We look at the shopping centre scene in Cardiff, Swansea, Newport and Bristol, find out more about agricultural retailing from Countrywide in Ledbury, get the story behind Tesco’s troubles in Stokes Croft and find out how the downturn is hitting the country’s most distinctive retailer, Newton Abbot based Trago Mills .

Locations like St David's shopping centre are enjoying increased footfall

If retail’s health barometer were based on the number of new brands opening stores in an area, then Wales and the Southwest would have passed their medicals with flying colours.

Since Cardiff’s overhauled and extended St David’s shopping centre opened in October 2009, 74 retailers from John Lewis to Apple have been tempted across the Welsh border.Meanwhile in Bristol, where Cabot Circus was unveiled in October 2008, names such as Harvey Nichols and Foyles have set up shop on previously unfamiliar UK turf.

This huge region of the UK faces the same macroeconomic pressures as every other, but after meeting people with experience of retail operations here, there are some encouraging signs.

Rob Lewis, PricewaterhouseCoopers regional chairman for the West region, says: “There’s no demographic reason why this part of the UK should buck the trend, but things are holding up well, despite the very low levels of consumer confidence.”

PwC’s latest retail insolvency statistics published earlier this month for the second quarter of 2011 show that store openings versus store closures by multiple retailers in the Southwest and Wales were in positive territory. There were 48 more openings than closures in the Southwest and six in Wales.

It’s not exactly a reason to crack open the champagne, but nor is it a reason to be downbeat.

Meanwhile, Experian’s monthly regional footfall figures published last week showed that the area had the biggest like-for-like increase in footfall in the UK, up 1.8% on the year before.

Reinvigoration

Wales’ capital is the first stop on the tour. Walking around St David’s shopping centre – a third of the total shopping area in Cardiff city centre – there is no doubt that the opening of the extension has reinvigorated a lacklustre retail scene. In fact, PwC says it has “heavily influenced” Wales’ net retail growth during 2010 and 2011 to date. Its figures show that in this time Wales has enjoyed 113 new retail stores, of which 58% are based in the capital.

St David’s has the added advantage of having the city’s Millennium Stadium around the corner. Jo Skilton, retail and leasing director of Capital Shopping Centres (CSC) – which jointly developed the scheme with Land Securities – says that the weekend when Take That descended for a gig resulted in unprecedented footfall. “There is a very local, loyal customer, but Cardiff also has 10 million visitors per year,” she says. “We’re pulling people in from far and wide.”

The timing of its opening, though, couldn’t have been less fortunate. Despite a decade of careful planning during the boom years, the global economy was in freefall when it opened its doors. It’s been a rocky road, but things are looking good.

Locations like St David's shopping centre are enjoying increased footfall

Locations like St David’s shopping centre are enjoying increased footfall

CSC was in closed period at the time of going to press, but the last available figures from the full-year results to the end of December 2010 show that lettings for St David’s extension were 83% committed compared with 65% on opening. “We knew it would take longer than planned, but we also knew it would be great because of its location. We never had to oversell Cardiff,” says Skilton.

The next stop on Retail Week’s tour is Bristol, a short hop across the Severn Bridge. Cabot Circus, too, has transformed the city into a retail destination that punches its weight. Broadmead, one of the streets that runs off Cabot Circus, is now part of Land Securities and Hammerson’s joint development.

Centre director Kevin Duffy recalls a conversation he once had with a retailer: “He joked that Broadmead used to be the kind of place you sent bad store managers to die,” he laughs. “Bristol wasn’t perceived as a great place to shop. People had deserted it in favour of places like Bath and Cribbs Causeway,” he says. But since Cabot Circus opened, sales have climbed, and the city now has a retail destination to be proud of.

Opening when it did in 2008 – on the cusp of the recession – was without doubt challenging, says Duffy. “Some retailers had expectations of sales and turnover based on what it was at the boom,” he explains. But it has progressed well. Cabot Circus was 95% let on opening.

Today it is 97% let, with interest in all the remaining units. In 2009, footfall rose 11% to 20 million, up from about 18 million in 2008. This year footfall is  flat, but like-for-like sales are up 3%.

