GB RETAIL AND LEISURE MARKET ANALYSIS FULL YEAR 2020 PUBLISHED MARCH 2021 BY LOCAL DATA COMPANY COPYRIGHT 2021 No part of this report may be reproduced or distributed without consent www.localdatacompany.com GB RETAIL AND LEISURE MARKET ANALYSIS - FULL YEAR 2020 FOREWORD 2020 was a year like no other, as the pandemic future relationship with the EU. impacted all aspects of our personal and professional lives. This created one of the toughest trading With the rapid pace of change in the market, it is climates for the retail sector, with all stakeholders important to note that these figures do not include having to rethink, adapt and show resilience in the the closures that will happen as a result of the sale face of a catalogue of challenges. of Arcadia and Debenhams in January 2021. This activity will be captured alongside the other recent This report focuses on the 12 months of 2020, which announcements including Thorntons and John we must not forget was unaffected by the pandemic Lewis in our H1 2021 report, which will also track until March. These first months of the year were the much-anticipated reopening of the market, filled with relative vibrancy after the general election which begins on 12th April 2021 (correct at time of provided some much-needed certainty on the UK’s writing). Local Data Company Ltd, 13-19 Vine Hill, London, EC1R 5DW. All Rights Reserved. Page 2 +44 (0) 20 3111 4393 | [email protected] | www.localdatacompany.com GB RETAIL AND LEISURE MARKET ANALYSIS - FULL YEAR 2020 CONTENTS 4 ABOUT LOCAL DATA COMPANY 46 2021 OUTLOOK Openings and closures 7 KEY FINDINGS Vacancy rates 10 INTRODUCTION 49 CONCLUSION Openings and closures Temporary closures 50 COMMENTARY Vacancy rates Lucy Stainton, Head of Retail and Strategic Failures and job losses Partnerships 18 LOCATIONS 51 METHODOLOGY Openings and closures by location type Vacancy rates by location type 52 GLOSSARY Regional vacancy rates Persistent vacancy Redevelopment activity Case study – West Byfleet Hyper-localisation Case study - Heckmondwike 29 SECTORS Net change Top 10 growing categories Top 10 declining categories Multiples vs independents 39 BRANDS CVA/Administration activity Case study – reoccupation of former stores Expanding brands Local Data Company Ltd, 13-19 Vine Hill, London, EC1R 5DW. All Rights Reserved. +44 (0) 20 3111 4393 | [email protected] | www.localdatacompany.com Page 3 GB RETAIL AND LEISURE MARKET ANALYSIS - FULL YEAR 2020 ABOUT THE LOCAL DATA COMPANY The Local Data Company is the UK’s most accurate data is underpinned by our proprietary technology retail location insight company. We physically track stack which supports the field research and quality every retail and leisure business across the country. control processes. This technology enables us to Our data powers strategy and decision making for provide our clients with unrivalled insight on over our clients working across retail, leisure, out-of- 680,000 retail and leisure businesses, access to home media, investment, property and financial location insight dashboards and footfall tracking services. capabilities. Our team of field researchers record the occupancy Our team of analysts and sector experts is committed status of every business on a regular basis. This to understanding the unique challenges our clients’ frequency enables us to track how the market is businesses face and applying our comprehensive changing in close to real-time. The accuracy of our data to support their strategic objectives. OUR PRODUCTS RICH, ACCURATE DATA Our database contains over 680,000 addressable, field-researched points of interest including over 400,000 independent premises and every chain retail and leisure brand across the UK. ANALYTICS Local Data Online provides fast and accurate access to market trends, competitor insights and portfolio analysis tailored to your business. STRATEGY For over fifteen years our dedicated insight team has been working in partnership with clients committed to investing in retail via a range of strategic projects. FOOTFALL TECHNOLOGY Accurate counting and analysis of footfall trends is invaluable. Our proprietary technology stack provides this at a granular level, enabling forensic insights into flows and trends around a physical space. Local Data Company Ltd, 13-19 Vine Hill, London, EC1R 5DW. All Rights Reserved. Page 4 +44 (0) 20 3111 4393 | [email protected] | www.localdatacompany.com GB RETAIL AND LEISURE MARKET ANALYSIS - FULL YEAR 2020 PROJECTS WE WORK ON INCLUDE: BUSINESSES WE WORK WITH: • Location planning and strategy • Due diligence • Store rationalisation • Competitor and market tracking • Investment strategy and asset management • Anti-money laundering • Alt-data projects • COVID-19 impact analysis • Portfolio strategic realignment After opening a number of successful dark kitchens and with home delivery being “an even more critical part of our strategy due to the covid-19 pandemic, Chopstix Group enlisted LDC to support the expansion of our dark kitchen network. LDC analysed