Shopping centres or lifestyle destinations?
Some of the UK's best-known shopping centres are increasing their experience-led leisure floorspace to entice visitors, finds Retail Focus.
It's hard to believe that it's been 10 years since Westfield London first opened its doors. In that time, the shopping centre has generated more than £8.6 billion in sales and welcomed nearly 250 million customers. The key to this success, according to Keith Mabbett, director of leasing at Westfield Europe, has been creating a retail and entertainment destination that spans beyond the traditional shopping centre offering. Now, in a move to stay competitive and relevant, the centre has unveiled the first phase of a £600 million, 68,750 sq m expansion, which will see more than 90 new shops, cafes, restaurants and leisure outlets open throughout 2018.
Westfield London expansion
The development forms part of the estimated 139,355 sq m of additional shopping centre floorspace that is scheduled for completion this year, almost all of which will be extensions to existing schemes - according to Cushman & Wakefield. Others include the intu Watford/Charter Place extension and the intu Lakeside extension.
The expansion of Westfield London has enabled it to introduce new retailers such as John Lewis and Primark, extend its new and growing categories, such as homewares and beauty with West Elm, BoConcept, Space NK and Miller Harris, bring more dining and leisure concepts with the golf-tech Puttshack concept, All Star Lanes and Japanese food hall Ichiba, as well as give existing retailers such as H&M and adidas an opportunity to upsize.
'Leisure is a current focus but we expect much more varied mix of uses being part of all development and this will be critical to creating successful places,' says John Percy, head of retail development consultancy at Cushman & Wakefield. 'Landlords are quickly adapting to market trends and engaging with an increasing number of "experience" led operators in order to entice shoppers offline and into their developments. Activity at some of the UK’s best-known shopping centres, including Westfield London, Brent Cross and intu Lakeside make this an extremely interesting year in development terms.'
The new anchor
'Today, dining, leisure and entertainment have become the new anchor and experience is king,' claims Mabbett. This sentiment is echoed in the Cushman & Wakefield report, 'UK Shopping Centres: Dead or Alive', which states that 'the shopping centre is being transformed from a place where people just go to buy "stuff" into a live-work-play environment, driven by food and beverage, experience and a sense of community'.
The study further suggests that the 'traditional' anchor stores, such as the large department store operators, are consolidating both in terms of size and number of stores, while the international multibrands are seeking more space. Inditex, for example, now occupies 5,295 sq m of space at intu Trafford Centre across four of its brands and H&M has taken 10,405 sq m at Westfield Stratford for six of its brands. 'These are the new shopping centre anchors of the future,' says the report.
Rebecca Ryman, regional managing director at intu, agrees that the type of anchor tenant is changing. 'Super retailers, such as Primark and Next are increasing their store size, while the likes of Inditex and H&M are taking additional stores to showcase their portfolios of brands,' she says.
Plans for intu Lakeside's expansion
There is also the new breed of leisure anchors, such as Cineworld, who anchor the development at intu Watford, and Hollywood Bowl and Nickelodeon who will anchor the 16,258 sq m intu Lakeside extension. 'These anchor tenants are drawn to our locations as they offer high footfall and a compelling mix of retail and leisure,' adds Ryman.
For Linda Tait, managing director at Prosper, which is responsible for the retail design delivery for intu's Southern portfolio, the move towards more dining and leisure anchors is the biggest game changer in the industry as shopping centres evolve into experiential destinations. 'Traditional department stores have moved to include branded eateries along with programmed events in store to enhance the customer experience.'
Technology is the name of the game
Unsurprisingly, the Cushman & Wakefield report further suggests that the most successful shopping centre schemes are those that bring together the physical and digital worlds through the use of technology. 'Destinations of the future will continue to be influenced by who/which developments can embrace and develop the digital revolution. Retail destinations that can integrate new digital technology into their existing architecture will be the schemes that thrive in the future.'
Notably, click-and-collect is driving shopping centre footfall and boosting sales. At Westfield London, for example, click-and-collect shoppers spend on average 40 per cent more than others in store.
Meanwhile, shopping centre owner, intu has recently launched artificial intelligence technology that can use a single photo to search more than four million items on its online shopping platform.
But, while digital technology may be key to the success of shopping centres, it does not replace the physical shopping experience. It is simply a tool that assists the process, argues Cushman & Wakefield. 'The real world customer is still king.'
Shopping Centre Developments 2018
Size: 7,432 sq m
Opening: March 2018
Westfield London extension
Size: 68,748 sq m
Opening: March 2018 (phase one)
intu Watford expansion plans
intu Watford/Charter Place extension
Developer: intu Properties
Size: 37,161 sq m
Opening: October 2018
intu Lakeside extension
Developer: intu Properties
Size: 16,258 sq m
Opening: Spring 2019
Adapted from Cushman & Wakefield's report, UK Shopping Centres - The Development Story