Retail and Leisure Sector in London FEBRUARY 2018

Insight focus FEBRUARY 2018 Retail and Leisure trends in London How important is the retail and leisure sector in the overall success of the London economy? © Jill Tate Jill ©

As the London Mayor consults on his new physical presence of retailers is being affected Draft London Plan, we are looking at the by the continued growth of new forms of retail and leisure trends affecting the Capital; retailing (e.g. multichannel shopping) and the and exploring how London best plans for this. shift in customers’ attitudes from traditional London’s retail sector has continued on shopping trips to a more experiential ‘day out’. A town centre’s performance its strong performance that has characterised While, in the past, planning for town centres has never been solely reflected it since mid-2013, helping to support the has primarily focused on retail, it is clear by its retail performance and Capital’s economy in the second half of 2016. that this focus is evolving, now more so than its business, cultural and civic As of the last quarter of 2016, retail output was before. As a result, it is essential that planning functions. The leisure, evening 5.1% higher than the previous year and annual policy fully addresses a wider range of town and night time economies are growth has averaged 2.6% in the first three centre uses. This Insight forms part of a series important components which quarters of 2017, despite growing inflation. of Retail & Leisure Regional Insight’s across help create attractive places Inner London, with International Centres the England’s different regions. This Insight will in which people want to live, West End and Knightsbridge, is unsurprisingly examine the ingredients of what makes the work, visit, shop and play. It’s performing the strongest, but Outer London is centres in London successful retail and leisure vital that the Capital plans also performing well compared to the national destinations, together with the current climate for continued evolution and average (see Figure 1). for retail and leisure development in the innovation in its town centres. Our previous analysis of national trends Capital and the direction of the sector over Steven Butterworth, in spending, spatial differences and the the coming years. Senior Director changes in the retail and leisure mix highlights the dynamic nature of retailing and associated leisure activities. These trends and changes vary across England, and whilst many wider Figure 1: Retail GVA in London (2006 Q1=100) trends apply, retail and leisure development in London is subject to unique challenges 150 and opportunities. Negative GDP London’s retail and growth leisure sector is integral 140 Greater London to the performance of Inner London Outer London the UK economy and it is 130 UK increasingly important to understand both how this 120 role can be maximised, and where new development opportunities exist, Retail (2006 GVA Q1 = 100) 110 especially in the context of 100 the changing 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 high-street, where the Source: Experian, Lichfields analysis lichfields.uk @LichfieldsTT INSIGHT FOCUS Retail and Leisure sector in London FEBRUARY 2018

Headline figures: Household expenditure equated to around £180 Consumer spending in the night time economy billion (in 2013 prices) in London in the year to in London amounts to 40% of the £66bn spent September 2017. This is the second highest among every year in the UK, equating to £26.3bn every UK regions, after the South East. Looking at a local year . The night time economy is not confined to 8% level, Westminster and Wandsworth have the the West End; it is evident across many Boroughs. of workers in highest spending among Inner London Boroughs, Charing Cross Road, Tottenham Court Road and employment work while in Outer London Boroughs, spending is the West End are recognised on an international in the retail sector highest in Barnet and Ealing . level as night time clusters, whilst Covent across London Factoring in the size of London’s population, Garden and The Strand are recognised on an consumer spending per household stands at international/national level. Inner London areas £20,322 per annum, a real term increase of 5.9% such as Brixton, Camden, Hammersmith and since 2012, 1.5% higher than in 2007. Shepherd’s Bush are recognised on a regional/sub- 65,700 Retail and leisure jobs across London’s 33 regional scale, together with the Outer London of workers in local authorities account for an average of 8% of areas such as Bromley, Croydon and Uxbridge. employment in total jobs, lower than the 9.4% in the rest of the UK. Of more than local importance, Barking, South the retail sector This lower proportion of workforce employed in Kensington, Greenwich and Woolwich are in Westminster the sector is unevenly distributed across the capital, examples of night time economies. the majority of employees in the retail sector are It is clear that the night time economy has a based in Westminster (around 66,000), followed by significant role to play in terms of London’s jobs, Kensington and Chelsea (around 25,000). growth and prosperity. London’s centres must 25,400 In July 2017, the London Mayor, published therefore ensure they continue to adapt and evolve of workers in ‘From good night to great night – a vision for to incorporate these uses, both to boost spending employment in London as a 24-hour City’, which recognises the and create the right environment to attract people the retail sector role the night time sector plays in the London to visit and stay longer. in Kensington economy. Khan’s vision is for London to become and Chelsea a ‘truly 24-hour city’, recognising that successful Source: Experian cities are also creative cities. In order to be a successful and creative city, leisure uses and retail uses must thrive.

