The Future of UK Retail Parks

In this article, written in 2015, retail design expert Adrian Griffiths explores the trends impacting retail parks and the implications these trends will have on the design of future retail parks and renovation projects on current retail park assets.

The UK’s retail park format has grown over the last 35 years and accounts for a significant amount of the UK’s overall retail floor space. Generally positioned on the outskirts of towns to provide cost effective space for the purchase of bulky products, or DIY goods, the format has evolved over time to include a wide range of complementary retail space in addition to the acquisition of bulky items.

The existing context

The principle of being able to drive and easily surface park outside a store of your choice has proven very popular with the UK public. Just as importantly, this format also works well for retailers, with the latest examples being the Vangard Centre, in York, where we have Marks and Spencer, John Lewis and Next all trading together along with a number of restaurants.

This retail format has changed little over time. They are generally found on the fringes of large towns and cities in accessible locations, and are aimed at car-owning households. They provide good visibility from the principal highway, surface parking out front and dominant retail signage to highlight the stores. Oh, and don’t think about putting a tree in the car park to soften the environment as this will only get in the way visually. The retail units are to be column-free, if possible, and high-bay, with simple servicing to the rear.

It is hard to question why anyone would change this format when top rents across the UK exceed £100 per sq.ft., and the yield has held up during the downturns. Arguably the only other retail format that can compete financially is that of designer outlets such as Bicester Village.

Trends that are impacting retail parks

Many of these schemes are around 25 years of age, and consumers' purchasing patterns have changed. The internet did not exist when retail parks were first conceived, and it would be complacent now to assume that we could just carry on as before.

So what is the future for this successful form of retail? Firstly, we should review whether certain sites are still appropriate for retail, as local circumstances may have evolved, and the potential for other real estate propositions may have significantly improved.

Secondly, we need to understand what the future needs and wants of retail customers are in the target audience, and what point of difference can future retail parks offer.

To assume change is not required is naïve, and, to make this point, who would have thought five years ago that we would be seeing our major supermarkets downsizing their larger stores whilst expanding their in-town basket-shop offer? Whilst the likes of Aldi and Lidl have grown their share of the market and helped to create cost-cutting tension, they are not the cause for this change in direction, which is being driven by customers who want to buy what they want on the day they want it rather than doing a huge weekend weekly shop.

Our lifestyles are also changing, but what evidence do we have to support this statement? Many of the younger generation will not be able to afford to purchase their own home and will become serial renters, which will inevitably take a huge chunk out of the DIY market. The number of people taking a driving test is decreasing along with car ownership, and the thought of repairing your own car today is a thing of the past. Let’s also look at how the younger generation live their home life. They watch TV and films via Netflix, they read books on a tablet or a Kindle, and their art consists of their bike hanging on the wall. What is clear is that they require excitement, and the growth of internet dating sites demonstrates that they get what they want when they want it. With more people living back in towns and shopping locally, this further reduces the need to travel. More importantly, many are happy to order white goods, TVs and many other items online, as next- or even same-day delivery that fits with today’s hectic life styles is becoming normal.

What needs to change

Now, in light of the above, let’s look at our retail park offer and question whether this will excite the younger generation who are the shoppers of the future. Unfortunately, the design of retail parks has not progressed over time, hampered by the fact that out-of-town retail agents are reluctant to propose new changes because this requires them to step outside their comfort zone. Something has to change to meet the needs of today’s consumers, and we need to break the agent’s guidelines to ensure that we are not faced with an asset that decreases in value over time. Even our garden centre operators have recognised the importance of change and diversity, increasing the variety of their products and creating a day out experience.

So, what is the answer? Most retail parks provide a large-box format for the retailers, and there is a debate as to whether this size requirement is sustainable and whether retailers may be moving to smaller stores. I believe smaller formats will follow, as we have already seen with our food stores, even if some of these are seen as showrooms that rely on online purchasing or click-and-collect. This will offer up the opportunity to introduce additional retail variety to complement the existing offer. Our customers require more choice and excitement, and these centres should have their own sense of place - which brings us to the main challenge.

To significantly change the current format we have to challenge the agents' rule book and look to provide two-sided street retailing, with leisure and click-and-collect embedded within the retail. Other uses could be considered on appropriate sites, such as residential or offices at the upper level. The aspiration would be to deliver a more rounded mixed-use scheme in tune with the younger generation. To make way for this, we need to consider appropriate decking for parking cars, as additional land may not be readily available. The architecture should also be more varied and 'substantial' creating a warm and attractive sense of place. In effect, we are looking to recreate more of a ‘town centre offer’ on the edge of town.

Seize the opportunity

This proposed format requires a cultural change in how we design these parks, and we need to see the Developers and Agents stepping up to the plate. Others have already started to show the way, such as British Land at Whiteleys, where large format retail boxes have been planned around a street environment. Also, Hammerson at Didcot have secured detailed planning for phase two of the Orchard Centre where embedded restaurants are proposed within two-sided retailing. I find it hard to understand why it is so difficult for this change to be realised. You only have to look at the best-performing retail centres, which have been around for some time, to take a cue. While it is a different retail offer, the designer outlet, Bicester Village, which has a “twee” town centre feel, outperforms other single sided outlet centres with parking to the front. If we believe our customers are not sophisticated enough to be able to park a car (or bike) and walk into an active and exhilarating street environment, we are doing them a disservice.