VENUESCORE. UK Shopping Venue Rankings JAVELIN GROUP EXECUTIVE SUMMARY

Transcription

1 VENUESCORE 2017 UK Shopping Venue Rankings JAVELIN GROUP EXECUTIVE SUMMARY

2 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 02 CONTENTS Contents 1 Introduction 03 2 Methodology 05 3 Findings 10 Location Grade Leading 180 venues represent ~24% of UK s total VENUESCORE 10 Top Shopping Venues Manchester pips Glasgow to the post 11 Major Movers John Lewis s opening increases Chelmsford s retail rank by 23 places 12 Top Shopping Centres Westfield continues to dominate 14 Top Retail Parks Fort Kinnard climbs the retail rankings 16 Top Factory Outlet Centres Cheshire Oaks defends its title 17 Dominant City Centres Conurbation performance is unchanged 18 Malls vs. High Streets Dominance of malls is a regional trend 19 London Focus Spending remains concentrated in Central and Inner London 20 Market Position London venues continue to lead 22 Food Orientation London dominates in the foodservice offer 24 Travel Retail continues to grow in importance within travel hubs 26 Fashion Position Spitalfields paves the way for progressive retailers 28 Age Position Carnaby Street attracts the youngest consumers 29 Tourist Venues Travel hubs lead the way 30 Internationalisation Regent Street is a destination for international retailers 31 Regional Analysis Many regions continue to be under-shopped 32 Order VENUESCORE About Javelin Group 35

3 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 03 CHAPTER ONE INTRODUCTION INTRODUCTION 1 VENUESCORE 2017 provides retailers, brands, property developers and owners with an up-todate, straightforward tool for understanding some of the key differences between shopping venues across the UK such as scale of offer, market positioning, fashionability and age positioning. VENUESCORE is Javelin Group s annual ranking of the UK s retail venues (including town centres, standalone malls, retail warehouse parks and factory outlet centres). VENUESCORE is one of a series of proprietary location insight datasets created by Javelin Group to help clients (including retailers, brands, local authorities, private equity, shopping centre owners and investors) to understand the full potential of their retail property assets and to shape these in response to the structural changes that are delivering a seismic shift to the UK s retail landscape.

4 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 04 CHAPTER ONE INTRODUCTION For retailers and brands trading nationally, and across a range of different location types, the development of an effective 'shape of chain' strategy requires the segmentation of the store estate so that the performance of outlets trading in venues of similar retail status can be better understood, and potential new store opportunities can be benchmarked in this context. For shopping centre developers and investors, an understanding of the retail hierarchy in an area, overlaid with consumer spending dynamics, helps to highlight opportunities for new development and/or tenant requirements for existing schemes. For private equity investors, a clear vision of the UK retail landscape can help evaluate the deliverability of roll-out plans and store performance assumptions presented as part of investment theses. For local authorities, a clear understanding of the hierarchy of retail venues within the area can help to determine trends in multiple occupancy, establish strategic priorities for future investment and provide the core input for area benchmarking studies and capacity assessments.

5 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 05 CHAPTER TWO METHODOLOGY METHODOLOGY 2 The retail offer of each shopping venue in the UK is evaluated using a straightforward and transparent scoring system, reflecting its relative consumer appeal. Retailer Scoring VENUESCORE 2017 evaluates each venue in terms of its provision of multiple retailers including anchor stores, fashion operators, and non-fashion multiples. The sectors covered include foodservice, which in recent years has become increasingly integrated in helping to define and differentiate successful retail offers, as well as all comparison and convenience-based product sectors. VENUESCORE 2017 is a dataset comprising 3,295 individual multiple retailer fascias trading nationwide in April 2016 from over 126,184 stores (using raw data supplied by Retail Locations).

6 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 06 CHAPTER TWO METHODOLOGY The score attached to each operator is weighted to reflect its overall impact on shopping patterns. For example, anchor stores (e.g. John Lewis, Marks & Spencer, Selfridges) receive a higher score than unit stores. The resulting aggregate score for each venue is called its VENUESCORE. Classification Illustrative example retailers VENUESCORE Premier Department Store Harrods, Selfridges (London) 50 Major Department Store Harvey Nichols, John Lewis 30 Premier Variety Stores Ikea 15 Hypermarkets Tesco Extra, Asda Supercentre 10 Department Store Chains Debenhams, House of Fraser 10 Supermarkets Sainsbury s, Morrisons, Asda, Waitrose 8 Variety Stores Dunnes, Beales 4 Local Anchors Marks & Spencer 4 Destination Speciality B&Q, Next, Toys R Us 3 Clothing Destination TK Maxx, Abercrombie & Fitch 3 Multiple Clothing Retailers H&M, Topshop, New Look, River Island 2 Leisure Goods Destination Halfords, Hobbycraft, Sports Direct 2 Other Multiple Retailers 99p Stores, Clarks, JD Sports 1

