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High Street vs Out of Town Shopping - UK - December 2010

The report considers the importance of store location in retail strategies by assessing trends in out of town, in-town, and home shopping patterns and analysing the attributes of different shopping locations that motivate and attract shoppers.

  • The death of the high street has been overplayed as nine out of ten adults use their “nearest high street” for at least some of their non-food shopping, indicating the importance of maintaining a vibrant local centre.
  • Continued expansion of multi-channel retailing will contribute to alter shopping patterns and affect future space requirements as some successful multi-channel retailers will conclude either that they do not need as much space as they have got or they do not need to increase the amount of space they occupy.
  • With parking charges looking set to rise in future, the appeal of car park ticketing systems that allow shoppers to get a discounted rate for parking when they shop at participating retailers is sure to have strong resonance. Parking reduction systems allow retailers to promote their shops yet maintain close control over how many discounts are being given and who is giving them.
  • Filling empty space with temporary lets, both to established retailers as well as to traders who specialise in short-term lets, has become commonplace, and using empty units for community interest groups helps create visual impact and can stimulate footfall.
  • Existing prime pitch sites are always valuable to retailers and will become more so as the amount of new space coming onto the market looks likely to be limited for the next three to five years and means that rents in the best locations will rise.
  • The average number of shopping locations used for non-food shopping decreased between 2008 and 2010, due to reduced use of some out of town locations, indicating that shoppers are currently strongly focused on everyday and comparison goods shopping rather than household goods shopping associated with locations such as retail parks.

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Table of contents

  1. Issues in the Market

      • Key issues
        • Abbreviations
        • Market in Brief

          • Local centres are experiencing a revival
            • Local shopping needs driven by everyday convenience
              • Bigger in-town locations favoured for choice and comparison goods shopping
                • Parking charges
                  • Clone town Britain is a myth
                    • Some out of town locations experiencing weaker footfall….
                      • … while others are increasing share of spend
                        • Retail mix shake up
                          • Little new space under development
                            • Too much poor quality space
                              • Expansion of very large grocery superstores not affecting in-town footfall
                                • Multi-channel retailers critically assessing future space needs
                                • Internal Market Environment

                                  • Key points
                                    • Planning regime unchanged
                                      • Planning Obligations Tariff to replace Section 106 agreements
                                        • Too much unwanted space…
                                          • … but strong demand for prime pitch space
                                            • Weak retail property market has stimulated temporary letting
                                              • Continued growth in online shopping
                                                • Figure 1: Broadband penetration, by demographics, 2004-09
                                              • Future space cutbacks
                                                • Grocers facing competition test
                                                  • Use of cars under pressure from rising fuel costs
                                                    • Increased parking charges could drive shoppers out of town
                                                      • More in-town Sunday trading in future
                                                      • Broader Market Environment

                                                        • Key points
                                                          • Waning consumer confidence
                                                            • Figure 2: Value of all retail sales (excluding automotive fuel) at current prices, non-seasonally adjusted – percentage increase on a year earlier, 2007-10
                                                          • No sign of any improvement
                                                            • Figure 3: Value of all retail sales (excluding automotive fuel), non-seasonally adjusted – percentage change on same month a year ago, 2010
                                                          • Government’s deficit management strategy keeping confidence low
                                                            • Rising input prices another cause for pessimism among retailers
                                                              • Cheaper mortgages increases disposable income
                                                                • Figure 4: GDP, PDI and consumer expenditure, at current prices, 2005-15
                                                              • Population growing but ageing
                                                                • Figure 5: Trends in the age structure of the UK population, 2005-15
                                                              • Grey market
                                                                • Figure 6: Forecast adult population trends, by lifestage, 2005-15
                                                              • Growing numbers of households
                                                                • Figure 7: Forecast household numbers and size trends, 1981-2021
                                                              • Consumers becoming more aspirational
                                                                • Figure 8: Forecast adult population trends, by socio-economic group, 2005-15
                                                            • Competitive Context

