New study reveals Britain's most recession proof retail centres
The retail destinations most likely to resist the recession - and those most likely to suffer from it - have been revealed in a new, comprehensive study of Britain's retail centres.
Retail destinations in London and the South East dominate a top 20 of centres which, while they will still feel the effects of the recession, are most likely to continue to prosper. Centres in the North and Midlands feature strongly among those which will be most impacted.
Market information analyst CACI conducted its study by measuring a number of variables, including projected income falls by population type and the subsequent likely changes in demand for particular types of service and product. These were then applied this to the top 150 retail centres by expenditure across Great Britain, taking into account the type of shops in each centre and the type of people in each centre's catchment area. An estimated expenditure drop for 2009 was then calculated for each centre. Further detail on methodology can be found at the foot of this press release.
Surrey's leafy suburbs head the list of the most recession proof retail centres with Richmond-upon-Thames, Epsom, Kingston-upon-Thames, Woking and Guildford occupying the top five positions nationwide. In London, Kensington, Kings Road, Knightsbridge and the recently-opened Westfield all made the top 20.
Outside London and the South East, the most recession proof centres were found to be in Harrogate and Cambridge.
Hanley, home to The Potteries shopping centre, tops the list of those likely to see the biggest falls in expenditure, with a projected fall of 11.23%. This would equate to a drop of approximately £42m over 2009. The top 20 least recession proof centres cover a wide geographic area, from Scarborough, Hull and Grimsby in the north, to King's Lynn, Plymouth and Hastings further south, with Swansea and Dundee also featuring.
Nielsen Harrap, Principal Consultant - Location Planning, CACI said:
"Centres in traditionally affluent areas are those better placed to survive the recession. People here will have less disposable income than before but will still have money to spend - if not on more expensive items by trading down to cheaper alternatives. In harder-pressed areas people are more likely to have very little or no disposable income in the current environment - here spending will not switch from one type of purchase to another, but slow down or stop.
"The recession is clearly affecting us all but our study shows where it will have greatest and least impact, allowing retailers to make informed decisions on planning for their future operations."
The top 20 most and least recession proof centres are:
Most recession proof retail centres
1 Richmond, Surrey
6 London - Kensington
8 London - Kings Road
10 High Wycombe
12 London - Knightsbridge
15 St Albans
19 Westfield London
Least recession proof retail centres
8 King's Lynn
Further editorial information: Graeme Buck / Emily Luscombe, Camargue, Tel 020 7636 7366
Notes to editors:
1. CACI's Recession Proof Retail Centres methodology:
CACI assessed the likely fall in real incomes across the country and, subsequently, consumer spending by value. For the purposes of the study, a 5% fall in consumer spending was assumed, based on GDP data published by the Office of National Statistics and projected by the Bank of England.
CACI then used economic modelling to assess the income elasticity of a range of goods and services across a broad range of categories - essentially how likely spending is to increase or decrease relative to changes in income.
CACI applied these findings to the top 150 retail centres by comparison expenditure across the country categorised through its Retail Footprint analysis (see below). This stage assessed the type of person in each centre's catchment area, to indentify how real incomes are likely to change in each area, and the type of shop in each centre, to identify how this change in income will affect changes in expenditure.
2. CACI's Retail Footprint analyses current and future shopping patterns, classifying retail centres into over 50 different types according to retail mix, market positioning and evolving shopping role. The annual ranking provides a definitive and independent guide to UK retail centres, helping retailers and property investors monitor changing dynamics and likely impact on investments.