There is a strong sense in both Cardiff and Bristol of what each development has done for the cities. Standing on the top balcony at Cabot’s Circus outside anchor House of Fraser, you can see exactly how well the covered shopping centre is integrated with neighbouring retail streets including Philadelphia Street, Broadmead and The Horsefair.

Meanwhile at St David’s, tenants such as Hugo Boss, Reiss and Kurt Geiger, which have entrances outside on The Hayes, have helped raise the retail offer on the other side of the road – not part of St David’s – with names such as White Stuff and Molton Brown.

Events run by both shopping centres – be they student ‘lock-ins’ and Gok Wan’s filming of his Clothes Roadshow at St David’s, or the 175th celebration of Bristol Zoo and fashion shows at Cabot’s Circus – have also helped make the retail scene in the cities more exciting and enhanced a sense of community.

The rest of the West

Cardiff and Bristol are, though, just two cities in a vast geographical area. What is happening deeper into Wales, and further into Devon and Cornwall?

Andrew Nunn is marketing director for destination retailer Trago Mills, which has stores in Liskeard, Falmouth, Newton Abbott and one planned in Wales in Merthyr Tydfil. Despite Trago Mills defying the downturn, Nunn says: “The West Country situation is bleak. There are significant businesses closing and wherever you look there, is trouble.”

There are also signs of difficulties elsewhere in Wales. There are reports of Newport haemorrhaging footfall to St David’s in nearby Cardiff. Its £200m Friars Walk retail and leisure development was scrapped in 2009 as the recession hit. Despite new proposals being put forward, many are sceptical about whether it will ever actually be built.

But elsewhere there are still stories of optimism. Chris Thomas, director at property agency Macarthur Wilson, says Swansea’s retail scene is looking “quietly optimistic” after its in-town footfall suffered at the hands of retail parks.

“It’s taken a while to settle down but things are starting to happen again,” he says. Superdry has just opened a flagship store in the city’s Quadrant Shopping Centre and a £13.5m investment in a bus station, of all things, is helping smarten up the city.

Thomas adds that perhaps the most surprising rising star of retailing in South Wales is Cwmbran, whose retail offer is now barely recognisable compared with a few years ago.

And in the West Country, Trago Mills, says Nunn, has also avoided trading difficulties. “We’re in a uniquely strong position,” he explains. The retailer owns its property freeholds, has no borrowings, buys and pays for stock upfront, and is in a strong cash position. It opened its £10m garden park project in 2009 just as things started to get rough.

“Most developers would have mothballed the project,” he says.

“We continued, kept people in jobs, held our nerve and we’ve enjoyed tremendous growth.”

Trago Mills’ developments include a £250,000 new pet offer, a new horticultural product offer, and it is about to open a 400-seater restaurant. Its sales are even holding up in the notoriously challenging fitted-kitchen business. Nunn says it is enjoying a 10% growth in fitted kitchens, and a 5% growth in bathrooms.

Diverse customers

Meanwhile rural retailer Countrywide (see box, next page) is enjoying similar resilience. The retailer has 47 stores in areas that extend into the Midlands and the Southeast, but its heartland in Wales and the Southwest.

Retail director Garry Wharmby says it has been reasonably well protected from the economic downturn in part because of its diverse customers. They include farmers, smallholders, equestrians, the ‘rural business’ community – from farriers to landscape gardeners – the affluent ‘country home’ set with their country mansions, chickens and Labradors, and the general public from local market towns wanting domestic products, footwear and pet food.

“We’ve seen a decline in sales of high-end seasonal products such as BBQs, but farmers will always need to feed their animals,” says Countrywide head of retail operations Steve Collard.

He adds that while fewer people from some segments are coming into the store, those in other customer segments are spending more. In the last financial year, the retailer notched up double-digit like-for-like growth for its agricultural business, above average like for likes for its pets business, and near double-digit like for likes for the equestrian side.

After several days spent talking to people in Wales and the Southwest, the outlook for the retail scene was overwhelmingly positive.

The region has had its fair share of retail news, be that positive in the form of all-singing, all-dancing property developments, or negative, such as Tesco’s difficulties in Stokes Croft. But Thomas sums it up: “Like anywhere, the backdrop has quite a lot of uncertainty, but on the whole it’s resilient.” And certainly in terms of the retail offer, the average shopper in the Southwest and Wales has never had it so good.