the existing sites to establish drivers of performance and used this as a framework for identifying what the market capacity was for this concept as well as providing us with a list of locations to target. It was critical for us to work with live and accurate data for this project, and the experienced team at LDC helped up carve “ out a strategic plan of action against set against a complex market background. JOHN LAKE MANAGING DIRECTOR, CHOPSTIX GROUP Local Data Company Ltd, 13-19 Vine Hill, London, EC1R 5DW. All Rights Reserved. +44 (0) 20 3111 4393 | [email protected] | www.localdatacompany.com Page 5 GB RETAIL AND LEISURE MARKET ANALYSIS - FULL YEAR 2020 LOCALLOCAL DATADATA COMPANY COMPANY RESEARCH METHODOLOGY DATA RESEARCH METHODOLOGY Our field research coverage 70 different data variables includes: collected including: 680K retail • Brand and leisure Every high name businesses street, retail • Address park and • Geocode 400K shopping • Website independent centre • Telephone businesses across the number Data is country is analysed by 3,200 visited either LDC’s Quality GB retail on a 6 or 12 Control Team destinations month cycle. Live data is uploaded 24 hour in real time each day to the 80k updates update secure Local Data Company processed cycles server per month Database of over 680K premises Products: including: Equalling in excess Online 400k of 1.2 million Insight independent 10 year unique records Dashboards businesses 4,800 national time brands series Rich, Accurate Data Strategic Consulting The Local Data Company is the only business tracking the huge change taking place across the GB retail and leisure market in near real-time. Contact us at [email protected] or visit www.localdatacompany.com to find out more about accessing data and insights on the post-covid landscape. Local Data Company Ltd, 13-19 Vine Hill, London, EC1R 5DW. All Rights Reserved. Page 6 +44 (0) 20 3111 4393 | [email protected] | www.localdatacompany.com GB RETAIL AND LEISURE MARKET ANALYSIS - FULL YEAR 2020 KEY FINDINGS 1. 4. EXPOSURE TO COMPARISON RETAIL LED CHALLENGES AHEAD FOR OWNERS OF TO INCREASED RISK FOR SHOPPING VACANT DEPARTMENT STORE SPACE CENTRES With the announcements that Debenhams will close Shopping Centres were the most negatively and John Lewis will shutter more stores, landlords impacted of all location types in 2020, with a net have a challenging task ahead in finding reoccupiers loss in occupied units of 5.4%. The retail mix within for large-format space. Of the House of Fraser, these asset types tends to comprise of more ‘non- Debenhams or Beales department stores that essential’ retailers than other location types. On closed between January 2017 and December 2019, average, 57% of units in Shopping Centres are only 24% had found new occupiers with no capital Comparison Goods stores, much higher than the investment required by the end of 2020. 30% of average for the High Street at 28%. The risk that this the former department stores saw some structural creates for Shopping Centres is evident by data on change either being demolished or split into smaller the Comparison Goods retail sector, which declined units. This is likely to be the favoured approach for by -6,984 units in 2020, accounting for 62% of the the 124 Debenhams stores that closed at the end total stores that were lost in 2020. of 2020. 2. 5. LACK OF COMMUTER AND TOURIST FUTURE DEMAND FOR RETAIL SPACE IS FOOTFALL HIT CITIES HARD THE KEY FACTOR IN RETAIL REVIVAL The Vacancy Rate across City Centres increased Despite the challenges in 2020, 39,060 stores by 2.5% to 16.1% in 2020, the fastest jump seen opened their doors for the first time. 42% of these across all town profiles analysed. The move to were prior to the pandemic with the rate of opening remote working, loss of international tourists and after March at an all-time low. Total online retailing cancellation of major sporting events and concerts values increased by 46.1% in 2020 when compared which are key City Centre attractions, collectively to 2019 (Source: ONS). This jump is likely to have a created a sharp downturn in footfall. Two town longer-term impact in 2021 as retailers opt for fewer profiles which benefited from the pandemic were stores. However, locations suited to support online Villages and Commuter Towns where vacancy operations such as those out of town and on retail increased by just 0.4% and 1.2% respectively, both parks will boost store openings across 2021. below the national average increase of 1.6%. 3. SLOWDOWN IN REDEVELOPMENT ACTIVITY AS THE PROPERTY MARKET ENTERED A DEEP FREEZE There was a slowdown in property redevelopment activity for the first time in five years, with the number of retail and leisure units being converted for other use such as office and residential dropping by 16%. This was due to operational delays caused by restrictions during lockdown, landlords and investors delaying plans due to market uncertainty and many businesses being unwilling to commit the capital needed to complete work.