7 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 07 CHAPTER TWO METHODOLOGY Venue Definitions Venue definitions have been fully updated in VENUESCORE 2017, reflecting the evolving status and extent of the UK s commercial centres. The area defined for each retail venue uses a common-sense approach, which describes the retail offer as one venue where there is a concentration of stores that shoppers would consider as part of the same 'walkable' shopping offer. To illustrate: Example 1: In central Cambridge, the area around the Grafton Centre shopping mall is defined as a distinct retail venue separate from Cambridge, Centre, which comprises Grand Arcade, Lion Yard, Petty Cury etc. This is because (a) although both offers are located in the centre of Cambridge, the retail offer is not continuous from one area to the other and (b) shoppers will generally shop in one area or the other as part of one shopping trip, and when they shop both they might generally travel from one to the other either by car or public transport. Venues are defined using a commonsense approach, which describes the retail offer as a single venue where there is a concentration of stores that shoppers consider part of the same walkable shopping offer. Example 2: In central Glasgow, Argyle Street and Sauciehall Street are both allocated to one venue Glasgow, Centre despite being some distance apart. This is because (a) the retail offer is relatively unbroken from one end of Sauciehall Street right through to the far end of Trongate and (b) a proportion of shoppers would visit both extremes of the retail offer as part of one shopping trip. Example 3: In Warrington, the town centre offer including the Golden Square shopping centre and the Cockhedge Retail Park is allocated to the same retail venue Warrington, Centre although it is then also possible to assess Cockhedge Retail Park as a distinct zone within the Warrington, Centre venue. The Grafton Centre, Cambridge Exceptions: In London, the retail offer of the West End (e.g. Oxford Street, Regent Street, Covent Garden, Bond Street, Carnaby Street) is broken down into constituent offers for the purposes of venue ranking although London, West End, London, Midtown and London, City can also be assessed as aggregates of their constituent retail venues.

8 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 08 CHAPTER TWO METHODOLOGY Venue Scoring The VENUESCORE for each location is created by combining the retailer scoring matrix (described on page 6) within the venue s area definition, and therefore reflects the presence and importance of the multiple retailers trading in each venue. The resulting VENUESCORE rankings generally correlate closely with the actual market sizes of these shopping venues (in terms of consumer spending). However, there are some notable exceptions. For example, the mega-malls such as Trafford Centre, Bluewater and Meadowhall will tend to generate spending levels that are well in excess of their relative VENUESCORE. The same is true of several London venues, with Oxford Street and the two Westfield schemes the most notable outliers to this rule. Westfield Shopping Centre, London London city centre venues are defined as distinct aggregate venues to reflect their true status as powerful city centre offers in their own right. For example, London, West End combines Oxford Street, Regent Street, Covent Garden and others, London, Midtown combines Holborn, Clerkenwell, Finsbury and others and London, City combines Bank, Moorgate, Liverpool Street and others.

9 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 09 CHAPTER TWO METHODOLOGY Venue Attributes In addition to its VENUESCORE, each location is assessed in terms of a range of other attributes, including: Market positioning Is the offer aspirational or down-market? Age focus Is the offer targeting younger or older consumers? Fashion focus How dominant is the venue s clothing offer? Fashionability of its offer Is the clothing offer traditional or progressive? Foodservice bias How strong is the food and beverage offer? Comparison vs. convenience bias Anchor strength How much of the overall score for each venue is delivered by major anchors (e.g. department stores, variety stores, supermarkets?) Shopping centre vs. high street dominance Is there a powerful mall offer? These characteristics are described in the Findings section on page 10. In the data tables that support VENUESCORE 2017, venues are ranked as follows: National ranking Alphabetical ranking (by town) Rankings by region Rankings by local authority MALLSCORE Separate rankings for purpose-built shopping centres, retail parks, outlet centres and transport hubs in the UK This year, Javelin Group has further refined its VENUESCORE methodology and added an additional 313+ venues to the rankings (down to Minor Local level). Refinements include changes to the geographic definition of certain retail venues and some changes to the underlying scoring system. Furthermore, an additional 128 multiple retailers are included. This partly reflects the continuing importance of foodservice multiples (e.g. Benugo, Joe & The Juice and CAU) but also new and interesting retailers (e.g. Kiko Milano and American Eagle Outfitters).

10 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 10 CHAPTER THREE FINDINGS FINDINGS 3 The following pages summarise key findings from the data analysis from VENUESCORE Location Grades Leading 180 venues represent ~24% of UK s total VENUESCORE VENUESCORE establishes eight principal grades of town centre/mall retail venue in the UK for town centres and malls, ranging from the 19 Major City locations such as Manchester city centre through to 1,800+ Local shopping venues such as Alexandria and Wick. In addition, there are a further 19,000+ venues across the country defined as Minor Local that are not shown in the table below. VENUESCORE establishes eight principal grades of retail venue in the UK, ranging from Major City to Local status retail offers. The leading 180 venues (e.g. Major City, Major Regional and Regional grades) represent nearly one-quarter of the nation s total combined VENUESCORE. This increases to over forty percent when the Sub-Regional and Major District grades are included. These larger venues capture an even greater share of consumer spending than is indicated purely based on VENUESCORE. Location Grade Illustrative example venues VENUESCORE range # of Locations Cumulative # Major City Manchester to Bath Major Regional Sheffield to Harrogate Regional Swindon to Chesterfield Sub-Regional Crewe to Stevenage Major District Aldershot to Woodbridge District Bakewell to Street ,109 Minor District Padstow to Prescot ,623 Local Alexandria to Ventnor ,814 3,437 NB. All venues scoring less than 10 are classified by Javelin Group as Minor Local