A rural retailer for the 21st century

Farmers require the best on-the-spot retail service

Farmers require the best on-the-spot retail service

Another stop on Retail Week’s tour of the Southwest and Wales is rural retailer Countrywide’s store just outside the genteel, well-heeled market town of Ledbury. It even smells of the country – a welcoming, heady combination of leather and hay.

Rows of riding hats sit alongside aisles stocking domestic cleaning products (farmers’ wives often accompany their husbands and pick up bumper packs), wellies, wax jackets, door mats, cookery books, tools and mini plastic wrapped straw bales, sheep medicine and garden furniture. Not that this is a mishmash of rural product shoved under one tin roof. For anyone living in the rural community, this is a veritable Aladdin’s cave. Moreover, this is big business. One of Countrywide’s customers once came to a store event and put in an order for £32,000 of goods. And someone who owns racehorses could spend up to £100,000 a year on horse feed alone.

To its customers – be they farmers with sprawling arable businesses, smallholders with a few cows, horse riders, pet owners or gardeners, Countrywide feels like home. As head of retail operations Steve Collard says: “If they want to turn up in wellies and overalls with their pet, we welcome that.”  The relationship the retailer needs to develop with them is absolutely critical. And this is a tough audience. Being viewed as a trusted source of advice is a first priority.

Retail director Garry Wharmby says: “If farmers believe you’ve treated them poorly they will step away. They’ll go to a cattle market and news will spread.”

Winning their loyalty in the first place isn’t easy. Countrywide has to work hard at being proactive and engaging with customers. It will run in-store events with hog roasts for customers to look at products and place orders, but also to meet up, socialise with like-minded people, and perhaps talk to a local vet who Countrywide might have invited along to answer any queries. For its equestrian customers it has a free online Pony Club Camp checklist, and will hold equine weekends with in-store discounts.

Meanwhile, the retailer’s field team members – who visit farms and stables to talk to farmers and horse owners about their requirements – will have had direct experience of farming or horse riding themselves. “It’s about their convenience,” says Wharmby. And to further consolidate its reputation for rural expertise, Countrywide is installing three specialist qualified advisers in all of its stores throughout the country, to help customers with anything from body protector fitting to animal health.

But there are other challenges in serving the rural community. If a farmer turns up at a store wanting a cattle crusher (don’t be alarmed, this is apparently merely a metal pen you use to treat livestock), he wants it then and there.

“We’ll do whatever it takes to make sure that customer is happy,” says Collard. In the past, Wharmby laughs that it wasn’t unknown for farmers to start trying to barter in store. There are now more structured approaches in place to ensure that they will get a good deal.

Rural retailing is, without doubt, a different world. It even has its own celebrity tie-up in the form of Adam Henson (no, me neither) – a rare-breed farmer from the Cotswolds who appears on Countryfile. Collard’s chin nearly hits the floor when I look mystified. But to everyone in the rural community, he’s a crowd puller.

In terms of scale, Countrywide is a small retailer. It has 47 stores, and of those in the Southwest and Wales region it spreads as far west into Wales as Carmarthen, and into Devon as far as Honiton near Exmouth. Its turnover is a relatively small £250m (which takes into account its energy supply business). But to its customers, it’s everything. And what’s more, it’s a business that is performing well.

“When I first came here I thought: ‘Oh isn’t it quaint and friendly’,” laughs Wharmby. But in reality, this is a professional business and many of its customers would genuinely be lost without it.

And how many retailers can boast that?

The battle of Stokes Croft

The anti-Tesco contingent continues to remain vocal in Bristol

The anti-Tesco contingent continues to remain vocal in Bristol

It would be impossible to visit Bristol without visiting Tesco’s Express store on Cheltenham Road in the bohemian area of Stokes Croft. The area hit the headlines over Easter when riots took place over the store opening. The term ‘riot’ is no exaggeration. It was reported that police raided the home of local squatters following concerns the store was to be petrol bombed. One night bins and skips were set alight. The following week, rocks and missiles were thrown. All this over a Tesco?

