For the best part of three years, retail parks have been the jewel in the crown of destination shopping.
As the shift to online and the drive for value and convenience have rapidly shaped consumer habits, high streets and shopping centres have struggled to maintain customer numbers.
Yet the traditionally big-box out-of-town locations were nimble enough to adapt their offers, attracting fashion retailers including Debenhams and Primark and leisure operators such as trampoline parks, to revamp their proposition and grow footfall.
Combined with free parking and a wider range of food and beverage options, retail parks went from strength to strength.
Until recently that is. In February, retail parks suffered a 1.6% slump in footfall, according to the BRC-Springboard data – their fourth consecutive month of decline and the steepest drop since November 2013.
Does that shuddering end to a fine run mark the bursting of the retail park bubble?
“I don’t think people should read into it too much,” asserts Andrew Berger-North, director of retail parks at developer and landlord Hammerson.
“Every month, year-on-year, for three years, retail park footfall has been improving, so this is coming off some pretty strong numbers.
“It’s nothing more than a tiny little blip in January and February. Retail park footfall has been resilient”
Andrew Berger-North, Hammerson
“It’s nothing more than a tiny little blip in January and February. We see no tail off in the requirement of retailers on retail parks, so I don’t think we should be panicked about a couple of months of very marginal decreases.”
So what caused the “tiny little blip” Berger-North refers to? And why has it occurred post-Christmas, a time when discounts traditionally drive shoppers into stores?
“In February what we saw was a mixed half-term spread over a two-week period because Easter is falling in a different place,” ScS boss David Knight says.
“I think the weather was also pretty nice and that is probably not what drives footfall in February.
“Normally in February, it’s very cold, icy, snowing, raining, windy, so there’s no alternative – people are not going to go to the beach and have fish and chips or an ice cream, they’re going to visit a retail park.”
Jonathan De Mello, head of retail consultancy at commercial property advisors Harper Dennis Hobbs, says the weather is “no excuse”, and believes there were other factors at play.
“It could be because the comparables were quite strong last year. It’s sometimes difficult to maintain that level year-on-year,” he says.
“People are spending less money on certain types of items that you would traditionally find in a retail park”
Jonathan De Mello, Harper Denis Hobbs
“People are spending less money on certain types of items that you would traditionally find in a retail park – house building, that sort of thing – because people have battened down the hatches a bit and are focusing on immediate needs rather than making big, one-off transactions.
“We also had a very, very strong Black Friday period, so anyone that wanted to buy bulky items ended up doing so at that point as opposed to in the January Sales.”
For Berger-North, such a slowdown at the start of the year is far from a new phenomenon.
“You always get a bit of a lull post-Christmas, maybe people overspent then and at Black Friday and ran out of gas come January,” he suggests.
“But my view is that we are over that now and things are on the up again.”
Berger-North claims that Hammerson’s retail parks have consistently performed above the BRC-Springboard index, with footfall dipping 1.1% in their locations last month compared to the 1.6% drop nationwide.
And he tells Retail Week that the company has already recorded footfall increases on their retail parks during the first two weeks of March.
Far from being spooked by those quieter months, Berger-North reaffirms Hammerson’s commitment to invest a further £100m into its retail park developments this year alone.
“We are delivering the space retailers want, where they want it,” he states.
“Instead of being in a badly configured high street, with poor parking, they can be in a purpose-built box”
Jonathan De Mello, Harper Denis Hobbs
De Mello believes that requirement for space will only increase this year, leaving retail parks on a solid footing to get back on track and gain further ground on rival high street and shopping centre locations.
“Increasingly, landlords that own these retail parks have tried to improve the nature and the tone of them by adding more fashion, and a lot of businesses like Next, Mothercare and TK Maxx actually trade better on out-of-town parks,” he explains.
“Instead of being in a badly configured high street, with poor parking, they can be in a purpose-built box, pay lower rents and make a higher sales density. It’s a no-brainer for a lot of these brands.
“Units on traditional high streets are way too small, badly configured, parking you still have to pay for. That’s why many retailers continue to vote with their feet and move out to retail parks.”
As long as that trend continues, it is hard to see retail parks falling out of favour.