11 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 11 CHAPTER THREE FINDINGS Top Shopping Venues Manchester pips Glasgow to the post London, West End clearly stands some distance above any other city centre in terms of the scale of its retail offer (with a VENUESCORE that is more than double that of its next nearest rival Manchester). However, London, West End can also be considered as a number of separate (albeit interlinked) retail venues (e.g. Oxford Street, Regent Street, Covent Garden), with VENUESCORE providing the opportunity to assess the capital from both perspectives. (Other characteristics of London s retail offer are described later). London s West End is the UK s leading shopping destination with a VENUESCORE of 1,625 more than double the UK s next largest retail hub (Manchester Centre). Manchester s retail offer continues to strengthen year on year, now ranking first (excluding London) due to a greatly improved retail offer. For example, the opening of itsu, Michael Kors, Joe & The Juice and Smiggle. John Lewis, Tommy Hilfiger, Hackett and Anthropologie are just a few names in the newly opened Victoria Gate development in Leeds which sees Leeds climb into third place. Croydon has fallen out of the top 20 UK retail venues (-6%). In the 1960s the Whitgift Centre was the first and largest covered shopping development in London, but regeneration in Croydon is now required for it to climb back up the retail rankings. The Croydon Partnership, a joint venture between Westfield and Hammerson, will help deliver retail regeneration to the centre. Rank Venue VENUESCORE % change Rank Venue VENUESCORE % change London, West End 1,625 1% London, City 823 2% 1 Manchester 780 2% 11 Aberdeen 443-5% 2 Glasgow 776-4% 12 Bristol 412-2% 3 Leeds 659 3% 13 Norwich 403-2% 4 Birmingham 640-7% 14 Leicester 394-2% 5 Liverpool 548-1% 15 Reading 393-4% 6 Cardiff 516 1% 16 Belfast 388-5% 7 Brighton 503-3% 17 Kingston upon Thames 382-3% 8 Nottingham 500-4% 18 Bath 363-2% 9 Edinburgh 498-3% 19 Sheffield 338-3% 10 Newcastle upon Tyne 450-2% 20 Southampton 338-5%

12 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 12 CHAPTER THREE FINDINGS Major Movers John Lewis s opening increases Chelmsford s retail rank by 23 places In the UK s top 200 retail venues, Chelmsford s retail ranking has greatly benefitted from the opening of Bond Street. Chelmsford has achieved Major Regional status thanks to this development. John Lewis, The White Company and Prezzo are just some of the retailers now open on Bond Street and the second phase (coming soon) will see Chelmsford climb even higher. Since its opening in November 2015, Newport has continued to rise up the rankings with new openings at Friars Walk such as Apple, Nando s and Sketchers to complement the existing retail offer. Highest Climbers Place Change (+/-) Biggest Fallers Place Change (+/-) Top 100 Venues 1 Chelmsford +23 Ipswich Regent Street +13 Carlisle Newport (Gwent) +13 Stoke-on-Trent Chichester +8 Hereford -8 5 Canterbury +7 Doncaster -7 6 Cheshire Oaks FO/Coliseum RP +6 Wolverhampton -7 7 Warrington +6 Uxbridge -6 8 Windsor +5 Middlesborough -5 9 Blackpool +5 Derby Swindon +5 Chester -4 Venues Ranked Belgravia +6 Wrexham Silverburn (Glasgow) +6 Braehead SC Angel +5 Wood Green Dunfermline +5 Stevenage Andover +5 Slough Walthamstow +3 Banbury Bexleyheath +3 Horsham Winchester +3 Stockton-on-Tees Inverness +3 Bedford Bury St Edmunds +2 East Kilbride -13

13 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 13 CHAPTER THREE FINDINGS Ipswich has fallen 13 places in its retail ranking due to the closure of some key stores including Next, Laura Ashley and Blacks. Similarly, Carlisle s retail position has fallen as a result of closures such as Mountain Warehouse, Mothercare and Miss Selfridge. Oxford, UK Westgate in Oxford, scheduled to open in autumn 2017, will see Oxford climb up the top 100 retail rankings. Ted Baker, John Lewis and Next are just some of the confirmed brands set to open in this new scheme.

