Over the past five years, many observers have heralded the death of the high street in the face of online growth, but it’s still alive and kicking.

However, where and how consumers shop is changing rapidly, with shopping becoming more of a leisure activity.

According to data intelligence specialist CACI, “leisure-dominated retail trips” have increased by 28% over the past two years, and food and beverage spend rose 15% between 2013 and 2016.

“Shopping is now an incidental part of going to a high street or shopping centre”

Andrew Phipps, CBRE

“Shopping is now an incidental part of going to a high street or shopping centre,” says Andrew Phipps, head of retail research at property specialist CBRE. “It’s not the prime reason for going out.

“In fact, four out of 10 people that go shopping say their primary reason is to eat and drink.”

The owners of shopping destinations have made moves to accommodate this growing trend by introducing more food and leisure formats to their schemes.

Phipps points out that the new Victoria Gate shopping centre in Leeds, which opened in October last year, launched with 52% of space devoted to food and beverage outlets.

Work on the 1.2 million sq ft Victoria Gate development is expected to begin next year if it gains approval from Leeds City Council

Victoria Gate

Victoria Gate opened with more than half of its space devoted to food and drink outlets

Longer dwell time

CACI associate partner and property consultant Alex McCulloch says this shift in consumer behaviour has led to shoppers spending longer in shopping destinations but visiting these locations less frequently.

“It’s now something that the entire family decides to do on Saturday morning and involves a full day out”

Alex McCulloch, CACI

It has also changed who we go shopping with. “It’s now something that the entire family decides to do on Saturday morning and involves a full day out,” says McCulloch.

In fact, there has been a 19% growth in family day out shopping missions over the past two years, according to CACI, which interviews shoppers as they leave retail destinations.

McCulloch says shopping centre owners have introduced more formats focused on the family to meet this growing shopper need.

Westfield London has introduced Kidzania – part theme park, part learning centre – into its centre; the Whiteley shopping centre in Fareham has brought in climbing experience Rock Up; and the St David’s centre in Cardiff plays host to a mini-golf operator.

Adapting to the leisure trend

Diane Wehrle, marketing and insights director at Springboard, says those retail destinations that have introduced more leisure into their schemes have benefited.

She says retail parks were quick to react, due to the lack of space constraints compared with other developments.

“Lots of improvements and changes have taken place [at retail parks] with the introduction of more leisure facilities such as cinemas and coffee shops”

Diane Wehrle, Springboard

“Lots of improvements and changes have taken place with the introduction of more leisure facilities such as cinemas and coffee shops,” she says.

However, this means the footfall boost shopping centre received when such cinemas and restaurants opened over the past few years is now tailing off.

Last year, footfall in retail parks increased just 0.9%, compared with a 2.2% jump in 2015 and a 2.8% rise in 2014.

However, retail parks remained the only destination to experience a rise in footfall over 2016.

The free parking provided at retail parks remains a big pull to consumers, particularly as people spend more time at them when visiting leisure destinations, such as cinemas. A similar visit to a high-street cinema might include costly parking charges.

High-street decline stabilises

The high street was hit hard during the recession – store closures were commonplace and footfall nosedived.

However, Wehrle says that footfall has begun to stabilise, down just 1.1% last year, and she is expecting this to improve in the year ahead.

“High streets can serve a day-to-day convenience. It’s great for basket-led shops when people want to buy something specific like a gift for a friend’s party”

Alex McCulloch, CACI

“The high street has lost quite a few customers; however, the decline is slowing. There’s a degree of stability. As the high street rebalances in terms of rental values, we may see a better result than -1.1%,” says Wehrle.

McCulloch says many high streets have become more functional – places people visit to get their necessities rather than schlepping to the nearest big centre.

He uses London’s Walthamstow and Brixton as examples and points out that stores such as M&S Simply Food and gifting shops such as Oliver Bonas and Joy have made a play for these areas.

“High streets can serve a day-to-day convenience. It’s great for basket-led shops when people want to buy something specific like a gift for a friend’s party,” says McCulloch.

Shopping centre woes

Shopping centres have suffered the biggest decline in footfall over the past year, falling 1.8%, and Wehrle predicts tough times ahead for non-prime centres.

“Some centres are dominated by retail. Shoppers want more than that now,” she says.

