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Wealthy UK cities showing resilience to retail downturn

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Wealthy UK cities showing resilience to retail downturn
CAMBRIDGE, UNITED KINGDOM - APRIL 19: Members of the public punt along the river Cam in front of the colleges of Cambridge University on April 19, 2011 in Cambridge, England. The UK is currently basking in fine weather with the Met Office predicting temperatures up to 25C this week. The fine weather comes as many people are taking advantage of the combination of a late Easter and additional Bank Holiday for the Royal Wedding to take extended breaks and holidays. (Photo by Oli Scarff/Getty Images)

A group of wealthy cities such as London and Cambridge are faring relatively well during the UK retail sector’s downturn while shops in poorer and more rural areas suffer, a new report has said.

Read more: Retailers brace for tough Christmas as confidence slumps

Shopping parks have also shown resilience as the bricks-and-mortar retail sector loses ground to online services, US real estate investment firm CBRE’s latest look into the sector revealed.

High streets across Britain have suffered in recent years as online shopping has rapidly expanded. Brexit uncertainty and a slowing economy have further hurt retailers in 2019, for example by driving up import costs as the pound loses value.

The growth of retail sales slowed in the three months to September, official figures showed this month, amid signs that employment and consumer spending are starting to drop off.

Yet London, Cambridge, Oxford, Brighton, Glasgow and Edinburgh have all performed better than the rest of the country during the recent retail downturn, CBRE said today.

“Tourism, affluent catchment characteristics and prevalence of universities have driven performance in these cities, and we expect them to continue to outperform the wider market,” CBRE said.

The report said London’s retail sector has led the way, with substantial growth in the values of businesses over the last five years.

Shopping parks have also done relatively well in 2019, the US firm said. “Visitor numbers at shopping parks have been supported by the increasing popularity of click-and-collect services and the growth of outlet centres,” said CBRE.

The report cited locations “such as Bicester Village and the newly developed Icon at the O2 [in London], which are being boosted by investment in amenities”.

The CBRE report also said that health and beauty retailers have done well, taking advantage of health-conscious lifestyle trends.

“Tactile in-store experiences such as virtual makeup mirrors and beauty counters have encouraged customers in-store, providing an experience that online cannot compete with,” CBRE’s report said.

Read more: TK Maxx defies retail gloom as sales top £3bn

CBRE head of UK retail Rhodri Davies said: “Retailers can survive and thrive by adapting quickly to changing tastes, offering new experiences in-store and by reviewing their respective property portfolios.”

(Image credit: Getty)