Retail Circuit Strategy for Derby City Centre 2008-2012

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Derby City Centre Retail Circuit Strategy 2008-2012 Full Report – Final

Simon Ho, Managing Consultant Colette Shields, Account Manager Property Consultancy Group

Date: November 2008

Tel: 0207 605 6226

Email: [email protected]

Page 1 CACI Property Consulting

Report Structure

1. Project Scope and Methodology

2. Derby’s Current Catchment and Competition

3. Centre Benchmarking & Potential to change Market Positioning

4. Current Retail Provision and Pitch Performance

5. Future Retail Circuit and Zone Strategy

6. Future Option Testing

7. Conclusions & Recommendations

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Derby City Retail Circuit

1. Project Scope and Methodology

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Project Scope CACI have been instructed by Derby City Council to examine the current retail market for the Derby City’s Retail Circuit and to assess the strengths, weaknesses, opportunities and threats for a strategy to maximise the future performance of the city’s retail. This project has been commissioned shortly following the opening of the new Westfield Derby scheme. This means that it has been able to review the year 1 performance of the new scheme, and what the short-term consequences have been for Derby City as a whole. CACI have been able to review the subsequent implications for Derby’s retail ranking and attractiveness as a location for retail and leisure operators. A major part of the project has been to review the potential for new operators to take existing space within the city, and what part the new Cathedral Quarter BID can play in making this a commercial reality.

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Project Scope Provide a strategy for the city centre that includes: A short term solution to capitalise on new visitors to Derby attracted by the opening of Westfield Derby. A longer term strategy for Derby City Centre ensuring that the centre’s regional position is consolidated. A qualification of the fit between Derby Cathedral Quarter BID aims and an optimal strategy for the city centre as a whole. Address the following issues: Help to understand target consumers and identify missing shoppers & visitors to the City. Identify and analyse distinct trading zones / pitches in the City Centre. Identify gaps for new complementary food and drink, leisure and retail requirements in the city centre. Define areas undergoing change and advise on strategy to revitalise these areas. Advise on new uses for vacant and underperforming sites/premises.

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Methodology – Shopper Flows Stratford-upon-

Retail Footprint predicts the flow of shoppers Leamington Avon at postcode sector level to competing retail destinations. It is a consumer driven model Spa that reflects the choices available to shoppers for comparison goods shopping trips. For each postcode sector, the market is allocated out to centres as a function of the size (or attraction) of the centre versus the accessibility (cost) of travelling there. The Retail Footprint Score (RF Score) CV37 6 measures the size of each centre. It is weighted by the national average turnover per outlet for each retailer within the centre. Ultimately, Retail Footprint defines overlapping catchments for over 3,000 retail centres within the United Kingdom. This enables assessment of market potential, competition levels, and consumer groups. Retail Footprint catchments are defined by the Birmingham sub catchments: Primary (first 50% of Oxford shoppers), Secondary (next 25% of shoppers), Tertiary (next 15% of shoppers), and Quaternary (final 10% of shoppers).

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Methodology – Retail Centre Class In Retail Footprint, centres are further described by their Class, which defines the role or function of centres within the retail hierarchy and the consequent characteristics of shopping trips. For instance, Classes such as ‘Primary Centres’ see strong shopper flows over large distances, and very strong flows from local customers. At the other end of the hierarchy customers will only travel to ‘Small Rural Centres’ or ‘Small Local Centres’ if they live very close. CACI recalibrate Retail Footprint on an annual basis using new data on shopper flows received from a combination of credit and debit card transactions, client’s own in-house exit surveys and loyalty cards.

25 20

15 10 5

s s

Average Drive TimeDrive (minutes) Average s n re n n res tres tres t io n ow ow entres en T sh T C Cen a Centres Centres Cent t Ce t C r F n l e nal jo an ca o th lit ural o gi R L stric e Ma wi po Urba Primary hopping ParksDi R o ry Outl S tr to ilt c u Parks Me ajor B l Fa M tai of Town Regional Malls se t o Re rp Ou u P

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Methodology – Market Positioning

Retailers have also been divided into Premium, Mass and Value categories in order to provide greater understanding of the market position and role of centres. Value retailers include Poundstretcher, TK Maxx, Argos, Woolworths, New Look, and Peacocks. Mass retailers include WHSmith, Top Shop, Clinton Cards, Next, and Dixons. Premium retailers include House of Fraser, Selfridges, French Connection, Zara, LK Bennett, and Joseph. The proportion of Value, Mass and Premium retailers present in a major centre will have an effect on the distances people will travel to get to a centre. Value orientated major centres have smaller more localised catchments, while shoppers will be willing to travel further to reach a Premium offer. In the case of regional centres, people are more willing to drive longer distances for the larger scale retail offer, amongst which a good provision of premium shops can be found. Regional Centre Quality Major Centre Average Major Centre Value Major Centre 100%

90%

80%

70%

60%

50% 40% % % Shoppers 30% 20%

10%

0 5 0 5 10 15 20 25 30 35 4 4 50 55 60 Drivetime Band (minutes)

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ACORN: An Overview

ACORN combines geography with demographics and lifestyle information, grouping the entire population into 5 categories, 17 groups and 56 types. By analysing significant social factors and consumer behaviour, it provides precise information and an in-depth understanding of the different types of consumers in every part of the country. ACORN can be used proactively as part of a shopper-focused tenant mix strategy, to facilitate ongoing asset management, for effective catchment zoning and ‘battleground’ analysis, and to drive marketing and shopper communication strategies.

ACORN

Wealthy Achievers Urban Prosperity Comfortably Off Moderate Means Hard Pressed Category 1 Category 2 Category 3 Category 4 Category 5

Groups A - C Groups D - F Groups G - J Groups K - M Groups N - Q

Types 1 - 12 Types 13 - 23 Types 24 - 36 Types 37 - 43 Types 44 - 56

Most Affluent Most Deprived

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Derby City Retail Circuit 2. Derby’s Current Catchment and Competition

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Study Area – Drivetimes from Derby City Centre

Derby City is located to the west of the M1, from which it gains strategic access to the north and south. Nottingham to the east, Loughborough to the south-east and Burton-Upon Trent to the south-west are located 30 minutes drivetime from Derby. Chesterfiield to the north, Mansfield to the north-east and Leicester to the south-east are located 45 minutes drivetime from Derby. Stoke-On-Trent to the west, Birmingham to the south-west and Sheffield to the north all lie 60 minutes drivetime from Derby. Derby benefits from a number of radial A-Roads providing access north-west, north, east, south- east, south-west and west. Access directly south is the least convenient.

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2007 Retail Catchment Map Derby 2007 catchment* Centre Class Average Major Centre

Retail Footprint Score 543 Centres competing Ranking 53 locally within Derby’s catchment shoppers Comparison goods exp £429.7m include Burton-On- Share of 15 minute catchment 63.8% Trent, McArthur-Glen Outlet Centre at Share of 15-30 min catchment 14.8% Mansfield, the Share of 30-45 min catchment 1.0% metropolitan towns of Long Eaton and Ilkeston. Belper local centre and the Wyvern and Kingsway retail parks trade within Derby’s core market area. Derby’s main competitor is Nottingham, located over 30 minutes drivetime away. Despite relative low levels of local competition, Derby’s catchment in 2007 was not filling its full potential – in particular with respect to it not extending further into the 30 minute drivetime of the city.

* This scenario was prior to the opening of the Westfield Extension in Derby

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2008 Retail Catchment Map Derby 2008 catchment* Centre Class Average Regional Centre

Retail Footprint Score 716 Derby’s new Major Ranking 38 Catchment, where 90% of spend comes Comparison goods exp £682.9m from, has substantially Share of 15 minute catchment 76.1% expanded following the opening of the Share of 15-30 min catchment 29.9% Westfield extension. It Share of 30-45 min catchment 4.0% is now contained within a 45 minute drivetime of Derby. The Core Catchment (Primary & Secondary) is contained within a 30 minute drivetime. To the south and south-east of Derby, the major catchment is contained within 30 minutes, due to the influences of Burton- On-Trent and Loughborough. To the east and north- east the catchment is similarly contained, due to Nottingham, just 30 minutes away. There is less competition to the west, meaning the catchment extends further.

* This scenario is prior to the opening of Leicester’s Highcross extension and Nottingham Trinity Square scheme due to open later in 2008.

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Derby Catchment Area: ACORN Spatial Distribution

The ACORN Category of each postcode in the catchment area of Derby has been plotted, providing a visual clue to the spatial distribution of Derby’s varying demographic groups. The higher concentration of ‘ACORN dots’ reflects a larger concentration of postcodes, and hence population. A number of residential areas within Derby’s catchment have been identified on the map, which represent important areas from which Derby needs to attract trade. These areas are used on the next page to understand what market share Derby is taking from these areas.

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Current Shopper Flows Map

The better north-south connections compared with east-west is a benefit to Derby’s ability to attract market shares. The areas to the north and west access Nottingham via Derby, which means Derby achieves higher market Competition shares from these residents. here with Nottingham is intense.

Market shares extend further west due to less competition.

Derby is in direct competition with Nottingham in this area, with Derby benefiting from the residents living west of the M1. The Westfield extension has succeeded in turning customers back towards Derby.

Wealthier residents living to the This area is good territory for Derby, north of Burton-On-Trent now have with Nottingham further away and a an alternative to shopping in their weaker retail offer in Burton-On- more local Average Centre. These are Trent & Loughborough. newly won customers, due to the improved offer from the Westfield extension.

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Derby’s Catchment Residents: ACORN Group Profile

Derby Shopper Profile 07 Derby Shopper Profile 08 UK average 30 minutes of Derby

20% 18% 16% 14% 12% 10% 8% 6% % Shoppers % 4% 2% 0%

s s s s t s e e s y ies e li hip il rbia iti lies ots i gle s ngle Ou n i o n i g u m rd ersity in bu sioners r R a Si v nt Gre Fam u n a F Ha d e rt S u Urbanites ing S ta omm e A Executivesfl d r ure Familied ned is y S c C gling e R th Af ishing spi ent Pe rd - r cate A Se d lue-Coll ug u h ou u Settl B B ig eal d ru Asian Str H ner City W Fl E P n st-Industrial Fam I o P Prosperous Professionals Derby’s catchment shopper demographic profile provides strong market opportunities, with an above average presence of Wealthy Achievers and a particularly high level of Secure Families (15.9% of shoppers, index of 111 against UK average). There are indices of Wealthy Executives, Affluent Greys, Flourishing Families and Settled Suburbia are 8.7%, index of 114, 13.3%, index of 166, 9.2%, index of 115 and 10.4%, index of 159 respectively. This means Derby will be more resilient to an economic turn-down and has a large population of family groups – who have particularly strong shopping patterns, supporting a wide-range of retail categories. Derby’s catchment is generally older and more suburban and rural than those of larger cities, with less Professionals, Educated Urbanites and Aspiring Singles than the UK average. The impact of improving the retail offer in Derby has been to draw in more people from all groups, but in particular the relative proportion of Affluent Greys and Flourishing Families has increased.

NB Derby Shopper Catchment Profiles ’07 and ’08 derived from respective Retail Footprint catchments. The difference in profiles is the result of the Page 16 change in shopper catchment between 2007 and 2008 due to the improved shopping offer brought about by the Westfield Extension. It should be noted that this profile shows the POTENTIAL to draw spend from each group, as opposed to actual spend attainment. CACI Property Consulting

Derby’s Catchment Residents: ACORN Group Profile Derby Nottingham 20% 18% 16% 14% 12% 10% 8%

% Shoppers % 6% 4% 2% 0%

s s ys es ls ia es Out ers ot na ites ilies rb ities ili ship Gre n ngle d mili ng m ion n a sio Si ubu r Ro nt rba ns Fam rti S la d Singles Har fes U ing e Fa e e lue r Pe mmu ial ing F ro ir Sta o -col hy ExecutivesAff h ttled str gling Families t s P ated e ent ue g h Ris c Asp Secu du uris S ud ian C Bl Burden g rou s Hi Weal lo Edu Pr A In Stru F pe Inner City Adversity ost ros P P Derby’s profile of Wealthy Executives, Affluent Greys and Flourishing Families is as strong as that of Nottingham, and actually has higher relative proportions of Secure Families and Settled Suburbia. Whilst difficult to compete against Nottingham for the younger and more urban lifestyle groupings, Derby’s profile enables Derby to compete for custom from all other shopping groups. The main exception here would be the Starting Out group, where there is the same relative proportion of this group in Derby’s catchment as there is in Nottingham. There is an opportunity for Derby to differentiate from Nottingham by focusing on its profile strengths, to appeal to family groups and older groups.

