Big increase in discount stores as recession bites in affluent areas |
| Industry News | |
| Thursday, 03 September 2009 | |
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Discount retailers have increased by 60% during the last two years, according to new research by the Local Data Company backed by the British Property Federation (BPF). Just under half of the 1,423 discount stores across Great Britain are in London and the south-east and for every one discount retailer that closes, two have opened. Regions with the most discount shops include Greater London (357 outlets), the south-east (250), Yorkshire & The Humber (137) and the north-west (135). Customer bases have also drastically changed. Poundland, for example, has seen a 22% increase in the numbers of shoppers from the richer AB group. Traditionally, its target market has driven by females in the C2, D and E socio-economic groups. The change has occurred because discount retailers have moved into more affluent areas such as Cambridge, Oxford, Stratford upon Avon and Tunbridge Wells. Liz Peace, chief executive of the BPF, said: "Whatever opinions people may have about pound stores, they are growing in popularity and more importantly, generate jobs and footfall that benefits other retailers on the high street. "This is good for landlords who would much rather have a discount retailer than an empty store, particularly as Gordon Brown is continuing to hurt businesses by making them pay full business rates on empty space. "The rise has also been fuelled by the demise of Woolworths leaving more prime spots available. "Some of our biggest members including British Land, Land Securities, Prupim, St Modwen and Westfield all have pound store tenants. "The increase in discount stores represents a marked change in the psychology of shoppers. "Rather than shopping for a particular good or commodity, people are going out with a set sum of cash knowing that they will be able to get a specific number of items. "And in practice they often end up buying more." Ian Parish, head of retail at property agents BNP Paribas Real Estate, said: "Discount retailers have undoubtedly seen an opportunity to acquire new stores at rents more easily viable for them when they are selling goods at lower margins than their more mainstream counterparts. "Clearly, this sector is also seeing a wider customer base walking through its doors with household budgets stretched and, combined with cheaper rents, this seems to be leading them on the expansion trail. "Given the current vacancy rate, I'm sure the property industry is very happy that these operators are in the expanding frame of mind." Source: British Property Federation
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