As e-commerce continues to disrupt bricks-and-mortar retail, the story of the retail apocalypse or death of the high street has been mainstream news and this isn’t a phenomenon unique to the UK. I talk to Mark Robinson of Ellandi to see if we can find out: a) whether the situation is as dire as it is presented and b) what is the future of mainstream retail (i.e. everyday shopping, as opposed to destination retail).
Mark founded Ellandi in 2008 and it is now now the UK’s leading investment manager of Community Shopping Centres. Mark is president elect of REVO, the retail property industry body, and one of the more outspoken commentators in the sector.
We start by discussing the categorisation of shopping centres and the polarisation towards either destination or convenience centres, versus the traditional (and probably defunct) prime & secondary definitions.
Interestingly, we soon hit on the concept of community - a running theme in recent episodes – and its importance in creating a sense of purpose and identity for local centres. In the traditional categorisations of shopping centres, there’s no appreciation for this idea and yet, this is clearly an increasingly critical driver of footfall and thus retail performance. Mark’s centres have created data to prove this point out.
Mark’s view (and he’s not alone) is that the retail apocalypse is over-stated; what we’re seeing is the death of poor concepts and badly managed operations. He uses the current example of Poundland as a case-in-point. That is not to say that the sector is not entering a period of profound change; just that some retailers are adapting better than others. Of course, this applies equally to property owners; those who aren’t capable of adapting their own business models in-step with their more forward-thinking tenants are going to struggle and will probably add to the problem.
So, who should be sorting out our struggling town centres out? I think our conclusion is that it’s situation dependent. Ultimately, it doesn’t really matter whether it’s public or private-sector led, the importance is driving ideas of collaboration (both between landlord-tenant and landlord-local authority & other stakeholders), innovation and community. To this end, the argument as to whether or not Local Authorities should be using their access to the Public Works Loan Board to fund town centre regeneration becomes moot; the key is that they’re using the funds to invest in their own built environments, rather than speculating in the wider asset class.
Cripplingly high & out-dated business rates, upward only reviews and misuse of the CVA process are all other complex problems facing property owners and retailers at present. We try our best to cover as many areas as possible and see where the solutions lie!