Westfield London is banking on drawing shoppers from the capital’s other retail hubs when it opens in October, but how severe could the outflow be? Ben Cooper investigates the effect it could have
London is bracing itself for its biggest retail shake-up in decades. In four months, Australian developer Westfield will open the doors of a shopping centre that will transform the capital’s shopping landscape. But a centre of this scale cannot create a market of its own and that means that retailers and landlords across a huge swathe of west and central London have been left quaking in their boots.
The 23 million shoppers a year that Westfield is expecting will have to come from somewhere. But who are they, where will they come from, what locations will suffer and how badly? Towards central London, shopping destinations ranging from Kensington High Street and Notting Hill to Fulham and Hammersmith, as well as Bond Street, Oxford Street and Regent Street themselves, will consider the scheme competition, as will west London suburban centres such as Ealing, Harrow and Uxbridge. Among these shopping hubs, some are bound to fare worse than others, but the shock waves will be felt by all of them.
While many UK centres are experiencing major redevelopments, London is a different kettle of fish altogether. With a massive concentration of wealth including international money, an abundance of tourism and dozens of distinct retail offerings all intermingling with historic world-renowned urban icons, examining shopping patterns in the capital is a complex business.
But it has never had an easily accessible, one-stop shopping centre like this before and that means an impact is inevitable. Westfield, which has about 100 million sq ft (9.3 million sq m) across the globe, is a world leader in what it does and this centre, a decade in the making, is to be its flagship UK development, planting it firmly on the map here.
It is a competitor to be reckoned with, as is shown by the roll call of retailers on board. With Marks & Spencer, Debenhams, Next, House of Fraser and Waitrose signed up to anchor the scheme and a multitude of other big high street names and luxury retailers committed, it is shaping up to be a formidable retail force. The total scheme will cover 1.5 million sq ft (139,350 sq m) and be home to just under 300 retailers and more than 40 caterers, with 90 per cent of the retail units let ahead of the October 30 opening date. It will have a quality of retail offer that west London’s other centres can only dream of matching.
This huge draw to retailers and the inevitable consumer pull that such a strong tenant mix will achieve will be causing more than a few sleepless nights among retailers and shopping centre owners that now find themselves in Westfield’s firing range. Some shopping areas of Birmingham are still recovering from the shell shock of when the Bullring first erupted on to the scene and some have had to change their very nature. The chances are that irrevocable changes in some areas of London are likely too.
But whether or not Westfield London will be the bombshell that many fear depends on who you’re talking to and which area you’re talking about. One of London’s qualities is its diversity within surprisingly small distances, so it’s likely that some retail centres will prove better protected than others when the doors open.
Exodus from Kensington?
One of the areas that has been highlighted for outflow both in terms of retailers and shoppers is Kensington High Street. Two of Westfield London’s key tenants, Next and House of Fraser, have vacated their stores on the street to set up camp in Westfield London, as has Habitat, although, the latter’s store has been snapped up by discount retailer TK Maxx. Does this mean that Kensington will become a destination for value retail as it is forced to change, to fit in with the new scheme?
“Many retailers are seeing Westfield London as a relocation prospect from Kensington High Street,” explains Savills associate director of in-town retail Rob Hargreaves. “There’s a real crossover of tenant mix and it’s only 10 minutes away on the Tube.”
In Ealing, one of the centre’s closest neighbours, Arcadia has put a number of its stores on the market in favour of space in Westfield London. According to Harper Dennis Hobbs director David Harper, these and other areas can expect to lose more retailers and experience a big drop in footfall. “Kensington High Street will go down 10 per cent or more. Hammersmith is clearly going to suffer and I don’t think it will ever bounce back,” he says. “Look at the tenant mix in Westfield London. Other centres around there just don’t have the same retailers on offer.”
One of Westfield London’s unique strengths is its ability to be all things to all shoppers. The diversity of retailers that it has attracted, from Tiffany to Topshop, is likely be irresistible to a wide cross section of shoppers and mean that the centre will draw them from a mixture of other destinations, both affluent and more mid-market focused.
Westfield says that it is providing the retailers with space in London that they have been starved of for years and by opening a scheme on this scale it is simply providing retailers with another place to set up shop.
“When national and international retailers look for a flagship location in London, they choose both the West End and Westfield London,” says a Westfield spokesman. “We are delighted by this and the solid take-up in space at Westfield London. This is all further confirmation of the under supply of quality retail floor space in the capital.”
Others agree that the risk to west London is a lot smaller than has been suggested. Mostafa Sbitri, partner at agency Kitchen La Frenais Morgan, which is active on Kensington High Street and all around the west of London says: “London is so robust and strong. We think Westfield London will be a great destination for Londoners, but the people who will shop there won’t be coming from Bond Street and Sloane Street anyway. In places like Kensington High Street there are still good requirements and deals to be done. Some retailers won’t go into Westfield London because it’s a scheme and they want to stay on the high street.”
And while there is bound to be some shock and awe, when the novelty wears off, just as has been seen after other big arrivals, there will be a period of settling and perhaps even a resurgence from the retail centres that have bled tenants and shoppers – particularly as petrol costs are soaring and if, as some fear, parking proves difficult.
“There’s a viewpoint that Westfield London will be great for six months and it’ll be the greatest thing since sliced bread,” explains Hargreaves. “But afterwards people might think that it’s a long way to go all the way out to and might wonder why they’ve turned their back on their local shops.”
In terms of other developments under way, all is generally quiet on the western front. However, one centre is undergoing a transformation in preparation for the arrival of its new rival. Whiteleys in Bayswater is a centre that hasn’t made the most of the affluence that surrounds it, but now its owner, Standard Life, is on a mission to reinvent its retail identity.
Its proximity to Westfield London and the threat it is likely to face are forcing Standard Life to come up with new ways to persuade shoppers to get off the Tube a few stops further east on the Central line. The tactic it has adopted is to focus on food. In the past month, the opening of a number of niche Food Inc stalls on the ground floor of the mall has sent out a clear signal about the type of retailers and shoppers Standard Life is hoping to attract.
These deli concessions sell a variety of foodie treats, including chocolate, freshly baked bread, fish and seafood, fruit and vegetables, wines and spirits, cheeses, meat and pastries. The developer has also signed award-winning chef Rowley Leigh to operate exclusive restaurant Le Caf頁nglais. Perhaps illustrating the sea change in Standard Life’s thinking, the restaurant, which has received rave reviews already and enticed celebrities and the Notting Hill epicurean set, has opened in the unit formerly occupied by McDonald’s.
As Whiteleys demonstrates, having a major change just beyond the horizon can have a positive effect. The increased urgency that the new threat creates can have a Darwinian influence on retailers and developers and this is what we can expect to see throughout west London.
Westfield London’s opening will be a challenge and will change London’s retail landscape – centres will need to be clear on their identity and who their customer is if they are to prosper with the new challenger on the doorstep.
The big issue for retailers is whether, as Westfield believes, the centre will generate new sales, or whether it will increase the cost base by simply cannibalising sales from existing stores but not generating new ones. As King Sturge partner Martin Crossley puts it: “A lot of retailers feel that they’ve got to be there, but I bet they also wish it had never come along in the first place.”
Whatever happens, however, the scheme will create a shopping environment that other centres in London cannot hope to match. Anyone with stores elsewhere in west London – whether retailer or landlord – must start preparing for the impact.