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ACORN Groups – Typical Retailers

Wealthy Affluent Flourishing Prosperous Educated Aspiring Starting Secure Settled Executives Greys Families Professionals Urbanites Singles Out Families Suburbia

John Lewis Jacques Vert Polo Ralph Lauren Karen Millen Diesel Mango Warehouse Deben hams Marks & Spencer Russell & Bromley Country Casuals Fiorelli L K Bennett Whistles Zara Oasis Next Hawkshead Mulberry Church's Lacoste Reiss Jigsaw Office Schuh Dorothy Perkins Clarks Mappin & Webb Viyella Petit Bateau Hobbs Ted Baker GAP Sole Trader Top Shop Wallis DAKS Windsmoor Ecco Hugo Boss Dune Elle Bank Mothercare Principles Austin Reed Marks & Spencer Daisy & Tom Gieves & Hawkes Crew Clothing Adams HoF Molton Brown EWM Fat Face Pink T M Lewin Miss Selfridge H&M Bally Monsoon Jo Malon e River Island

Prudent Asian Post Industrial Blue-collar Struggling Burdened High Rise Inner City Pensioners Communities Families Roots Families Singles Hardship Adversity

Damart Littlewoods New Look Barratts Woolworths Aldi Internacionale Bon Marche Scholl Morrisons Bay Trading Co Burton M K One Shoe Express Bacons Shoes QS Littlewoods Matalan H Samuel Peacocks Stead & Simpson Primark Bewise Shoefayre BHS Argos T K Maxx George Ciro Citterio Cromwell's Madhouse The Officers Club Claire's Slater Menswear BHS Shoe Zone Ethel Austin TJ Hughes Wealthy Executives are some of the most affluent people in the UK. They live in wealthy, high status suburban, rural and semi-rural areas of the country. Since incomes in this group are high, the shoppers favour upmarket, quality retailers such as Jigsaw, Austin Reed, Jaeger, Ted Baker, John Lewis, Jones the Bootmaker, Karen Millen and Monsoon. Flourishing Families are wealthy families with mortgages. The live in established suburbs, new housing developments around commuter towns and villages and rural areas. These are high income achievers, successfully juggling both jobs and families. Preferred shops range from the upmarket traditional House of Fraser & John Lewis to the mass brands of Debenhams. H&M, Fat Face, Coast and The Body Shop. Secure Families comprises of home owning families living comfortably in stable areas in suburban and semi-rural locations. People are employed in a range of occupations, including middle management and clerical roles. The retail choices of Secure Families demonstrate lower spending patterns with many mass and value retailers featuring. Dorothy Perkins, New Look, River Island and Miss Selfridge for womenswear and Next for men.

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Current Catchment Summary – RF Catchment Areas

Total comparison Weighted Total Total Market Catchment goods expenditure Market population households Share (£m) Potential (£m)

Primary 209,187 89,912 £457.6 £345.5 75.5%

Secondary 150,852 64,183 £346.9 £167.1 48.2%

Tertiary 323,293 140,523 £731.9 £102.8 14.0%

Outside £67.5

Core 360,039 154,095 £804.5 £512.6 63.7%

Major 683,332 294,618 £1,536.3 £615.4 40.1%

Total £682.9

Derby currently attracts Comparison goods market potential of £682.9m per annum. The major catchment area (Primary, Secondary and Tertiary) is where 90% of Derby’s comparison goods spend is estimated to come from. Comparison goods expenditure from this area is £615.4m. This is generated from a major catchment area of 663 thousand households with an annual Comparison goods spend of £1.5 billion. Derby captures a 75.5% market share from the Primary catchment and 48.2% from the secondary catchment, together generating Comparison goods expenditure of £512.6m from this core catchment area, where 75% of Derby’s comparison goods spend is estimated to come from. The market share achieved from the core catchment is 63.7%, whilst the market share achieved across the major catchment is 40.1%.

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Current Catchment Summary – Drivetime Catchment Areas

Total comparison Weighted Total Total Market Catchment goods expenditure Market population households Share (£m) Potential (£m)

0-15 Mins 156,495 68,329 £335.5 £255.4 76.1%

15-30 Mins 500,395 214,795 £1,121.4 £335.6 29.9%

30-45 Mins 940,374 403,778 £2,111.3 £85.2 4.0%

45-60 Mins 517,195 225,466 £1,185.7 £6.7 0.6%

0-30 Mins 656,890 283,124 £1,456.9 £591.0 40.6%

0-45 Mins 1,597,264 686,902 £3,568.2 £676.1 18.9%

0-60 Mins 2,114,459 912,368 £4,753.9 £682.8 14.4%

Derby currently attracts Comparison goods market potential of £682.8m per annum from within a 60 minute drivetime catchment. This is generated from a catchment area of 912 thousand households with an annual Comparison goods spend of £4.7 billion. Derby captures a 76.1% market share from the 15 minute catchment and 29.9% from the 15-30 minute catchment, together generating Comparison goods expenditure of £591.0m from this 30 minute catchment area, where 87% of Derby’s comparison goods spend is estimated to come from. The market share achieved from the 30 minute catchment is 40.6%, whilst the market share achieved across the 45 minute catchment is 18.9% and across the 60 minute catchment area is 14.4%.

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Leakage to Competing Centres Derby's current market penetration of its major catchment is 40.2% and 63.5% of its core catchment, making it the dominant retail centre within its catchment. The list of centres taking market share from Derby’s catchment has been ranked by the share of its major catchment. Other than Derby, only Nottingham and Burton-on-Trent takes more than 5% market share of this catchment area, where 90% of Derby’s current shoppers are estimated to come from. In relation to the core catchment, other than Derby only Nottingham takes more than 5% market share. Burton-on-Trent takes 3.9% whilst Wyvern and Kingsway Retail Parks take 2.5% and 2.4%, and Belper 2.0%. This means that Derby has very little in the way of significant local competition, with its only main competitor being Nottingham.

Centre Name Retail Classification Retail RankingMarket Market Share (2008) Share (Core) (Major)

Derby Average Regional Centres 38 40.2%63.5% Nottingham Principal Centres 7 16.0% 10.3% Burton-on-Trent Lower Average Centres 125 8.5%3.9% Mansfield - McArthurGlen Outlet Centre Major FOCsss MarketMa 217 2.8% 1.7% Long Eaton Lower Average Metropolitan Towns 538 2.6% 0.8% Ilkeston Value Metropolitan Towns 615 2.4% 0.6% Heanor Average Local Centres 740 2.0% 0.6% Ashbourne Rural Centres 886 1.8% 0.2% Ripley Rural Centres 836 1.8% 0.7% Alfreton Value Metropolitan Towns 669 1.7% 0.1% Belper Average Local Centres 972 1.6% 2.0% Derby - Wyvern Retail Park Retail Parks Minorityhion Fas 1041 1.5% 2.5% Derby - Kingsway Retail Park Retail Parks Minorityashion F 1087 1.3% 2.4% Spondon - Asda Wal-Mart Supermarkets 1304 1.0% 1.5% Leicester Quality Regional Centres 14 0.9% 0.9%

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Section Summary – Derby’s Current Catchment

Since last year, following the opening of the 36,897 sqm gla Westfield Extension in October 2007, Derby has seen substantial growth in its trading catchment area and market penetration of existing trading areas. Market Potential has increased by 65%, from £414.2m to £682.9m per annum – increasing Derby’s UK ranking from 63 rd to 38 th .

Derby’s catchment area contains strong concentrations of Wealthy Executives, Affluent Greys, Flourishing Families and Secure Families. This means that there are particularly strong retailing opportunities for the centre, and that engaging with these groups will be critical to maximising Derby’s potential as a retail destination.

Derby’s catchment is generally older and more suburban and rural than those of larger cities, with less Professionals, Educated Urbanites and Aspiring Singles than the UK average. The impact of improving the retail offer in Derby has been to draw in more people from all groups, but in particular the relative proportion of Affluent Greys and Flourishing Families has increased.

Derby has very little in the way of significant local competition, with its only main competitor being Nottingham. There is an opportunity for Derby to differentiate from Nottingham by focusing on its profile strengths, to appeal to family groups and older groups.

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Derby City Retail Circuit

3. Centre Benchmarking & Potential to change Market Positioning

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Derby 2008 – Current Benchmarks CACI have used ACORN and expenditure data to identify towns with a similar market potential size (in terms of Comparison Goods expenditure) and shopper lifestyle profile to Derby, that share a post-industrial heritage. The similarity of the ACORN profile is measured by the degree of correlation. A correlation of 1 is a perfect match with Derby. A correlation greater than 0.70 is considered to be a strong fit. Southampton is classed as a ‘Quality Regional Centre’, whilst Leicester and Sheffield are classed as an ‘Average Regional Centre’ in Retail Footprint; the same as Derby. Bradford and Coventry are classed as ‘Major Centres’; one classification beneath the ‘Regional Centre’ classification, and have much lower market potential sizes; more similar to Derby pre Westfield extension. Furthermore, the profiles of these city’s do not correlate so well with that of Derby. The performance of Leicester shown here is prior to the opening of the Highcross Extension, which will take Leicester from ‘Average’ to ‘Quality’ Regional Centre. Alongside the benchmarks, Nottingham is included in the analysis, as Derby’s main competitor. Nottingham is classified as a ‘Principal Centre’ – a classification above ‘Regional Centre’.

£1,600 1.00 £1,400 0.90 £1,200

£1,000 0.80 £800 (£m) £600 0.70 Correlation £400 0.60 £200 £0 0.50 Annual ComparisonAnnual Expenditure

rby ld try e n De gham ve n o Leicester Sheffi Bradford C Notti Southampton

Comparison Expenditure (£Millions) Correlation Page 24 CACI Property Consulting

Derby’s Current Benchmarks – ACORN profile The individual profiles of Leicester, Southampton and Sheffield each vary from the profile of Derby in different ways, but generally fit well to Derby’s profile, although in both Southampton and Sheffield the proportions of Prosperous Professionals, Educated Urbanites and Aspiring Singles are higher, where Derby’s profile is weaker. Leicester has the closest overall fit to Derby, albeit with lower relative levels of Affluent Greys and higher relative levels of Secure Families, but sharing the characteristic of lower levels of Prosperous Professionals, Educated Urbanites and Aspiring Singles. Both Bradford and Coventry are most dissimilar to Derby, due to much lower levels of Wealthy Executives, Affluent Greys and Flourishing Families, against much higher levels of Asian Communities in Bradford and Post-Industrial Families and Blue-collar Roots in Coventry.

Derby Leicester Southampton Sheffield Bradford Coventry 25%

20%

15%

10%

% % Shoppers 5%

s s s s y ies ls s les ut ia ts ty e g b tie lie i re na ite O r i gles ship tiv mil n u milies in rd G a io ng amilies a ers cu s ba i F v e s r rt Fam lar Roo Ha g F fe U a e l ed S ring Sin t d Sub ol ng F n se Ex in S ur e t Pensioners i pi c n Affluent ish Pro ted s e n Communistria e-c ggl Ri thy a A S a u u r City Ad al ur us Settl Blu e lo uc si Burde F Prude A Str High We Ed st Ind Inn Po Prospero

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Derby’s Current Benchmarks – average ACORN profile

The overall fit with the benchmark average provides a reasonable good fit with Derby. However, Derby has higher relative levels of Wealthy Executives, Affluent Greys, Flourishing Families, Secure Families, Settled Suburbia and Struggling Families than the benchmark average. This is counter-balanced with lower relative levels of Prosperous Professionals, Educated Urbanites, Aspiring Singles, Post-Industrial Families, Burdened Singles and High Rise Hardship.