14 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 14 CHAPTER THREE FINDINGS Top 20 Shopping Centres Westfield continues to dominate MALLSCORE represents the VENUESCORE of purpose-built shopping centres (malls, retail parks or factory outlet centres). Isolating the scores of these centres allows them to be ranked on a consistent basis, whether or not they are part of a wider retail offer (such as Liverpool One within Liverpool, Centre). The top of the mall rankings shown on page 15 is dominated by standalone regional mega-malls. Westfield London remains the number one ranked shopping centre in the UK and is the premier scheme in terms of its aspirational market positioning as evidenced by its Value-Luxury Index* (see page 16) of 140. Westfield Stratford s retail provision has strengthened when compared to Westfield London and Bluewater, which have both experienced decline (-4% and -3% respectively). There are signs of stress at Arndale Centre, intu Merry Hill, and The Centre:MK; all of which have seen retail supply in decline. Bullring, Birmingham

15 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 15 CHAPTER THREE FINDINGS Festival Place has fallen out of the top 20 shopping centres and has been replaced by The Mall at Cribbs Causeway (9% decline in supply). Cribbs Causeway has seen many new openings, such as Kiko Milano, Kurt Geiger and Smiggle (1% increase in provision). When analysing the presence of multiple retailers, the large majority of malls listed below are appearing to experience a decline in provision since last year. However, new retail and catering entrants into the UK market with only one store are not captured in the analysis, and therefore, this downward trend is better explained by the opening of new international retailers rather than store closures. For example, R.M.Williams (an Australian brand selling leather goods) and The Meat Co. have recently opened in Westfield London. Rank Scheme Town MALLSCORE Value-Luxury index (avg=100) 1 Westfield London London Westfield Stratford City London Bluewater Greenhithe intu Trafford Centre Manchester Meadowhall Sheffield intu Lakeside Grays intu Metrocentre Gateshead St Davids Centre Cardiff intu Merry Hill Brierley Hill Arndale Centre Manchester Liverpool One Liverpool intu Derby Derby Canary Wharf London Bullring Birmingham The Centre:MK Milton Keynes intu Eldon Square Newcastle Brent Cross London Whitefriars Canterbury Highcross Leicester The Mall at Cribbs Causeway Bristol *The Value-Luxury Index reflects the relative market position orientation of a venue where 100 defines the average UK retail venue. Scores above 100 reflect an aspirational bias; scores below 100 reflect an orientation towards the discount/value end of the market.

16 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 16 CHAPTER THREE FINDINGS Top Retail Parks Fort Kinnard climbs the retail rankings Once again, The Fort, Glasgow remains the UK s leading retail park destination with recent openings including Wagamama, Pandora and Fat Face. However, Fort Kinnaird s retail offer has notably strengthened over the past year (13% growth). Fort Kinnard has developed its food and beverage offer opening eight new restaurants including Chiquitos and Five Guys. The Fort, Glasgow Rank Scheme Town MALLSCORE % change 1 The Fort Glasgow 111 4% 2 Fort Kinnaird Edinburgh % 3 Middlebook Horwich 100 6% 4 Teesside Thornaby 97-1% 5 Parc Trostre Llanelli 89 2% 6 Castlepoint Bournemouth 85-2% 7 Retail World Parkgate Rotherham 79-5% 8 Whiteley Village Fareham 80 5% 9 Ventura Tamworth 75 0% 10 Pentland Loanhead 73-4%

17 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 17 CHAPTER THREE FINDINGS Top Factory Outlet Centres Cheshire Oaks defends its title Cheshire Oaks remains ahead of any other factory outlet by scale. Bicester Village (ranking sixth) continues to offer the most differentiated aspirational brand mix by some margin with a Value-Luxury Index of 178 a positioning above London s Knightsbridge! Brands such as Alexander McQueen, Fendi and Gucci are just some of the impressive brands at Bicester Village contributing to its very high Luxury score. Rank Scheme MALLSCORE Value-Luxury index (avg=100) 1 Cheshire Oaks Designer Outlet York Designer Outlet Gunwharf Quays Bridgend Designer Outlet Swindon Designer Outlet Bicester Village Ashford Designer Outlet Freeport Village Braintree Livingston Designer Outlet Junction Bicester Village, Oxford

18 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 18 CHAPTER THREE FINDINGS Dominant City Centres Conurbation performance is unchanged The extent to which the city centre offer of the UK s largest major cities dominates each conurbation's wider retail market is assessed below, as well as the extent to which each conurbation appears to be relatively over- or under-shopped. The picture painted is varied, ranging from London and Birmingham at one extreme where the city centre offer represents a relatively small part of each wider conurbation's total offer (under 12%); to the dominant city centre offers of Kingston, Leeds and York (33%+). At the conurbation level, VENUESCOREs have not changed dramatically due to a lack of major retail developments. Liverpool, Southampton and Sheffield have the lowest overall provision of multiple retail relative to their affluence-weighted populations (i.e. thereby appearing relatively under-shopped) when compared against this set of major conurbations, whilst York and Milton Keynes are at the opposite extreme. Rank Conurbation Conurbation Population (000) Affluence Index (avg=100) Conurbation VENUESCORE Weighted Population per VENUESCORE point Under- / over-shopped index (avg=100) City Centre VENUESCORE City Centre as % of conurbation 1 Greater London 7, , ,817 11% 2 Greater Birmingham 2, , % 3 Greater Manchester 1, , % 4 Greater Glasgow 1, , % 5 Tyneside , % 6 Bristol 1, , % 7 Edinburgh , % 8 Liverpool 1, , % 9 Leeds 1, , % 10 Greater Nottingham , % 11 Belfast , % 12 Sheffield , % 13 Cardiff , % 14 Leicester , % 15 Southampton , % 16 Kingston upon Hull % 17 Portsmouth % 18 Milton Keynes % 19 Stoke-on-Trent % 20 York % (*) The Index shown here is inversed whereby a high score indicates a potential relative over-provision of retail.