                                                              • Key points
                                                                • Retailers benefiting from changing patterns of expenditure…
                                                                  • Figure 9: Consumer expenditure (current prices), by major category, 2005-09
                                                                • … but few retail categories are high priority items of expenditure
                                                                  • Figure 10: Expenditure priorities, 2007-10
                                                                  • Figure 11: Consumer spending priorities, November 2009-June 2010
                                                                • Increased numbers of smaller stores for major grocers
                                                                  • Figure 12: Major grocers’ expansion of small stores, 2005-10
                                                                • Superstore expansion creating more space for non-foods
                                                                  • Figure 13: Expansion of Tesco Extra, 2005-10
                                                                • Expansion of dedicated non-food stores by major grocers
                                                                  • Expansion of non-foods online by major grocers
                                                                    • Company instability freeing up space
                                                                      • Implications for the future
                                                                      • Strengths and Weaknesses in the Market

                                                                        • Strengths
                                                                          • Weaknesses
                                                                          • Who’s Innovating?

                                                                            • Key points
                                                                              • Temporary leases here to stay
                                                                                • Digital delivering an enhanced shopper experience
                                                                                  • Making digital way-finding more affordable
                                                                                    • Social media and micro-blogging
                                                                                      • Get on the phone
                                                                                        • Parking opportunities
                                                                                          • Pay by phone parking will increase dwell time
                                                                                            • Reductions systems attractive to retailers and shoppers
                                                                                              • Managed locations responding to changing needs
                                                                                                • Retail parks improve their appeal
                                                                                                  • Examples include
                                                                                                    • Factory outlets encourage high churn rates
                                                                                                      • Shopping centres making it easier for short term lets
                                                                                                        • Phase 2 loyalty schemes
                                                                                                        • Sector Size and Forecasts

                                                                                                          • Key points
                                                                                                            • More space and higher sales productivity
                                                                                                              • Figure 14: Retail space, outlets and sales productivity, 2005-13
                                                                                                            • Grocers have the fastest growth rate for space
                                                                                                              • Figure 15: Retail space, by sector, 2005-13
                                                                                                            • Managed shopping space continues to increase
                                                                                                              • Shopping centres the main focus of development
                                                                                                                • Limited amount of new space being started
                                                                                                                  • Retail park completions at an all time low
                                                                                                                    • Outlet centres market is mature
                                                                                                                      • Implications for the future
                                                                                                                      • Trends in Usage

                                                                                                                        • Key points
                                                                                                                          • Trends in usage frequency
                                                                                                                            • Figure 16: Average frequency usage of shopping locations, by type of location 1997-2010
                                                                                                                          • Key trends
                                                                                                                            • In-town – key trends and implications
                                                                                                                              • Figure 17: Average frequency usage of in-town shopping locations, by type of location, 2008-10
                                                                                                                            • Out of town – key trends and implications
                                                                                                                              • Figure 18: Average frequency usage of out of town shopping locations, by type of location, 2008-10
                                                                                                                            • Home shopping
                                                                                                                              • Figure 19: Average frequency usage of home shopping locations, 2008-10
                                                                                                                            • Narrowing trend in repertoire usage
                                                                                                                              • Figure 20: Number of shopping locations used, 2006-10
                                                                                                                            • ABC1 adults have the widest repertoires
                                                                                                                              • Men, older people and the less affluent have narrower repertoires
                                                                                                                                • Future implications
                                                                                                                                • In-Town/City Centre Locations – Usage and Appeal

                                                                                                                                  • Key points
                                                                                                                                    • High interest in in-town locations
                                                                                                                                      • Figure 21: Use of in-town locations, by frequency, October 2010
                                                                                                                                    • Nearest high street
                                                                                                                                      • Figure 22: Trends in frequency of usage of nearest high street for non-grocery shopping, 1997-2010
                                                                                                                                    • Key trends
                                                                                                                                      • Core user groups
                                                                                                                                        • Development opportunities
                                                                                                                                          • Local parade
                                                                                                                                            • Figure 23: Trends in frequency of usage of local parades for non-grocery shopping, 1997-2010
                                                                                                                                          • Key trends
                                                                                                                                            • Core user groups
                                                                                                                                              • Development opportunities
                                                                                                                                                • Nearest city centre
                                                                                                                                                  • Figure 24: Trends in frequency of usage of nearest city centre for non-grocery shopping, 1997-2010
                                                                                                                                                • Core user groups
                                                                                                                                                  • Development opportunities
                                                                                                                                                    • Covered shopping centres
                                                                                                                                                      • Figure 25: Trends in frequency of usage of covered shopping centres for non-grocery shopping, 1997-2010
                                                                                                                                                    • Key trends
                                                                                                                                                      • Core user groups
                                                                                                                                                        • Development opportunities
                                                                                                                                                          • Another town/city centre
                                                                                                                                                            • Figure 26: Trends in frequency of usage of another town/city centre for non-grocery shopping, 1997-2010
                                                                                                                                                          • Key trends
                                                                                                                                                            • Development opportunities
                                                                                                                                                              • Future implications for in-town locations
                                                                                                                                                              • Out-of-Town Shopping Locations – Usage and Appeal