Figure 2: Household expenditure per person by region

22,000

Year to Q3 2007 20,000 Year to Q3 2012

Year to Q3 2017 18,000

16,000

14,000

12,000 Household expenditure per person (£), 2013 (£), person per expenditure Household

10,000

Wales Scotland South East South West North West North East East Midlands Greater LondonEast of England West Midlands

Yorkshire and The Humber

Source: Experian, Lichfields analysis

1Experian 2NTIA, Forward Into The Night (2015) lichfields.uk 2 Spatial trends in productivity and household expenditure INSIGHT FOCUS FEBRUARY 2018

Retail activity is unevenly distributed across centres in London (applying Venuescore's ranking London. This is due to the differences in the role, – see page 4), relative to that area’s productivity and function and scale of centres and the inherent expenditure. The exercise shows that not all of the characteristics of retailing – and, more generally, top venues are located in areas of high productivity economic activity – whereby businesses and and high spending as one might expect. Ilford customers prefer to concentrate in specific areas (ranked 14th) and Romford (ranked 7th), for or venues that are larger, stronger and have better example, are located in areas with both low accessibility. In the London context, this has productivity and low spending, as is the Broadway translated into an interesting spatial pattern that is Shopping Centre in Bexleyheath (ranked 8th) and centred in the West End and expands towards the the Bentall Centre in Kingston-Upon-Thames West and South West of the city in what could be (ranked 7th). described as the capital’s ‘retail corridor’ (Figure 3). The Draft London Plan (para 2.6.3) recognises Overall, the remaining retail hotpots that, whilst household expenditure is expected are scattered around Greater London, broadly to continue to rise, this will be spread unevenly following the geography of town centres. A across London’s centres, reflecting the trends sharp East-West divide is however visible in the towards the polarisation of retail space towards underlying data on household expenditure, while the larger and stronger centres in London. This productivity follows more closely the border polarisation presents a significant challenge and between Inner and Outer London Boroughs, with opportunity for retailing, whereby centres must central Boroughs boosting the higher productivity adapt and evolve to manage the transition of in the retail sector. any surplus retail floorspace to other uses, A mapping exercise undertaken by Lichfields such as leisure, and adapt to new innovative (Figure 3) illustrates the location of the top 15 forms of retailing (i.e. interactive displays/ shopping venues and top 15 managed shopping in-store workshops).

Figure 3: Productivity in the retail sector and household expenditure by London Borough

Boroughs of London: 1. Barking and Dagenham 2. Barnet 3. Bexley 4. Brent 5. Bromley 6. Camden 7. City of London 8. Croydon 9. Ealing 10. Enfield 11. Greenwich 12. Hackney 13. Hammersmith and Fulham 14. Haringey 15. Harrow 16. Havering 17. Hillingdon 18. Hounslow 19. Islington 20. Kensington and Chelsea 21. Kingston upon Thames 22. Lambeth 23. Lewisham 24. Merton 25. Newham 26. Redbridge 27. Richmond upon Thames 28. Southwark 29. Sutton 30. Tower Hamlets 31. Waltham Forest 32. Wandsworth 33. Westminster Source: Experian, Lichfields analysis lichfields.uk 3 INSIGHT FOCUS Retail and Leisure mix in the top venues and centres FEBRUARY 2018

Successful shopping destinations are no longer Westfield White City and Westfield Stratford solely defined by the strength of their retail offer. take first and second place (Table 2) in terms of the Data from Venuescore ranks centres based on their managed shopping centres. Following approval anchor retailers, fashion operators, non-fashion last year of a Westfield in Croydon, the number multiples, and also their food/service provision, of Westfield’s in the Capital will increase to three. given this is an important part of the It will include more than 300 shops, restaurants, shopping ‘experience’. cafes and leisure facilities, as well as a cinema and Unsurprisingly, Oxford Street (an bowling alley. This demonstrates the increasing international centre and located in London’s importance of innovation and providing visitors Central Activities Zone (CAZ)) ranks as the highest with an ‘experience’. shopping venue (Table 1). The Draft London In terms of food and beverage (FAB) provision, Plan (para. 2.4.10) recognises the CAZ contains a eleven of the top shopping venues have an above vibrant, successful and diverse retail offer at a scale average provision, however Knightsbridge and Ilford and quality that makes it a shopping destination have the lowest. All but one of the top shopping of global significance. Draft London Plan Policy centres have a below average FAB provision, with SD4 seeks to specifically support the vitality and Palace Gardens in Enfield being notably below viability of the international shopping and leisure average. For the top shopping venues as a whole, the destinations located in the CAZ. average FAB provision index is 128, whilst for the managed shopping centres, this is only 49.

Table 1: Top 15 shopping venues in London Table 2: Top 15 managed shopping centres in London

Venue 2016/ Change in rank 2016/17 Food and Venue 2016/ Change in 2016/17 Food and 2017 since 2013/14 Beverage Index 2017 rank since Beverage Index rank (Ave = 100) rank 2013/14 (Ave = 100)