Derby Current Benchmark Average 20% 18% 16% 14% 12% 10% 8% 6% % % Shoppers 4% 2% 0%

s s s s e s e es ie l li v l al tes ilies ities i gles i Out n n rsity mi g oner u e Fa Sing in si amilies Si g t Fam F d xecut en n re P E d Urbani iri ne y rofession Star t e Affluent Greysishing P te n Comm d th r a Asp Secu e n ustrial r u c d d ruggling Famu al ous u Settled Suburbia n Blue-collart Roots B er City Adv e lo r d ru Asia I S High Risen Hardship W F E P n st I spe o ro P P

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Benchmarks: Market Positioning Comparing the current market positioning of Derby’s multiple comparison goods stores with the market positioning of its benchmarks demonstrates that Derby has a stronger mass-bias than the average, with a lower level of value stores. Both Leicester and Southampton have higher overall RF Scores (reflecting a higher overall presence of multiple comparison goods stores) and a higher level of Premium. Derby’s current retail positioning is most similar to Plymouth, which also has a strong mass-bias. Sheffield, Coventry and Bradford all have much higher relative levels of value retailers and a lower level of Premium. The healthy presence of premium independents in Derby, and its demographic profile, that contains more Wealthy Achievers and Secure Families than across its current benchmarks would all suggest that Derby should be performing better than these centres, with an opportunity to develop a premium multiple market. This opportunity is particularly pertinent to retaining spend from Nottingham, whose overall multiple comparison goods retail offer is not only 70% larger (based on RF Score) but has a higher relative mix of premium stores. The strong premium multiple market in Nottingham can be viewed as a threat to developing one in Derby. To qualify the opportunity, more evidence is needed on other centres which have achieved a strong multiple premium market despite a larger, dominant neighbour.

Centre Name RF Score Premium % Mass % Value %

Derby 716 15.6% 62.8% 21.7% Nottingham 1202 22.9% 56.7% 20.4% Leicester 782 18.4% 56.5% 25.2% Southampton 785 18.6% 57.6% 23.7% Sheffield 753 11.6% 54.5% 33.9% Bradford 699 7.1% 58.2% 34.7% Coventry 730 9.9% 55.0% 35.1% Benchmark Average 750 13.1% 56.4% 30.5%

*Based on count of multiple fascias only, Derby data updated from audit Page 27 CACI Property Consulting

Main Competing Centres on catchment: Market Positioning

The table below shows the current top six competing centres on Derby’s catchment, detailing their size (in terms of Retail Footprint score) and market positioning in comparison to Derby. Nottingham is Derby’s key competitor. It has a larger Retail Footprint score and has a much higher level of premium outlets. This means that not only does Nottingham have a larger retail offer, it better caters for the more affluent groups in Derby’s catchment – meaning that currently more of their spend will leak from the Derby catchment to Nottingham. Other than Nottingham, all other centres competing within Derby’s catchment have a higher mix of value retailing than Derby (where the mix is already high), and therefore are more effective at competing for spend from lower income groups and bargain hunters. This highlights a key opportunity for Derby to improve its performance against its dominant competitor, by growing a niche premium offer within the city centre, that will retain and attain greater patronage and spend from the wealthier groups in Derby’s catchment.

Centre Name RF Score Premium Mass% % Value %

Derby 716 15.6% 62.8% 21.7% Nottingham 1299 22.9% 56.7% 20.4% Burton-on-Trent 429 5.6% 54.4% 40.0% Mansfield - McArthurGlen Outlet Centre 61 10.8% 51.4% 37.8% Long Eaton 173 0.0% 56.3% 43.8% Ilkeston 130 4.0% 48.0% 48.0%

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Derby 2008 –Aspirational Benchmarks CACI have used ACORN and expenditure data to identify towns with a similar market potential size (in terms of Comparison Goods expenditure) and shopper lifestyle profile to Derby, that can help qualify the opportunities for Derby to develop a premium market. The similarity of the ACORN profile is measured by the degree of correlation. A correlation of 1 is a perfect match with Derby. A correlation greater than 0.70 is considered to be a strong fit. All of the selected benchmarks, excluding Sheffield, are classed as ‘Quality Regional Centres’ in Retail Footprint. Bath, Chester and York are all particularly relevant benchmarks, due to their competitive position with the larger cities of Bristol, Liverpool and Leeds respectively. £900 1.00 £800 £700 0.90 £600 0.80 £500

(£m) £400 0.70

£300 Correlation £200 0.60 £100 £0 0.50 Annual ComparisonAnnual Expenditure

er d rby t el e York fi Bath D hes Exeter C Shef heltenham C

Comparison Expenditure (£Millions) Correlation

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Derby’s Aspirational Benchmarks – ACORN profile The individual profiles of the benchmarks each vary from the profile of Derby in different ways, but generally fit well to Derby’s profile, with exception of the proportion of Prosperous Professionals and Educated Urbanites, where Derby’s profile is weaker. Chester has the closest fit to Derby, similar with respect to lower levels of Prosperous Professionals and Educated Urbanites.

Derby Chester York Cheltenham Sheffield Bath Exeter 25%

20%

15%

10%

% % Shoppers 5%

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Derby’s Aspirational Benchmarks – average ACORN profile

The overall fit with the benchmark average provides a particularly good fit with Wealthy Executives, Affluent Greys and Flourishing Families. However, Derby has lower proportions of Prosperous Professionals and Educated Urbanites, and higher proportions of Secure Families and Settled Suburbia – presenting stronger opportunities amongst older consumer groups and family groups.

Derby Aspirational Benchmark Average 20% 18% 16% 14% 12% 10% 8% 6% % % Shoppers 4% 2% 0%

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Anchor Department Stores @ Benchmarks & Competing Centres

Derby: Debenhams, Co-Op, Bennetts Nottingham:Debenhams, House of Fraser, John Lewis Leicester: Fenwick, House of Fraser, John Lewis

Chester:Debenhams (Browns of Chester), TJ Hughes Liverpool: John Lewis, Lewis’s, TJ Hughes, Debenhams*

York: Boyes, Browns of York, Debenhams, Fenwick Chester Leeds: Debenhams, Harvey Nichols, House of Fraser Cheltenham:Debenhams, House of Fraser Bath:House of Fraser, Debenhams Bristol: House of Fraser, Debenhams Sheffield: Atkinsons, Debenhams, TJ Hughes, John Lewis Meadowhall:House of Fraser, Debenhams Exeter: Debenhams, House of Fraser Bath

Source: EGI, CACI Retail Locations Page 32 CACI Property Consulting

Existing Malls & A1 Development Pipeline @ Benchmarks Derby: Westfield Derby – 90,897 sqm gla: (just completed 36,897 sqm gla extension) Nottingham: Victoria Shopping Centre – 91,137 sqm gla The Pod – 9,290 sqm gla (opened 2007, mixed retail and hotel) Trinity Square – 16,258 sqm gla: under construction Westfield’s Broadmarsh – 44,227 sqm, gla: planned 76,073 sqm gla extension The Pod - Nottingham Chester: The Mall – 20,903 sqm gla: Just sold to Carlyle, potential for 10,000 sqm ext. Northgate Centre – 9,290 sqm gla York: Coppergate Shopping Centre – 13,935 sqm gla, Lasalle have just bought from Landsec and appointed Centros to deliver circa 26,942 sqm gla extension. Cheltenham:

Beechwood SC – 11,799 sqm gla Princesshay - Regent Arcade – 17,837 sqm gla Exeter Bath: The Podium SC – 6,596 sqm gla Multi’s Southgate Shopping Centre – 35,220 sqm gla (just completed 19,148 extension) Exeter: Henderson’s Princesshay Shopping Centre, opened Sep 07 – 36,308 sqm gla

Source: EGI, CACI Centre Futures Page 33 CACI Property Consulting

Existing Malls & Development Pipeline @ Sheffield Existing Malls: Orchard Square – 14,864 sqm gla (1987) Moor Shopping Centre – 30,000 sqm gla (1997) New A1 Retail Development New Retail Quarter: Sevenstone, Hammerson – 79,896 sqm gla under construction, to include John Lewis – due to open New Commercial Office Development Sevenstone - Sheffield St Pauls Place (Norfolk Street), Heart of The City – 18,580 sqm gla – under development Riverside Exchange – 12,820 sqm gla – under construction Sheffield Digital Campus, Sheaf Street:–15,000 sqm gla in phase 1 alongside ‘Electric Works’ creative space The Square, Castlegate; 8,000 sqm gla 1 st and 2 nd phases, full potential up to 15,000 sqm gla. Phase 1 complete.

St Pauls Place - Sheffield

Source: EGI, CACI Centre Futures Page 34 CACI Property Consulting

Aspirational Benchmarks: Market Positioning Comparing the current market positioning of Derby with the market positioning of its benchmarks, shows that the benchmarks have a higher representation of premium retailers than Derby, with exception of Sheffield. This demonstrates that whilst the recent extension of the Eagle Centre significantly improved market shares, the size of its catchment and its UK ranking, Derby City Centre has further opportunities to capitalise on this investment. There is an unmissable opportunity to optimise its retail mix throughout the rest of the centre to alter the overall market positioning of the centre. This change in market positioning should in turn maximise conversion of the spend available within its catchment, in particular from the wealthier groups. This opportunity is based on the current market potential of the centre, and is therefore is an opportunity for immediate action – relating to improving the leasing of existing units throughout the city centre; drawing footfall out of the Eagle Centre through a stronger city centre retail circuit. Since the requirements of premium retailers are less dependent upon the size of retail floorplates, but rather the quality of the high street environment, there exists a timely opportunity for the Derby BID to initiate this new leasing scenario through investment in the public realm and partnership work with local landlords and agents.

Centre Name RF Score Premium % Mass % Value %

Derby 716 15.6% 62.8% 21.7% Chester 756 21.2% 62.4% 16.4% York 755 22.9% 60.8% 16.3% Cheltenham 728 26.9% 56.9% 16.3% Sheffield 699 11.6% 54.5% 33.9% Bath 611 31.4% 57.7% 10.9% Exeter 665 17.4% 61.7% 20.9% Average 702 21.9% 59.0% 19.1%

*Based on count of multiple fascias only, Derby data updated from audit Page 35 CACI Property Consulting

Market Positioning of Clothing & Accessories – Benchmark Targets Comparing Derby’s clothing & accessories mix by market positioning against Derby’s aspirational benchmarks, we confirm that the opportunity for improving the premium mix of Derby lies with the opportunity to improve upon the representation of ‘Upper’ and ‘Upper Middle’ retailers in the centre. These premium fashion retailers trade well in areas with good quality public realm, mixed in with strong independent fashion and specialist stores. There is an opportunity to build a cluster of such stores in the city centre, catalysing the development of a strong, complementary area of retail pitch to the Eagle Centre, creating a point-of-difference for Derby compared to out-of-town style shopping provision, and develop a city centre environment convivial to attracting more of the Wealthy Executives, Affluent Greys and Flourishing Family groups.

Derby Aspirational Benchmarks 60%

50%

40%

30%

20%

% Multiple Clothing Retailers Clothing Multiple % 10%

0% Upper Upper Middle Middle Lower Middle Lower

*Based on count of multiple fascias only, Derby data updated from audit Page 36 CACI Property Consulting

Premium Retailer Model – sustainable levels of demand To determine a sustainable level of premium shopping for Derby City Centre, post-development, CACI have built a regression model to predict the average premium RF score supportable in centres across the UK, based upon the ‘premium shopper population’ of each centre, defined by the estimated number of shoppers in the following ACORN group categories: Wealthy Executives, Flourishing Families, Prosperous Professionals, Educated Urbanites and Secure Families.

