‘Vitality Rankings’ show flagships’ bounce-back

UK retail is bouncing back to health with the flagship destinations that have struggled since the pandemic leading the charge. That’s the conclusion of a new Vitality Rankings report that has been released by Newmark.

It shows some distinct changes since the anomalies that were a big feature of the last report in 2022 and highlights how the pandemic period really skewed the way retail destinations were performing.

The international real estate group said the 2024 report has seen a recovery for many of the retail centres that did best before the pandemic. 

That means city centres are riding high again, along with some key malls that had been all-but deserted a couple of years ago.

So how did the company judge the ‘vitality’ of the different locations? It used a number of different measures such as: spend by shoppers on a yearly basis; the proportion of spend that comes from workers in the area; the vacancy rate and changes in that rate; the floor space that’s currently under alteration; the number of bank branches lost since 2019; the proportion of floor space given over to food and drink; the destinations’ suitability for local consumers; and how many affluent consumer groups and less affluent groups use it, among other things. Some of those variables can be positive and some not (for instance, an increase in dining space is usually seen as a good thing even if it reduces the amount of direct retail space).

Newmark said that “unique to the 2024 rankings uniquely are the decline in bank branches and the percentage of retail floor space under alteration”.

James Ebel, Vice-Chairman, Retail UK & EMEA, added: “Since our 2022 ranking, many people have returned to their previous shopping behaviours and general movement patterns, with the ‘new normal’ not looking too dissimilar from the ‘old normal’.

“Whilst footfall might be slightly lower than pre-Covid levels in some major city and town centres due to hybrid working, sales have recently recovered to – or bettered – 2019 values for many tenants trading in these areas. Consequentially, many prime retail destinations across the UK have experienced a welcome return to the top positions.”

That said, some locations “have been held back in the 2024 rankings. They have seen increased vacancy rates, as high street chains and independents alike have suffered during a tough trading period and left empty units throughout Britain’s high streets, whilst the cost of living crisis is constraining shopper expenditure in less affluent areas.

“However, the ‘waves of creative destruction’ that result from periods of economic and social turmoil provide opportunities for new brands and concepts. Online brands are taking their first steps onto the high street; successful occupiers are expanding into new territories; and new offers are finding space where it was previously unavailable”.

Ebel added that while “many centres have returned to their pre-pandemic levels of vitality, others provide the opportunity for regeneration and renewal – both for the centres themselves and occupiers that trade in them”.

The trends

So, what do we actually see with 2024’s rankings? Well first, let’s look at some general trends.

Andy Metherell, Newmark’s Head of Consultancy & Analytics, Retail UK & EMEA, said that there’s “now an over-supply of retail space across the UK, leading to increased vacancy rates and unproductive space” caused by many people still working from home.

As a result, it has looked at the aforementioned amount of floor space under redevelopment as an additional positive factor, to show locations that are taking proactive steps to improve or reduce the building stock. It means those locations are likely to be booming in a few years’ time when economic health is hopefully better.

Two key trends are that many locations have regained their previous positions. Smaller centres that benefited from their convenience-led offers during lockdowns have largely fallen away, and been surpassed by major retail destinations to which shoppers, tourists and workers have returned. The make-up of a visitor profile may be slightly different, with fewer workers, but many tenants are experiencing strong sales in the big destinations.

And luxury destinations have performed better this year than in the past few: the demise of tax-free shopping may be affecting overall sales in these locations, but their retail vitality compared to other centres is stronger – “particularly benefiting from tourism and the presence of high-net-wealth individuals who are unaffected by cost of living”. 

Newmark said that “overall the health of retail centres across the UK is looking better than at anytime in the past three years”.

Who’s at the top?

Now on to the actual rankings. It may be a surprise to some, but number one this year is Cambridge City Centre. It was only in 36th place in 2022, but pre-pandemic was also up at the top.

It’s followed by affluent Cobham, up from 16 in 2022 but interestingly only in 17th place in 2019. Behind them is equally affluent Wimbledon Village, which was also third in 2022 and fourth in 2019.

Number four is where it gets really interesting. London’s Sloane Street occupies that slot but was a lowly 107th in 2022 as London struggled post-lockdowns. What’s perhaps also a surprise is that it was ‘only’ 16th in 2019. But it has seen huge investment of late and luxury brands are rushing to upsize on the street (think Dior and Valentino).

In fifth place is Kingston upon Thames, not much changed from 2022’s fourth spot, and Knightsbridge is sixth. Like Sloane Street, this has seen a huge leap from 2022, rising from number 102 and having been third in 2019. Ditto Westfield Stratford City, jumping to number 7 from 85 and having been 11th in 2019.

Rounding out the top 10 are Chester City Centre at 8 (up from 19 in 2022 but also up from 46 in 2019); Beaconsfield, which dropped from first place two years ago but leapt from 64th in 2019; and Chelsea. Its number 10 spot saw it recovering from 123rd in 2022, but it’s down from 4 in 2019.

Elsewhere among the top 25 we can see city centres like Oxford, Bath, and York climbing back up the rankings as workers, locals and tourists return to their stores. The giant Bluewater mall has also recovered to 22nd from 78th two years ago. However, it was fifth in 2019, showing that the loss of major tenants like the Arcadia brands means it’s still not fully back to health.

City centre recoveries can also be seen in the 26th-50th spots with Brighton, Leeds, Liverpool, Exeter, Edinburgh, and London’s West End (up to 39 from 304th but still not as high as its 2019 ninth place) all climbing.

And key malls like Cribbs Causeway, Westfield London, and Brent Cross have risen too.

It’s also notable that in general, larger retail centres are seeing a resurgence in vitality. Major destinations like Reading, Edinburgh and Liverpool have all climbed at least 100 places compared to 2022, as mentioned, a sign that the bigger centres are recovering their retail health.