Retail and retail property is in a healthier position to deal with potential changes to tariffs in the medium to long term, supply chains and currency volatility as a result of Brexit, than they were to deal with the financial crisis in 2008 – according to the ‘Brexit: Retail Outlook’.
Published by British Council of Shopping Centres (BCSC) and Cushman & Wakefield, the Outlook is an analysis of the UK retail and retail property market fundamentals in light of the UK’s recent vote to leave the European Union.
The report states that since the financial crisis in 2008 which, combined with the growth in online retail sales, sent shock waves through the retail market, retailers have adapted their store footprints and business models to take into account increasing online sales, click and collect, new technologies and changing consumer trends.
Edward Cooke, acting chief executive, BCSC, said: “In our opinion, many of the fundamentals that drive retail performance – high employment, real wage growth and economic growth – remain relatively strong.
“Retail property remains a strong asset class with retail investors constantly looking at new ways to attract customers, enhance their shopping and leisure experience and increase value.
“We also shouldn’t forget that 90% of goods or services sold continue to involve a physical shop in some way, even if the way customers use that store is changing.”
Justin Taylor, head of EMEA Retail, Cushman & Wakefield, said: “A low shopping centre development pipeline alongside low prime retail vacancy rates should help to maintain a healthy supply-demand balance.
“Occupiers have been creating more efficient property portfolios by acquiring new space, increasing internet sales, click and collect, utilising new technologies and rightsizing to drive efficiencies and overall sales throughout their businesses.
“Landlords have spent the last three years in particular creating greater quality retail assets focusing on their tenants needs, so the retail market is currently looking in a healthier condition than it has for a long time to deal with any uncertainty from the Referendum result.”
Mark Bourgeois, BCSC president and executive director, Capital & Regiona, said: “We’ve been pleased with levels of activity post Referendum. Footfall has held up well and our typical customer has been more preoccupied with bagging a bargain in the summer sales than worrying about wider political volatility. Activity from occupiers has been robust and significantly, local authorities have maintained their increased levels of ambition in collaborating with developers.”
‘Brexit: Retail Outlook’ is an analysis of current reporting and predictions – for the UK economy, retail performance, consumer confidence, shopping centre development, retail company failures, rental growth, pricing pressures, labour costs, tourism spend, potential M&A activity and retail capital markets.