500 450 400 350 300 250 200

Premium RF Score RF Premium 150 100 50 0 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 Premium Shopper Population

Predicted Actual

Page 37 CACI Property Consulting

Premium Retailer Model – sustainable levels of demand The extended Westfield Derby has had the effect of significantly increasing the market potential of Derby to support a strong cluster of premium retailers. However at current this opportunity has only been taken up as far as what the Average Trend across the UK would predict. Derby’s affluent catchment and BID improvements to the public realm in the Cathedral Quarter means that there is potential to outperform this Average Trend, and work at the Upper Trend, performing closely to benchmark towns of Cheltenham, Chester and Bath.

250 London - Knightsbridge Norwich Upper Trend

Cheltenham Newcastle- 200 Tunbridge Upon-Tyne Merry Wells Bath Southampton/ Hill Meadowhall Oxford Cardiff/Aberdeen Chester 150 Solihull Bromley Average Trend

Croydon 100 Watford Sheffield

Premium RF Score RF Premium Thurrock 50 Derby 2008 Derby 2007 0 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 Premium Shopper Population

Predicted Actual

Page 38 CACI Property Consulting

Section Summary – Centre Benchmarking & Market Positioning Comparisons with other post-industrial cities such as Leicester, Southampton, Plymouth, Sheffield and Hull reveals that Derby has a stronger mass-bias than the benchmark average, with a lower level of value stores, associated with a stronger level of Wealthy Executives, Affluent Greys, Flourishing Families, Secure Families and Settled Suburbia compared with the average market these benchmark towns operate in. In terms of demographic profile, Derby is closest to Leicester. Both Leicester and Southampton have a stronger premium presence than Derby. Considering the healthy presence of premium independents in Derby, and its strong demographic profile, Derby should be performing better with respect to its market positioning balance, with a clear opportunity to develop a premium multiple market. The strong premium multiple market in Nottingham can be viewed as a threat to developing one in Derby. To qualify the opportunity, more evidence is needed on other centres which have achieved a strong multiple premium market despite a larger, dominant neighbour. Chester, York and Bath have all developed strong premium multiple markets in the shadow of a more dominant neighbour. Other relevant benchmarks, which have similar market potential size and demographic profile include Cheltenham and Exeter. Sheffield has also been selected as a particularly relevant benchmark – a city which needs to compete against Meadowhall and which has a strong set of office developments in the pipeline, despite strong competition with Manchester, Leeds and Nottingham in terms of office markets. Comparisons with these cities/towns qualifies that there is an economically sound argument for Derby to strengthen its premium market, with opportunities to attract a significant number of additional ‘upper’ and ‘upper-middle’ clothing and premium home, jewellery and toiletry retailers. In order to achieve this, Derby will need to create a step-change in the way that it is perceived, by both the retail community as well as consumers, to achieve a premium market, supportable along the lines of an ‘Upper Trend’ established by a number of successful towns and cities across the UK. Chester, York and Bath benefit from heritage and a strong tourism strategy. Sheffield does not operate under the shadow of a nearby dominant centre. Therefore, despite the comparisons, ultimately Derby’s situation and future development strategy will be unique to Derby. The key lessons to draw is that Derby needs to have a wider point of interest than retailing alone, and like Sheffield, will need to develop a much stronger city-based employment sector to support the city retail economy, in the absence of such a strong tourism market as other benchmarks enjoy.

Page 39 CACI Property Consulting

Derby City Retail Circuit

4. Current Retail Provision & Pitch Performance

Page 40 CACI Property Consulting

Derby City Centre– Identified Areas

The city centre and North Area the adjoining riverside and North Castleward areas has been divided into 4 distinct areas. The Retail Core is where the core city centre retailing occurs, and broadly fits with DCC’s current planning boundaries.

West Area East Area The limits of the new Cathedral Quarter BID (red) are also Retail Core shown which broadly encompasses the identified north-west business area.

Page 41 CACI Property Consulting

Derby City Centre– Places of Note Joseph Wright College

Derby Cathedral

Fountain – Market Place

Ark –Sadler Gate

Friar Gate Sadler Gate Market Place

Victoria Street Pedestrianised Street St Peters Street – St Peters Street La Tasca –Friar Gate

Westfield Derby

Page 42 CACI Property Consulting

Derby City Centre – Audit June ‘08

On the 23 rd June 2008 CACI conducted a detailed retail floorspace audit of all retailers currently trading in the Retail Core of Derby to determine:

Derby’s current retail provision by fascia category (Clothing, Health & Beauty, Leisure Goods etc.)

Current Operator Configuration (Department Store, Variety Store, MSU, Multiple and Independent)

Floorspace provision by Retail Pitch (Westfield Derby, St Peters Street, Sadler Gate etc.)

This critical appraisal of current retail supply has enabled CACI to draw conclusions on the relative strength of competing areas of retail pitch and operator configuration and market positioning relative to catchment potential and demand. In order that this report remains relevant at point of publication, the old M&S store in the Cornmarket has been entered into the audit as the new Primark, and the old M&S food hall a new Tesco-Metro. To estimate net internal trading areas, CACI auditors have paced the size of every retail unit open for trade. For vacant premises, CACI have used either OS mapping or estimated the available net trading space from taking external measurements of the unit.

Page 43 CACI Property Consulting

Retail & Services Provision – Floorspace Breakdown

Retail / Service Provider Net Sq. M % of RCG % of Total Derby city centre’s Retail Core Category currently provides 79,056 net sq.m. in the core ‘Retail Centre Goods’ (RCG) Department Stores 20,544 26.0% 17.1% categories, with the Variety Stores 7,020 8.9% 5.8% department stores and Clothing & Accessories 34,458 43.6% 28.6% clothing & accessories sector representing 69.6% of this Leisure Goods 7,186 9.1% 6.0% space. Household Goods 3,047 3.9% 2.5% The Leisure Goods category Health & Beauty 3,704 4.7% 3.1% has 9.1% of RCG floorspace, Electrical Goods 3,098 3.9% 2.6% Household Goods has 3.9% whilst Health & Beauty Retail Centre Goods Sub-Total 79,056 100.0% 65.7% account for 4.7% and Catering 9,495 7.9% Electricals 3.9%. Markets 6,222 5.2% Amongst the 23.1% of retail Supermarkets 3,144 2.6% floorspace categorised as Non- RCG, Catering takes 7.9%, the Convenience 588 0.5% markets take 5.2% of all Other Sales of Goods* 1,034 0.9% space, Supermarkets Banks and Building Societies 2,075 1.7% (Sainsbury’s and Tesco Metro) 2.6%, Banks & Building Other Services** 4,030 3.3% Societies 1.7% and Other Amusements/Betting Shops 1,263 1.0% Services 3.3%. Non RCG Sub-Total 27,851 23.1% Total floorspace in Derby city Non-Vacant Sub-Total 106,907 88.8% centre’s Retail Core available for retail and services is Vacant 13,501 11.2% 120,408 net sq.m. 13,501 net Grand Total 120,408 sq.m. is vacant (11.2%).

NB. Retail Centre Goods are those retail categories which represent the majority of shopping centre trading activity *Other Sales of Goods include antique shops, charity, florists and DIY. Page 44 **Other Services include surgeries, dentists, estate agents, hairdressers, insurance, laundry, pawnbrokers, photo-processing, piercing and tattoo studios, post office, recruitment, repairs, salon, travel CACI Property Consulting

RCG Operator Configuration (proportion of floorspace) Other MSU's Other Variety Stores Bennetts 9% Coop Primark 2% 4% 2% MAXX (T K) 4% Multiples - Units 2% 30% BHS 2% Wilkinson 2% Matalan 3% Woolworths 2% Next Boots Independents 3% 2% Debenhams Marks & Spencer 15% 10% 8% The town is anchored by a number of Department Stores, Variety Stores and major space users (MSUs) accounting for 55.7% of net space. There are currently five department stores, of which just Debenhams and M&S occupy a significant floorplate. The circa 8,500 sq m net Debenhams is located in the new Westfield Derby centre, on the southern end of the centre – meaning it is located right on the edge of the city centre. Debenhams was previously located on Victoria Street. The Marks & Spencer is a circa 7,000 sq m net store that joins the new Debenhams in anchoring the southern end of the new Westfield Derby centre. M&S was previously located in two units; one on the top end of St Peters Street and the other on Cornmarket. Together they take 19% of floorspace. Derby’s other Department, Variety and MSU stores together take up 35% of space respectively and include Westfield Derby centre –Boots, Woolworths, SportDirect.Com, New Look, Next, Zara, Top Shop, H&M,; St Peters Street– BHS, JJB Sports, ; London Road – Woolworths, WH Smith, Matalan, Argos, Wilkinson; East Street – Co-Op, TK Maxx; Irongate – Bennetts and the new Primark on Cornmarket. Multiples (national retailers operating out of non-MSU units) currently account for the largest percentage of sales space in Derby city centre, 32%. These are most highly concentrated in Westfield Derby, St Peters Street, East Street, Albion Street and London Road. There is also high concentration of independents in Derby, taking 15% of utilised retail space. These are most highly concentrated in Babington Lane, Sadler Gate and Irongate. There is also strong independent presence in Green Lane, Osmanton Road and The Strand.

Page 45 CACI Property Consulting

Derby City Centre– Core Retail

North Side

Sadler Iron Gate Friar Gate Wardwick Gate Cornmarket Market Place East Side East Curzon Street St Peters Street Street

Green Eagle Lane

Westfield The Spot Extension Green Lane

East Street

Page 46 CACI Property Consulting

Retail Category – Floorspace (Net Sq M) by Primary Areas of Pitch

Retail / Service Provider Westfield East St Peters Corn Sadler Green Category Extension The Spot Eagle Street Street market Gate Lane Total Department Stores 14,199 0 0 2,835 1,839 0 1,671 0 20,544 Variety Stores 0 6,258 284 312 166 0 0 0 7,020 Clothing & Accessories 17,175 879 1,914 3,751 2,843 4,051 2,662 1,182 34,458 Leisure Goods 3,001 1,079 481 1,536 229 116 368 377 7,186 Household Goods 417 1,311 294 0 0 0 96 929 3,047 Health & Beauty 425 266 2,665 50 99 71 0 128 3,704 Electrical Goods 980 74 334 641 135 74 480 381 3,098 Retail Centre Goods Sub-Total 36,197 9,866 5,972 9,125 5,310 4,312 5,276 2,997 79,056 Catering 2,817 839 391 436 441 1,055 2,620 896 9,495 Market 0 0 4,405 0 0 1,818 0 0 6,222 Supermarket 0 0 1,555 0 1,589 0 0 0 3,144 Convenience 0 161 38 131 23 12 95 128 588 Other Sales of Goods 0 212 0 20 100 267 77 359 1,034 Banks and Building Societies 0 222 0 684 358 632 146 33 2,07 5 Other Services 295 672 197 124 186 814 1,087 655 4,030 Amusements/Betting Shops 0 164 0 205 133 139 308 315 1,263 Non RCG Sub-Total 3,112 2,270 6,585 1,599 2,829 4,738 4,33 2 2,386 27,851 Non-Vacant Sub-Total 39,309 12,136 12,558 10,724 8,139 9, 050 9,608 5,383 106,907 Vacant 881 200 1,756 445 1,018 515 1,363 7,324 13,501 Grand Total 40,190 12,336 14,314 11,169 9,157 9,565 10,971 12,707 120,408

NB. Retail Centre Goods are those retail categories which represent the majority of shopping centre trading activity *Other Sales of Goods include antique shops, charity, florists and DIY. Page 47 **Other Services include surgeries, dentists, estate agents, hairdressers, insurance, laundry, pawnbrokers, photo-processing, piercing and tattoo studios, post office, recruitment, repairs, salon, travel CACI Property Consulting