                                                                                                                                                                • Key points
                                                                                                                                                                  • Out of town reliant on occasional use
                                                                                                                                                                    • Figure 27: Use of out-of-town locations, by frequency, October 2010
                                                                                                                                                                  • Retail parks
                                                                                                                                                                    • Figure 28: Trends in frequency of usage of retail parks for non-grocery shopping, 1997-2010
                                                                                                                                                                  • Key trends
                                                                                                                                                                    • Core user groups
                                                                                                                                                                      • Development opportunities
                                                                                                                                                                        • Non-food section of major grocery superstore
                                                                                                                                                                          • Figure 29: Trends in frequency of usage of non-food sections of major grocery superstores, 2006-10
                                                                                                                                                                        • Key trends
                                                                                                                                                                          • Core user groups
                                                                                                                                                                            • Development opportunities
                                                                                                                                                                              • Out of town regional shopping centres
                                                                                                                                                                                • Figure 30: Trends in frequency of usage of out-of-town regional shopping centres for non-grocery shopping, 1997-2010
                                                                                                                                                                              • Key trends
                                                                                                                                                                                • Development opportunities
                                                                                                                                                                                  • Factory outlet/designer outlet centres
                                                                                                                                                                                    • Figure 31: Trends in frequency of usage of factory outlet/designer outlet centres for non-grocery shopping, 2006-10
                                                                                                                                                                                  • Key trends
                                                                                                                                                                                    • Core user groups
                                                                                                                                                                                      • Development opportunities
                                                                                                                                                                                        • Future implications for out of town locations
                                                                                                                                                                                        • Home Shopping – Usage and Appeal

                                                                                                                                                                                          • Key points
                                                                                                                                                                                            • Online is a widely adopted form of shopping
                                                                                                                                                                                              • Figure 32: Use of home shopping, by frequency, October 2010
                                                                                                                                                                                            • Shop online
                                                                                                                                                                                              • Figure 33: Trends in frequency of usage of shopping via internet for non-grocery shopping, 2006-10
                                                                                                                                                                                            • Key trends
                                                                                                                                                                                              • Development opportunities
                                                                                                                                                                                                • Other forms of home shopping
                                                                                                                                                                                                  • Figure 34: Trends in frequency of usage of other forms of home shopping for non-grocery shopping, 2006-10
                                                                                                                                                                                                • Key trends
                                                                                                                                                                                                  • Core user groups
                                                                                                                                                                                                    • Development opportunities
                                                                                                                                                                                                      • Future implications for home shopping
                                                                                                                                                                                                      • Expenditure by Location

                                                                                                                                                                                                        • Key points
                                                                                                                                                                                                          • Relative spend favours in-town locations
                                                                                                                                                                                                            • Figure 35: Comparison of relative spend, by location, 2008 and 2010
                                                                                                                                                                                                          • Key trends
                                                                                                                                                                                                            • Who spends what in-town?
                                                                                                                                                                                                              • Key spenders
                                                                                                                                                                                                                • Development opportunities
                                                                                                                                                                                                                  • Who spends what out of town?
                                                                                                                                                                                                                    • Key spenders
                                                                                                                                                                                                                      • Development opportunities
                                                                                                                                                                                                                        • Implications for the future
                                                                                                                                                                                                                        • Choice and Retail Appeal – Comparison by Location