19 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 19 CHAPTER THREE FINDINGS Malls vs. High Streets Dominance of malls is a regional trend The role played by shopping centres in the UK s leading venues now ranges from only 10% of the offer in central London up to 80% in Bristol. Whilst the uneven nature of shopping centre distribution across these leading retail venues partially reflects the specific configuration and opportunities available for development, it nevertheless suggests that additional mall development might be possible in areas such as Sheffield and Bath. The importance of shopping centres in the UK s leading retail venues is reflected by the proportion of the total offer accounted for by malls within the UK s top 20 venues. Rank Venue VENUESCORE MALLSCORE (*) Mall Dominance (%) Central London (**) 2, % 1 Manchester % 2 Glasgow % 3 Birmingham % 4 Leeds % 5 Liverpool % 6 Cardiff % 7 Brighton % 8 Nottingham % 9 Edinburgh % 10 Newcastle upon Tyne % 11 Aberdeen % 12 Bristol % 13 Norwich % Eden Centre, High Wycombe 14 Leicester % 15 Reading % 16 Belfast % 17 Kingston upon Thames % 18 Bath % 19 Sheffield % 20 Southampton % (*) Total MALLSCORE of Shopping Centres only (**) London here defined as London, City, London, Mid-town and London, West End

20 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 20 CHAPTER THREE FINDINGS London Focus Spending remains concentrated in Central and Inner London Central London s retail offer has a clear focus on upscale retail. This is exemplified by the Value-Luxury Index scores that are well above 100 for the vast majority of central London venues (defined as venues that make up London, West End, London, City and London, Midtown). In Inner London (definitions here are based on borough boundaries), the Westfield shopping centres lead the way, followed by Docklands, Kings Road, Hammersmith and Camden Town. In Outer London, Kingston, Croydon, Bromley and Romford stand out as the capital s major suburban destinations. Assessed as aggregates of their constituent parts, London s West End, City and Midtown offers would rank 1st, 2nd and 19th respectively in the national VENUESCORE rankings. Bond Street, London

21 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 21 CHAPTER THREE FINDINGS London's top 10 venues Rank Venue VENUESCORE % Change vs VENUESCORE National Rank Value- Luxury Index (Avg=100) Fashion Position (Avg=100) TOURISTSCORE London, West End 1,625 0% London, City 823 2% London, Midtown 369 4% Central London, Top 10 Venues 1 Oxford Street 497-1% Covent Garden 313-1% Knightsbridge 279-2% Regent Street 187 1% Angel 165 4% Kings Cross/St Pancras 139 9% Belgravia 125 5% Victoria 117 4% London Bridge 103-6% Cheapside 102-6% Inner London, Top 10 Venues 1 Westfield London SC 328-4% Westfield Stratford City SC 327 4% Docklands 229 0% Kings Road 210-1% Camden Town 168-1% Clapham Junction 167 0% Hammersmith 167-2% Kensington 165-1% Putney 156-4% Wandsworth 139 9% Outer London, Top 10 Venues 1 Kingston upon Thames 382-3% Croydon 328-6% Bromley 286-3% Romford 258-5% Watford 254-5% Sutton 199-5% Harrow 184-3% Uxbridge 183-5% Richmond upon Thames 184-1% Brent Cross SC 180-4%

22 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 22 CHAPTER THREE FINDINGS Market Position London venues continue to lead As the largest and most differentiated non-food spending sector, the fashion offer is often key for consumers when choosing a particular shopping venue. It is important for retailers to understand how venues differ in terms of market positioning (e.g. quality/price) in order to find the optimum locations for their format. The Market Position Index provides a useful guide for distinguishing between shopping venues based upon their relative positioning along a spectrum running from Value to Luxury (as illustrated below). The fashion offer (together with some easily classifiable operators from other categories) is used to profile each venue. The Market Position Index provides a useful guide for distinguishing between shopping venues based upon their relative positioning along a spectrum from Value to Luxury. Each venue has an estimated average market position score based on the retailers present, with the Market Position Index for each venue then calculated by comparing the venue s market position score against the average for all venues (down to Major District grade). Luxury Upscale Appeal Value Discount Focus

