The latest stop of Retail Week’s summer roadtrip takes us to Scotland where we visit Edinburgh, Glasgow, Aberdeen and the Highlands.
Edinburgh and Glasgow have long grappled over the right to be considered the jewel in Scotland’s retail crown, both offering genuine shopping destinations for natives and tourists alike.
Indeed, they now find themselves also tussling over a direct flight from China, which should provide a further boost to tourism.
Whichever city winds up with that feather in its cap, both appear well-equipped to thrive.
Edinburgh is perhaps more accustomed to servicing a tourism influx – the Edinburgh Fringe, currently in full flow, more than doubles the city’s usual 500,000 population during August.
But the area has slowly adapted to create reasons to visit all-year round – and retailers have had to move with those times, too.
Jenners, the House of Fraser-owned department store that celebrates its 180th birthday next year, offers a prime example of meeting such challenges.
While its nine elevators, three escalator banks, six stairwells and countless nooks and crannies create something more akin to a maze than a shop, the store has embraced its unique layout and legacy – it boasts two royal warrants – to become the go-to location on Edinburgh’s Princes Street.
“I love the fact that people come in here because they have heard about it, read about it and expect to have a fantastic experience,” Jenner’s store manager Alan Thomlinson tells Retail Week.
“Some people will absolutely love it, some people may not, and the difficulty is trying to keep all people happy and be all things to everybody – our core customer, tourists and the younger consumer we are trying to attract.”
Jenners, like many retailers, believes its experiential credentials are central in achieving that aim.
The store houses restaurants, spas, hairdressers and an art gallery. It puts on gin, whiskey and cheese and wine tasting events and its boardroom even hosts small comedy shows during the Fringe.
To support the shift towards year-round tourism, it now employs Mandarin speakers permanently rather than seasonally on the shop floor, and dedicates the same amount of space throughout the year to Scottish souvenirs – such as tartan-dressed teddy bears – instead of contracting space during winter months.
But Thomlinson and Jenner’s aren’t stopping there.
“We’re also looking at the possibility of maybe next year using the roof as an area to watch the firework displays, either during the festival or at Christmas and at Hogmanay, where we can have a small event for maybe 50 VIP customers,” he says.
Room for growth
It’s a forward-thinking approach is mirrored across Edinburgh as the city seeks to realise its growth potential.
The £1bn redevelopment of the Edinburgh St James scheme will provide the city with a shopping and leisure destination, something it currently lacks, when the first phase opens in 2020.
Anchored by John Lewis, it will comprise 850,000 sq ft retail space, a multi-screen cinema, 214-room hotel and 150 apartments.
There is investment in other areas of the city, too. In April Moorgarth Group acquired the Waverley Mall, which links Edinburgh Waverley train station to Princes Street.
(CHECK WITH LUKE) The new owner has wasted no time in changing its image, adding ‘the Waverley Festival concept’ to its roof at street level, where bars and grab-and-go food stalls complement the likes of Superdry, New Look, Body Shop and Flying Tiger Copenhagen inside.
“We are wanting to create a true destination here and nurture the convenience offer that currently exists with an interesting mix of uses and offers,” Moorgarth chief executive Tim Vaughan says.
“Our proposals will massively improve the profile and prominence of the scheme.”
Glasgow packs a punch
Far from throwing in the towel amid such competition, Glasgow is countering with an increasingly powerful punch.
Centred around the pedestrianised ‘Z’ of Sauchiehall Street, Buchanan Street and Argyle Street, retail in Glasgow has more than held its own amid the uncertainty sparked by Scotland’s independence referendum, the Brexit vote and this year’s snap general election.
St Enoch Shopping Centre, at the apex of Buchanan Street and Argyle Street, offers affordable, high street names including H&M, Debenhams, M&Co and Boots, while at the opposite end of the ‘Z’, Buchanan Galleries boasts the likes of John Lewis, Next, Oasis, Quiz and Glasgow-based Trespass.
The half-mile walk along Buchanan Street, which connects the two destinations, provides a world-class retail thoroughfare, featuring House of Fraser’s first-ever store, Hotel Chocolat, L’Occitane, Michael Kors, JD and Paperchase.
It is easy to see why, according to data from commercial real estate firm CBRE, retail rents jumped 9.4% in Glasgow during the first quarter of 2017, compared to the same period last year.
But Princes Square, Buchanan Street’s outside-in development that with its atrium design offers a Mediterranean feel, provides a slightly cheaper alternative for luxury retailers looking for prime pitch.
Indeed, independent Scottish operators including high-end kids’ retailer Ollybear and jean maker Rabbie Denim – which counts Manchester United footballers Michael Carrick and Edwin van der Sar among its customers – have opted for the lower rents offered there, alongside the likes of Ted Baker, Vivienne Westwood, Kurt Geiger and Jo Malone.
John Menzies, partner at retail estate agents Cushman & Wakefield’s in Glasgow, believes London could learn from the city’s successful pedestrianisation.
“The principal retail ‘Z’ in Glasgow gets about 55 million shoppers per annum. That’s a big footfall,” Menzies explains.
“It’s busy and it’s visibly crowded, but it creates a great buzz and it also lets you create a bit of theatre on the street.