Derby City Centre– Retail and Services Floorspace Derby city centre currently provides circa 79,056 net sq.m. in the core ‘Retail Centre Goods’ (RCG) categories. Total floorspace in Derby city centre available for retail and services is 120,408 net sq.m. 13,501 net sq.m. is vacant (11.2%). The majority of available vacant space is in the ‘Green Lane’ area, due The Eagle Market to the relocation of Debenhams. The previously vacant M&S in Cornmarket has been replaced by a new Primark store, and the Foodhall Market Hall in St Peter Street by a Tesco Metro. Both the Market Hall and the Eagle Centre market play a significant role RCG in the composition of the Market Catering Place and ‘Eagle’ areas. Market With the Primark and Tesco Metro not yet to open, the Convenience interim impact has been to weaken footfall on St Peters Banks & Building Soc. Street and Cornmarket, Other Services leading to a disconnection between Sadlers Gate and Vacant the rest of the retail core. The Westfield Extension is 35% of all floorspace and 60% of all RCG. © Crown Copyright. All rights reserved. (100024913) (2008)

NB Area of Pie Charts are in proportion to the amount of total floorspace in each zone. Page 48 CACI Property Consulting

Retail Pitch Analysis – Floorspace & Mix Retail Pitch Net Sq. m% of City % % % Grocery % % Vacant Comparison Catering etc Services

[A] Westfield Extension 40,190 33.4% 90.1% 7.0% 0.0% 0.7% 2.2% [B] The Spot 12,336 10.2% 81.7% 6.8% 1.3% 8.6% 1.6% [C] Eagle 14,314 11.9% 41.7% 2.7% 41.9% 1.4% 12.3% [D] East Street 11,169 9.3% 81.9% 3.9% 1.2% 9.1% 4.0% [E] St Peters Street 9,157 7.6% 59.1% 4.8% 17.6% 7.4% 11.1% [F] Cornmarket 9,565 7.9% 47.7% 11.0% 19.3% 16.6% 5.4% [G] Sadler Gate 10,971 9.1% 48.5% 23.9% 1.1% 14.0% 12.4% [H] Green Lane 12,707 10.6% 26.2% 7.1% 1.2% 7.9% 57.6% Grand Total 120,408 66.5% 7.9% 8.3% 6.1% 11.2% The Westfield Extension has the largest trading area, accounting for 33.4% of town centre floorspace, dominating all other areas of pitch. The “Eagle” area, containing St Peters Mall, the original Eagle Centre and the Eagle Centre Market, with 11.9% of floorspace. This means that the joined-up covered mall area of these two adjacent pitches represent 45.3% of Derby’s total retail and service floorspace. The Westfield Extension is dominated by RCG goods (90.1%). The only two other retail pitches with a similar concentration of RCG goods is the East Street area (81.9%) and The Spot (81.7%). East Street represents 11.9% of total floorspace in the centre and The Spot 10.2%). The “Eagle” area contains both the Eagle Centre Market and Sainsbury’s and hence is less dominated by RCG. St Peters Street covers 7.6% of floorspace in the centre. Tesco-Metro will be soon opening where the old M&S food-hall used to be. The Cornmarket covers 7.9% of floorspace, providing a balanced mix of RCG, Catering, Grocery/Market and Service uses. A new Primark Store is just about to open, in place of the old M&S store. Sadler Gate covers 9.1% of floorspace, 48.5% of which is RCG and 23.9% catering. The Green Lane area has 10.6% of floorspace, however over half of this is now vacant, with the closed old Debenhams store. Vacant floorspace in the city is high (11.2%), with the highest levels in Green Lane (57.6% - Old Debenhams), Sadler Gate (12.4%), St Peters Street (11.1% relating to vacancies in the Audley Centre) and “Eagle” (12.3%).

*Grocery etc = Markets, Supermarkets, Convenience

Page 49 **Services = Banks and Building Societies, Amusements and Betting Shops, surgeries, dentists, estate agents, hairdressers, insurance, laundry, pawnbrokers, photo-processing, piercing and tattoo studios, post office, recruitment, repairs, salon, travel CACI Property Consulting

Derby City Centre– Active Frontage

The proportion of vacant units is Sadler highest in the Eagle area. Gate Sadler Gate and Cormarket both have a much higher representation of caterers. Friar Gate is an adjunct to the city retail offer and is dominated 60 137 by caterers and services. Farmers Market Representation of services are also 60 high in Sadler Gate, Cornmarket and Friar Gate Green Lane, and significant in The Spot. Cornmarket East Reflecting the lower level of services, the St Peters Street, East Street, Street 71 Eagle and Westfield Extension Clothing Retail 41 represent the primary core for Non-Clothing Retail retailing in the centre. Whilst much smaller in terms of Catering Eagle floorspace, the Sadler Gate area has Grocery etc Green St Peters 125 units, compared to Westfield 53 Extension’s 147; the area also has a Lane Street Banks & Building Soc. high representation of clothing and Other Services 89 accessories retailers. This highlights The Spot its very important contribution to the Other Uses Westfield 147 city’s overall retail offer. Extension Vacant 83

NB Pie Charts are of equal size regardless of number of fascias. The bold number ontop of the pie-chart provides the number of fascias present in Page 50 the respective area of pitch. CACI Property Consulting

Retail Pitch Analysis – RCG Fascias & Market Positioning

Retail PitchRCG RCG Fascias % of City % % Value % Mass % Premium Floorspace Multiple

[A] Westfield Extension 36,197 111 34.4% 73.0% 7.2% 73.9% 18.9% [B] The Spot 9,866 36 11.1% 58.3% 33.3% 60.6% 6.1% [C] Eagle 5,972 28 8.7% 64.3% 46.4% 46.4% 7.1% [D] East Street 9,125 37 11.5% 78.4% 25.0% 69.4% 5.6% [E] St Peters Street 5,310 22 6.8% 86.4% 19.0% 81.0% 0.0% [F] Cornmarket 4,312 15 4.6% 73.3% 36.4% 45.5% 18.2% [G] Sadler Gate 5,276 42 13.0% 16.7% 4.9% 17.1% 78.0% [H] Green Lane 2,997 32 9.9% 12.1% 6.9% 72.4% 20.7% Grand Total 79,056 323 58.0% 21.7% 62.8% 15.6%

The Westfield Extension, East Street and St Peters Street are all dominated by multiple chain retailers (73.0%, 78.4% and 86.4% respectively). The Spot, Eagle and Cornmarket have a balance between multiples and independents, whilst Sadler Gate and Green Lane areas contain predominantly independent stores (83.3% and 87.9% respectively). In terms of market positioning, the Westfield Extension is the mass dominated (73.9%), anchored by the M&S and Debenhams and mass retailers WH Smith, Next, Zara, Top Shop and Hennes. There is an 18.9% representation of premium retailers, including Pumpkin Patch, Beaverbrooks, Lacoste, Vero Moda, G-Star, Allsaints, Jones Bootmaker and Hawes & Curtis. The extension has very little in terms of value retailers (7.2%), however, this contrasts with the existing Eagle Centre and St Peters Mall area (“Eagle”) where the offer is value dominated (46.4%), an area anchored by the large Boots, BHS and Sainsbury’s. East Street and St Peters Street are also mass dominated (69.4% and 81.0% respectively), however they are more value- biased than the Westfield Extension, with 25.0% and 19.0% value respectively. The Spot has a similar market position to East Street and St Peters Street (albeit with less multiple stores), while the Cornmarket has a more balanced mix, with 18.2% premium representation. Sadler Gates’ independents are predominantly premium (78.0%), contrasting quite drastically against all other areas of pitch. In comparison, Green Lane’s independents are mostly mass-orientated (72.4%).

Page 51 CACI Property Consulting

Derby City Centre– RCG Market Position & Multiples v Independents

Value Both Green Lane and Sadler Gate are Cathedral dominated by independent retailers (91% and 87% respectively). Mass This contrasts with St Peters Street, 83% where 87% of retailers are national Sadler Premium chains. 36% 46% 18% The only premium part of Derby is Gate Sadler Gate, due to the quality of its independent traders. Unfortunately, Ark & Canopy – Sadler Gate 5%16% 79% Cornmarket it is this area which has currently 27% become disconnected from the rest East 25% 69% 6% of the retail offer. Street This means that the potential demise

18% 82% 0% St Peters 22% of Sadler Gate is a great concern, since it would be the natural area of Street 46% 46% 7% the city to start growing a stronger 14% representation amongst national Eagle 88% premium brands. Green 36% The Westfield Extension is mass- dominated, with a healthy (19%) Lane 27% representation of premium retailers. However, the Eagle area immediately 7% 71% 21% Westfield to the north is value dominated, Extension meaning other mass-dominated Westfield Extension 42% areas of St Peters Street and East

7% 74% 19% Street are linked and centred around Independent this value-pitch. The Spot 33% 61% 6% This is not the best zoning Multiple arrangement with respect to market positioning of the areas. 93% % Indep. Friar Gate © Crown Copyright. All rights reserved. (100024913) (2008)

Page 52 CACI Property Consulting

Derby City Centre– RCG Floorspace Mix This spatial analysis highlights the new dominance of Westfield Derby, which covers the extension but also much of The Spot and the ‘Eagle’, and has the most significant anchorage of Department Store and Variety Stores. However, with the opening of the new Primark, the areas of Sadler Gate, Cornmarket, St Peters Street and East Street also provide a signifcant Clothing & Accessories offer.

Department Store Variety Store Clothing & Accessories Leisure Goods Household Goods Health & Beauty Electrical Goods

NB Area of Pie Charts are in proportion to the RCG floorspace in each zone. Page 53 CACI Property Consulting

RCG Performance by Retail Pitch – ‘Baseline’ Primark & Tesco Metro

Retail Pitch RCG floor Estimated Sales Market Rated Performance space (net Turnover (£m) density share of sq.m) (£ / sq Primary m) Area Zone A: Westfield Extension 36,197 £201,826,987 £5,576 Turnover55.1% 115-Good Zone B: The Spot 9,866 £29,565,330 £2,997 8.1% 61-Poor Zone C: Eagle 5,972 £23,364,234 £3,912 6.4% 80-Satisfatory Zone D: East Street 9,125 £36,405,406 £3,990 9.9% 82-Satisfatory Zone E: St Peters Street 5,310 £33,036,087 £6,221 9.0% 128-Very Good Zone F: Cornmarket 4,312 £15,803,569 £3,665 4.3% 75-Satisfatory Zone G: Sadler Gate 5,276 £18,139,221 £3,438 5.0% 71-Poor Zone H: Green Lane 2,997 £8,161,856 £2,723 2.2% 56-Very Poor Grand Total 79,056 £366,302,690

Through a unit-by-unit and pitch-by-pitch turnover assessment, CACI have estimated the current comparison goods* turnover of the primary area of Derby City Centre to be £366.5m per annum (exc. VAT). This turnover is just 54% of the centre’s market potential (inc. VAT). In addition to the difference between VAT accounting, in CACI’s experience centres seldom turnover their full market potential, since there are other unaccounted impacts on available spend, such as spend through ‘special forms of trading’ such as catalogues, internet and spend when abroad and at locations not recognised as comparison goods retail centres in CACI’s Retail Footprint model. The difference between turnover and potential also relates to the level of spend attained by the centre against what could be attained if the retail mix was optimised to match the full range of consumer needs. The Westfield Extension dominates with close to 55% of this turnover, with East Street taking the next 9.9% and The Spot, which includes further properties managed by Westfield taking 8.1%. The ‘Eagle’ area and St Peters Street take 6.4% and 9.0% of sales respectively. Sadler Gate takes 5.0%, whilst Cornmarket and Green Lane only takes 1.6% and 2.3% respectively. The highest sales density can be found in the Westfield Extension, at £5,576 per sq m net, with no other area of pitch achieving anywhere close to this density. Sales densities have been indexed against a benchmark trading density of £4,800 per sq m net

Page 54 * This analysis excludes explicit detail on the performances of Derby’s market halls. CACI Property Consulting

Derby City Centre– RCG Pitch Performance – Primark & Tesco Metro The performance analysis reveals that only the Westfield Extension Sadler and St Peters Street are performing well. Gate The other areas of Cornmarket Friar Gate (despite the opening of Primark), 71 East Street and the ‘Eagle’ area Cornmarket however only perform satisfactorily, with Sadler Gate and The Spot performing poorly, and Green Lane 75 very poorly. East Of greatest concern is the poor performance of Sadler Gate – an Street 82 area which is host to a high number of Derby’s independent retailers, 128 and an area identified to have the greatest potential to grow a stronger St Peters premium multiple presence in the city. Very Poor Pitch Street 80 56 It would also be more desirable in particular Poor Performance to see East Street Green performing better, as Satisfactory Westfield this area is at the Lane Performance Extension Good Performance centre of the retail The Spot 115 core, and needs to Very Good Performance function as an 61 important retail link Additional Trading between the northern Opportunity and southern areas of the retail core. 93 Performance Index © Crown Copyright. All rights reserved. (100024913) (2008)

n.b The relative size of the circles represent the relative turnover achieved in each area of pitch. Page 55 CACI Property Consulting

Non-developmental Factors that could improve current performance

The estimated performances of this ‘baseline’ scenario do not take into changes in footfall due to the opening of the new Bus Station. They also do not factor in the potential benefits of the Primark attracting higher levels of patronage to the northern car parks. Neither do the estimates take into account known new leasing activity, or indeed, what could be done with a stronger leasing strategy for the area. The poor estimated performance for Sadler Gate is therefore a worst-case scenario. However, this scenario cannot be ignored, and highlights the fragility of the area and need for every effort to bolster footfall in the area and improve the area to be suitable for premium tenants, including necessary public realm improvements, removal of nuisance neighbours / toning down of their impact on the tone of the area.