23 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 23 CHAPTER THREE FINDINGS Major District status venues and above with the strongest bias towards either the upper or lower end of the market position spectrum are shown below. Upscale venues are dominated by central London providing six of the 10 most upscale offers. Three of the UK s top 10 Luxury locations are occupied by terminals at Heathrow Airport (T2, T3 and T5). At the other end of the spectrum, Wythenshawe, Belle Vale and Grays are defined as the UK s most downmarket retail venues. Value (most downmarket) Rank Luxury (most upmarket) Wythenshawe 1 Bond Street Belle Vale (Liverpool) 2 Bicester Village FO Grays 3 Knightsbridge Salford SC 4 Marylebone Lower Edmonton 5 Heathrow T3 Leith (Edinburgh) 6 Heathrow T5 Peterlee 7 Heathrow T2 Erdington (Birmingham) 8 Regent Street Castleford 9 Kings Road Motherwell 10 Hamptstead Ellesmere Port 11 Portobello Road Blyth 12 York Designer Outlet FO Huyton (Liverpool) 13 Westfield London SC Boscombe 14 Carnaby Street Rotherham 15 Ashford Designer FO Longton (Stoke-on-Trent) 16 Swindon Designer Outlet FO Dudley 17 Gunwharf Quays FO Aberdare 18 Covent Garden Kings Heath (Birmingham) 19 Gatwick South Wallasey 20 Cheshire Oaks FO

24 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 24 CHAPTER THREE FINDINGS Food Orientation London dominates in the foodservice offer Successful shopping venues are no longer solely defined by the strength of the retail offer available to consumers an integrated foodservice offer (often referred to as F&B) has now become a key value driver and an increasingly important component of the venue s overall brand proposition. There are several reasons that underpin this trend, including the surge in private equity investment in fast-growth foodservice operators and the subsequent fasttracked roll-out of new outlets, the relative immunity of foodservice from the growth of online shopping, and also the rise of leisure activities and eating out as an increasingly essential part of any shopping or leisure trip for consumers. An integrated foodservice offer has now become a key value driver and an increasingly important component of the venue s overall brand proposition. The casual dining sector has experienced rapid growth globally over the past few years, a trend anticipated to continue. There remains a great opportunity for casual dining operators to roll-out an increasing number of stores across the UK and across a variety of venue types. Byron, CAU and Wahaca provide a good testament to this trend with an ever increasing number of stores. For instance, Wahaca s store estate has increased by more than 30% over the last year.

25 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 25 CHAPTER THREE FINDINGS In Tier 1 venues (~60 Major City and Major Regional destinations), Covent Garden has the most food orientated offer. F&B makes up 40% of Covent Garden s total retail offer with foodservice operators such as Benugo, Bill s and Jamie Oliver s. Conversely, Darlington has the weakest F&B offer, with only 11% of units dedicated to foodservice operators highlighting an opportunity to develop its catering offer. Manchester, Oxford and Brighton lead the way outside of London. In Tier 2 venues (>300 Regional and Sub-Regional destinations), Soho has the strongest foodservice offer (~70% of its retail offer). Honest Burger, Joe & The Juice and Busaba Eathai are just a few of the caterers contributing to Soho s strong F&B performance. Interestingly, in Tier 2 venues, all of the top 10 most food orientated destinations are London based. London is by far the most advanced region in terms of F&B provision. Covent Garden, London Tier Rank Most food orientated venue Least food orientated venue Tier 1 Major City + Major Regional Tier 2 Regional + Sub-Regional 1 Covent Garden Darlington 2 Manchester Harrogate 3 Oxford Livingston 4 Brighton Knightsbridge 5 Leeds The Trafford Centre SC/Barton Square 6 Newcastle upon Tyne Solihull 7 Cardiff Hull 8 Bristol Meadowhall SC 9 Reading Chelmsford 10 Birmingham Westfield London SC 1 Soho Nuneaton 2 London Bridge Falkirk 3 Paddington Corby 4 Holborn Buxton 5 Belgravia Cwmbran 6 Ludgate Hill Ashford Designer FO 7 Spitalfields Accrington 8 Baker Street Coleraine 9 Strand Birkenhead 10 Cannon Street Cribbs Causeway SC

26 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 26 CHAPTER THREE FINDINGS Travel Retail continues to grow in importance within travel hubs Although shopping in travel hubs is not the primary function, these destinations are of growing importance to retailers and travel hub operators alike. Retail offers within smaller railway stations in particular are primarily focused towards convenience-led retailers, concentrating on food-to-go and items for use on the journey to cater for frequent and time-poor passengers. Airport environments on the other hand provide an opportunity for retailers to take advantage of a captured audience with longer dwell times, with the flying population also more affluent than the average UK population. Of the UK s largest airports, Heathrow T3, T4 and T5 have the most premium market position, well above expected levels for a retail offer of its size. T3 and T4 are hubs for long haul international travel and the main terminals for passengers travelling to and from BRIC nations dealing with ~26 million passengers per annum. Meanwhile, T5 is the home of the national flag carrier, British Airways. T5 passengers have a high spending power, hence retailers such as Burberry, Gucci and Cartier are suitable. Other termini, such as Gatwick and many of the regional airports, have strengthened their commercial proposition to cater more towards a low cost carrier focussed passenger mix. Airport retail is a strong opportunity for retailers, as operators have a detailed understanding of the passenger profile, allowing for a targeted retail offer to be developed. Airport retail is a strong opportunity for retailers, as operators have a detailed understanding and more importantly data of the passenger profile passing through, allowing for a targeted retail offer to be developed.

