UK town centres: forces impacting the vitality and viability

Dr L.Dolega E-mail:l.dolega@liv.ac.uk

www.cdrc.ac.uk

UNIVERSITY OF

Southampton School of Geography

Competition from out-of-centre retail developments

and adoption of ‘town centres first’ policies

Economic crisis and austerity

Rapid expansion of online retailing

Shifting consumer behaviour towards convenience

and value

Changing demographics

Forces shaping town centre

performance

‘Free for all’ approach (Guy, 2007)

‘Town centres first’ – regulatory tightening

Prioritisation of UK town centres by PPG6

Adoption of the ‘sequential test’

Social inclusion’ and ‘urban regeneration’ agendas

Promotion of the vitality & viability of town centres by

PPS6, PPS4 and NPPF

Impact of retail planning policies

Source: Griffith and Harmgart, 2008

Effects of policy tightening on retail

developments

Decrease in large retail developments

Adjustment of the major retailers to the planning regime

‘Policy friendly’ stores - located in/edge-of-town centre

Store formats flexibility

Retail-led urban regeneration

‘Food deserts’ and

social inequality agendas

‘Mezzanine floor loophole’

Response of UK town centres to the

economic crisis and austerity

267 centres with retail composition

surveys completed after the collapse

of CCI - Oct 2008

119 in South West

31 in East Anglia

93 in North West

24 in West Yorkshire

Pre-crisis surveys completed in 2006

– 2007

Within-crisis surveys carried out either

in Q4 2008 or 2009

Cross-regional analysis

Change in retail categories

Large increase in vacant retail:

Relative change +28.2%

Absolute change +2.7pp (increase

from 10.4% to 13.1%)

Major contributors to closures:

comparison retail (-5.3%)

financial services (-3.2%)

Convenience retail more resilient

Leisure services - positive growth in

all regions

Cross-regional study – descriptive results

2,7

-2,5

-0,2 -0,1 -0,5

0,6

-4

-3

-2

-1

0

1

2

3

4

Vacant Retail Comparison Convenience Retail Service Financial &BusinessServices

LeisureServices

Absolute change in retail categories

pp

28,2%

-5,3% -1,1%

0,4%

-3,2%

4,3%

-10%

0%

10%

20%

30%

40%

Vacant Retail Comparison Convenience Retail Service Financial &BusinessServices

LeisureServices

Relative change in retail categories

North South Avg across sample

-8,6% -9,4%

-7,8%

6,9%

0,6%

-3,4% -4,3%

8,0%

-9,9% -9,2% -12,1%

-1,1%

15,9%

-26,5% -29,5%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

An

tiq

ue &

Art

Bo

okselle

rs

Sp

ort

& L

eis

ure

Charity

Shops

Chem

ists

&

Be

auty

Clo

thin

g &

Fo

otw

ear

DIY

,Carp

ets

&E

lectr

ical

Household

dis

counte

rs

Fu

rnitu

re s

tore

s

Gifts

& T

oys

Flo

rists

Jew

elle

rs

Te

lephones

&accessorie

s

Mu

sic

,Film

&P

hoto

Sto

res

Depart

me

nt

Sto

res

North South Avg across sample

Most fragile

Department stores -29.5%

Music, video & photography -26.5%

Florists -12.1%

Furniture shops -9.9%

Booksellers -9.2%

Gift and Toys -9.2%

Most resilient

Phones & accessories +15.9%

Household discounters +8.0%

As a result of filling vacant space:

Charity shops +6.9%

Cross-regional study –

change in comparison retail

-0,3% -8,2%

25,2% 21,4%

42,2%

-3,8% 5,6%

-3,7% -7,9% -7,1%

-30%

-15%

0%

15%

30%

45%

60%

75%

Bak

ers

&C

on

fect

ion

ers

Bu

tch

ers

&Fi

shm

on

gers

Ind

epen

den

tC

on

ven

ien

ce S

t

Sym

bo

lC

on

ven

ien

ce S

t

Co

rpo

rate

Co

nve

nie

nce

St

Fro

zen

Fo

od

&Su

per

mar

kets

De

licat

ess

en &

Gro

cers

Hea

lth

Fo

od

s

Gre

en

gro

cers

CTN

's &

Off

Lice

nce

s

North South Avg across sample

Cross-regional study –

change in convenience retail

Most fragile

Butchers & Fishmongers -8.2%

Greengrocers -7.9%

CTN & Off licences -7.1%

Most resilient Convenience Stores:

Multiple +42.2%

Independent +25.2%

Symbol Group +21.4%

Grocers & delicatessen +5.6%

Change in retail vacancy rates –

response variable

Spatial variability in vacancy rate:

up in 185 (69.3%) centres

down in 61 (22.8%) centres

unchanged in 21 (7.9%) centres

The average cross-regional increase

in vacancy rate:

+2.2pp for fixed boundaries

+1.9pp for variable boundaries

Cross-regional modelling

Changes in Vacancy Rates have been filtered through two systems:

1. Regional economic system in which centres are located

North – South divide

Affluence of catchments

2. Existing local economic structures

The mix and interdependencies of businesses (balance of retail vs.

services, diversity and presence/entry of a corporate foodstores)

Local supportive/unsupportive institutional structures (car park charges,

town centre manager, BIDs schemes or attracting key ‘magnet stores’)

Physical configuration of a centre (size, proportion of larger modern shops

and level of ‘structural – harmful vacancy’)

Explanatory variables

Explanatory Variable Parameter

estimate

Standard

Error

T-value

Constant -0.076 0.019 -3.998**

South-North divide -0.016 0.004 -4.170**

Centre size (Log) 0.013 0.002 5.743**

Retail diversity pre-crisis -0.027 0.013 -2.139*

Corporate food store entry -0.008 0.004 -2.081*

Retail vs services % pre-crisis 0.095 0.021 4.463**

Structural vacancy pre-crisis 0.060 0.010 6.130**

Std Avg Store Size x Std magnet store floorspace

-0.349 0.082 -4.243**

Best supported model

--------------------------------------------------------

**parameter estimate significant at 1%, * significant at 5%.

R squared = 35.6% N = 259

P-value for normality test of residuals =0.84

Durbin-Watson d value = 2.17

Condition index value = 28.61

Which town centres are more resilient?

Published in E&P A

Attracted large interest in the

UK and internationally

Nominated for the AESOP

best published paper prize

Impact of the cross-regional study

Intra-urban study design

47 retail centres in Bristol

surveyed by Goad down to a

shopping parade with 15 units

All centres surveyed in three

different periods:

Pre-crisis (Jul 2006)

Within-crisis (Oct 2008-Feb 2009)

Austerity period (Feb-Mar 2012)

Main characteristics of Bristol

centres in pre-crisis

75% centres small - average centre

size 88 units

High ratio of services (1.7) relative

to retail

High diversity - independent retailers

73%

Characteristics of Bristol centres

Main aims

Validate cross-regional results at

local scale

Model the performance of UK retail

centres during austerity

Cross-regional findings hold well at local scale

Over the longer term - three variables significant: Diversity in the pre-crisis

Beneficial role of services

Presence of policy-compliant corporate foodstore/anchor store

Significance of centre size, structural vacancy and income deprivation waned

Explanatory Variable Parameter

estimate

Standard

Error

T-value

Constant -0.099 0.047 -2.124

Retail vs services % pre-crisis 0.168 0.069 2.428

Centre size (Ln) 0.020 0.008 2.415

Retail diversity pre-crisis -0.110 0.033 -3.321

Structural vacancy pre-crisis 0.098 0.028 3.506

Corporate supermarket presence -0.039 0.017 -2.258

Income deprivation 0.101 0.057 1.755

R squared = 48.4% N = 47

Intra-urban modelling

Conceptualising the results

Intriguing question in economic geography – ‘why some regional economies manage to renew themselves, whereas

others remain locked in decline’? (Hassink, 2010)

