Bulky goods retailers have had the roughest ride. While the past year hasn’t seen any casualties on the scale of Courts or Furnitureland, many retailers have been struggling. ScS and Land of Leather have both issued profit warnings in the past few months and scaled down their expansion plans.
Other big-ticket retailers such as DFS and MFI have felt the slowdown and DIY giant B&Q has yet to complete its down-sizing programme. Retailers such as Wickes and Dunelm are reporting strong sales, but both are aware that the market is less buoyant.
Fashion is also in the doldrums. Most of the major high street names have seen sales slump in the past few weeks and there are no clear fashion trends that are driving shoppers to the stores.
This apparent slowdown has meant some retail park landlords have been more lenient with rents. While rents are not necessarily going down, retailers are being able to secure better incentives.
New retailers are also being tempted onto retail parks with good deals. Danish furniture retailer Jysk is one bright star on the horizon, along with TK Maxx’s Canadian homewares format HomeSense.
But a couple of newcomers to the market won’t fill all the voids. Landlords need to reinvest in their parks to stem deterioration. If parks are left to fall into disrepair, they will soon become secondary space and it will take a miracle to fill the voids.
Landlords need to offer better deals to encourage more high street retailers to out-of-town. They also need to find other ways of filling the space, whether this is with cafés or other leisure uses. Anecdotal evidence suggests that the presence of cafe chains, such as Starbucks and Costa Coffee, may extend dwell times.
There is talk that retail parks could be turned into residential space. And if landlords fail to be flexible and don’t come up with better deals to tempt new retailers, then we could see this trend start to emerge.
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