“It’s make or break for shopping centres. If they don’t change their offer, they’ll see a loss of trade”

Diane Wehrle, Springboard

“It’s make or break for shopping centres. If they don’t change their offer, they’ll see a loss of trade.”

Wehrle explains that adapting to the new leisure-centric shopping mission is more of a challenge for shopping centres as there is “more pawns to move around”.

“Owners have to ask, ‘If we change the food offer, what does it mean? Is it consistent with the rest of the centre? Who do we have to move?’ It takes time and it’s costly,” she says.

Securing investment is also an issue for shopping centre owners. Wehrle says investor confidence in that sector is low, so bringing about the major changes needed to meet growing demand could be challenging.

Meanwhile, Wehrle predicts the consumer appetite for more leisure activities is only set to increase.

“It’s the natural evolution of retail. How many products does anyone need? Leisure demand is at the beginning of the cycle. It will increase, not diminish,” she says.

Big box v convenience

Changing shopping behaviour is also influencing which format of store consumers desire.

Convenience has been a key driver of consumer behaviour, particularly in grocery, where time-poor shoppers are increasingly seeking more ‘food-for-now’ options in smaller baskets at local stores.

Industry body IGD predicts the convenience market will grow from £37.7bn in the year to April 2015 to £44.1bn by April 2020.

Retailers have raced to meet this growing demand and the number of smaller shop openings had surged 21% in the five years to the end of 2015, according to the Local Data Company.

Tesco’s Express and Metro formats and the Sainsbury’s Local fascia have come to dominate high streets. Even traditional retail park players such as Topps Tiles and Carpetright have launched smaller store formats to serve shoppers in the areas they live.

But where does this leave the big-box format? Grocers such as Tesco and Sainsbury’s have tried to breathe new life into bigger stores by adding more non-food into store along with more options to dine in-store.

Tesco has partnered with both Sports Direct and Arcadia to add fashion brands to its stores, while Sainsbury’s is introducing Argos and Habitat concessions following its acquisition of Home Retail Group last year.

Timpson at Morrisons

Timpson at Morrisons

Morrisons has introduced Timpson to 116 of its stores

Meanwhile, Morrisons partnered with Timpson last year to introduce key-cutting, shoe, watch, tablet and phone repairs, and dry-cleaning services to 116 of its stores.

Such initiatives appear to be working, as Tesco reported an improving like-for-like sales performance at its Extra stores at its interim results last October.

Phipps believes the big-box format still has legs. “Shoppers are treating these stores like mini shopping centres. It’s a destination where they can not only pick up food but use the click-and-collect point and buy clothes.”

The reinvigoration of these bigger stores shows that retailers and centres that respond to changing shopping demands can prosper.

With the desire for more food, leisure and convenience set to grow throughout 2017, retailers will need to be fleet-of-foot to give these shoppers what they want.

Online drives store sales

Stores Fabled Marie Claire 6

Stores Fabled Marie Claire 6

Ocado and Marie Claire’s Fabled format

Online has not brought about the death of the high street as many predicted, but sales via the channel are still growing.

According to the Office for National Statistic, online accounted for 8% of retail sales in November; however, volumes jumped 28.6% year-on-year.

Andrew Phipps, head of retail research at CBRE, points out that retail destinations are benefiting from online, both through click-and-collect and the opening of new stores by etailers.

Over the past year, Ocado opened health and beauty format Fabled.com, in partnership with Marie Claire, while fashion etailer Missguided launched its first store at Westfield Stratford City with more shops set to follow.

Meanwhile, click-and-collect continues to grow. More than half of John Lewis’s sales are fulfilled by click-and-collect; however, this is not representative of the wider industry, according to CACI.

“25% of shoppers simply click-and-collect, the significant majority make further purchases”

John Platt, CACI

On average, just 2% of consumers use click-and-collect on a shopping trip; this is highest in retail parks at 3.3%, compared with 1.4% at in-town destinations.

CACI associate partner and property consultant John Platt says click-and-collect is often not the sole motivation for visiting a retail destination; instead people tend to “add it on” to an existing shop.

“25% of shoppers simply click-and-collect, the significant majority make further purchases,” says Platt.

In fact, Platt says the average spend of a click-and-collect shopper is exactly the same as a normal shopper, not including the purchase they have collected.