Following the Brexit vote, I had the pleasure of being invited to the Retail Property Analyst Future of Shopping Centres conference hosted by TH Real Estate in their stunning Bishopsgate offices.

The event inevitably featured discussions on how the retail industry responds to challenges following a vote for Brexit. This provided the unprecedented political backdrop for the conference themes of: creative ways to drive turnover in shopping centres, adoption of technological breakthroughs and the evaluation of the current economic climate faced by the industry as a whole. An eclectic line up allowed for much to agree on as well as differences to resolve, be it Dilys Maltby with her inspiring talk about creation of amazing spaces to encourage shoppers to dwell and enjoy the experience of place or James Mullan with his somewhat controversial yet exciting take on the trend of convenience and streamlining the shopper experience.

The future isn’t all about Online

We kicked off the day with an exuberant Terry Duddy. Duddy delved into the role that ‘bricks and mortar’ play in the retail market. Having spent his formative years with Argos during their expansion of the highly successful ‘call and collect’ scheme, later renamed to ‘click and collect’, Terry pondered the failure of online to disrupt traditional shopping. Pure online sales, he predicted, are likely to make up only 20% of total sales by 2020 and presently only account for about 15% as of June 2015 (ONS). ‘Pure Play Strategies’ previously the focus of the retail industry has now shifted towards multi-channel. This combined approach has been successfully exploited by Argos, with a third of sales now completed through click and collect. The model has been replicated by Amazon, in reverse, the online giant now offering brick and mortar retail. This take up of physical space by previous pure play operators has coincided with the building of further retail developments, from 80,000,000 m2 in 2002 to 94,000,000 m2 in 2015, which Duddy views as a positive signal for a thriving retail space market.

Retail Space Supply versus Retail Offer

Marcel Kokkeel wasn’t quite so sure that increasing supply of retail space was a positive sign. Kokkeel considered the greatest threat to shopping centres presently is the oversupply of certain types of retail space, particularly that of out of town. Cars and the proliferation of driving has created an environment that can be exploited by Out of Town centres but argued that the smartphone has now destroyed that once all powerful paradigm. No centre can compete with online prices or range of offer. Kokkeel argues that small community based shopping centres will be especially effective in the future as urbanisation rates climb. Kokkeel also considered the need to make centres places of value to the community. Employment of required government services in shopping centres such as libraries and pharmacies will encourage the users of these services to visit these centres on a near daily basis. Further, these tenants have a very low risk profile due to the rent being provided by government which is especially desirable in uncertain economic climates.

Experience versus Online

Dilys Maltby found much to agree with from both Duddy and Kokkeel in that it was indeed all about the type of space but felt like duddy that the future could be very bright. Focusing on Amazing Spaces and creating areas which make consumers feel happy and uplifted. Maltby believes that more interaction with their environment would lead to increased discretionary expenditure. Paradoxically we should look more towards shopping as an experience and not purely a point of financial transaction. This approach was echoed by Helen Barnish of Hamleys, a lady on a mission to delight children in stores. Hamleys has managed to compete with the likes of Toys R Us, not on the basis of price, but on the basis of creating amazing spaces for children to engage with their products and drive the demand. Consequently, Hamleys is very attractive to shopping centres since they drive enormous footfall through the rest of the centre not just by visitors seeking the in-store experience but because of the shopping centre-wide events that Hamleys routinely hold drawing crowds of consumers ready to part with their cash for teddy bears and train sets.

Convenience versus Experience

Yet another perspective is how much weight do you really give the oft quoted circa 20% online? Scott Kempton asked us to take another look at the prevalence of technology in shopping today with 78% of those buying in store have nonetheless looked online first. He argued that we could assume from these consumers that they already know what they want and that this product awareness is the real game changer. James Mullan explored this idea, from a show of hands Mullan quickly established that not all that many people want to ‘dwell’ in shopping centres. He argues that mothers and busy professional women likely don’t have the time to care about branding but instead care about convenience. Despite shopping centres wanting to capture and retain interest in consumers with their amazing spaces, perhaps consumers just want to do their shopping quickly and efficiently. Now more than ever, as consumers already know what they want and don’t want to be delayed on the way to the till.

And what about Brexit?

The scope of the conference was extended to that of the economic outlook for the sector due to the inextricable link between the economy and consumer demand. First on the docket was the post Brexit environment. Colm Lauder provided insight into the economic repercussions that Brexit would have on the economy in the short term. He spoke of a gloomy short term environment where uncertainty wreaks havoc on financial markets. However, Lauder does consider there to be some upsides of a weaker pound making purchases for overseas investors cheaper as well as lower rents accelerating a greater diversity in space usage and thereby making London more accessible for the middle classes. However, he did also mention that the lower rents in commercial property may well lead to more frequent exercise of break clauses due to upward only, in particular Lauder was concerned with market access impacting yields in the medium term Scott Corfe also shared a number of troubling possible futures for the health of our economic system in the long run, citing potentially systemic issues such as the decline in wage growth; wealth disparity and its impacts on effective demand; slowing growth of financial assets and the corresponding impact on pensions; the high costs of housing and the lower levels of consumption by younger people. this comprehensive analysis by Corfe has its value in that early identification of these issues enables to respond appropriately to the inherent macroeconomic challenges which lie ahead for the industry.

Time well spent

My personal takeaways from the conference was the more holistic approach that can be taken to the myriad of techniques that centres use to drive consumption in shopping centres Maltby argued that making them more approachable and less arduous will drive traffic whilst James suggested that enhancing convenience will yield results. I conjecture that this balance between creating spaces to increased dwell time and the increased importance of streamlining and convenience will play a large role going forward. We will have to wait and see which of these philosophies evolve as being most effective in driving turnover in shopping centres. But for now we must also be ready to embrace the growth of technology and how this can work for the industry rather than against us in these uncertain economic times.

Information about the next RPA conference can be found at

To enhance your understanding of shopping centres and retail, consider signing up to our next Shopping Centre Investment course on the 28th of September in Warsaw or the 12th of October in London.


Retail research analyst, Alasdair Pocock @BayfieldTrain