A new generation of shopping centre is emerging, with food and leisure at its heart. But while the extra footfall this brings is always welcome, Ben Cooper asks if it is all good news for retailers.
Dance schools, roller discos and craft fairs aren’t the first things that come to mind when you picture the typical shopping centre experience. But the retail property development game has changed. Initiatives like these, at Bluewater’s new experiential events venue, are a sign of the lengths developers are going to now to attract and retain consumers.
“For the industry as a whole, there has to be a far greater awareness that shopping and leisure are fundamentally linked,” says Nigel Gillingham, director at retail agency Bruce Gillingham Pollard. “The bad old days of developers appearing to be tacking on a leisure offer in locations where they can’t let shops, and sometimes more of an afterthought, have to be consigned to history.”
Necessity is the mother of invention, and it’s the new threats to shopping centres and retail parks that have bred the latest trends. The internet has cut out the need for people to even leave their homes to shop. Combined with the poor consumer spend of the last few years, retailers are revising their property acquisition programmes accordingly.
But people do still like to shop, and socialise. Even if they don’t plan to splash out as much as they would have four years ago.
“Despite its popularity, the internet is not a leisure experience,” says Tesco head of leasing and investment management Jane McFarland. “People still enjoy spending quality time relaxing with friends and enjoying the little free time they have to socialise.
“We expect developers to be increasingly focused on creating an environment that supports and facilitates this consumer need and to recognise that a strong leisure offer is key to this.”
So what can be done to make developers’ centres – and retailers’ stores – the place to be?
Matthew Allen, principal of investment and asset management company Addington Capital, which is about to carry out a major cinema and leisure-driven refurbishment of the Harvey Centre in Harlow, explains how important a move like this is, especially in the less heavily populated areas.
He says: “A sub-regional town centre without a strong leisure or heritage offer will have shorter trading hours and most likely appeal to a narrower socio-economic consumer group.
“The key anchor is a cinema because national casual dining restaurants need evening trade to be viable which, in turn, needs adjacency to a multiplex cinema.
“On the back of a cinema and restaurant cluster there is potential to build related leisure uses such as bowling, swimming, climbing and extreme sports.”
The benefits of having a popular non-retail offering in schemes are huge. The continued strength of leisure means that empty units are being taken over by, in particular, food providers. This means that schemes are generally healthier and better equipped to prevent shopper leakage.
Tracey Mills, director of development leasing at leisure property consultancy Davis Coffer Lyons, says things have moved on so far that shopping has become a secondary activity for some, and developers need to keep this in mind.
She says: “It is now necessary to provide the right, tailored leisure offer for increasing dwell times in centres at either end and throughout the day and evening. The leisure facilities within any centre provide an important part of that experience, so much so that in some instances it can be the sole motivation for the visit. For example, dinner coupled with a cinema visit.”
“Operators have been reviewing their acquisition policy and while some of the more eclectic brands have not considered centres in the past, their views are changing ,” she adds. “The big developments deliver huge guaranteed footflow. It may ebb and flow but it’s normally quite consistent.”
Putting food in shopping centres is hardly a new phenomenon, although it’s become more sophisticated recently. But what is emerging as a genuinely new trend are the more quirky leisure activities.
Gillingham says: “Developers need to make leisure more innovative and certainly beyond just the food and beverage offer. There also needs to be a wider leisure offer to include ice skating rinks, bowling alleys and even bingo, particularly for larger scale shopping developments where there is a much wider catchment available.”
Westfield went all out at its latest UK opening in Stratford City, adding a bowling alley and the UK’s largest casino into the mix.
At Bluewater, the 55,974 sq ft Glow events space, completed last year, marked a big step for the centre, which has had to keep evolving, particularly since the opening of both Westfield centres in London.
Hosting events including trade shows, wedding fairs, BBC Good Food Live and a one-off experience last winter, Christmas in New York, has allowed owner Lend Lease to offer multiple reasons to visit its centre. In the case of the New York-themed Christmas, more than 35,000 visitors came to see the show.
Lend Lease says it’s also a plus for retailers, not just for the extra traffic. Sponsorship opportunities allow tenants in the centre to tie their brands to various events taking place at Glow.