“You see pop-ups and you see some of the restaurants putting tables outside and creating zones where people can have a bite to eat.
“You have to applaud the local council for letting Glasgow become a little bit more cosmopolitan and do these kind of things that you can’t really do on a non-pedestrianised street.”
Schuh on the front foot
The focus rightly remains on Glasgow and Edinburgh when it comes to Scottish retail, but there are other stories to be told north of the border.
Livingston, which lies 15 miles west of Edinburgh and 30 miles east of Glasgow, sprung up in the 1960s when it started to become something of an “overspill area” from the two key cities.
“It is a bit like Milton Keynes in that sense,” our trusted taxi driver informs us en route to West Lothian.
It’s here that footwear retailer Schuh has proudly called home since moving its central operations to Livingston in 1991.
Since opening its first store in Edinburgh in 1981, the business has grown to 130 stores across the UK, Ireland and Germany, 17 of which are in Scotland.
It now employs about 5,000 people, 328 of whom work at its Neilson Square headquarters, with a further 174 based five miles away at its European distribution centre just off the M8.
From its low-profile Livingston location, Schuh has masterminded a strategy to kick into touch the footwear blues being experienced by many of its rivals.
Investments in technology, mobile payments, its online platform and store openings helped pre-tax profits jump 9.3% to £16.6m in the year to the end of January, as sales climbed 5.3% to £280.9m.
The retailer is eyeing further growth. Schuh boss Colin Temple says: “There are some areas where we are very under-represented, such as central London, and we are also rolling out our kids’ footwear standalone store chain, so we are definitely looking.
“We are reaching maturity in our standalone business, but we still have some growth within kids and the M25 area.
“How many will that be? We know it’s not going be 500, it might be 30 to 50 kids’ stores, perhaps 150 to 200 Schuh stores, depending what happens with ecommerce. We’ll be considered.”
Even with such targets in mind, Temple insists the Genesco-owned retailer has no plans to move its base south of Hadrian’s Wall.
“We are a Scottish-based UK retailer that is ambitious in Europe, but Scotland has a number of advantages with regards to the geography and location,” Temple explains.
“We have quite a good business in the Republic of Ireland and you can get the ferries from here quite easily. That’s a good plus for us.
“A lot of the population is within the M25 and obviously we are a bit distanced from that, but we have a satellite in West Bromwich to help us out.
“So we’ve never had plans to relocate the office. There is no reason to do it and we don’t see why that should change.”
Aberdeen slips into crisis
Away from Scotland’s central belt, smaller towns and cities can only dream of replicating their more illustrious neighbours Edinburgh and Glasgow.
Aberdeen, the capital of North Sea oil, was once hailed as one of the richest cities in the UK, where retailers would consequently trade well.
But the nosedive in oil prices has sparked something of a crisis – even for a city accustomed to such fluctuations – as money dries up, residents move out and retailers find the going tougher.
Menzies insists that while retail spend has fallen, it has done so from “a very high base”.
Hammerson-owned Union Square and John Lewis-anchored Bon Accord & St Nicholas shopping centres undoubtedly still represent relatively vibrant destinations, where, during the good times, retailers were clamouring to be.
But for many businesses there now, it has become a case of weathering the storm.
Former KPMG head of retail David McCorquodale, a Scot, paints a bleak picture of the current landscape.
“Over the past two years, sales have been down 20 or 25%,” he says. “It was a city that had a lot of disposable income when the oil times were good, but the dip in the oil price has significantly affected the retail market.
‘But there is always a belief that something will come back in some way in Aberdeen and, when it does, that population will have money to spend’
Former KPMG head of retail David McCorquodale
“Retailers there have five and 10-year leases, so they can’t just get out when times are bad. They will batten down the hatches.
“But there is always a belief that something will come back in some way in Aberdeen and, when it does, that population will have money to spend.”
High hopes in the Highlands
Inverness, on the other hand, is in the midst of a growth spurt.
The population of the unofficial capital of the Highlands has grown 17.8% within the past decade to more than 79,000, according to the 2011 census.
The Highland Council expects that figure to top 100,000 by 2035.
Its retail and leisure offer is also moving fast to cater for a growing student population at the University of the Highlands and Islands – Scotland’s newest university – as well as the thousands of retired residents seeking a quiet and scenic lifestyle in Inverness.
Spearheaded by Eastgate Shopping Centre, the city’s retail proposition is expanding at a similar pace as its catchment, although retail parks and an out-of-town Tesco Extra have taken some footfall and trade away from the high street.
“The challenge it has had is the layout of the city centre with too many one-way streets,” McCorquodale says.
“That’s difficult for traditional retail because car parking is very difficult there.”
Yet there is one road that could create an appetite for retail in more remote Highland locations.
The North Coast 500 – Scotland’s self-styled “answer to Route 66” launched in March 2015 – begins in Inverness, taking in Applecross on the west coast, heading north to the towns of Torridon, Ullapool and passing by John O’Groats, before returning to Inverness via Dingwall.
The route is becoming increasingly popular with holidaymakers who are keen to see more of the countryside having initially flown into Edinburgh or Glasgow.
While those two cities remain unchallenged in their scrap to be seen as the Flower of Scotland, the country’s wider retail scene can continue to blossom.