Property developer Hammerson [IRDX VHAM] this week set out the ways that retailers are using different types of stores to support their multichannel strategies at a time of falling footfall.
Its commentary comes just a week after figures suggested that shoppers continued to move away from stores to shop online in the January sales. Meanwhile, ONS Retail Sales figures for December 2016 estimated that 15% of sales took place online, a proportion that has risen steadily over time – and is expected to continue to do so.
Hammerson, which has a stake in 10 retail shopping centres including Bristol’s Cabot Circus [pictured], the Bull Ring in Birmingham and Brent Cross in London, and owns 18 retail parks, set out in its 2016 full-year results its view of how different types of stores now function within retail strategies.
It points to prime shopping centres that support shoppers as they buy across channels. “Prime centres support retailers’ multichannel strategies as they offer high sales, footfall and dwell times in an attractive, well-managed environment which provides a mixture of leading brands, food, leisure and digital infrastructure,” it said. These include Victoria Leeds, which has more than 115 brands, including a flagship John Lewis store, Gant, Hackett, Aspinal of London and Anthropologie in 30 stores, a casino and resturants, in a 56,300 sq m shopping centre that represents a “modern take on Victorian arcades”. Overall, however, Hammerson’s shopping centres showed a 1.1% fall in retail sales over 2016 and 0.5% reduction in footfall. Hammerson pointed to national index figures that showed footfall falling by 1.9% during the year.
Retailers are also building new stores on out-of-town retail parks to fill a gap in their networks between large shopping centres and town centres. These stores help to support click and collect sales, while offering a new look and more space than high street stores. Hammerson reported 2.2% growth in footfall at its retail parks over the last year. Feedback from shoppers has resulted in the addition of Amazon lockers for online collections at its Rugby retail park.
Hammerson also said that it was detecting a focus on multichannel retailing strategies in its French operations. “Online retailing is not as advanced in France compared with the UK, although it is growing rapidly and retailers are beginning to focus on their multichannel strategies in a similar way to those operating in the UK,” it said.
Overall, the company reported an 8.8% increase in rental income – or 2.2% on a like-for-like basis – to £346.5m. Adjusted profits of £230.7m were 9.4% up on the same time last year, but once the falling capital value of its shopping centres was taken into account, reported profits of £317.3m were down from £727.8m at the same time last year.
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