Resilience of economic systems recently attracted wide-spread

attention of social sciences

Resilience is defined as: ‘the ability to recover form and position elastically following a disturbance

of some form’

Evolution of UK town centres

affected by: Unexpected shocks – economic crisis

‘Slow burns’ – competition from online

and out-of-town retailers, changes in

consumer culture

Adaptive resilience of town centres

Town centre adaptive resilience linked to:

pre-crisis position in adaptive cycles

knowledge and innovation of various

actors

successful interventions across

multiple scales

The

Adaptive

Cycle

Growth

INNOVATION & CREATIVITY HIGH NEW RETAIL UNITS OPEN UP HIGH RETAIL CHURN

RESILIENCE HIGH

Consolidation

PERIOD OF STABILITY LOW RETAIL CHURN SLOW RESPONSIVENESS TO CHANGE

INCREASING RIGIDITY

RESILIENCE DECLINING

RESILIENCE LOW

Release

INCREASING VACANCY RATES/ SHOP CLOSURES

ECONOMIC OR COMPETITIVE SHOCK TRIGGERS CHANGE

RESILIENCE INCREASING

Reorientation

EMERGENCE OF INNOVATION

NEW INTERDEPENDENCIES AND SYMBIOTIC RELATIONSHIPS

INSTITUTIONAL SUPPORT

Progressive rise of online sales

Impact on traditional high streets

Rise of e-commerce, m-commerce and

omni-commerce

Online sales reached 12% of the total

sales in the UK

Amazon - 8th biggest retailer in the UK

Major retailers transformed into ‘bricks &

clicks’

Impact on traditional high streets

Changing face of internet use and

online shopping

Emergence of a new demographic

group – the ‘digital generation'

Geography of online shopping

Role of geo-demographics in

predicting internet shopping

patterns

The e-resilience project

E-resilience - vulnerability and response of British retail centres

to the effects of rapidly growing online sales

Aims and objectives: Estimation of catchment areas for

evolved retail centres

Multidimensional classification of

UK town centres

Measures of Internet engagement

at small area level

Defining characteristics of e-

resilient catchments

Dimensions of e-resilience

Connectivity - available

infrastructure to get online

Behaviour - propensity to use

internet for shopping

Demographics (ethnicity, age,

gender, disability)

Retail supply - attractiveness,

accessibility & convenience

Hierarchy of retail centres

Measures of vitality & viability PPS4 INDICATORS

AMT BENCHMARKING: KEY

PERFORMANCE INDICATORS

ATCM Indicators

A1: Diversity of main town centre uses KPI 1: Total number of commercial units Diversity and vitality of place:

retail offer

culture and leisure offer

events

reported crime

markets

A2: Amount of floorspace outside centres KPI 2: Retail by Comparison/Convenience

A3: Capacity for growth/change in centres

A4: Retail representation KPI 3: Key attractors / multiple trader

representation

KPI 5: Number of markets / traders

A5: Shopping rents Economic characteristics:

retail sales

partnership working

charity shops

vacant retail units

evening / night time economy

A6: Vacancies KPI 4: Number of vacant units

A7: Commercial yields KPI 6 and 7: Zone A Retail Rents and Prime Retail

Property Yields

A8: Land values and length of time key sites

have remained undeveloped

A9: Pedestrian flows KPI 8: Footfall People and footfall:

footfall,

geographical catchment,

access,

car parking,

community spirit

A10: Accessibility KPI 9: Car Parking Availability and Usage

A11: Customer and residents’ views and

behaviour

KPI 10: Business Confidence Survey

KPI 11: Town Centre Users Survey

KPI 12: Shoppers Origin Survey

Consumer and business perceptions:

Business confidence

Visitors satisfaction

Attractiveness

Crime and safety perceptions

A12: Perception of safety and occurrence of

crime

A13: Town centre environmental quality