In this post we pose the question; which is the best location for today’s retailers to do business – on the high street, or in a retail park?
Traditionally; retail parks were dominated by retailers of white goods, furniture and DIY items. However, in recent years there’s been a sea change, with ‘softer’ retailers such as Boots, Next and even banks such as Metro Bank moving in.
Added to this new type of retailer, the ‘leisure’ crowd have also taken a piece of the action, with cinemas, bowling alleys and restaurants fast becoming synonymous with out-of-town locations.
So which is better – the high street or the retail park?
Some retailers choose maintain a presence in both, for example – as already mentioned – Boots and Next. Others have very clearly defined parameters when it comes to store locations. Primark, for example, has just one retail park shop in Milton Keynes, and recently confirmed it would not expand into any other out-of-town locations.
Retail parks can offer convenience, free parking and those with a leisure element, a meal, movie or afternoon of bowling. Many are also home to a wide range of different retailers, and often provide the convenience element of an on-site or nearby supermarket.
In terms of benefits for retailers, these tend to include flexibility of space available, free parking for customers, and often a wide variety of complementary stores – which can help to draw the crowds. Of most importance for many portfolio managers is, of course, cost. Retail park rents are still typically lower than town centre properties, although the very popular centres sometimes buck this trend.
On the flip side, retail parks may struggle to attract the same levels of passing trade that high street retailers benefit from. Additionally, without the ‘draw’ of a heavyweight or flagship retailer such as House of Fraser or Marks and Spencer, retail parks can fall out of favour with shoppers. This can lead to a downward cycle with retailers moving out, and portfolio managers struggling to attract replacement tenants.
Although the high street has been described variously as ‘dying’, ‘on its last legs’ and ‘in need of help’, it has thus far refused to roll over and die. The benefits of the high street for retailers are varied. From a location perspective; high streets are often convenient for workers popping out for lunch or after work. British town centres also tend to be well served by public transport, although parking availability and costs may provide a hurdle when it comes to encouraging shoppers to visit from further afield.
Tourist attractions such as historical buildings, museums and art galleries should not be forgotten. These are commonly located centrally and attract tourists in their own right. Of course, these travellers can also be tempted into visiting nearby retailers.
In addition, the high street is also typically the home of the independent outlet; shops of course, but also restaurants and coffee shops, which remain attractive to a certain kind of shopper.
Finally, it’s important to consider the social aspect of shopping; that is an hour or two spent in the shops, and then lunch or even mid-afternoon cocktails. Whilst many retail parks have aped the retail/leisure mix often found on the high street, many shoppers continue to choose the high streets of Britain as their ultimate shopping and entertainment destination.
In essence, retail parks and high street locations offer different benefits and challenges alike for retailers. Existing or wannabe retailers should take careful note of these when making decisions about location, and must be careful not to rush into long and expensive leases before carrying out a detailed analysis of the pros and cons associated with both.
For information and advice on retail law, landlord and tenant law and property law matters, please contact Joanna Norris on 0161 464 9540, or by email: joanna.norris@ratiolaw.co.uk.