27 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 27 CHAPTER THREE FINDINGS LHR Terminal 5 70 MALLSCORE LGW South Terminal LHR Terminal 3 Stansted Airport Birmingham Airport LGW North Terminal LHR Terminal 2 LHR Terminal 4 MAN Terminal 1 Luton Airport Edinburgh Airport Glasgow Airport MAN Terminal 2 Newcastle Airport MAN Terminal Market Position St Pancras s market orientation is well above all other rail destinations as its function differs hugely. Its role, and retail offer, is more alike to that of an airport due to the significant number of international passengers using the Eurostar to international destinations (leading to longer dwell time), which is reflected in its more up-market retail offer. Following the recent redevelopment, London Waterloo, Liverpool Street and Kings Cross have strengthened the market position of their retail offer. This indicates the potential for other rail termini with a similar user profile to follow suit. 80 St Pancras Station Victoria Rail Station MALLSCORE Paddington Rail Station Piccadilly Rail Station Leeds Rail Station Central Rail Station Liverpool St Rail Station Waterloo Rail Station Euston Rail Station Kings Cross Rail Station Market Position

28 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 28 CHAPTER THREE FINDINGS Fashion Position Spitalfields paves the way for progressive retailers In assessing the relative 'fashionability' of shopping venues, a similar approach is used as that described in the Market Position section, assessing fashion retailers across a spectrum running from progressive through to traditional. London destinations dominate as the most progressive venues as the city is seen as the ideal location for flagship stores and first stores for international brands making their first foray into the UK. Spitalfields has climbed into the top 10, now ranking as the most progressive UK venue, whereas Bridport in Dorset is the most traditional venue. Spitalfields has climbed into the top 10, now ranking as the most progressive UK venue, whereas Bridport in Dorset is the most traditional venue. Traditional Rank Progressive Bridport 1 Spitalfields Llandudno 2 Portobello Road Market Harborough 3 Bond Street Sevenoaks 4 Knightsbridge Marlborough 5 Hampstead Brentwood 6 Kings Road Southsea 7 Angel Penrith 8 Camden Town Farnham 9 Marylebone Eltham 10 Carnaby Street Spitalfields Market, London

29 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 29 CHAPTER THREE FINDINGS Age Position Carnaby Street attracts the youngest consumers By identifying those multiple retailers with particularly strong young (e.g. Hollister, H&M, Miss Selfridge, Blue Inc., Game, Base Menswear) or old (e.g. Edinburgh Woollen Mill, Evans) orientation, it is possible to compare venues based on their overall appeal to different age cohorts. Venues such as Bangor (Wales) and Carnaby Street have a relatively young retail focus. A large number of these top 10 young venues host universities, accounting for the youthful orientation of the retail offer. Carnaby Street and Oxford Street are at the forefront of innovative retail which attract unique and new retailers appealing to younger shoppers. Meanwhile, venues with the strongest bias towards older shoppers include provincial market towns such as Marlborough, Nantwich and Stamford whereby the retail offer within the venue reflects the age orientation of its catchment. Carnaby Street, London Oldest Rank Youngest Marlborough 1 Bangor (Wales) Nantwich 2 Carnaby Street Stamford 3 East Kilbride Sevenoaks 4 Oxford Street Saffron Walden 5 Dunfermline Lymington 6 Wandsworth Ringwood 7 Enfield Dorchester 8 Bexleyheath Chichester 9 Swansea Stratford-upon-Avon 10 Hinckley

30 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 30 CHAPTER THREE FINDINGS Tourist Venues Travel hubs lead the way Knightsbridge and Bicester Village Factory Outlet provide the greatest mix of retailers appealing to the tourist shopper. Of the top 10 ranking tourist venues, travel hubs account for three, including London Heathrow T3 and T5 along with Gatwick South. These travel hub venues host many retailers attractive to tourists such as Fortnum & Mason, Gucci and Salvatore Ferragamo. Rank Venue TOURISTSCORE Index (Avg=100) 1 Knightsbridge Bicester Village FO Heathrom T Bond Street Piccadilly Heathrow T Gatwick Airport South Carnaby Street Regent Street Gunwharf Quays FO 317 Knightsbridge, London

31 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 31 CHAPTER THREE FINDINGS Internationalisation Regent Street is a destination for international retailers Looking at the theme of non-domestic influences from another perspective, the orientation of the UK venues towards incoming foreign brands offers an additional insight into their perceived status within the UK retail hierarchy. Using Javelin Group's GLOBALSCORE Index, Regent Street is the most globally orientated venue in the UK, with 36% of its total multiple provision accounted for by international retailer brands. Of the 20 most globally oriented venues in the UK, six are located in central London, including Regent Street and Knightsbridge. Cheshire Oaks and Bluewater are the only non-london venues with the highest GLOBALSCORE. Rank Top 20 of leading 100 Javelin Venues VENUESCORE GLOBALSCORE GLOBALSCORE % of VENUESCORE GLOBALSCORE Index 1 Regent Street % Westfield London SC % Knightsbridge % Westfield Stratford City SC % Brent Cross SC % Cheshire Oaks FO/Coliseum RP % Bluewater SC % Oxford Street % Covent Garden % The Trafford Centre SC/Barton Square % Belfast % Meadowhall SC % Metrocentre SC % Kingston upon Thames % Kings Road % Lakeside SC % Southampton % Brighton % Bromley % Basingstoke % 134