Page 56 CACI Property Consulting

Section Summary – Current Retail Provision & Pitch Performance

The Westfield Extension has added more than 50% more retail space to Derby City Centre, providing much needed units to satisfy retailer requirements of those seeking larger floorplates; and up-to-date accomodation for Marks and Spencer and Debenhams. However, the location of the extension means that the impact has been to drastically shift the centre of gravity of retailing in the city towards the south-east of the city centre. The only premium part of Derby is Sadler Gate, due to the quality of its independent traders. Unfortunately, it is this area which has currently become disconnected from the rest of the retail offer. The Westfield Extension is mass-dominated, with a healthy (19%) representation of premium retailers. However, the Eagle area immediately to the north is value dominated, meaning other mass-dominated areas of St Peters Street and East Street are linked and centred around this value-pitch. This is not the best zoning arrangement with respect to market positioning of the areas. Modelled pitch performance indicates that following the opening of the Primark and Tesco Metro, all areas will perform satisfactorily or better, other than Sadler Gate and The Spot. This poor estimated performance for Sadler Gate is a worst-case “do-nothing” scenario. This scenario highlights the fragility of the area and need for every effort to bolster footfall and improve the area to be suitable for premium tenants, including necessary public realm improvements, removal of nuisance neighbours and/or toning down the impact some fascias have on the tone of the area.

Page 57 CACI Property Consulting

Derby City Retail Circuit

5. Future Retail Circuit and Zone Strategy

Page 58 CACI Property Consulting

Derby City Centre– Development Opportunities

City Gate House Cathedral Road 60,000 sq ft 60,000 sq ft

Full Street 80,000 sq ft

Sadler Square 70,000 sq ft Bold Lane Sadler Friar Gate Gate Audley Centre Market Place Riverlights St James Yard 40,000 sq ft 80,000 sq ft Old M&S / Audley Centre

Curzon Street East Street Debenhams / St Petersx Beckett Well Lane/ Green Green Lane Street Eagle St James Yard Lane

Westfield The Spot Extension St Pauls Place - Sheffield North Castleward 400,000 sq ft

The figure above maps known office-led scheme proposals (blue) and retail-led scheme proposals (red). Page 59 As part of their audit CACI have also identified two further sites with redevelopment potential (dotted pink). CACI Property Consulting

Developmental Issues and Options Westfield Extension has irrevocably changed the centre of gravity for retailing in Derby. The new positioning of the focus of core retailing to the south-eastern area of the retail core presents an opportunity to link the two distinct business areas of Derby; one which lies in the north of the city centre, the other which lies around the rail station area. The impact of the Westfield Extension and relocation of Debenhams is to set the conditions for a shift eastwards of the main north-south shopping axis through the city; presenting an opportunity to establish a stronger link between Market Hall, Albion Street and Westfield Derby. The induced changes to footfall levels due to the extension and current vacancies of old Debenhams and M&S has had the greatest impact on trading conditions at Sadler Gate. Sadler Gate represents an important opportunity area to fulfil the identified premium gap, with the St. James Yard development as an important catalyst to drive this opportunity. However, under current footfall levels and vacancy rates, leasing units to the target retailer list is going to represent a significant challenge. For St Peters Street, the occupation of the old M&S Foodhall with a Tesco Metro in combination with the opening of the Primark store would secure the viability of St Peters Street’s current level of retail provision. The Debenhams Building, and potential for redevelopment of surrounding land, is identified as the lynchpin for the future development direction of the city. Whilst there maybe capacity for replacing the loss of the Debenhams with an equivalent level of retail floorspace, we have not identified this location as a priority with respect to providing replacement retail space. Rather, we have identified an opportunity for an office-led scheme to deliver greater levels of daytime footfall to this area, which would help support a stronger catering presence in the centre of the city and support the economy of St Peters Street (north), Sadler Gate and Market Place. This would not preclude retail use on the groundfloor. We do however recognise the sequential preference for retail at this location compared to other edge-of-town locations. Aspirational benchmark analysis has identified that in the long-term, Derby could aspire to an additional department store anchor, such as a House of Fraser or John Lewis. However, we would view this as a longer term opportunity, since Derby has a long way to go in terms of changing market perceptions. We would suggest that it will need to ‘prove itself’, by building a stronger premium market without any additional department stores; as Chester has achieved with only a Debenhams and TJ Hughes.

Page 60 CACI Property Consulting

Towards a future city centre development strategy

Considering the issues and options identified, critical to a successful strategy will be linking opportunities to timing; in particular identifying what dependencies there are on each opportunity. Due to the fragile situation in Sadler Gate, this area is identified to have top priority for immediate action. The opportunities for premium retailers in this area are not dependent upon new development, but rather on increasing the utilisation of the northern car parks, improving the environment and reducing the negative visual impact of the Walkabout and Betfred frontages. In terms of public realm, ensuring the place is clean and well-kept is important. However, care must be taken on the timing of improvements to the street surfaces, as these can disrupt trade and therefore can be counter-effective if not managed properly. Getting the St James Yard development underway would set the right investment message for the area and achieve better connection of the Sadler Gate area to the rest of the core retail area. The opening of the new bus station will further improve opportunities on East Street, and therefore the proposed new retail spine between the Westfield Extension and Market Hall, via the Co-Op department store anchor could be delivered in the shorter term – just requiring some public realm improvements around Osnabruck Square and linking with the new Quad arts facility. Osnabruck Square therefore becomes an important public space. Further planned office development to the east of Market Place (Full Street development) will also further strengthen this concept. The opportunities for St Peters Street, however, relate to longer term opportunities. The retail units are currently well-let, and therefore not of immediate concern. However, in the mid-long term, there are redevelopment opportunities for the Audley Centre and the Debenhams site – which could re-invigorate this zone – especially if delivered with further office space and a mix of other uses. The Debenhams site (Beckett Well Lane) has good potential for an office-led scheme, which could be developed in the mid-term. The redevelopment of the Audley centre is seen as a longer term opportunity. Due to its good positioning close to the East Street and new retail spine, it could work towards accommodating a fourth department store anchor for the city.

Page 61 CACI Property Consulting

Derby City Centre– Footfall Anchors & Visitor Paths

Bennetts Car Car Park Park

Friar Gate Independents Market Place Sadler Market Hall Gate Bennetts – Iron Gate

Primark

TKEast Maxx Tesco Old Car Metro Street Car Debs Coop Park Park St Peters Eagle Market Street Bold Lane Car Park BHS Green Eagle Sainsbury’s Lane Walter Smith Butchers – Market Hall Boots Next, Zara, Top Shop, H&M Westfield The Spot Extension Debs

The figure above maps the locations of the main car parks and key retail attractions across the city. From their Page 62 audit, CACI have marked important dwell/meeting points (red circles) and main visitor paths (dashed lines). CACI Property Consulting

Derby City Centre– New Retail Circuit CACI have identified a new retail circuit for Derby City Centre. This builds on the current identified dwell points and visitor paths, and acts to provide a stronger connection between the Cathedral Quarter and Westfield. Important dwell points have been Friar Gate identified, which would all benefit from Market Place improvements to the quality of the Sadler public space and potential use of public art to help strengthen their identity and Gate roles as orientation points. The main shopping circuit (black long- dashed) has two main north-south axes; one between Westfield and East St Peters Osnabruck Square, cutting through the Street middle of East Street, and one between The Spot and Irongate, along St Peters Street and Cornmarket. Key East Street is the most important east- Primary Green Eagle west shopping street, with the street connecting the new Bus Station with St Shopping Circuit Lane Peters Street, and providing access to Catering/Evening Westfield. Victoria Street, now forms an Circuit extended catering/evening economy Westfield The Spot circuit (blue-dashed) from the Friargate Exploratory Extension shopping circuit and the Wardwick. The Cathedral Quarter has an Important exploratory second circuit (green short- Dwell Points dashed) that runs along Albert Street, Victoria Street, The Strand, Sadler Gate, Market Square and Market Hall.

Page 63 CACI Property Consulting

Derby City Centre– New Retail Circuit over Current Pitches

The proposed new retail circuit has been super-imposed ontop of the current retail pitches, as identified in the audit. The main issue, moving forwards, with Friar Gate this current segmentation of retail pitches, is the poor connection between Sadler both the Green Lane and The Spot Gate Cornmarket pitches. The current segmentation reflects the pre Westfield extension conditions, where the main north-south visitor path East St Peters was along the whole of St Peters Street, Street where a stronger connection between ‘The Spot’ and ‘St Peters’ existed. However, the new circuit recognises a shift of the retail footfall eastwards, and an opportunity to reconsolidate the Green Eagle Green Lane, St Peters and The Spot Lane pitches.

Westfield Extension

The Spot

Page 64 CACI Property Consulting

Derby City Centre– New Retail Circuit and Pitches

Independent, In response to the new proposed retail Specialist circuit, CACI have redefined their Shopping segmentation of the city centres retail pitches to better reflect the Markets, Events, Tourism opportunities for retail moving forward. Sadler In particular, the old ‘Green Lane’, ‘St Peters’ and ‘The Spot’ retail pitches FriarEvening Gate Gate have been reconsolidated Economy Market High Street Retailing The Westfield Extension zone now Place includes London Road, and as such connects to the main retail circuit in this way (via the main Westfield centre).

East The southern part of St Peters Street and Babington Lane and Osmaston Office, Food, Street Shopping Road have been combined to form a Catering St Peters Centre and new ‘secondary retail’ area, which Covered Market acknowledges its new role as an area off the main retail circuit. Eagle A new St Peters pitch includes the northern part of Green Lane, and the old Debenhams site. This recognises the new opportunities for this area to Mixed & Specialist Retail Babington provide a stronger catering role for the Lane retail circuit, and to change in nature, Westfield through the opportunities brough about by an office-led scheme on Beckett Well Lane site.

