a retail centre in a year. This is calculated by making
use of accurate definitions of residential, worker and tourist spend across the country. Gravity modelling also determines how much market
share a retail centre retains from its own catchment area, and how much is drawn away to competing centres.
Gravity Model
Shopper Flow Aggregation Calculation of
Retail Centre Shopper Flow Catchment
By Postal of Market
Inputs Expenditure* Definition
Sector Expenditure Shares
Total retail expenditure = The total amount of spend that is available in the catchment area.
Spend is calculated at a postal sector level in the UK, using a variety of sources. They include industry-standard purchasing power figures and the
results of the Household Expenditure Survey which is produced by each country’s statistical office. This enables the calculation of total retail
expenditure, along with retail product category breakdowns, at a postal sector level. Internet spend is then removed using online spending
propensities for consumers at various levels of affluence, sourced from the local statistical office, and applied at a postal sector level and
product category. The retail expenditure used to calculate retail centres’ catchment spends therefore equates to spend in physical routes to
market only.
Shopper/weighted expenditure = The amount of spend that is attracted to a specific stand-alone mall, town or other type of retail centre. This
is calculated by taking the market share at a local level for each retail centre and multiplying through the available expenditure in that area.
These spends are then aggregated to show the shopper expenditure that is attracted to each retail centre from the catchment area.
Page 31Our Services for Retailers: Store Sales and Profitability Forecasting
Harper Dennis Hobbs has been providing independent, strategic retail advice for over 26 years. Headquartered in London but offering a global
service, its team of real estate professionals offer an end to end solution for retailers, providing quality, consistent, market-leading advice to
everything from the world’s leading brands, to the smallest start-ups.
The Retail Consultancy team at Harper Dennis Hobbs specialises in providing tailored solutions to the retail, retail banking and retail property
sectors. We provide strategic location planning services for retailers, acquisition appraisals for private equity companies, portfolio optimisation
studies for banks, and feasibility studies for shopping centre investors.
For more information, please contact:
Jonathan De Mello Head of Retail Consultancy Andy Metherell Senior Consultant
T: +44 20 7462 8703 T: +44 20 7462 8708
M: +44 7824 143 563 M: +44 7920 862 637
E: JonathanDeMello@hdh.co.uk E: AndyMetherell@hdh.co.uk
Louisa Thomson Consultant Louis Brewer Consultant
T: +44 20 7462 8707 T: +44 20 7462 8706
E: LouisaThomson@hdh.co.uk E: LouisBrewer@hdh.co.uk
HARPER DENNIS HOBBS
Langham House,
302-308 Regent Street,
London,
W1B 3AT
www.hdh.co.uk
Please note that the attached documentation and materials together with all of the intellectual property rights contained within it belong to Harper
Dennis Hobbs © Copyright 2019. All information is to be kept strictly confidential and is only to be used for the purposes of assessing the suitability of
Harper Dennis Hobbs. This document is subject to Harper Dennis Hobbs’ standard terms and conditions, which are available on request.
Page 32Our Services for Retailers: Store Sales and Profitability Forecasting
Retail Centre Market Size: Interaction with Other Markets: Customer Demographics:
Rank Retail Centre Country Market Size
1 London West End United Kingdom € 10,394,465,281
2 Paris France € 9,734,413,154
Macro
3 Madrid Spain € 6,049,702,377
4 Rome Italy € 5,432,779,177
5 Berlin Germany € 5,327,190,888
6 Munich Germany € 5,289,799,566
7 Barcelona Spain € 5,289,380,488
8 Amsterdam Netherlands € 5,089,668,250
9 Milan Italy € 5,016,845,374
10 Zurich Switzerland € 5,008,829,671
Presence of Desired Adjacencies: Local Shopper Profile: Footfall Volumes:
Micro
Benefit to the Retail Eco-System: Building Brand Equity: Sales Forecasting and Profitability:
Operational
Sales Margin
Retail Location
Forecast %
Flagship Wholesale
Carnaby Street Flagship £xx,xxx,xxx 6.9%
Covent Garden Flagship £x,xxx,xxx -17.8%
Online
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