32 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 32 CHAPTER THREE FINDINGS Regional Analysis Many regions continue to be under-shopped The table below summarises the overall characteristics of the retail supply available nationally across the UK regions. The table also includes an assessment of the extent to which multiple retail penetrates different UK regions by comparing resident population (weighted for affluence) against each region s aggregate VENUESCORE. The ratio of Weighted Population per VENUESCORE Point identifies London, the East Midlands, the East of England as the UK s most under-supplied regions (relative to their spend-weighted populations), whilst the North East and North West appear to be the most multiple-penetrated areas. The North East is a major over-shopped outlier relative to all other UK regions. Region Total VENUESCORE Value-Luxury index (avg=100) Population (000) Affluence index (avg=100) Weighted Population per VENUESCORE Point Under- / overshopped index (avg=100) Total UK 175, , East Midlands 11, , East of England 15, , London 24, , North East 7, , North West 19, , Northern Ireland 4, , Scotland 15, , South East 24, , South West 15, , Wales/Cymru 8, , West Midlands 14, , Yorkshire and The Humber 13, , The Index shown here is inversed whereby a high score indicates a potential over-provision of retail.

33 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 33 CHAPTER THREE FINDINGS The table below shows the proportion of the total retail offer provided by foodservice at a regional level. There is huge variation between regions, with London s foodservice provision the highest in the UK, whereas for Northern Ireland, foodservice is less than 10% of the total (based on multiple operator provision). These differentials indicate the scale of category shift that could occur across the UK regions in the coming years as foodservice (combined with other Leisure operators) becomes an increasingly important component of the nation s multiple retail offer. Region Total VENUESCORE Total FOODSCORE FOODSCORE as % of total Total UK 175,281 26,970 15% East Midlands 11,327 1,632 14% East of England 15,449 2,143 14% London 24,048 6,113 25% North East 7, % North West 19,419 3,085 16% Northern Ireland 4, % Scotland 15,980 1,797 11% South East 24,586 3,722 15% South West 15,609 2,155 14% Wales/Cymru 8,579 1,122 13% West Midlands 14,444 2,129 15% Yorkshire and The Humber 13,681 1,757 13%

34 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 34 ORDER VENUESCORE 2017 ORDER VENUESCORE 2017 The full VENUESCORE 2017 report can be licensed annually and is delivered as an Excel spreadsheet and a Tableau dashboard. The full dataset contains the following rankings tables: 1. National ranking National rankings for the UK s leading shopping venues (e.g. Major City to Major District grade) 2. Alphabetical ranking Full ranking of UK retail venues presented in alphabetical order (e.g. Major City to Local grade) 3. Rankings by region All venues ranked within their region (e.g. London, South East, N.Ireland) 4. Rankings by local authority Ranks all venues by local authority to assist in local retail hierarchy planning 5. MALLSCORE ranking Ranking UK shopping centres, retail parks, outlet centres and transport hubs Example tables in Tableau format. Order VENUESCORE 2017 To order your copy of the full VENUESCORE 2017 dataset for 1,500 + VAT, please laura.short@javelingroup.com and include the following information: name, position, company name to appear on invoice, company VAT number, invoice address and telephone number. Thank you for your order.

35 JAVELIN GROUP EXECUTIVE SUMMARY VENUESCORE 2017 PAGE 35 ABOUT JAVELIN GROUP ABOUT JAVELIN GROUP Javelin Group, part of Accenture Strategy, provides strategy consulting and digital transformation services to the world s leading retailers and consumer brands. Javelin Group helps clients improve their competitiveness by anticipating and responding to the rapid changes in customer shopping habits and retail technologies. Javelin Group, which serves retail and brand leaders across Europe, North America, the Middle East and Australia, supports clients with their strategies, operations, technologies, locations and analytics. In June 2015, Javelin Group was acquired by Accenture to spearhead its capabilities in digital retail transformation within Accenture Strategy, and remains a separate but connected business unit within the firm. Our Locations & Analytics team, which has worked with more than 210 retailers and brand clients, combines information on stores, catchments and spending with a detailed knowledge of shopping venues across Europe to advise retail companies on: 1. Roll-out potential of expanding chains 2. Store portfolio review to establish investment/exit priorities 3. Sales forecasting 4. Site-specific evaluations for town centre and out-of-town retailers 5. Catchment analysis (RETAILNATION) 6. Store grading and local merchandising 7. Retail store performance benchmarking (SHOPSCORE) 8. Market analysis software tools (e.g. Alteryx, Tableau) 9. Consumer data and segmentation Contact us If you would like to discuss your retail locations and analytics requirements, please contact Robin Bevan, Director of Locations & Analytics practice at Javelin Group, at robin.bevan@javelingroup.com or on +44 (0) For more information about Javelin Group, please visit

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