Shopping Centre and Cinema

Page 65 CACI Property Consulting

Retail Category – Retail Fascias by New Defined Areas of Pitch

Retail / Service Provider Babington East Market Sadler Category Lane Eagle Street Friargate Place Gate St Peters Westfield Total Department Stores 1 0 1 0 0 1 0 2 5 Variety Stores 1 1 1 0 0 0 1 4 8 Clothing & Accessories 17 16 15 0 7 28 20 73 176 Leisure Goods 7 3 8 0 2 5 6 19 50 Household Goods 10 2 0 1 0 2 0 3 18 Health & Beauty 3 4 1 0 1 0 2 7 18 Electrical Goods 3 2 10 1 1 5 2 13 37 Retail Centre Goods Sub-Total 42 28 36 2 11 41 31 121 312 Catering 13 5 10 29 13 28 12 25 135 Markets 0 1 0 0 2 0 0 0 3 Supermarkets 0 1 0 0 0 0 1 0 2 Convenience 0 1 2 2 1 1 2 2 11 Other Sales of Goods 9 0 1 2 5 2 0 0 19 Banks and Building Societies 6 0 4 0 6 5 2 0 23 Other Services 20 4 3 14 11 30 9 9 100 Amusements/Betting Shops 1 0 4 2 2 3 4 3 19 Non RCG Sub-Total 49 12 24 49 40 69 30 39 312 Non-Vacant Sub-Total 91 40 60 51 51 110 61 160 624 Vacant 13 13 8 3 8 19 16 6 86 Grand Total 104 53 68 54 59 129 77 166 710 The figure above summarises the number of retailers present in each new area of pitch, by retail category. The Babington area is particular strong in Household Goods and ‘Other Sales of Goods’ retailers and also strong in Banks and Building Societies, ‘Leisure Goods’ and ‘Other Services’. East Street is particular strong on ‘Electrical Goods’ retailers and ‘Leisure Goods’. Eagle, East Street, Sadler Gate, St Peters and Westfield have the highest relative mix of Clothing & Accessories retailers (30%, 22%, 22%, 26% and 44% respectively, compared with 25% across all pitches). Next to Friargate, where 54% of its units are catering, Market Place and Sadler Gate currently have the highest relative mix of Catering units (both with 22%).

NB. Retail Centre Goods are those retail categories which represent the majority of shopping centre trading activity

Page 66 NB2. Friargate is not considered Primary, due to only having 2 units classified in the RCG category. Rather it has 55 units, of which 30 are catering, 16 services & leisure, and a low level of vacancies. CACI Property Consulting

Retail Clustering - Methodology

In order to examine the strengths of each retail pitch in more detail, CACI have performed an analysis of the number of units within each retail pitch, by detailed retail and services category breakdown. The analysis has revealed where there are strong ‘clusters’ of these detailed categories within different areas of pitch. The figure on this slide provides a screenshot of the analysis performed. The results of the analysis have then been more usefully plotted spatially on top of the retail pitch map (on the next page) to provide a view on the current retail clusters within each area. CACI have then identified the opportunities for a future retail cluster plan for the city. This future plan has been validated by a unit-by-unit assessment of the opportunities to improve the leasing of each unit, and in some cases the opportunities to split or combine units to accommodate new preferred tenants. This has resulted in a unit-by-unit indicative future ‘tenant schedule’ for the city, which has been provided to the client as an aid for implementing the strategy. This unit-by-unit ‘tenant schedule’ was established by first filling vacant units, then considering a change of tenancy of units which were deemed to have a current tenant which conflicted with the theme of the pitch and/or had a more appropriate area of the city to locate to strengthen the cluster in that location. In doing so, the ethos was to maintain the status quo of the majority of tenants, so that the plan was realistic in terms of the number of leasing opportunities centre management could realistically influence.

Page 67 CACI Property Consulting

Derby City Centre– Current Retail Clusters of New Pitches Market The retail cluster analysis of Themes: current retail provision highlights Pubs the lack of a strong catering Restaurants Hairdressers Arts & Crafts cluster in the centre of the retail Florists pitch; rather they are located Bars Arts/Photo Gallery Butchers/ along Friargate and to the north Pubs Fishmongers of Market Place on Irongate. Greengrocers Restaurants Menswear Along with fashion, the Sadler Banks & Building Soc Gate area is important for Insurance Estate Agents hairdressers, galleries and estate Jewellers Salon agents. In terms of fashion, it is Greeting Cards currently the menswear offer which is a particular strength. Betting Shops Health Foods This could be complemented with Travel Shops an improved high fashion ladies Missing Clusters: Ladieswear Electrical offer. Amusements Mobile Phone Whilst the analysis confirms the Employment Antiques strength of Westfield for the Bookshops majority of fashion categories, Drugs/Toiletry Computer East Street has a stronger DVD/Games emphasis on non-fashion related Opticians Drapery Home Goods retail, and for betting and travel Soft Furnishings Fashion Accessories shops. Education General Furniture Jewellery The analysis confirms the Employment Charity Giftware/China/Glass secondary nature of the retail Stationary strengths of the Babington Lane pitch. Music Toys Childrens Clothing Equipment Fast Footwear A number of missing clusters Food Café / Coffee Shops Ladieswear have been identified, including Confectionary Menswear Home Goods, Bookshops and Sandwiches/Bakers Mixed Clothing DVD/Games. © Crown Copyright. All rights reserved. (100024913Sportswear) (2008)

Page 68 CACI Property Consulting

Derby City Centre– Proposed Retail Clusters of New Pitches New Specialist Shops Employment The new plan for retail clusters in New the main builds upon existing Safe Fashion Employment Market Themes: clusters. Main interventions Arts & Crafts include: Restaurants Florists Bars Arts/Photo /Cafes Butchers/ 1. Strengthening the fashion in Pubs Gallery Independent Fishmongers the Sadler Gate area with Restaurants Antiques Fashion Banks & Building premium fashion retailers, Soc Greengrocers Salons offering an ‘independent/younger Insurance Market fashion’ theme for Sadler Gate Travel Shops Estate Agents against ‘safe/older fashion’ theme Betting Shops for the Irongate. These two Home Goods Amusements Books themes will help to engage both Family Opticians Mobile Phone young and older customers within Restaurants Electrical the Weathy Executive, Affluent Value Music, DVD & Games Greys, Flourishing Families Fashion Leisure groups. New 2. Developing Cornmarket for Employment Stationary Drugs/Toiletry Home Goods, Books and Opticians Greeting Cards Health Foods – to provide a non-fashion retail link to the Sadler Gate and Giftware/China/Glass Drapery provide for a stronger Home Toys Soft Furnishings Goods and Books offer in the city. General Furniture Fashion Accessories 3. Introducing Family friendly Music Equipment Jewellery restaurants along Victoria Street. Mainstream Fashion: This will change the nature of this Fast Food Children Clothing street, extending the catering Charity Footwear theme of the Wardwick into the centre, and connect conveniently Café / Coffee Shops Ladieswear with the main retail circuit. Confectionary Menswear Sandwiches/Bakers Mixed Clothing © Crown Copyright. All rights reserved. (100024913) Sportswear(2008)

N.B. To the north of Irongate, Queens Street represents another secondary retail area, which already plays a role in Page 69 accommodating specialist ‘destination’ shops, such as Bang & Olufsen and Aga, who do not seek primary areas of retail pitch to be able to trade. Such use should continue to be supported and strengthened in this area. CACI Property Consulting

Derby City Centre– New Retail Circuit and Zones In order to implement this plan, the city needs to be divided into a small Premium and number of management areas we Independent refer to as ‘zones’. The zoning on Shopping this page has been identified by considering the current Cathedral Quarter BID management Markets, Events, boundaries and the Beckett Well Tourism development opportunity area. Friar Gate Evening Wardwick The ‘Wardwick’ zone will concentrate Economy Market and The Gates its efforts on strengthening its High Street evening economy. Retailing The ‘Market and The Gates’ zone will concentrate on improvements to the market positioning of its retail Shopping tenants to a more premium offer Office, Food, and improving on its heritage and Beckett Well Centre and Catering, Covered Market tourist appeal. Services Development Opportunity Area The ‘Retail Core’ zone will Retail Core concentrate on promoting the area as the primary retail pitch for the area, where footfall needs to be maximised throughout.

Mixed and The ‘Babington Specialists’ zone area needs to be supported as an Specialst Retail Babington Specialists important area for, furnishings / specialist retail uses. The Beckett Well DOA will be the subject of a development options Shopping Centre study, that will identify viable and Cinema options to deliver food, office and council service uses on this site. © Crown Copyright. All rights reserved. (100024913) (2008)

Page 70 CACI Property Consulting

Section Summary – Future Retail Circuit and Zone Strategy We have identified a new retail circuit and zone system based upon recognising the impact of the recent Westfield Extension, strengthening retailer clusters, and the following future potential developments: Proposed St James Yard mixed-use retail development Proposed Bold Lane mixed-use retail development Proposed office developments at City Gate House, Cathedral Road, Full Street, Riverlights and North Castleward Mid term potential office-led development of old Debenhams Site Longer term potential for redevelopment of Audley Centre (potentially for retail) This new retail circuit is based on two north-south retailing spines linking the Westfield Extension (with Debenhams and Marks and Spencer) to Irongate (with Bennetts); one via Albion Street, the Exchange and Osnabruck Square; the other via The Spot, St Peters Street and Cornmarket. East Street would be an important east-west shopping street, linking the bus station with the new Primark via St Peters Street and also via Exchange Street and Albert Street. There would be two alternative routes from East Street to Market Place; one through Market Hall and the other via Cornmarket. To the west of Cornmarket will be the boutique area of Sadler Gate, St James Yard, St James Street and the Strand with revitalised permeability thanks to the St James Yard development, and new premium / specialist tenants secured as part of this scheme and the Bold Lane Development scheme. The evening economy / catering circuit of Friar Gate and Wardwick Street is proposed to extend along Victoria Street, to provide restaurants that would be suitable for catering for visitors and shoppers of the city centre, conveniently located adjacent to the main core retail circuit. This use would also be suitable adjacent use for a office redevelopment of the old Debenhams Site. Important external dwell/orientation points will be: Interchange of East Street, Albion Street and The Exchange Interchange of St Peters Street, Victoria Street, Albert Street and Cornmarket Osnabruck Square Interchange of Wardwick Street, Victoria Street, St James Street and The Strand Interchange of The Strand, Cheapside, Bold Lane and Sadler Gate Interchange of Sadler Gate, Iron Gate and Market Place.

Page 71 CACI Property Consulting

Derby City Retail Circuit

6. Future Option Testing

Page 72 CACI Property Consulting

Macro Scenario Forecasts - Methodology and Scenario Options Making use of the flexibility to undertake ‘what-if’ scenarios within CACI’s Retail Footprint gravity model, CACI have assessed the potential changes to market shares in the future, due to impacts of the development pipeline (in particular Highcross Leicester and Broadmarsh Nottingham) and differing leasing and development scenarios for Derby. This assessment of Derby’s future competitive position in 2012 incorporates CACI’s extensive database of competing retail developments. When incorporating these developments into the model, CACI have taken a realistic view on their future performance based on the latest information available. In addition to the committed developments outside of Derby over the next 4 years, CACI has assessed three main macro-scenarios for DerbyCity Centre. The three macro-scenarios relating to three strategic options have assumed the following improvements to the retail offer in the town centre as a whole:

(1) – Do Nothing

A future ‘baseline’ where our recommendations are not initiated.

(2) – Improve Leasing.

This includes a raft of recommendations for establishing a new retail circuit, public realm improvements and a pro- active approach to leasing vacant units to target retailers.

(3) – Improve Leasing + New Development (includes Sadler Square & St James Yard Development)

As ‘Improve Leasing’, but most crucially includes the St James Yard development, which will help secure more retailers, and create additional connections into the Sadler Gate area through entrances on Sadler Gate, Cornmarket and The Strand. The scenario also includes the Salder Square development, which will provide Sadler Gate better definition at the western end of the street.

Page 73 CACI Property Consulting

Scenario Summary – Do Nothing Option to 2012 The chart below provides a summary of the impacts on market potential that developments within Derby and outside of Derby will have over the next 4 years (2008 expenditure). The recent Westfield extension has increased Derby’s potential by 65%; an additional £268.7m.

