Oracle Retail Week Awards: Hull’s St Stephen’s beats the recession

St Stephen’s shopping centre in Hull may not have been the most high-profile shopping destination of the year - last year’s winner Westfield Stratford City, forming as it did the entrance to the Olympic Park, took that accolade - but its impressive story struck a chord with judges.

The retail centre operates in a location that has faced more than its fair share of recession-related difficulties. Unemployment in the East Yorkshire city stood at 15.8% in October last year, and a series of mass-job losses over the past couple of years hit the region hard.

Yet despite this less than inspiring backdrop, St Stephen’s increased footfall by 30% between 2008 and 2012, with the figure rising from 8.5 million to 11 million in the period. It has also managed to attract brands such as Lipsy and Superdry, and in May 2011 it defied the retail forecasts and became 100% let, and has remained so since.

Figures released at the end of that same year showed a sales increase at some stores of 15%, with one store reporting a 37% increase. Dwell time, meanwhile, is up to a healthy 74 minutes, and the centre has even played host to the first electric car charging points to be installed in the East Yorkshire area.

The British Retail Consortium said when the centre became fully let: “Nationally, about one in eight shops is now standing empty, so for a shopping centre to have no vacancies is clearly a good thing and a real vote of confidence in that location.”

Not only that, but the service charge for retailers at St Stephen’s is well below the national average after energy use at the centre was cut by 35% over a three-year period. As one judge says: “The story is really powerful.”

All this stands in stark relief from the bleak reality facing some shopping centres in the UK. The latest figures from the Local Data Company show that the average vacancy rate for UK shopping centres is 15.6%. For a city the size of Hull, with stiff competition from nearby mega-mall Meadowhall in Sheffield and cities such as Leeds and York, it would have been easy to go the way of many secondary shopping centres and fall into decline.

So how has St Stephen’s done it? The retail mix is certainly helping, with big-name brands such as Zara attracting shoppers who would previously have travelled elsewhere. The centre has also focused hard on public relations, both in its own marketing and improving the perception of Hull itself. Shopping events have helped too: gatherings aimed at specific consumer groups, such as student ‘lock-ins’, have been successful, generating a healthy return on investment.

The St Stephen’s story began in 2009 when owner British Land decided to invest in the centre, and work first began on creating an offer that would appeal to today’s customers and retailers.

Centre manager Jim Harris, who works for managing agent Munroe Asset Management, says that signing Superdry was the real turning point for St Stephen’s. “We had a key unit at the front of the centre which wasn’t let,” he recalls. “They hadn’t really heard of Hull, but we brought them up here. They liked the demographics and the site, and we did a deal. That was the first of the iconic brands to come to the city.”

After that, other big names such as H&M were brought in, and things started to fall into place. Today, the centre has a selection of strong retail brands as well as the all-important leisure offer that every successful shopping centre seems to need, including a 24-hour gym and a cinema.

There is free wi-fi in the centre’s ‘Chill Out Zone’ - something that harried shoppers no doubt appreciate, with crowding often coming in near the top of consumers’ most disliked aspects of shopping.

The centre also focuses hard on ensuring that children are catered for with large baby changing facilities. And there is technical experimentation too, with one recent promotion sending deals from St Stephen’s outlets and restaurants direct to consumers’ mobiles while they were shopping.

Once the St Stephen’s team had something in place that it thought consumers would like, the marketing effort kicked in.

Harris says that there was a concerted effort to target and attract wealthy shoppers from the outskirts of Hull who had previously shopped further afield. “The city of Hull has had a difficult time economically,” he says. “But we also have several affluent villages in our hinterland such as South Cave.”

Part of the challenge was to entice these people to St Stephen’s, he says. “In the past, lots of them would have gone to Leeds, York or Meadowhall. However since 2010, when we thought we had an offer that could entice them, we’ve marketed to them. And it has worked very well.”

He says the St Stephen’s centre has managed to create the right retail experience for today’s shopper, which is why it has managed to defy the downturn and attract new consumers. “We have the kind of brands that people want,” he says, “and we are offering those people the right experience.”

Harris highlights the role played by British Land, saying the landlord had the foresight to invest in the site despite operating in a less than brilliant economic climate. He says that some retailers were more prepared to come on board because of British Land’s relationship with them, and that a landlord’s willingness to invest is an increasingly important part of retail success.

“British Land had the forward thinking and the relationship with retailers, and that helped,” he says. “They had the foresight to say they would pay for it. It’s about having a landlord that is prepared to invest. You’ve got to keep yourself fresh.”

The judges agree that it was the clever strategic thinking that really made St Stephen’s stand out. One judge says: “We want to recognise a brave investment decision that’s changed the landscape and driven economic growth. It would have been so easy to starve it of investment and run it down.”

The coming year will see further investment for St Stephen’s. Footfall held up over 2012 - there was a 0.8% drop, Harris says, but he adds that the centre is pleased with that against a national average fall of around 3.5%. And there are plans afoot for further improvements: 2013 will bring investment in the car park and a new children’s play area.

Much of today’s retail success is focused on big cities and flagships - it’s often about downsizing store estates, and the future looks bleak for many smaller centres and high streets. But St Stephen’s is proof that a smaller, more local offer can work. If the offer is right, tailored carefully to the local demographic and if the centre is well-managed, this year’s Retail Destination of the Year winner is proof that retail outside the big cities can succeed.