A year of failures and successes for City retailers

2006 spectacular retail failures

In the past six months there have been some spectacular retail failures. The all important Christmas period proved disastrous for some retailers and we have seen a number of names disappearing including Music Zone, Card Warehouse/Cardfair, Olan Mills, Morgan, Silverscreen, etc. All these retailers were represented in Norwich, compounding the “Chapelfield effect”.

There have been, however, some notable success stories, John Lewis, focussing on its core customer care values, had an increase in sales in excess of 10% and New Look, aided by an aggressive expansion programme, saw in excess of a 25% increase.

So what does this mean for Norwich? The City has recently been placed 8th in an independent survey of all UK shopping destinations. This puts Norwich on par with some of the most famous retail locations in the country, including Oxford Street, Birmingham and Bluewater Shopping Centre. Chapelfield has added House of Fraser Department Store (not many cities can boast five,) and a new level of national and international retailers. So why are there 65 shops currently on the market, within the City Centre including retail outlets that have only recently opened in Chapelfield? There are a number of reasons:

1. Post Christmas retail failures have increased the number of vacancies.
2. Chapelfield has “over-shopped” Norwich, meaning that there are too many shops available in comparison to current demand.
3. Chapelfield has not been the success initially envisaged and despite enormous efforts to turn it around, it remains problematical.

Despite this tale of doom and gloom, Norwich continues to attract new retailers and Roche Retail have recently been involved in the three most recent lettings in the City Centre, which included Animal agreeing to take a unit in Davey Place, as part of their national drive to enter into direct retailing. Roche Retail have a database of over 200 retailers looking to enter the Norwich market and this list is continually growing because the City is considered to be one of the “must have” retail locations in the country.

Take-up however is slow due to there being a plethora of units to choose from and therefore there is no perceived urgency to make decisions. Also retailers are nervous about the fickle nature of their market while incentives are generally improving, as landlords try and maintain rental levels with longer rent free periods and capital contributions given in some cases.

For the remainder of 2007, the outlook in Norwich is that we will see the number of units available reducing as take-up improves. This will strengthen Norwich’s retail diversity still further and lead to a slow but steady self perpetuating upward spiral.

So long as retailers have a healthy Christmas at the end of the year, then 2008 will be the year for Norwich’s true retail comeback, following a number of difficult years.

Adrian Fennell

Date Added: April 24th 2007