IKEA Southampton Impact Research

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1 IKEA Southampton Impact Research 1 IKEA Southampton Impact Research

2 Overview IKEA Southampton Swedish homewares retailer IKEA is to open a new 34,000 sqm store in Southampton in February As this development is the furniture giant s first to be located on the south coast, it is expected to attract shoppers from far and wide sparking fears that traffic congestion and competition for parking spaces in the heart of the city is set to become much worse, despite the provision of a new 900 space car park. However, the new retail development is likely to make Southampton a more desirable place to shop, which may be a crumb of comfort to local retailers amidst a bleak economic outlook. To assess the likely impact of the new IKEA store, Experian have used their award winning retail gravity model Where Britain Shops and comprehensive GOAD database of UK retail property. The impact on both Southampton and other places within the local area has been considered. Side elevations of the new IKEA development 2 IKEA Southampton Impact Research

3 Impact on Southampton Analysis of the likely impact that the IKEA store will have on Southampton reveals that the city centre as a whole is likely to see shopper spend increase by 4.05%. Due to their relative proximity, other retail destinations such as the WestQuay shopping centre (pictured) are likely to see higher levels of footfall as people combine a visit to IKEA with their wider shopping trips. However, rather than elevate Southampton within the UK Retail Centre Rankings from its current position of 15 th ; the new IKEA development is more likely to compensate for extra vacancy elsewhere in the city. Retailers such as MFI, Zavvi and Adams all previously had stores in Southampton, and as a result IKEA should help to maintain the quality of retail rather than attracting significantly higher numbers of visitors. Retail Centre Rank Centre 11 White City 12 Newcastle upon Tyne 13 Norwich 14 Bristol 15 Southampton 16 Leicester 17 Kingston upon Thames 18 Reading 19 Milton Keynes 20 Aberdeen 3 IKEA Southampton Impact Research

4 Impact on Competing Centres Eastleigh, Fareham and Winchester to experience decline Retail businesses in smaller, local centres outside Southampton are projected to be severely affected by the new IKEA development. As Southampton becomes a more attractive shopping destination, centres such as Eastleigh, Fareham and Winchester are expected to see shopper numbers fall. This can also be considered within the wider retail context of higher failure rates amongst retailers and more vacant units. IKEA will act as a key new attractor to the already enviable retail offer boasted by Southampton, which smaller centres will struggle to compete with. As a result Winchester is expected to lose 10.7m in retail spend, Fareham fares slightly better at a loss of 4.4m, whereas Eastleigh will be the worst affected centre, losing 13.7m. Summary Though IKEA s decision to locate in Southampton is not a surprising one, it still represents a coup for the city as the Swedish retailer is not present in a number of other significant British centres, including Liverpool, Norwich, Aberdeen and Leicester. IKEA s opening will not sufficiently raise the profile of Southampton to see it move higher than its current rank of 15 th in Experian s Retail Centre Rankings. Retailers in the smaller centres (such as Eastleigh, Fareham and Winchester) are likely to bear the brunt of IKEA s opening and will see falls in shopper numbers and revenues. 4 IKEA Southampton Impact Research

5 Southampton s Current Market Share 5 IKEA Southampton Impact Research

6 Southampton s Projected Market Share Following IKEA s Opening 6 IKEA Southampton Impact Research

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