                                                                                                                                                                                                                          • Key points
                                                                                                                                                                                                                            • Wide choice gives in-town an edge
                                                                                                                                                                                                                              • Figure 36: Key elements of choice and retail appeal motivating shopping locations decisions, by type of location, October 2010
                                                                                                                                                                                                                            • Leveraging in-town appeal
                                                                                                                                                                                                                              • Leveraging out of town appeal
                                                                                                                                                                                                                                • Implications for the future
                                                                                                                                                                                                                                • Convenience, Parking and Social Attributes – Comparison by Location

                                                                                                                                                                                                                                  • Key points
                                                                                                                                                                                                                                    • Out of town use based on easy and free parking
                                                                                                                                                                                                                                      • Figure 37: Key elements of convenience and access motivating shopping locations decisions, by type of location, October 2010
                                                                                                                                                                                                                                    • Leveraging in-town appeal
                                                                                                                                                                                                                                      • Leveraging out of town appeal
                                                                                                                                                                                                                                        • Implications for the future
                                                                                                                                                                                                                                        • Attitudes Towards Retail Offer at Shopping Locations

                                                                                                                                                                                                                                          • Key points
                                                                                                                                                                                                                                            • Independents valued for variety but multiples reassure
                                                                                                                                                                                                                                              • Figure 38: Attitudes towards retail offer at shopping locations, October 2010
                                                                                                                                                                                                                                            • Muted support for independents
                                                                                                                                                                                                                                              • Clone town claims are over stated
                                                                                                                                                                                                                                                • Multiples provide focus and benchmarks
                                                                                                                                                                                                                                                  • Implications for the future
                                                                                                                                                                                                                                                  • Appendix – Internal Market Environment

                                                                                                                                                                                                                                                      • Figure 39: Broadband penetration, by demographics, 2004-09
                                                                                                                                                                                                                                                  • Appendix – In-Town/City Centre Locations – Usage and Appeal

                                                                                                                                                                                                                                                      • Figure 40: Frequency of use of local parade, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 41: Frequency of use of nearest high street, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 42: Frequency of use of nearest city centre, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 43: Frequency of use of another town/city centre, by demographics, September 2010
                                                                                                                                                                                                                                                  • Appendix – Out of Town Shopping Locations – Usage and Appeal

                                                                                                                                                                                                                                                      • Figure 44: Frequency of use of covered shopping centre, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 45: Frequency of use of regional shopping centre, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 46: Frequency of use of retail park, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 47: Frequency of use of non-food section of major grocery superstores, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 48: Frequency of use of factory outlet/designer outlet centre, by demographics, September 2010
                                                                                                                                                                                                                                                  • Appendix – Home Shopping – Usage and Appeal

                                                                                                                                                                                                                                                      • Figure 49: Frequency of use of shop via internet outlet centre, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 50: Frequency of use of shop via other type of home shopping, by demographics, September 2010
                                                                                                                                                                                                                                                  • Appendix – Expenditure by Location

                                                                                                                                                                                                                                                      • Figure 51: Overall expenditure in local high street shopping, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 52: Overall expenditure in out-of-town shopping, by demographics, September 2010
                                                                                                                                                                                                                                                  • Appendix – Choice and Retail Appeal Comparison by Location

                                                                                                                                                                                                                                                      • Figure 53: Most popular reasons for shopping in a town or city centre, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 54: Next most popular reasons for shopping in a town or city centre, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 55: Most popular reasons for shopping in out-of-town shopping centres and large edge of town retail parks, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 56: Next most popular reasons for shopping in out-of-town shopping centres and large edge of town retail parks, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 57: Repertoire of places visited for regular/occasional non-grocery shopping, September 2010
                                                                                                                                                                                                                                                      • Figure 58: Repertoire of places visited for regular/occasional non-grocery shopping, by demographics, September 2010
                                                                                                                                                                                                                                                      • Figure 59: Places visited for regular/occasional non-grocery shopping, by repertoire of places visited for regular/occasional non-grocery shopping, September 2010
                                                                                                                                                                                                                                                      • Figure 60: Places visited for regular/occasional non-grocery shopping, by repertoire of places visited for regular/occasional non-grocery shopping, September 2010

                                                                                                                                                                                                                                                  High Street vs Out of Town Shopping - UK - December 2010

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