0-15 Mins 15-30 Mins 30-45 Mins 45-60 Mins 60+ Mins £800 +64.9% -1.9% 0.0% -0.1% -3.6% £700

£600

£500 % change Year-on-year £400

£300

£200

£100 Market Potential (£ million per annum) per million (£ Potential Market £0 History - Current - 2009 - 2010 - No 2011 - No 2012 - 2007 2008 Highcross and Major Change Major Change Broadmarsh Trinity Square

Total Market £414.2 £682.9 £670.2 £670.1 £669.5 £645.6 Potential million million million million million million

Page 74 CACI Property Consulting

Scenario Summary – Improve Leasing + Development Options to 2012 The chart below provides a summary of the impacts on market potential that improved leasing and complementary new developments, as per the three tested options, will have. The results demonstrate that new development is necessary to sustain a higher level of performance following impacts of development outside of the centre, in particular the Broadmarsh scheme in Nottingham.

0-15 Mins 15-30 Mins 30-45 Mins 45-60 Mins 60+ Mins £850 +4.9% +16.1% +1.3% +12.0% £800

£750

£700 % change £650 Against 2011 £600 ‘Do Nothing’ Baseline £550

£500

Market Potential (£ million per annum) per million (£ Potential Market £450

£400 2011 - Do Nothing 2011 - Improve 2011 - Improve 2012 - Improve 2012 - Improve Leasing Leasing + Leasing Leasing + Development Development

Total Market Potential £669.5 £702.4 £777.2 £678.0 £749.9 million million million million million

Page 75 CACI Property Consulting

Micro Performance Forecasts – Methodology and Scenarios

CACI have developed a bespoke micro-gravity model for Derby to forecast turnover potential and density for each area of pitch and highlight the modelled impact on retail pitch as a result of the development.

CACI micro-gravity models are calibrated using retail floorspace audits, and validated through sales productivity benchmarking to predict unit by unit sales performance for retailers in Derby. The result is a robust assessment of individual pitch performance, that takes into account both the macro-impacts of changes in market share and the micro- impacts of changes in with respect to footfall in the centre due to the locations of retailers.

The three micro-scenarios have assumed the following improvements to the retail offer in the town centre as a whole:

(1) – Do Nothing

A future ‘baseline’ where our recommendations are not initiated.

(2) – Do Something (includes Bold Lane Development).

This includes a raft of recommendations for establishing a new retail circuit, public realm improvements and a pro-active approach to leasing vacant units to target retailers.

(3) – St James Yard Development (also includes Bold Lane Development)

As ‘Do Something’, but including the St James Yard development, which will help secure more retailers, and create additional connections into the Sadler Gate area through entrances on Sadler Gate, Cornmarket and The Strand

All forecasts are based on current (2008) expenditure

Page 76 CACI Property Consulting

Derby City Centre– RCG Pitch Performance – 2011 Do Nothing In the ‘Do Nothing’ scenario, performance is estimated to be Sadler very similar to the 2008 scenario, with the Primark and Gate Tesco-Metro open.

Friar Gate In this scenario the centre will 72 be perform adequately well, Market Place with St Peters Street performing very well. However, it will be in the context of a 102 poor performing Sadler Gate, East meaning that the centre will have lost an important part of 81 Street its retail area, which currently provides a point of difference 123 for Derby that out-of-town, more functional centres do not St Peters have. This means that under this Very Poor Pitch Street 79 56 scenario Derby will not be achieving its full potential, and Poor Performance will be at risk of potential decline as other centres Satisfactory Green Westfield improve their overall retail Performance Lane Extension offer and experience. Good Performance The Spot 112 Very Good Performance 60 Additional Trading Opportunity

n.b The relative size of the circles represent the relative turnover achieved in each area of pitch. Page 77 n.b 2. The areas of pitch used in this modelling exercise differ from the proposed new shopping area definitions CACI Property Consulting

Derby City Centre– RCG Pitch Performance – 2011 Do Something Implementing CACI’s Strategy will significantly improve the Sadler performance Sadler Gate and Market Place zones, and have a Gate knock impact of drawing more footfall out in the centre of the Friar Gate 102 retail area, benefiting the Market Place performance of East Street. St Peters Street and Eagle areas will continue to provide a 118 more value-orientated pitch; East important for providing for a Street complete retail offer, but 101 explaining why they will only perform satisfactorily. 81 Important to this strategy is the increased representation of St Peters premium retailers in the Sadler Gate area, improved leasing of Very Poor Pitch Street 76 57 Cornmarket units, the provision of more restaurants Poor Performance along Victoria Street and revitalisation of Osnabruck Satisfactory Green Westfield Square. Lane Performance Extension Good Performance The Spot 118 Very Good Performance 48 Additional Trading Opportunity

n.b The relative size of the circles represent the relative turnover achieved in each area of pitch. Page 78 n.b 2. The areas of pitch used in this modelling exercise differ from the proposed new shopping area definitions CACI Property Consulting

Derby City Centre– RCG Pitch Performance – 2011 St James Yard In this scenario, the same strategy is adopted as the ‘Do Sadler Something’ scenario, with the additional benefit of the St Gate James Yard development.

Friar Gate This will provide important 135 additional shopping Market Place connections throughout the Sadler Gate area – in particular improving the connectivity to 139 Cornmarket. East The assumption in this scenario is that the St James Yard Street 109 development will help to attract and secure important 88 target premium retailers to the area. St Peters Under this scenario, the overall market potential of Derby as a Very Poor Pitch Street 82 63 whole will be significantly Poor Performance lifted, meaning that all areas will benefit, including quite Satisfactory Green importantly the Westfield Westfield Lane Extension. Performance Extension Good Performance This scenario is clearly the The Spot 126 Preferred Option of the three Very Good Performance presented. 53 Additional Trading Opportunity

n.b The relative size of the circles represent the relative turnover achieved in each area of pitch. Page 79 n.b 2. The areas of pitch used in this modelling exercise differ from the proposed new shopping area definitions CACI Property Consulting

Scenario Summary – Timeline and Longer Term View to 2026 Examining the impact of each scenario option over time, highlights how important the relatively small-scale new developments, in combination with improved leasing, predominantly occurring in the Cathedral Quarter BID area, will be to the long term sustainability of trade in the city centre. It is only under the preferred scenario of new development and improved leasing, that CACI have estimated that the economic conditions will be sustained to help deliver further development, such a major new development to bring in an additional department store anchor, post-2021. Under other scenarios, the city will be subject to the threat of a decline in performance, compared to what is currently being achieved. Do Nothing Improve Leasing Improve Leasing + New Development Further Development Opportunity

£900

£850

£800

£750

£700

£650

£600

£550

£500

£450 Market Potential (£ million per annum) £400 Yr 2007 Yr 2008 Yr 2009 Yr 2010 Yr 2011 Yr 2012 Yr 2016 Yr 2021 Yr 2026

All figures at 2008 prices

Page 80 Critical Period of Activity Broadmarsh, Nottingham CACI Property Consulting

Derby City Retail Circuit

7. Conclusions & Recommendations

Page 81 CACI Property Consulting

Report Conclusions – Current Situation

Derby’s Current Catchment and Competition Following the Westfield extension in October 2007, Derby has seen its market potential size grow by 65%, propelling it through the UK retail centre ranking from 63rd to 38th. Alongside its attractive demographic profile, with high indices of Wealthy Executives, Affluent Greys, Flourishing Families and Secure Families, this means that there are now new opportunities to grow the retail economy in Derby further. Centre Benchmarking & Assessment of Potential to change Market Positioning Through a detailed process of benchmarking Derby against relevant comparator centres and applying a premium-market model, we have established that there is a robust opportunity for Derby to grow a stronger premium-market in the centre. To achieve this, Derby will need a strategy unique to Derby’s situation, as a post-industrial city with a demographic profile very similar to some of the UK’s most historic and charming city’s. Current Retail Provision and Pitch Performance The Westfield Extension has added more than 50% more retail space to Derby City Centre, providing much needed units to satisfy retailer requirements of those seeking larger floorplates; However, the scale and location of the extension has meant that the impact has been to drastically shift the centre of gravity of retailing in the city. The main opportunity to build a stronger premium market in Derby is presented by the Sadler Gate area of the city. However, this area has suffered the greatest from the change in the centre of gravity; highlighting the fragility of the area and the immediate priority required to support retailing in this area and keep alive the opportunity to build upon its strengths to bring in more national premium brands to sit alongside its strong independent offering.

Page 82 CACI Property Consulting

Report Conclusions – Future Strategy Future Retail Circuit and Zone Strategy CACI have provided a detailed analysis of existing retail, leisure and service occupation patterns in the city, in addition to a detailed review of development opportunities. Combining this analysis with an understanding shopper paths and dwelling points, and an ‘optimised’ retail clustering plan for the city centre as a whole, CACI have proposed a new retail circuit and zoning plan for the city. This ‘plan’ represents the key output of this study in terms of a communications tool, which can be used to initiate change and action with respect to improving the leasing of units in the city centre and optimising centre performance. This will enable Derby City Council to follow PPS6 guidelines with respect to pro-actively managing their centre, and ensure it moves towards a position of better health and vitality. Future Option Testing Through the use of their modelling techniques, CACI have assessed three key options for the city centre, which provides the evidence that the centre will only achieve a sustained improvement from current conditions if the recommendations made in this report are further investigated and supported. In particular it will be crucial to follow CACI’s advice to implement a pro-active approach to leasing through city centre management and marketing activities, and to support relatively small-scale new retail development in the Cathedral Quarter area. SWOT and Recommendations On the following 3 pages we conclude the report with summary of a strategic SWOT and Issues and Options analysis that this report has enabled, along with recommendations for key tasks for strategy delivery, including comments on timing.

Page 83 CACI Property Consulting

Conclusions: SWOT Analysis

Strengths Weaknesses Independent Stores & Markets Demographic Profile – Fewer Urban Professionals Contemporary Shopping Mall Retail Industry Perceptions Retail Ranking & Market Potential Size Shopper Experience Demographic Profile – High Indices of Wealthy Achievers and Family Groups Retail Mix Distribution of footfall

Opportunities Threats Premium market in historical setting in the Recession Cathedral Quarter Insufficient co-operation Clearly define the retail circuit and shopper Impacts of Commercial Realities zones Attract investment and revitalise footfall with new developments

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Conclusions: Issues and Options Issues Areas for Delivery Fragile conditions in Cathedral Quarter Marketing Need to strengthen heritage Retail Zoning & Leasing Retail Circuit & Public Realm Need for public realm improvements Development Opportunities Need to integrate with transport strategy Transport Need for pro-active approach to leasing

Options Timing Considerations Do Nothing Preferred Option of improved leasing with new development, in particular St James Yard, needs Improve leasing accomplished by 2012, to secure Derby’s position prior to Improve leasing in combination with new opening of Broadmarsh. development With the current higher levels of vacancies and greater levels of change due to the impacts of Westfield extension, new leasing opportunities need to realised with urgency to take advantage of current situation. This element of timing is crucial to avoid the threat of decline.

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Recommendations: Key Tasks Communication of new retail circuit to all local landlords, tenants and agents. Promote Car Parking in northern areas promoted for access to city centre shopping & Primark. Review needed on pricing policy for these car parks? – if it is a strategic priority to bolster patronage of these car parks for shoppers, how is this best achieved? Focussed marketing activity to change perceptions of Derby, in particular in relation to the affluence of its catchment and the unique selling points of Derby City Centre. Focussed marketing activity to promote Sadler Gate area to new premium entrants – include feedback research on retailer requirements for the area (including factors on why they wouldn’t currently take space and what they would expect to see before they would consider). Focussed marketing activity to promote to existing retailers in the Cathedral Quarter area, with the wrong fit, the opportunities to relocate to fit with new retail circuit and zoning ‘vision’. Namely Walkabout and Betfred. Joined-up work with wayfinding consultants to message new retail circuit to both shoppers and retailers. Partnership with Clowes Development to bring forward St James Yard scheme and ensure scheme secures target tenants. Work with Blueprint to bring forward Sadler Square development. Development Brief for Debenhams site – opportunity for council to explore in more detail the opportunities for this site and to pro-actively promote their preferred option for the site to landowners. Public Realm improvements for Osnabruck Square, linked with revitalised uses along the square. Public Realm improvements along new retail circuit – priority for Cornmarket and Albert Street. Monitoring of footfall and audit data, following key development events.

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