Merry Hill is one of the largest regional malls in the UK, encompassing over 200 shops such as major flagships Primark, M&S and Next. Sovereign Centros from CBRE were appointed asset managers of the former Intu asset in 2022, and have since expanded the retail, F&B, and leisure offering, with recent high profile openings including Hollywood Bowl and national debuts for Harvey Norman and XF Gym.
When Merry Hill chose to invest in renovating the M&S flagship store, they needed to quantify the impact changes would have on performance. This required a robust simulation of the future turnover and resulting footfall. In this blog, we uncover the steps that CACI took to help Merry Hill understand the impact of refurbishing M&S and gain investors’ approval to execute it.
How CACI evidenced outcomes of refurbishing Merry Hill’s M&S
CACI compiled a report covering an overview of M&S’ current performance, the impact of a refurbishment on the retailer’s turnover and the cross-shopping potential it could bring across Merry Hill. The report also considered factors such as benchmark centre sales where M&S had already been upgraded, annual trips to Merry Hill should the refurbishment not take place, and potential customer loss to Bullring & Grand Central mall where a new M&S was due to open.
The data sources included in CACI’s report were:
- Transactional Spend Data: Derived from real-world debit card spend data from multiple sources, Transactional Spend Data is a fully consented view of spending patterns. It offers granularity into how different groups interact and how customers engage through an analysis of spend by product category.
- Acorn: CACI’s consumer segmentation model combines geography with a variety of demographics and lifestyle data sources, grouping the entire population into 6 Categories, 18 Groups and 62 Types. It supplies insights into the role that demographics plays in impacting the performance of a location and helps identify key users of a site.
- Location Dynamics: CACI’s machine learning tool predicts the retail, grocery and leisure catchments of over 6,000 destinations in the UK. It considers underlying population and spend, competitive landscapes and accessibility to each destination to model overlapping catchments. In this context, Location Dynamics was used to predict the centre’s performance, and overlap with Birmingham city centre, allowing for a comparison to actual sales to understand where and how the centre could grow turnover.
- Brand Dimensions: CACI’s benchmarking tool tracks the performance of 300 major brands over time. In this instance, it examined M&S spend performance nationally and at benchmarked locations.
What value would refurbishing Merry Hill’s M&S bring?
Having been at Merry Hill for three decades, investing in a refurbishment of M&S would solidify its continued commitment to the centre.
Increase in average spend, dwell time & turnover
CACI uncovered that centres with a refurbished M&S store have seen an increase in average spend per head in benchmark centres by 2.2%, which could help generate a substantial turnover at Merry Hill. With M&S accounting for 11% of centre floorspace at Merry Hill, improving its appearance could impact the ambience of the rest of Merry Hill and contribute to an uplift in dwell time, retail spend, and catering for the wider centre. Refurbishing Merry Hill’s M&S would also accelerate turnover at both the store and across the centre, as refurbishment is cited as a key factor for increasing sales.
Appealing to younger, more affluent demographic
Our research has shown that refurbished stores tend to attract younger, more affluent shoppers. While Merry Hill’s diverse shopper profile of Executive Wealth, Mature Money, and Steady Neighbourhoods Acorn groups is well aligned to key shoppers for M&S, key groups have all under performed versus catchment expectation. A refurbished M&S would appeal to these underperforming visitors.
A reported 82% of M&S shoppers also go on to spend in other stores at Merry Hill. Therefore, the new footfall that a refurbished M&S would attract would benefit other tenants in the centre.
Sales growth from new & existing shoppers
Within this project, we were able to quantify the number of new Merry Hill visitors that would be generated as a result of the refurbished M&S, with considering factors including their potential spend in M&S and their spill-over expenditure across the wider centre.
Graeme Jones, Executive Director at Sovereign Centros from CBRE: “M&S has been a big part of Merry Hill for several decades, so any decision about their future is one that needed to be made with real consideration of the potential impact on the destination. When we decided that we wanted them to introduce their latest shop fit, while consolidating from two units into one to create new opportunities, we started to create a proposal for M&S that would make the best possible case for a significant investment commitment. The data and insight from CACI was a crucial element of that business case, emphasising the rationale from a visitor, brand, and landlord perspective. It helped achieve a positive outcome for all parties, and the new M&S store is already beating commercial targets, and has had a big impact on Merry Hill and its visitor numbers.”
Ellie Brettell, Senior Property Consultant at CACI: “We’re increasingly being asked to support decisions like this one, where significant investment is involved and multiple parties need reassurance that the right choice is being made. Our objective, data-driven approach helps provide that clarity. Our contribution to this fantastic deal for Merry Hill was possible because of our expertise working for brands and owners of places – we understand the goals and potential impacts on both sides and can therefore create a report that rationalises a decision for all parties. Our evidence base made it clear that this deal would create positive outcomes for everyone involved, so naturally we’re proud that our work has helped to deliver such tangible success.”
How CACI can help
The insights provided through CACI’s report instilled both internal and external stakeholders with the necessary confidence to make significant investments in the refurbished M&S. To learn more about our products and data available from key partners to generate a single view of the UK property market, contact us today.