The anti-Tesco contingent continues to remain vocal in Bristol

The anti-Tesco contingent continues to remain vocal in Bristol

The area’s anti-capitalist vibe could not be more apparent. It’s written on the walls. One disused building sports the graffiti: “Against State Repression”. Other scrawlings are more artistic. Even elusive Bristolian artist Banksy got involved, producing a piece of art depicting a Tesco Value petrol bomb. However, many of those responsible for the violence itself had no real anti-Tesco feelings at all. As criminal proceedings have since proved, some were simply in the area and fancied getting involved.

After such publicity, though, the imagination runs wild. It’s easy to construct a mental image whereby the store has morphed into a thing of menace, looming threateningly at every Stokes Croft turn, trampling over long-standing independent shops, its Tesco logo in neon lights – a symbol of all that is wrong with a capitalist society.

Not so. In fact, blink and you can easily miss it. It’s tiny. And as Tescos go, it’s quite attractive, with a cream fascia that blends into its surroundings. The even more baffling thing is that competitor convenience stores immediately surrounding the Tesco Express store are hard to find.

The plan to chat to the brave souls who dare shop at the branch as they leave is foiled, though, on two fronts.

The first is the positioning of two heavies stationed near the entrance who have been keeping vigil – so the cashier says – since the violence erupted. Not the most welcoming of sights. The second is the fact that there is no one in the shop. Honestly. Not one. And no one goes into the shop for at least 15 minutes. Who knows? This might be normal for Stokes Croft’s footfall patterns at 11.30am on a Monday, but it still seems strange. The one cashier present is upbeat, though. “It’s quiet now but we’re busy early in the morning and in the evening,” he says.

Are the heavies necessary? “We’ve only had friendly protests outside since Easter,” he smiles. Tesco’s head office backs this up: “Our staff are proud to be serving hundreds of local customers every day,” says a spokesman. It is also keen to distance itself from the violence that took place. “Many local people and businesses have welcomed our investment, and the jobs, value, quality and convenience we offer. Some people disagreed, but did so peacefully. We respect that.”

Stokes Croft's opposition to Tesco

Stokes Croft’s opposition to Tesco

Moreover, he points out that this is not a community against Tesco – just a section of the community: “We continue to play our part in a community dialogue and are very grateful for the feedback we have received from customers, businesses and residents, who tell us they see us as a catalyst for further investment and regeneration in the area.”

There is, certainly, a group on Facebook entitled ‘Yes to Tesco in Cheltenham Road’. Aside from many a political rant about the people responsible for the anti-Tesco violence, there are also some reasoned positives behind Tesco’s difficult debut here. “Tesco is good for the Cheltenham road area. It’s better quality than all the crappy local shops and creates jobs,” says one. Others are baffled by the proclamation that 93% of local residents are anti-Tesco.

Nevertheless, the anti-Tesco contingent remains powerful and vocal. These are not the violent, petrol bomb-plotting type, but normal residents who say they are infuriated by both the store opening and the way in which they feel the grocer has handled their objections.

Claire Milne, a member of the No Tesco in Stokes Croft organised group, says: “Our community’s strength lies in its transcending of the blinkered belief that economic growth is the end goal”. Over these discussions, it emerges that Tesco as a whole, rather than the presence of this one store, is their real enemy. Among a host of criticisms, Milne says it epitomises the “exploitation of power” and “insatiable greed” that the community is opposed to.

Rightly or wrongly, this is a section of the community that feels let down. It’s a group that, as Milne points out, has gone to “extraordinary efforts” to stop this store opening.

The group also disputes strongly Tesco’s insistence that the store has been successful and busy since opening, and says the grocer has “refused to allow us to speak to anyone other than public relations staff, which makes a mockery of meaningful dialogue indeed”.

This group may only be a section of the community, but it has strong opinions and it feels its voice hasn’t been listened to. Tesco is an operationally brilliant retailer. It’s not in the business of opening a store that it didn’t think would make money, and it’s not going to keep a store open out of sheer stubborn defiance. Whether the campaign to boycott the store is successful remains to be seen, but this case does illustrate the challenges that face a highly profitable and ubiquitous retail brand.

It also illustrates just how powerful the customer voice can be.