Bal Nahal, operations manager of John Lewis’ Bluewater store, points out that the dedicated events and exhibition space at Bluewater has helped attract new visitors as well as providing regular customers with more reasons to return. “John Lewis Bluewater has participated in a number of events and exhibitions, which have proved useful to our business,” he adds.
There are many examples of ambitious, new concepts emerging in the UK, such as the Legoland Discovery Centre at the Trafford Centre. Wavehouse, an indoor surfing experience, has also arrived in the UK and could open in shopping centres soon – in Durban, South Africa, for example, shoppers can visit Wavehouse at the Gateway shopping mall.
Hammerson portfolio director Martin Plocica believes that every new build is going to have leisure at its core. “The prominence of catering and leisure within schemes will continue and will be clearly tailored and targeted for the individual catchments,” he says. “What works in Brent Cross doesn’t necessarily work for a Union Square shopper. The leisure element will go beyond catering and will focus more on offers that provide consumers with an experience.”
Nobody would deny that bringing people in and keeping them in a centre is good for a retailer’s business, but only if they actually shop. Dwell time and centre loyalty are great, but they are conceptual ideas.
However, figures from the International Council of Shopping Centres suggest that more than half of the people brought into a scheme by a cinema will do some shopping too.
McFarland believes there are tangible benefits to retailers in a successful food and leisure strategy, particularly in town because of the complex symbiotic relationship that exists between shopping and the wider community.
Using the example of the New Square scheme extension in West Bromwich, which Tesco is anchoring and funding development work on, she explains: “The centre will effectively create a new leisure quarter in West Bromwich and will include a cinema, restaurants and cafes, all the elements needed to increase dwell time and encourage shoppers to return.
“New Square will also be an extension of The Public, a community and cultural space located beside the scheme. Developers must recognise that feeding into the existing leisure facilities of a town, as we have done in West Bromwich, is vital for a retail development’s success.”
To look at the shopping centres of even 10 years ago compared with present – and future – designs is a reminder of how far things have come. Thomas Rose, associate for leisure and restaurants at Cushman & Wakefield, says the die is now set in terms of how the future will look, and a half-way house just won’t do.
“We have seen many proposed schemes where leisure is viewed as secondary to the retail units and going forward this just won’t work,” he says. “Restaurants must form a key component within schemes, not be an afterthought or add-on. Without footfall retail tills aren’t ringing and by adding leisure and restaurants landlords are seeing footfall retention or even growth.”
With the need to innovate now greater than ever, the next decade in retail property is going to be one of the most interesting periods of all. A new type of shopping, and a new type of shopping space, is emerging.
Westfield Stratford City
Westfield has pushed the boundaries with its latest UK centre at Stratford City on the site of London’s Olympic Games. As well as a host of restaurants, cafes and a 17-screen Vue cinema, it has some interesting additions in the food and leisure offer. They are:
- All Star Lanes Westfield is the first shopping centre site for the luxury bowling and dining operator, which opened its largest venue to date there, finding an ideal home for its food and leisure combination at Stratford City.
- Aspers Casino Billed as the UK’s first ‘super-casino’, Aspers (pictured) is on the third floor at Westfield Stratford City is open 24 hours a day.
- Great Eastern Market A homage to a market of the same name that operated nearby some 100 years ago, the Great Eastern Market provides space for a cluster of food delis, luxury food and coffee operators in a quirky setting in the centre.
Beyond food and drink
Capital Shopping Centres (CSC), owner of Braehead Shopping Centre in Glasgow, has revealed its intention to submit a planning application to build new facilities. It is the first step of a £200m investment at the mall. There are also plans for a new arena for ice and dry sports events, concerts, exhibitions and conferences, as well as a hotel, cafes, restaurants and a new civic square. According to Mike Butterworth, chief operating officer of CSC, “innovation is key to providing entertainment”.
British Land’s Whiteley Shopping Centre, due to open in Hampshire in May 2013, comprises 320,000 sq ft with Tesco and Marks & Spencer confirmed as anchors. Smaller units on the outside will be available to independent local retailers around a market square area.
The London Designer Outlet, next to Wembley Stadium and Arena and being developed by Quintain, will include a nine-screen cinema and 15 bars and restaurants. Part of the centre is integrated into the new four-star Hilton hotel on the site. Phil Cottingham, managing director of Quintain Estates & Development, believes a strong leisure offer is crucial in maximising potential capital spend at shopping centres.
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