Oxford Street, Westfield 1 No change 107 1 No change 62 London White City

Kingston- Westfield 2 No change 101 2 No change 64 Upon-Thames Stratford City

Croydon 3 No change 128 Canary Wharf 3 +1 128 Shopping Centre Covent Garden, 4 +2 244 Brent Cross London 4 -1 43 Shopping Centre Bromley 5 -1 113 The Glades, Knightsbridge, 5 No change 74 6 -1 85 Bromley London Southside, 6 +2 56 Romford 7 No change 99 Wandsworth Kings Road, 8 No change 93 The Bentall Centre, London Kingston- 7 No change 48 Upon-Thames Sutton 9 No change 117 Broadway Regent Shopping Centre, 8 +4 35 Street, 10 +7 183 Bexleyheath London The Whitgift Harrow 11 +1 123 Shopping Centre, 9 No change 39 Croydon Richmond 12 +6 163 Upon Thames Intu Uxbridge 10 +1 58 Shopping Centre Uxbridge 13 -3 123 The Mall, 11 +4 33 Ilford 14 -3 85 Wood Green

Ealing Broadway Wimbledon 15 -2 150 12 +2 23 Shopping Centre

Source: Venuescore 2013/14 and 2016/17 Palace Gardens Shopping Centre, 13 +3 6 Enfield

Centre Court Shopping Centre, 14 -4 25 Wimbledon

Centrale Shopping 15 -2 39 Centre, Croydon

Source: Venuescore 2013/14 and 2016/17 lichfields.uk 4 London Plan – Town Centre network changes INSIGHT FOCUS FEBRUARY 2018

The Draft London Plan (December 2017) will well. Southfields is one example of a newly provide London’s spatial development designated District centre, having not been strategy over the next 20-25 years. classified in the previous iteration of the London It identifies a number of centres which have Plan. Wandsworth been re-classified in the Town Centre network (which includes Southfields) has some of the (Figure 4). highest consumer spending among Inner Canary Wharf has been elevated from a London Boroughs. Major Centre to a Metropolitan Centre. Canary In terms of future potential elevations Wharf Shopping Centre is clearly improving, (Figure 4), both Stratford and Shepherds having moved up to the third top managed Bush are proposed for elevation from shopping centre in London, taking the place of Metropolitan Centres to International Centres. Brent Cross (page 4). It is also the only managed Both centres contain the highest ranked shopping centre with an above average food and managed shopping centres in London (and beverage provision. in the UK) in terms of Venuescore (Westfield Figure 3 on page 3 demonstrates that Tower White City and Westfield Stratford). It therefore Hamlet borough (which includes Canary Wharf) follows that this elevation should be deliverable. has both high expenditure and high productivity. However, whilst Shepherds Bush is located Elephant and Castle/Walworth Road is in an area of both high expenditure and high located in Southwark borough and has been productivity, Stratford is located in an area of elevated from a District Centre to a Major Centre. both low expenditure and low productivity, Whilst the borough has low productivity, it does demonstrating the obvious wide trade draw of have high expenditure and is clearly performing the centre.

Figure 4: Town Centre network changes

Boroughs of London: 1. Barking and Dagenham 2. Barnet 3. Bexley 4. Brent 5. Bromley 6. Camden 7. City of London 8. Croydon 9. Ealing 10. Enfield 11. Greenwich 12. Hackney 13. Hammersmith and Fulham 14. Haringey 15. Harrow 16. Havering 17. Hillingdon 18. Hounslow 19. Islington 20. Kensington and Chelsea 21. Kingston upon Thames 22. Lambeth 23. Lewisham 24. Merton 25. Newham 26. Redbridge 27. Richmond upon Thames 28. Southwark 29. Sutton 30. Tower Hamlets 31. Waltham Forest 32. Wandsworth 33. Westminster Source: London Plan Draft for Public Consultation (December 2017) lichfields.uk 5 Case studies INSIGHT FOCUS FEBRUARY 2018

So how are these trends in retail and leisure spending and plan-making manifesting in new development? We set out below two examples of schemes in London which we consider are a successful response to, and illustrate, the importance of diversifying the retail and leisure offer and ‘place making’ in an evolving centre.

Case Study 1: The Glades – Case Study 2: Greenwich The Queen’s Garden, Bromley Peninsula, North Greenwich

A new restaurant scheme at the Glades North Greenwich is recognised as a centre shopping centre in Bromley opened in 2015, for future potential elevation to a District delivering a new day and evening leisure Centre. A masterplan for the peninsula was offer. It particularly enhances Bromley’s approved in 2015. The retail floorspace is night time economy by attracting a wider primarily focussed in the proposed District range of visitors including families, helping Centre (c.16,900 sqm). Most of the other Bromley to remain vibrant and vital into the retail floorspace will be located adjacent evening and therefore a more competitive to the ‘hub’, with a small element spread Metropolitan Town Centre. throughout residential blocks, outside the District Centre. This is a prime example of creating the right offer for the locality and Figure 5: Queen’s Garden Restaurant Terrace ultimately ‘place making’, to attract people to live and visit.

Conclusion

Our analysis of the trends in spending, want to visit and stay longer. The future success workforce, spatial differences and the changes of London clearly relies on evolving mixed and in the retail and leisure mix in London sustainable retail destinations, including the highlights the dynamic nature of retailing and growth in the food and beverage sector and the associated leisure activities and the continued night time economy. importance of these sectors to the success of the This Insight Focus forms part of a series of London economy. future Retail & Leisure Insight’s across England’s There is a need for greater innovation to different regions. More regional Insight’s ensure we create attractive places where people will follow.

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